Unsurprisingly, I agree with Professor Boudreaux who writes:
"Greed" certainly can be unleashed to do harm, but it can also be harnessed to do good. Any compelling explanation of economic problems must take "greed" as a given while identifying the specific incentives provided by prevailing social institutions. If these institutions make serving the needs of others the best path to personal gain, then "greed" is harnessed for human betterment. But if these institutions make predating on others – either through force or fraud – the best path to personal gain, then "greed" will indeed lead people to act destructively. In either case, though, it is the institutions and their accompanying incentives, rather than "greed," that explain economic reality.
In yesterday’s N&O, I argue along similar lines:
Nobel Laureate James Buchanan put it best. He argued that you can’t assume that under certain circumstances (markets) people are greedy and in other circumstances (government) they are angels. In whatever circumstances, people pursue their own interests.
To think otherwise is to go against human nature’s grain. But in their pursuit of self-interest, people will respond to the incentive systems they’re operating within. As Buchanan reminds us,
"Much of the growth of the bureaucratic or regulatory sector of government can best be explained in terms of the competition between political agents for constituency support through the use of promises of discriminatory transfers of wealth."
Or risky loans. Or carbon credits. Or bailouts.