The virtues of greed have been widely promoted by some economists in the 20th century. Allegedly it is Adam Smith who provides this new dignity to greed (Lerner, 1937, ix). Kenneth Arrow and Frank Hahn in the General Equilibrium Analysis (1971), for example, implicitly assume that Adam Smith's self-interest is the greed that promotes economic efficiency (quoted in Evensky, 1993, 203). Walter Williams (1999), a devoted follower of Smith, writes in his column that, "Free markets, private property rights, voluntary exchange, and greed produce preferable outcomes most times and under most conditions." These pronouncements have become part of the cultural tableau. The noted investment banker Ivan Boesky gave a commencement address to MBAs declaring, "You can be greedy and still feel good about yourself" (Andrews, 1966). In a movie loosely based on his story, the character Gordon Gekko in Wall Street (1987) opines that, "[G]reed is good.... Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit." In other words, greed is said to promote survival in Smith's competitive environment.
Copyright © 2005, Association of Private Enterprise Education. This article first appeared in Journal of Private Enterprise 21:1 (2005), 46-58.
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Wight, Jonathan B. "Adam Smith and Greed." Journal of Private Enterprise 21, no. 1 (2005): 46-58.