Greed Is Not Good (Part 3)

In the final segment of this three-part post, we will consider benevolence, which is the driving force behind Adam Smith’s “optimal” economy, and then look at the practical necessity of restrained competition, since, as discussed in the previous segment, unrestrained competition tends to decompose on its own.

Benevolence

In “The Sympathetic Organization,” Kirk Hart points out that “human nature [has] not one, but two, primordial aspects: the need to love self (self-love) and the need to love others (benevolence).”¹ A major problem with corporate capitalism, as we’ve already discussed, is that it has enthroned self-love and abandoned benevolence (or sympathy). “The fundamental question of management theory is ‘What links individuals together in cooperative endeavor? The answer, according to the contemporary management orthodoxy, is self-interest—the raw egoism of Hobbes and Mandeville, refurbished in chic, modern, linguistic garb. . . . All organizational behavior is summarized in the inelegant phrase, ‘What’s in it for me?’”²

I’ve already mentioned the striking juxtaposition of the two news stories that unfolded together in September 2008—the Wall Street meltdown and Paul Newman’s death. Another contrasting pair of stories that aired on NBC’s Nightly News on March 16, 2009, perfectly illustrate what Kirk Hart is trying to say. The first story involved government beneficiary AIG, which had received over $170 billion in government bailout money but still handed out $165 million in executive bonuses. This story comes from the heartland of greed and excess, and I could waste a lot of words railing against the selfishness and absolutely unthinkable narcissism of the culture in our out-of-control financial sector, but a story that aired on the same news program is much more effective at painting the AIG story in the correct light.

Joe Works, owner of a trailer hitch factory in Humboldt, Kansas, and employer of 180 people, had lost about half his business to the economic downturn. But he couldn’t bring himself to lay anyone off. His employees were his friends. So Works paid his people full wages to do work around the community: fixing up a playground, pruning trees, repairing a church roof, refurbishing a baseball diamond, painting houses, giving back to his small community. This labor accounted for about 10 percent of his losses, but money wasn’t the issue. “Because I’ve been blessed by a business that’s been successful and have made some money,” said Works, “I don’t want to hang onto that with a greedy attitude. I want to share.”³ This is a perfect example of the benevolence Hart is pointing to. It is there, all around us in the small businesses and local companies we often refer to as Main Street. And it is virtually if not completely absent on Wall Street and in the executive offices of the multinational corporations.

Hart insists that this organizational philosophy of self-love that dominates corporate capitalism has created a society that alienates individuals not only from each other but from themselves and from their work. “Alienation results when an individual is separated from something essential to the development of his or her full human potential. It is not, then, just a minor psychological dyspepsia, but rather the spiritual sickness that comes with the ruination of one’s life possibilities. Our modern age experiences it through the soul-entanglements of modern organizational life.”⁴ In a later post, I’ll explore this concept in great detail, but suffice it to say here that organizations dehumanize people by treating them as functions, as commodities, as human resources, linking them to each other “in artificial relationships defined solely by the organizational mission.”⁵ Work becomes what Hart calls an “instrumental activity valuable only for what it contributes to organizational goals. It has no intrinsic meaning.”⁶ This is the value system that prevails in most large corporations, particularly those tied to the myopic, money-centered culture of Wall Street. It stands in stark contrast to the culture developed by Joe Works and others who comprehend and practice benevolence.

Part of what I am trying to establish with Kirk Hart’s argument about the connection between self-interest and alienation is that self-interest does not just create an unsustainable economy. It also exacts immense individual human costs. It creates a society in which community is ravaged in order to create malleable, functional human resources. This is a far cry from what Adam Smith was trying to implant in early capitalist society with his moral theory of economic benevolence.

