Saturday, September 25, 2010

Carlos Lozada Discusses My 'Envy' Lecture in the Washington Post Sunday 'Outlook'

In this Sunday's "Outlook" section of the Washington Post, Outlook editor Carlos Lozada reflects on my lecture earlier this week at the American Enterprise Institute:
"Greed, for lack of a better word, is good. Greed is right. Greed works."

Gordon Gekko's infamous speech in Oliver Stone's 1987 film "Wall Street" came to embody the excesses of 1980s high finance. Now Gekko, fresh out of prison, is back in Stone's "Wall Street: Money Never Sleeps," which features the financier (played again by Michael Douglas) warning of the impending economic crisis of 2008. Turns out greed caused some trouble while Gekko was locked up.

But is greed capitalism's worst sin? Not so, argues economist Victor Claar. In a speech at the American Enterprise Institute last week, Claar posited that another deadly sin -- envy -- is an inherent part of the free-market system and can prove even more insidious.

Claar, a co-author of Economics in Christian Perspective, relied on Thomas Aquinas's definition of envy: sadness at the good of another. He cited the biblical parable of the prodigal son, in which the older sibling is envious of his dissolute brother, whose return home sparks a big party. "It sounds like blue-collar frustrations that we hear today," Claar said. " 'I did everything the right way, I played by all of the right rules -- and here I am.' "

Whether because of differing intelligence, skill, ambition or luck, free markets produce different outcomes for different people, so envy is inevitable. . . .


1 comment:

  1. Let’s have a show of hands: Do you want free-market capitalism or egalitarian socialism?

    This is the argument that passes for political discourse. Victor Claar, as reported in The Post Sunday, believes that “ [w]hether because of differing intelligence, skill, ambition or luck, free markets produce different outcomes for different people, so envy is inevitable.”

    That seems reasonable but he takes the argument to the illogical conclusion that because of these often random chances and opportunities, envy is behind the “social justice” urge to “spread the wealth around.” He says such ideas are “mean” because liberals are “suggesting those making over (sic) $250,000 should feel guilty for the hard work they have done to contribute something others find valuable enough to voluntarily pay for…. [P]ursuing self-interest in a system that allows you to be rewarded for pursuit of your own self-interest and at the same time in service of others? That’s certainly better than the alternative.”

    And here I thought we were just talking about an adjustment to the tax code. Claar sees the end of the world as we know it.

    Raising taxes on the wealthy is not socialism. And asking those making more than $250,000 isn’t asking that they feel guilty, just asking they help pave the roads and build our schools. But that request is translated by economic conservatives as a guilt trip. Gee, now that you’ve figured me out, can I get up from the couch, doctor?

    Pursuing self-interest and being rewarded for success? Seems reasonable to me. But much of what he and others are so strident in defending is not free market capitalism. What we have is a convoluted system of codes, judicial opinions and regulations that to many seem a rigged game.

    Some folks just want a more level playing field, like the one we had 50 years ago while we were building interstate highways and suburban boxes for the prospering middle class.

    Tax hikes are not apocalypses. But it seems to behoove those against such hikes to predict dire consequences. It much like the argument that raising taxes will shut down entrepreneurship and business investment. I doubt if a businessman wants to invest $1 million because he thinks there’s a $5 million return on investment he is, in the face of a three-four percent tax hike, going to put the money in his mattress instead of taking home $4.6 million.

    Maybe worse, he’ll shoot himself because he now lives in a socialist state.

    Bob Griendling