Moderating selfishness and greed, and using them for good
While some say free markets promote selfishness and greed, we think another perspective on this question is helpful. Because of the way free markets work, they also exercise a moderating force on greed, if not in everyone, at least in many successful people. (We discuss the difference between greed, which is wrong, and ordinary self-interest, which is often morally right, in a later section: see 208-9.)
Wherever a free-market system (under the rule of law) is allowed to function, life, health, liberty, and prosperity are all improved because countless individuals seem to be able to take an idea, act on it, and begin to produce something (perhaps by starting a small business). The ideas that are most successful are those that best meet the needs of others. Therefore, successful business people are often those who, over the course of a lifetime, have become habitually accustomed to recognizing and meeting the needs and desires of others.
Short-sighted selfishness, in fact, makes it impossible for a business to flourish. In order to develop a successful business, individuals must forgo present spending on themselves by saving, by exercising self-control, and by investing wisely. If there is no saving and no capital formation, the business does not grow.
We do not pretend that free markets eliminate human selfishness. But a free-market system can channel selfishness into work and investment activities that actually bring good to other people. Thus, someone’s initial short-sighted selfishness can be modified over time to long-term enlightened self-interest, and thus it is turned to beneficial ends for society. As for those who are not greedy and selfish, but simply want to work and invest because of healthy, normal self-interest (not greed) and a proper desire to provide for their families, the free market also channels their work in a productive direction.
Finally, even for those people who do not give a moment’s thought to earning money and whose sole purpose is just to serve others through new, useful inventions (such as smart phone apps), the free market often provides a financial reward that frees up more of their time and enables them to go on inventing and creating.
Again, we repeat that free markets will not rid the world of selfishness, greed, or other defects of human nature. But the actual working of a free-market system moderates and directs those tendencies in a socially beneficial direction more than any other economic system.