The Role of Greed in a Capitalist Society :: Economy Economic Essays

The Role of Greed in a Capitalist Society Introduction Much has been said about the role of greed in a capitalist, free market economy. Some believe that greed fuels the economy. Others say that it undermines the value system that drives the economy. Adam Smith said that, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest" (Smith, 1776: 26-27). This statement explains that it is the self-interest of individuals that causes people to trade. This trade pushes an economy in a forward progression, which creates a more profitable living situation for the individuals in the economy. Yet Smith also stated that an individual could either pursue the study of wisdom and virtue or the acquisition of wealth and greatness. In this context, one individual may choose to follow riches, which would in turn create a confidence in trade and the economy. The confidence of this person would strengthen the economy of that country. The other person may choose to attain wisdom and virtues. This person is notably less concerned with securing financial wealth (Smith, 1759: 62). Does this then mean that their lack of concern with material gain will work against the economy? It is my thesis that greed does not fuel the economy, but undermines the value system on which capitalism (according to Adam Smith) was built, and a good example of this today is child labor. I plan to argue that Smith’s case for pursuing self-interest only works in the context of a wealthy society. He understood that there was more to life than amassing wealth, but he did not consider the plight of those in abject poverty. Using Biblical principles, new theories on democratic capitalism, and real life examples I hope to describe how greed undermines capitalism and that the free market economy is driven by a good work ethic, delayed gratification and the virtues of individuals. These qualities can better provide the wealth of life that Smith describes in both The Theory of Moral Sentiments and The Wealth of Nations. Background Information The Theory of Moral Sentiments was Adam Smith’s first book and it was first published in 1759. He was appointed to be the Chair of Logic at Glasgow in 1752 and then moved to the Chair of Moral Philosophy in 1752. He was teaching subjects such as natural theology and ethics before moving into law and government.