Isn’t Capitalism Based on Greed? [1] Myth no. 5: The Greed Myth (believing that the essence of capitalism is greed) Richards opens this chapter with a discussion on greed. He demonstrates that the Bible is clearly against greed, and cites several authors (capitalist and otherwise) who think that the fundamental principle of capitalism is greed. Featured heavily are Bernard de Mandeville’s The Fable of the Bees [2], Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations [3], and, the writings of Ayn Rand [4]. Richards spends the rest of the chapter defending capitalism against such claims. I think this is best summed up in a list of points. There’s a difference between self-interest and greed. “Every time you take a breath, wash your hands, eat your fiber, take your vitamins, clock in at work, look both ways before crossing the street, crawl into bed, take a shower, pay your bills, go to the doctor, hunt for bargains, read a book, and pray for God’s forgiveness, you’re pursuing your self-interest.” (p. 121) Capitalism doesn’t need greed. (p. 122.) Capitalism channels greed into a socially desirable outcome. “We should want a social order that channels proper self-interest as well as selfishness into socially desirable outcomes.” (p.122) Capitalism doesn’t make people greedy. “[T]here’s no evidence that capitalist countries in general, or Americans in particular, are greedier than average. In fact, the truth is just the opposite.” [International Giving [5]] (p. 123) Entrepreneurs are “the greatest source of wealth creation in capitalism.” (p. 131) “[E]ntrepreneurial capitalism requires a whole host of virtues…unlike gluttons and hedonists, entrepreneurs set aside rather than consume much of their wealth. Unlike misers and cowards, however, they risk rather than hoard what they have saved, providing stability for those employed by their endeavors. Unlike skeptics, they have faith in their neighbors, their partners, their society, their employees…” (p. 130) Richards concludes the chapter by marveling at how well the free market works, and how many of the objects in his office came from entrepreneurs, and proclaims, “Only the most miserly moralizer could look at this mysterious efflorescence of cooperation, competition, and creativity–of entrepreneurial capitalism–and see only the dead hand of greed” (p. 133). [1] http://www.amazon.com/gp/product/0061375616?ie=UTF8&tag=defendingcom-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0061375616 [2] http://www.amazon.com/gp/product/0872203743?ie=UTF8&tag=defendingcom-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0872203743 [3] http://www.amazon.com/gp/product/1153586541?ie=UTF8&tag=defendingcom-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1153586541 [4] http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fentity%2FAyn-Rand%2FB000APYGIW%3Fie%3DUTF8%26ref_%3Dsr_ntt_srch_lnk_1%26qid%3D1284672846%26sr%3D1-1&tag=defendingcom-20&linkCode=ur2&camp=1789&creative=390957 [5] http://www.cafonline.org/Default.aspx?page=12183