Greed is Good – An Update

We can begin with one of two definitions of greed — the first from the legendary Gordon Gekko and his pronouncement in Wall Street.

Or we can go with this definition used by the study’s researchers.

“Greed -the desire to acquire more and the dissatisfaction with never having enough”

The study comes from our window into the thoughts of politicians and journalists, Twitter. The researchers used the roughly 860,000 Tweets of 140 US Senators between 2013 and 2021. They used that definition of greed and considered some 1000 tweets containing the word “money” to identify words and phrases that might be associated with greed and create a “greed dictionary.” Those words were, in turn, applied to all of the public Tweets of our US Senators.

When the digital dust had settled, they had measures of how often a given Senator would Tweet about greed, obviously of the OTHER party. They also measured how a given Senator’s greed tweets compared to their peers.

• As you might anticipate, despite Gordon Gekko’s pronouncement, Senators did not characterize greed as good, instead surrounding it with words conveying negative emotions and feelings. As the researchers write, “senators on both sides of the aisle tend to portray greed as a destructive force in society when they tweet about it.”
• As expected, Tweets involving greed provoked more “likes” and retweets. This was true when considering solely the Tweets of a given Senator (Tweet level) and when considering the Tweets by all Senators (Senate Level)
• Tweets of greed performed much like others involving negative emotions, outgroups, and moral outrage. As the graph shows, greed drew significant attention for our Senators.
• One last factoid, greed resulted in more “likes” and retweets when the source was a Democratic Senator. Perhaps Mr. Gekko’s admonition was more acceptable to Republican partisans.

“Private greed can lead to public good. The sensible goal for securities regulation is to channel selfish behavior, not thwart it.”

- NY Times Editorial

So wrote the NY Times after the 1988 economic meltdown due to derivatives. Samuel Bowles wrote in 2016 that greed had been rehabilitated since medieval times. Then, greed, or avarice, was one of the mortal sins. Niccolò Machiavelli, a keen observer of social and political behavior, opined that

“all men are wicked [and] . . . never act well except through necessity . . . It is said that hunger and poverty make them industrious, laws make them good.”

With the rise of commerce, Adam Smith espoused a different view. While Wealth of Nations’ invisible hand is perhaps his best-known idea, he tempered the self-interests of individuals with a more compassionate, moral view of the community, noting

“By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”

In the words of Samuel Bowles, the “economic alchemists” seized upon this idea to describe homo economicus, the mythical man driven solely by economic interests – with side benefits to society. A competitive marketplace, free and open, with “defined property rights,” was the sign of good governance. “In the economy, prices would do the work of morals.”

But this version of homo economicus is flawed. Competition is balanced by reciprocity and more ethical stances – the economics of “Dollar stores” may not be as productive to the creators as the consumers. Moreover, “Smith’s invisible hand has always needed the helping hand of both public policy and personal morality.” President Biden’s decision for the FDIC to cover all the savings of SVB and Signature is public policy helping the invisible hand.

“The greatest challenges now facing the world—including controlling the spread of epidemics and managing climate change and governing the knowledge-based economy–arise from global social interactions that cannot adequately be governed by channeling entirely self-interested citizens to do the right thing by means of incentives and sanctions, whether provided by private contract or by  government fiat.” [Emphasis added]

Greed’s rehabilitation has never been complete. The views of Machiavelli and Smith continue to reverberate and inform the public square. Self-interests, wrapped in protecting the physically or fiscally vulnerable, remain a contested part of our COVID pandemic response discussion. As this study demonstrates, US Senators, attuned to their supporters, know that greed, a variation of self-interest, garners attention and votes when calling out the opposition party. Are their tweets in the self-interest of themselves, their party, or the national good?  

Source: Greed communication predicts the approval and reach of US senators’ tweets PNAS DOI: 10.1073/pnas.2218680120

How the Deadly Sin of Greed Was Rehabilitated as Self Interest Evonomics.com