Is greed an inherent problem for free enterprise?

[Abu]

Very clear, tafan (#80)

Robert Sock #78
How do you know my views on free enterprise when you never asked?

The hide and seek is appalling clear! The intention to twist free enterprise and touting communism is evident.

THREAD: Bishops: The rising economic inequality of our society is mounting
Examples of his confusion and inability to understand the reality of the free enterprise developed by Catholics and praised by the Popes.

Robert Sock #18
To say that the inequality is due to God given talents, and that the disparity between the rich and the poor is therefor earned and justifiable, is a lie and an abomination!

Robert Sock #21
[44] "And all they that believed, were together, and had all things common. [45] Their possessions and goods they sold, and divided them to all, according as every one had need --."Acts 2:44-45This is communism; people worshiping Christ in common, with all their needs satisfied.
Do I think that communism can work today? Yes! But I think of a two-tier system; one tier that is guided by capitalistic principles, which would include the the middle and upper-classes, and the other tier where people work in common to provide their basic needs, and where ‘luxuries’ are largely absent.

Robert Sock #37
What are these God-given talents? The ability to compete? Greed and the abnormal desire for power and prestige?

Robert Sock #91
And what is the official economy of the Vatican? It seems to be far more ‘communistic’ than capitalistic.
If ‘communism’ is condemned by the Church, then why it practiced in monasteries?

Robert Sock #108
And mainstream communism cannot be sound economics?

Robert Sock #118
Doesn’t capitalism also fail miserably in not recognizing people’s well-being?

 

[Michael57]

Try telling that to the 1.2 billion people living on $1.25 USD or less worldwide. True, free enterprise does not exist in all the countries with extreme poverty, but the bulk of my argument stands.

There is a man that travels to an impoverished province of a third world country once or twice a year, and he can’t do much to change everyone there.

But he has helped a few families start their own piggeries and change their farming practices. He mentors the farmer, and his wife also helps mentor the farmer’s wife and they encourage the children in their studies.

One of the biggest changes was mindset. Waiting for the market price to rise and then sell as opposed to immediate gratification.

It’s been a few years now and he’s had success with at least one family (husband, wife, and four children) raise their standard of living.

It’s not 1.2 billion people, but it’s at least six.

Perhaps it will catch on?

 

[Michael57]

How good it is to be reminded of what Pope Pius XI had to say about this subject…

DIVINI REDEMPTORIS

ENCYCLICAL OF POPE PIUS XI ON ATHEISTIC COMMUNISM MARCH 19, 1937

To the Patriarchs, Primates, Archbishops, Bishops, and other Ordinaries in Peace and Communion with the Apostolic See.

Venerable Brethren, Health and Apostolic Benediction.

The promise of a Redeemer brightens the first page of the history of mankind, and the confident hope aroused by this promise softened the keen regret for a paradise which had been lost. It was this hope that accompanied the human race on its weary journey, until in the fullness of time the expected Savior came to begin a new universal civilization, the Christian civilization, far superior even to that which up to this time had been laboriously achieved by certain more privileged nations.

1. Nevertheless, the struggle between good and evil remained in the world as a sad legacy of the original fall. Nor has the ancient tempter ever ceased to deceive mankind with false promises. It is on this account that one convulsion following upon another has marked the passage of the centuries, down to the revolution of our own days. This modern revolution, it may be said, has actually broken out or threatens everywhere, and it exceeds in amplitude and violence anything yet experienced in the preceding persecutions launched against the Church. Entire peoples find themselves in danger of falling back into a barbarism worse than that which oppressed the greater part of the world at the coming of the Redeemer.

1. This all too imminent danger, Venerable Brethren, as you have already surmised, is bolshevistic and atheistic Communism, which aims at upsetting the social order and at undermining the very foundations of Christian civilization .

1. In the face of such a threat,** the Catholic Church could not and does not remain silent. This Apostolic See, above all, has not refrained from raising its voice, for it knows that its proper and social mission is to defend truth, justice and all those eternal values which Communism ignores or attacks. Ever since the days when groups of “intellectuals” were formed in an arrogant attempt to free civilization from the bonds of morality and religion, Our Predecessors overtly and explicitly drew the attention of the world to the consequences of the dechristianization of human society**. With reference to Communism, Our Venerable Predecessor, Pius IX, of holy memory, as early as 1846 pronounced a solemn condemnation, which he confirmed in the words of the Syllabus directed against “that infamous doctrine of so-called Communism which is absolutely contrary to the natural law itself, and if once adopted would utterly destroy the rights, property and possessions of all men, and even society itself.”[1] Later on, another of Our predecessors, the immortal Leo XIII, in his Encyclical Quod Apostolici Muneris, defined Communism as “the fatal plague which insinuates itself into the very marrow of human society only to bring about its ruin.”[2] With clear intuition he pointed out that the atheistic movements existing among the masses of the Machine Age had their origin in that school of philosophy which for centuries had sought to divorce science from the life of the Faith and of the Church.

