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The Greed Cop-Out

Most people who accuse others of greed do not provide evidence.

by James Leroy Wilson
October 18, 2011

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The Greed Cop-Out

The most over-used word in discussions of economics and society is "greed." The first one who invokes it in a debate essentially loses the debate, because he reveals that he doesn't really know enough about the issue to pinpoint the real problem, yet wants to put himself in a position of moral superiority. To accuse people of "greed" is to avoid the responsibility of understanding the subject and making a rational argument. It's a cop-out.

In any given instance, it's hard to tell whether a person is being greedy, or merely prudent. He may even be acting responsibly on behalf of others. It is most charitable to refrain from assuming "greed," and yet that often seems to happen.

Let's take the case of "corporate greed." There may be instances of cronyism within corporate boards of directors and CEO's, and compensation may seem excessive to outsiders. Nevertheless, if the corporations on which they serve are bringing good returns for shareholders (including middle-class 401k holders), then aren't they doing what they're supposed to do? Is it "greed" to do your job?

Most obnoxious of all is the accusation of "greed" in sports.

Even when greed seems to be the motivation, it may not really be the case. Let's assume a Major League owner offers to pay a star baseball player $25 million per year for four years, whereas the player demands $30 million. One may think, "How many millions does the player need? Isn't he being greedy?

First, let's remember that the two sides are making their first offer in a negotiation. Each side is expressing their preference. How is it greed for the player to want to be paid more for longer? Wouldn't you want the same? And why should the owner pay more than he has to? Would you?

If they close the deal at, say, 5 years at $28 million per year, then the player gains $40 million over the owner's original offer. He didn't get everything he asked for, but a lot more than if he never asked at all. What he ultimately gets paid is probably the most accurate assessment of his actual market value.

One may call it "greed" if the player uses the additional money to build tennis courts and bowling alleys at his third home; does anyone really need all that? It is ironic, however, that many of the people who whine about such conspicuous consumption the loudest are the very people who believe that spending, not savings, drives the economy and creates real wealth. In this case, according to their own logic, this rich baseball player is performing a public service by providing more construction jobs.

And what if the player doesn't spend it? What if he wants the extra money for the specific reason of giving it to charity?

What if he wants to get into venture capital, and ultimately become wealthy enough to own a baseball team himself? Is there anything wrong with that? If it is, then "greed" must be synonymous with "ambition."

By the same token, owners are often called greedy, especially when there are disputes with player unions. And yet, they have a variety of concerns - stadiums, tv deals, non-player employees - that force them to think about the long-term interest of their teams and their league. It is not self-evident that they are driven by "greed" if they think players should be paid a little less.

Silliest of all is the concept of "greed" in college athletics. Yes, there are a lot of flaws in the system. And yet, most of the member colleges are public or otherwise non-profit organizations, and they have the long-term interests of the university and its athletic programs to think about. When one college leaves one athletic conference to join another, wealthier conference, are the President and Athletic Director getting substantial raises?

The system may be driven solely by financial considerations, and that could be a problem in an academic environment. But the people making decisions are NOT doing so to enhance their own wealth. Rather, they are working on behalf of their employers, the universities themselves.

If "greed" is the problem in sports, then tell me who, exactly, is being greedy? Name the people, and provide evidence.

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