Angels and demons

One way to look at our economic activities is through the conventional framework of selfishness--we do what we do in order to serve our self-interests and that the "invisible hand" of the market produces all wonderful things that all of us get to enjoy.

That self-interest then leads critics to label the system as one that is driven by greed.  Of course, greed is not what most of us would consider to be a virtue.  Even as children, we instinctively understand that greed can be awful.  When we were kids, "greedy pig" was one of the many words that we yelled at siblings when unhappy about another's actions.  Michael Douglas, via his Wall Street character Gordon Gekko, made sure we would always equate the market economy with greed; remember that famous line?

Ricardo Hausmann offers a different way to think about the market:

But a market economy should be understood as a system in which we are supposed to earn our keep by doing things for other people; how much we earn depends on how others value what we do for them. The market economy forces us to be concerned about the needs of others, because it is their need that constitutes the source of our livelihood. In some sense, a market economy is a gift-exchange system; money merely tracks the value of the gifts we give one another. 

I earn my salary as a university faculty.  I get paid for educating students, whether or not I am really contributing to students' education in my classes.

My neighbor, "Archie," runs his own machine tool business, in which he makes products that others use.

I earn my keep by doing things for others.  Archie earns his by doing things for others.

Ah, if only it were that simple.  If only we were able to create a paradise in which we did things for others and everybody lived happily ever after!

We  humans are not always good-hearted.  That view of human nature is also why I, after a great deal of looking around, chose the Bernard Shaw quote as the title for this blog.

Of course, the understanding that we humans are not always good is not new; as James Madison put it:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

We humans are no angels.  There are all kinds of satans within us.  Most of us try our best to control the inner demons.  But, there are many who carry out the demon's instructions.  Government becomes a necessity.  But then, not all those who work in "government" are angels either!

Try as we can, as we do, I suppose we will forever be trapped in this struggle over dealing with our selves that are far from angels doing only good things for other people.