LINK

 

[St_Francis]

IMO, greed is prevalent when NO amount of money is ever good enough, for a company it would be there if they are NEVER content with any yearly total gross amount, and alwsy want more and more. I dont care who you are, everyone has an amount they would be content with, and to want more than that…well, that is greed.

When no amount of money is ever enough and they always strive for more, that person/company is guilty of being greedy. I believe greed plays a HUGE part in daily life for many people, but probably more so in the US, where greed is seen as good to some!!

With this and some other things that seem to be mainstream in todays world(in the US), I seriously wonder whether God considers the US to be in the same category as Sodom and Gomorrah!! Just look at some of things we hold true in this country!!

I would say greed starts a little earlier than when no amount of money is enough. I’d suggest that greed starts when someone is willing to commit an immoral or (justly) illegal act to get more money.

OTOH, I would say that far more than the free enterprise system, the fact that this (US) society rates success by how much money one has contributes to greed. What can one say about people who have billions of dollars and who continue to maximize their money? They can’t even *want *that much stuff! Money becomes like points, “toys” for the rich as in Be who dies with the most toys wins."

 

[Ridgerunner]

There is a man that travels to an impoverished province of a third world country once or twice a year, and he can’t do much to change everyone there.

But he has helped a few families start their own piggeries and change their farming practices. He mentors the farmer, and his wife also helps mentor the farmer’s wife and they encourage the children in their studies.

One of the biggest changes was mindset. Waiting for the market price to rise and then sell as opposed to immediate gratification.

It’s been a few years now and he’s had success with at least one family (husband, wife, and four children) raise their standard of living.

It’s not 1.2 billion people, but it’s at least six.

Perhaps it will catch on?

The following is almost off-topic, but not quite.

Because I do raise cattle, I pay attention to certain food industry publications and websites. Of particular interest yesterday was an article outlining how (mega-giant) Tyson Foods is sending instructors in animal husbandry to third world countries, to teach small farmers how to increase the productivity and health of their food animals with the resources that are available to them.

So even the giants aren’t all entirely self-serving. Yes, they do get “paid” in terms of praise in articles, but it really doesn’t improve their bottom lines or executive salaries, either one.

 

[mikekle]

I would say greed starts a little earlier than when no amount of money is enough. I’d suggest that greed starts when someone is willing to commit an immoral or (justly) illegal act to get more money.

OTOH, I would say that far more than the free enterprise system, the fact that this (US) society rates success by how much money one has contributes to greed. What can one say about people who have billions of dollars and who continue to maximize their money? They can’t even *want *that much stuff! Money becomes like points, “toys” for the rich as in Be who dies with the most toys wins."

Good point!

Another thing is if you look at nearly all US companies, and what the CEOs are paid, it is absurd, compared to what the low level employees are paid.

The amount of money the CEOs earn in just one year is more than enough for that person and their entire family to live on, quite comfortably, for the rest of their lives, yet the low level employee barely makes enough to survive on for that particular year!! Something is wrong here!

I laugh whenever I hear these companies talk about how much they respect and love their employees, but it requires the fed govt stepping in and raising the minimum wage in order for these companies to give their employees more money on the hour, so they are basically forced to do this…IMO, this is NOT a company that cares about their employees at all, and if it was legal, they would definitely pay them less.

 

[Ridgerunner]

Good point!

Another thing is if you look at nearly all US companies, and what the CEOs are paid, it is absurd, compared to what the low level employees are paid.

The amount of money the CEOs earn in just one year is more than enough for that person and their entire family to live on, quite comfortably, for the rest of their lives, yet the low level employee barely makes enough to survive on for that particular year!! Something is wrong here!

I laugh whenever I hear these companies talk about how much they respect and love their employees, but it requires the fed govt stepping in and raising the minimum wage in order for these companies to give their employees more money on the hour, so they are basically forced to do this…IMO, this is NOT a company that cares about their employees at all, and if it was legal, they would definitely pay them less.

