There has been much discussion in recent days of how the financial system has been brought down by the greed of bankers, and how in the future we must not allow greed to flourish. There are those that want to argue, with Gordon Gecko, that greed is good. I am not one of them. But I do want to urge the following. It is true that in a market economy we need some basic underpinning ethical framework for the market to function well. Specifically, we require a general commitment, amongst market participants, to truthfulness, promise-keeping, law-abiding, and perhaps also some vague desire that agreements should be to mutual benefit rather than the harm of one party. But that is pretty much it, and that is one of the great unsung strengths of a market economy - namely that it works with the grain of human imperfection and diverse motivations and turns all to the common good.
Markets don't deny that people are greedy, impatient, selfish, covetous and avaricious. But they do not depend for their success upon the virtue of economic agents. They don't require that we all adhere to the same religion, that we all have the same political beliefs, that our interpretation of history or science is the same, that our goals for ourselves and society are similar. Markets are celebrators of diversity.
Markets don't "fail" (if they fail at all) because of immorality. Greed cannot bring down a market system - unless by "greed" you mean to allege illegality, promise-breaking, an attempt to defraud those trading with you, or some other violation of the required market virtues.
That so many people, of many political persuasions, are rushing to say that "greed" is something to do with our current plight shows how far we have already raced from the tenets of market economies. But be careful! For in the grand collectivist utopia you hope for, in which commerce only flourishes if people are virtuous, it will suddenly become very important - central to collective economic success - that we are all good and all similar. Toleration of differences in ethical outlook, in religion, in attitude to history, in personal motivations and goals - these things must pass in such a system. I hope you enjoy the world you seek to create...
