Re: Wal-Mart and Wages?

From: Johnny 5 (johnny5_at_yahoo.com)
Date: 07/25/04 

Date: Sun, 25 Jul 2004 17:50:34 GMT

"wilfred" <wilfred@europe.com> wrote in
news:cdt2pc$ec2$1@news5.svr.pol.co.uk:

>> You answered my question with nothing but questions. Please
>> answer it now: "Economics without ethics is a recipe for
>> kleptocracy. Is *that* your agenda?"
>
> Economics without ethics should be a reasonable tool for any form of
> government. There's nothing to link economic theory with kleptocracy,
> any more than it links to fascism, communism, democracy, etc, with
> the possible exception of nihilism.
>
> You're the one raging against the straw-man. I'm not a
> 'neo-classicalist' insofar as I'd characterise myself. But I am an
> economist, and we have a way of doing things that is, in its ideal
> form, apolitical.

http://www.mises.org/fullstory.asp?control=1565

A Screed on Need and Greed
By Gary Galles

[Posted July 22, 2004]

For two years, we have been innudated with denunciations of "corporate
greed" that has supposedly created scandal and led to prosecutions of
CEOs. The greed of the fatcats is nicely contrasted with the "need" of
the middle class and the poor. And so with these two little words we
recreate a Marxian-style drama of class conflict based on human
motivation.

These two words should be treated with care. Not only do they lack clear
meanings, but they have been systematically abused to trigger the use of
government power to coerce others. As Joseph Sobran put it, "'Need' now
means wanting someone else's money. 'Greed' means wanting to keep your
own. And 'Compassion' is when a politician arranges the transfer."

The problem with using need in any analytical sense is that it assumes
away an essential aspect of economics—the fact that in a world of
scarcity, choice is unavoidable. Such choices also include tradeoffs
among various "needs." Therefore, calling something a need adds nothing
but confusion to the analysis.

The word need diverts attention from the actual choices faced. It also
implies that since people ought to have what they need, someone else must
therefore have the responsibility to pay for such things if they cannot
or will not. Need carries this implication even more strongly than
"right," since that calls attention to the fact that when government
gives one what they assert a right to, it must violate the rights of
those forced to bear the burden.

Economists must also insist on the term self-interest rather than greed
or selfishness. After all, greed is in the eye of the beholder and there
are many motives for acquiring command over resources that are not greedy
or selfish, but do advance purposes people care about. For example, when
Mother Teresa used her Nobel Prize money to build a leprosarium, she was
not acting out of greed, but was acting in her self-interest. And
everyone's behavior reveals similar concerns that extend well beyond
their narrow, selfish interests. Further, in terms of social cooperation,
whether people are greedy is largely irrelevant—offering someone command
over more resources can induce voluntarily cooperation, regardless of the
purposes those resources will be put to.

The misuse of need and greed creates conflict whenever some people "who
can afford it" do not volunteer to finance someone else's need, as seen
by that person or a third party who wants to help them with other
people's money. Then they are accused of heartlessly putting their greed
before others' need.

Unfortunately, that accusation includes a glaring inconsistency. Such
critics are equally subject to their criticism of doing less than they
could for the problem at hand. In effect, they say "I could do more than
I now do for this cause, but choose not to (i.e., I do enough, in my own
eyes); you, however, are to be forced to do more."

The real questions about social and political affairs concern not
motivations but institutions. The case for a market economy, writes
Mises, rests on the logic of human action, which "is independent of the
motives that cause it and of the goals toward which it strives in the
individual case. It makes no difference whether action springs from
altruistic or from egoistic motives, from a noble or from a base
disposition; whether it is directed toward the attainment of
materialistic or idealistic ends; whether it arises from exhaustive and
painstaking deliberation or follows fleeting impulses and passions."
(Epistemological Problems)

Even if someone is greedy, regardless of how morally objectionable
someone else considers it, that greed is turned to socially useful ends
by reliance on voluntary arrangements. And no other way of arranging our
relationships has that property. Whenever coercion is allowed, the
"insurance" each has that others require his consent is taken away, and
greed is turned to other people's harm. That is why property rights,
which limit people to voluntary arrangements, are best understood not as
helping greedy people, but as the defense of what people have
legitimately acquired from the greed of others who would like to take it
from them.

Since other than through theft, government transfer schemes are the most
common means of turning the greed of some into harm for others, a better
understanding of greed and need comes from Thomas Paine's warning:
"Beware the greedy hand of government, thrusting itself into every corner
and crevice of industry." And animating that greedy hand are those who
want to advance their purposes with other people's resources. Further,
judging from what such efforts actually accomplish, talking about needs
is just the rhetorical garnish necessary to sell morally indefensible
political coercion to those who choose not to think too carefully about
the real issues involved.

Coercion cannot eliminate either need or greed. It only puts more power,
particularly the power to harm others, in the hands of those centuries of
experience have revealed are no less likely to be greedy. The only thing
that can ultimately help individuals meet their "needs," without
infringing on others' ability to meet their own, is the opposite—freeing
them from the power others have to dictate to them. Only that takes away
the mechanism by which the greed of the politically powerful can harm
those they claim to serve.
  

-- 
The only function of economic forecasting is to make astrology look 
respectable. -- John Kenneth Galbraith

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