How do we know a particular CEO is not, to his company, worth the money? If a company’s board believes a certain executive is likely to do a great deal for the company, and if the executive demands “$X” to work for that company, is it your position that the company should seek out some other person for the job, even if the company does not feel that other person would do what the first one might do?

I’m not saying those highly paid CEOs really confer that much benefit to their companies, but how do any of us know any particular one of them doesn’t?

What was Steve Jobs really worth to Apple? Do we know?

 

[SamH]

Good point!

Another thing is if you look at nearly all US companies, and what the CEOs are paid, it is absurd, compared to what the low level employees are paid.

The amount of money the CEOs earn in just one year is more than enough for that person and their entire family to live on, quite comfortably, for the rest of their lives, yet the low level employee barely makes enough to survive on for that particular year!! Something is wrong here!

What makes you think paying them less will help the poor? Any study showing this is the case?

Too many people think that because someone else has money it somehow relates them having no money. When you ask how the reply is usually insults.

 

[stinkcat_14]

How do we know a particular CEO is not, to his company, worth the money?

That is the $64 question in economics, because part of a company’s return is due to prudent decision making and part of it can be due to the market changing in a way that is favorable to the company. For example, if the price of oil goes up, Exxon will have higher profits and some of those profits will have nothing to do with CEO behavior.

If a company’s board believes a certain executive is likely to do a great deal for the company, and if the executive demands “$X” to work for that company, is it your position that the company should seek out some other person for the job, even if the company does not feel that other person would do what the first one might do?

In economics we call this problem the principal agent problem which is unique when there is a separation of ownership from control. If you hire a manager to run a business which you 100% own then that decision is not very interesting since if you pay too much you will bear the cost of that in the form of lower profits. However, in a large corporation if a CEO is overpaid the cost is spread among thousands of shareholders. Theoretically the board should represent the shareholders interests, but most board members are recommended by management and so there is a closer relationship between the board and management than is ideal. Warren Buffet tells the story of being on a board compensation and arguing that a CEO should not get a big raise because of subpar performance. The result was that he was never asked to serve on a compensation committee again.

en.wikipedia.org/wiki/Principal%E2%80%93agent_problem

I’m not saying those highly paid CEOs really confer that much benefit to their companies, but how do any of us know any particular one of them doesn’t?

What was Steve Jobs really worth to Apple? Do we know?

Actually, one thing that disclosure requirements might do is increase compensation across the board. If the CEO knows how much his peers are making it makes it easier to ask for more. So it is possible that everyone is overpaid, although I am not sure how one determines that.

 

[davidv]

No.

Greed is inherent in the concupiscience of the fallen human being. Greed exists in every form of trading system.

 

[tafan]

I would say greed starts a little earlier than when no amount of money is enough. I’d suggest that greed starts when someone is willing to commit an immoral or (justly) illegal act to get more money.

Close, but not quite. Greed is, like all of the capital sins, is a vice:

1865 Vices can be classified according to the virtues they oppose, or also be linked to the capital sins which Christian experience has distinguished, following St. John Cassian and St. Gregory the Great. They are called “capital” because they engender other sins, other vices.138 They are pride, avarice, envy, wrath, lust, gluttony, and sloth or acedia.

Think of it like lust: it is in the heart and it causes of more explicit sins, eg lust is the capital sin which leads to the grave sin of fornication or adultery.

So greed started before someone committed an immoral act to get more money, likely it started even before someone was willing to commit an immoral act to get more money.

Now, the problem with this thread is that it is the question itself. Certainly, just as things in culture can lead to more lust, things in a given culture can lead to more greed. The problem with this thread is that it is treating “free-enterprise” as a economic system. That is a flaw (although a very common one). Captialism, socialism, communism: those are economic systems. Free-enterprise is simply the allowance of letting people choose how they are going to make a living. It is not a economic system: it is what every economic system should allow. And if it doesn’t allow that, it is likely a immoral economic system as it inhibits personal freedom.

So the question is really saying: can a basic human freedom lead to a capital sin?

 

[Robert_Sock]

As to the second question, your views are fairly well established. You did write the following:

This does not necessarily mean that I’m against free enterprise. Indeed, I tend to believe that extreme poverty can be eliminated with it in tact (but with a strong government). And as the previous statement implies, I also believe that free enterprise can exist with a relatively strong government.

