Economics Index and Qualifications
By Richard Bruce BA, MA, and PhC in Economics
Former Instructor St. John's University, New York City

The West Turns Greed into Efficiency and Hypocrisy into Justice

The market runs on greed, democracy runs on hypocrisy. As both greed and hypocrisy are abundant both of these key Western institutions are very successful, and so Western societies from their beginnings in ancient Greece until today have been very successful.

That greed drives the market is a common place idea. You can find it discussed at length in any economics text book. The great founding text of economics was Adam Smith's, The Wealth of Nations published in 1776. Perhaps the most commonly quoted line from that book is, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” This line is commonly sited to defend the notion that the market runs on greed, or at least self-interest.

That hypocrisy runs democracy may have first been introduced by Economist Gordon Tullock's 1971 article in The Journal of Economic Inquiry "The Charity of the Uncharitable."

Tullock's idea was that as the probability of casting the deciding vote in an election with a large number of voters is essentially zero, so it costs essentially nothing to vote according to one's values, even if that means voting against one's self-interest. So while self-interest generally trumps values in the market, in democracy values tend to trump self-interest, particularly when the electorate is large.

Tullock is a libertarian and very pro-market and at least somewhat anti-democracy. I am a fan of both institutions and so I take a more positive view of democracy. I believe we may reasonably hope that our government will be somewhat benevolent and fair because of the benevolence of the butcher, the brewer, the baker and the other voters because those voters know that voting for their sense of benevolence and fairness is very likely to cost them nothing.

It is commonly argued that the market runs on greed. The conservatives like this formulation because it allows them to argue against even the most moderate attempts to soften the most extreme inequalities of income distribution that the market can generate. One of my economics professors liked to explain things by assuming that beer was the only thing being consumed. All people are assumed to be fully functional young adults and they do not have real needs for nutrition, clothing, or shelter.

The family man working to support his family has traditionally been considered a more reliable worker than the single man supporting only himself and his love of beer. So it might be reasonable to argue that the market is largely driven by the virtue of adults trying to support their family.

Radicals leftists love to argue that the market is run on greed because it allows them to argue that the market economy is corrupt and evil even it achieves some efficiency.

So both the right and the left wing find it to their advantage to assume the market is run on greed.

I on the other hand like to say that democracy runs on hypocrisy and the market runs on greed because it is a counter intuitive thought that two of the central institutions of Western Civilization somewhat magically turn vices into virtue, spinning straw into gold, making two silk purses out of the proverbial sows ears.

The above thoughts on democracy and the market are part of a much larger theory of how the Western Institutions came to be. I have now put this on line.

Here is an index to my other pages on economics, and a short review of my qualifications in this field.

Here is an index to other pages on essays on media.

Tell me what you think. Here is my contact information..

Last updated March 12, 2020

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