Tag Archive for 'return_on_investment'

In making the utilitarian case for most public action – that is, arguing that government should be doing something because it is a “greater good” or “in the public interest” – there is an implicit assertion that government is going to be more organised, objective and long-term oriented than businesses or individuals.

Many calling for a bailout are arguing that capitalists will tend to be “greedy” – and what they mean by this is short-sighted and wantonly destructive in their private pursuit of wealth. They argue on the one hand, that greed is the cause of economic woes, because greedy people are just looking to gratify some immediate short term want. Capitalist greed is seen as uncaring and cruel, but more importantly, as basically irrational.

Spontaneous order: the idea that many different private entities working for private interests could also provide greater public benefits seems strange and almost magical thinking to some. How can anything good come of greed? Won’t selfish people just do whatever they want, acting like a bunch of thieves and conmen to make a quick buck?

The greatest irony of this, is that central planning is conversely argued to be able to rise above petty private greed with – or all things – greed.

The government, it is believed by some, is going to act rationally and long-term. The government is going to profit the taxpayers on net by making wise investments in public goods. Increasing public education programs or welfare, for example, is not merely argued in altruistic terms – but as wise, prudent ways to enrich society and get a good return on investment.

Consider the current economic climate. When businesses fail miserably, and shares are selling for next to nothing, the government is perfectly just to come in and buy those shares. Capitalists, we’re told, are too short-sighted to buy up these bad companies – whereas government has the wisdom and patience to make a profit out of these assets (often, by managing them with government “czars” and expert boards). However, capitalists merge, buy and sell companies all the time. Bad companies fail and good companies assimilate their capital and make it profitable again. If capitalists aren’t buying up certain companies, it is more likely because these shares are viewed as practically worthless for making a profit.

It is unclear how greedy capitalists manage to profit at all. If they are always conning one another, conspiring to thwart working people and only making short-term investments – then why does capitalism thrive? Why does capitalism produce so much wealth and abundance for societies which embrace even marginally free markets? But more importantly, why would a monopolistic government with the same greedy motives, run and ordered by people with these motives, somehow be able to use greed for good?

If greed produces such horrible, destructive results in capitalism, how is it that “socialist” greed can get different results? Why is a CEO, for example, a short-sighted self-indulgent weakling with a lust for power and short-term gratification, while the president of a country is a wise, benevolent pillar of honour and strength, desiring to serve the people and promote the collective good?

If the government is viewed as somehow being able to be profitable when using greed, then why can’t this apply to private entities? If greed is a major cause of economic problems, then how can greed also be the solution?