 

[Abu]

tafan #92
The problem with this thread is that it is treating “free-enterprise” as a economic system. That is a flaw (although a very common one). Captialism, socialism, communism: those are economic systems. Free-enterprise is simply the allowance of letting people choose how they are going to make a living. It is not a economic system: it is what every economic system should allow.

The flaw here is in not recognising that free enterprise = capitalism. Obviously neither socialism nor communism have the essentials of capitalism (free enterprise). That Karl Marx prostituted the term “capitalism” has spawned the confusion and dislike which found expression by the acknowledged St John Paul II in *Centesimus Annus *42, 1991:
‘If by “capitalism” is meant **an economic system **which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’ [My emphasis]. A great summation.

Since here capitalism = free economy, and reaffirmed by Bl John Paul II is the ‘fundamental human “right to freedom of economic initiative,” ’ Sollicitudo Rei Socialis (On Human Concerns) Encyclical, 1987, #42], and initiative = enterprise, it is clear what the pope means.

On Caritas in Veritate, Fr John De Celles points out that Pope Benedict XVI clearly states that “The Church does not have technical solutions to offer” [CV 9]. Also…it does refer repeatedly to the ‘market economy,’ a term of art which Pope John Paul II used to refer to that form of capitalism that is ‘the path to true economic and civil progress.’

1. Free enterprise (Wordweb)
   “An economy that relies chiefly on market forces to allocate goods and resources and to determine prices”
2. Capitalism (Wordweb)
   “An economic system based on private ownership of capital”

 

[tafan]

The flaw here is in not recognising that free enterprise = capitalism. Obviously neither socialism nor communism have the essentials of capitalism (free enterprise). That Karl Marx prostituted the term “capitalism” has spawned the confusion and dislike which found expression by the acknowledged St John Paul II in *Centesimus Annus *42, 1991:
‘If by “capitalism” is meant **an economic system **which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’ [My emphasis]. A great summation.

Since here capitalism = free economy, and reaffirmed by Bl John Paul II is the ‘fundamental human “right to freedom of economic initiative,” ’ Sollicitudo Rei Socialis (On Human Concerns) Encyclical, 1987, #42], and initiative = enterprise, it is clear what the pope means.

On Caritas in Veritate, Fr John De Celles points out that Pope Benedict XVI clearly states that “The Church does not have technical solutions to offer” [CV 9]. Also…it does refer repeatedly to the ‘market economy,’ a term of art which Pope John Paul II used to refer to that form of capitalism that is ‘the path to true economic and civil progress.’

1. Free enterprise (Wordweb)
   “An economy that relies chiefly on market forces to allocate goods and resources and to determine prices”
2. Capitalism (Wordweb)
   “An economic system based on private ownership of capital”

Abu, your selective quoting of section 42 of JP II’s encyclical is deceptive; and even your highlights lead to a misinterpretation of what he wrote. He certainly was not making the point that capitalism is equal to free enterprise. What he was saying is that based on one’s definition of capitalism, it can be a good or bad thing.

That’s the point: these days it is common to equate all forms of capitalism with free enterprise . That would not be accurate. I would suggest a careful analysts of the capitalism that exists today in china and Russia as examples which it is not a free economy.

As Bl. JP II said, the capitalism that works is better labeled a free economy.

 

[tafan]

This does not necessarily mean that I’m against free enterprise. Indeed, I tend to believe that extreme poverty can be eliminated with it in tact (but with a strong government). And as the previous statement implies, I also believe that free enterprise can exist with a relatively strong government.

Robert, if, as you suggested, free enterprise promotes a capital sin, I fail to see how any of us could support it. It would be like saying pornography is good, despite the fact that it promotes lust. So your point of view is confusing, to say the least.

Look at it this way: food and drink do not promote gluttony, even though they are particular means toward which people are often gluttonous.

 

[Abu]

tafan #95
[The Pope] certainly was not making the point that capitalism is equal to free enterprise.

Clearly the Pope is equating the “**economic system **which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector” to his recommended replacement of the term “capitalism” with the term “free economy”. There is the specific recognition of that capitalistic economic system which is based on the glorious structure developed by the Catholic Late Scholastics.

“The first examples of capitalism appeared in the great Catholic monasteries”, about the ninth century. (John Gilchrist, The Church and Economic Activity in the Middle Ages, St Martin’s Press 1969, I; cf. op. cit (Stark) p xii, 55-58).