Restrained Competition

So, the first step we must take if we wish to “take back” our economy, is to return to Adam Smith’s original ideal: economic transactions governed by sympathy. This is a philosophical shift that must occur one individual and one business at a time. We cannot legislate it, although, as I will discuss in a later post, we can pass laws that will make sympathetic economic relationships much more probable. Some cynics, of course, will toss this whole argument aside as naïve idealism, but doing so will bring us only more of what we already have: a dysfunctional and broken and ultimately suicidal economy.

If we really do want change, if we really do want an equitable and healthy economy, we must first change our basic assumptions and beliefs. This will require a tremendous educational effort not only among the business community but also among consumers. And only when we complete this shift in thinking will we be in a position to change systems and structures.

One significant reason for both restructuring the parameters of capital accumulation and educating individuals in the theories of benevolence is actually to curb the competitive nature of our economy. The most compelling traditional argument for a highly competitive economy is that competition is responsible for all the things that make our lives comfortable, secure, and healthy. Fortunately, the fruits of corporate capitalism are finally proving this argument to be sheer myth. Our competitive economy cannot endlessly produce the fruits it promises except by stealing from future generations both their wealth and the healthy environment they deserve.

While I admit that competition does spur technological growth (which we generally mislabel progress) and that the by-products of corporate warfare have benefited society in certain ways, I have come to espouse two other beliefs: first, that competition has also brought us the waste and inefficiency of planned obsolescence, the curse of a decimated environment, artificial growth that shows itself to be nothing more than a financial Ponzi scheme, and an economy based on adversarial relationships rather than cooperative ones; and second, that competition is not the only impetus for improving the human condition.

Indeed, I submit that a noncompetitive environment would actually liberate people to be more innovative, more creative, and more directly motivated to make life better for one another. In short, if we removed the reward for self-interested innovation, I believe more people would be inclined to share Ben Franklin’s attitude and motives for bettering the lives of their neighbors.

To avoid or overcome the perpetual problems caused by miscalculations of self-interest, Benjamin Franklin chose the course of modesty and disinterestedness as a means for progressing. True, Franklin wanted to succeed in his business and he worked hard to do so. . . . But in all his endeavors, his objectives were to do good and to be useful as opposed to getting rich or gathering honors. His emphasis was on contributing rather than obtaining; on giving rather than receiving. Strange as it may seem, it was Franklin’s “indifference to the things of this world” that unleashed his full creative powers. . . .

Benjamin Franklin was one of those rare individuals who had it within his power to become immensely wealthy, but who declined the opportunity to do so. To his mother he had written that he would rather have it said of him that he had lived usefully than that he had died rich. When his business attained a level to assure him of financial independence he turned his interests to science and government. Believing “that, as we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously,” he made no effort to patent or profit from any of his inventions. The Franklin stove alone could have made him a fortune, but he chose not to patent it, and printed the plans for it in his own newspaper.⁷

If people were freed from the desperate craving to secure their future and the perceived necessity of acquiring more than they actually need, they might be surprisingly inclined, even eager, to focus their energies on assisting their fellow men and women—and find great happiness in doing so. In such a society, “What’s in it for me?” becomes obsolete thinking.

We must finally come to grips with the fact that Ivan Boesky was wrong. Greed is not good. Benjamin Franklin was right. So was Paul Newman. And Joe Works. And Adam Smith.

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1. David K. Hart, “The Sympathetic Organization,” in Papers on the Ethics of Administration, N. Dale Wright ed. (Provo, Utah: Brigham Young University, 1988), 68.

2. Hart, “Sympathetic Organization,” 67–68.

3. NBC Nightly News, March 16, 2009; story viewable online at http://www.msnbc.msn.com/id/3032619/#29728257.

4. Hart, “Sympathetic Organization,” 71.

5. Hart, “Sympathetic Organization,” 77.

6. Hart, “Sympathetic Organization,” 87.

7. Benjamin Franklin, Benjamin Franklin’s The Art of Virtue, ed. George L. Rogers (Eden Prairie, Minn.: Acorn Publishing, 1990), 115, 158–59.