Acton Institute Powerblog

Capitalism is Not Based on Greed

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In a new essay at The American, Jay Richards explains why capitalism isn’t based on greed.

In Acton’s first documentary, The Call of the Entrepreneur, Richards along Rev. Robert Sirico, Sam Gregg, Michael Novak and others touch on this matter in making the moral case for the free economy.

Jonathan Witt


  • Roger McKinney

    It’s ironic that socialists claim capitalism is based on greed. Adam Smith insisted that free markets were the only possbile way to control greed because government is easily captured by greedy people to serve them.

  • mr teachersir

    I think the interesting thing is that Adam Smith never used the term Capitalism…Karl Marx did. Thus there is a distinction. Capitalism is based on greed (which creates the inhuman conditions of the late 1800s), whilst the free-market is not (and thus results in an increase in the standard of living for everyone involved).

    Capitalism is defined by many high-school textbooks as “the use of capital to make a profit”. The free-market is likewise defined as “an economic system in which the economic transactions occur without a controlling agent interfering”. Of course, the vary textbooks we use in schools today are Marxist in slant, but the distinction still holds.

  • Roger McKinney

    mrteachersir: “Capitalism is based on greed (which creates the inhuman conditions of the late 1800s)”

    What inhuman conditions are you talking about? The late 1800’s saw the fastest growth and highest standards of living in history to that time.

    Marx came up with the name capitalism, but he was referring to the system of private property. Marx opposed all private property. Free markets are nothing but the implementation of property rights; you can’t have one without the other.

    As for greed, capitalism didn’t invent it. According to the Bible, greed began with the expulsion of Adam and Eve from the garden. All men are greedy; Socialists are men; All socialists are greedy. Capitalism is no more based on greed than is socialism, although socialist greed takes the form of envy.

  • DavidW

    Mrteachersir, I wonder with what alternative you could come up to forestall greed in a systematic way.
    True, the Mafia is also a free market enterprise (historically with strings to some ‘officials’ though), and those who sold moldy meat in Europe a while ago were entrepreneurs – the typical or the criminal sort?
    Free market provides checks and balances: your competitors will constantly have an eye on you, your customers can dodge your garbish every day.
    But what’s YOUR alternative to greedy entrepreneurs?
    More government?
    ‘Greed and government’ translate into a fixed term: it’s spelled corruption.
    The more government, the more greed of this sort.

  • DavidW

    … another question:
    Capitalism is defined by many high-school textbooks as “the use of capital to make a profit”.
    ‘Profit’ in the textbooks: how is it defined there?
    As the equivalent to the teacher’s salary? …or as a synonym for a robber’s booty?
    If it’s the second: why?

  • Nopig

    The only government control there should be is to protect against greed like enforcing health and safety, pollution control and making sure companies and individuals live up to their contractual duties.

    To equate free market enterprise with greed is a dismissive stereotype that really does not understand the nature of exchange of goods and greed. If I have something and others want to pay for it in a legal and fair way, where is the greed?

    I say socialism breeds greed. I think greedy socialists want an unsustainable standard of living for the services and products they provide, i.e. unionism.
    Socialists are greedy. They want everyone else to pay for everything for them. They want a higher salary for less work. They want their governments to pay for their education and not themselves. They want the government to pay for health care and not themselves. They want everything and not have to pay for it themselves. Isn’t greed expecting more than what you have to offer in return? Isn’t greed the brother of laziness? Isn’t greed stopping your contractual duties and holding up others for the ransom of higher wages and fewer hours?
    Excuse me! If that is not greed. I don’t know what is!

  • Bill

    Obviously this author has not read the Theory of Moral Sentiments and Smith’s writing after the Wealth of Nations. Why do Capitalist have a problem with their greed? because they have no value structure equal to Smith’s sympathetic nature. Nihilism killed values and now they are just economic determinist to justify their greed.