The fact is that Catholic philosophy and theology, based on reason and faith, enabled the birth of free enterprise. From the great monastic estates in the ninth century, immense increases in agricultural productivity grew from “such significant innovations as the switch to horses, the heavy moldboard plow, and the three-field system” away from subsistence agriculture to specialised crops and products, sold at a profit to initiate a cash economy. “As their incomes continued to mount, this led many monasteries to become banks, lending to the nobility.” The Victory of Reason, Rodney Stark, Random House, 2005, p 58].

Randall Collins has noted that innovation and specialization in the monastic estates was “a version of the developed characteristics of capitalism itself… the dynamism of the medieval economy was primarily that of the Church.” [Randall Collins, *The Sociology of Philosophies: A Global Theory of Intellectual Change, 1998, Cambridge: Harvard University Press, p 47].

“So by no later than the thirteenth century, the leading Christian theologians had fully debated the primary aspects of emerging capitalism – profits, credit, lending and the like…it was the active participation of the great houses in free markets that caused monastic theologians to reconsider the morality of commerce…

“The Church didn’t stand in the way – rather it both justified and took an active role in the Commercial Revolution of the twelfth and thirteenth centuries. Had this not occurred, the West may have ended up much like the nations of Islam.” The Victory of Reason, Rodney Stark, Random House, 2005, p 66-67].

‘But if by “capitalism” is meant **a system **in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.’
[Bl John Paul II *Centesimus Annus #42]. That’s the type of Chinese communist system which is NOT the free enterprise championed by the Popes. That communist system skews the “economic system” away from free enterprise capitalism.

 

[migueltojose]

Because no government has ever been greedy?

Today, wanting someone else’s money is called ‘need,’ wanting to keep your own money is called ‘greed,’ and ‘compassion’ is when politicians arrange the transfer.

Now that there is funny…

Think… Tragedy of the Commons…

Uncertainty… the unknown… leads to fear… fear leads to selfishness… selfishness leads to greed, hoarding…

When our world seemd more idyllic… (think Mayberry… Andy, Barney, Opie, etc…) The future seemed relatively stable, certain, global competition was minimal… then technology with nuclear weapons and satellite communication brought fear and opened our eyes to see things we didn’t know and in retrospect probably didn’t want to see… but you can’t put the pooch back in the whoopie cushion. Too late…

In a previous thread we were discussing why we don’t rally around social causes like we used too… I think because they were new then (Biafra, Bangladesh, Vietnam, civil rights, yada yada yada)… now they’re not as much fun as they used to be… Not to mention we saw causes get hijacked by extremists (feminism led to abortion… kaphung? what?)…

Back to the point, uncertainty and unknowns (lack of knowledge/wisdom) are root causes of greed by instigating fear.

 

[migueltojose]

What about the greed in exploiting workers; such as large corporations having menial assembly work sent to third-world countries where the needy workers are certainly exploited?

That’s not greed. That’s economics. Competition. Supply and demand (of labor and transportation). Compete or go out of business. Should they go out of business?

In this case “greed” is prudent.

(Of course I’m not condoning exploiting workers just acknowleding there are variances in currency and living statndards which lead to this sort of thing on an acceptable level).

What’s the difference then between greed and competitive advantage? Does might make right?

 

[migueltojose]

This does not necessarily mean that I’m against free enterprise. Indeed, I tend to believe that extreme poverty can be eliminated with it in tact (but with a strong government). And as the previous statement implies, I also believe that free enterprise can exist with a relatively strong government.

Governments proliferate. It’s what they do. They grow. They gain power and grow more. It’s a recipe for disaster but they can’t help it. It’s what they do. Instinctively, I don’t trust government… too much… Our Constitution recognized this and built in safegurds to protect against it… but… they are crumbling under the weight of an onerous ever growing government.

 

[mikekle]

Governments proliferate. It’s what they do. They grow. They gain power and grow more. It’s a recipe for disaster but they can’t help it. It’s what they do. Instinctively, I don’t trust government… too much… Our Constitution recognized this and built in safegurds to protect against it… but… they are crumbling under the weight of an onerous ever growing government.

The constitution also says US citizens have a DUTY to prevent such things from happening regarding govt, but in todays worlds, most people that even suggest such a thing are arrested and called domestic terrorists, so no one is willing to stand up and do their constitutional duties anymore. like ive said before, if our founding fathers could see the state of our country, they would be rolling in their graves. Majority of the population is content with just letting the govt do whatever it wants to do