INTRODUCTION

The point is, ladies and gentlemen, that greed—for lack of a better word—is good. Greed is right. Greed works.

Gordon Gekko, Wall Street

Fictional characters are not the only ones to argue that greed redeems itself by motivating economic growth.

Michael Douglas played the ruthless takeover capitalist Gordon Gekko in Oliver Stone's 1987 film, Wall Street, with arrogant style.¹ His ‘‘greed is good'' speech mirrored the spirit of the decade, echoing the words of William Safire in a New York Times column the previous year.² But the film, unlike the column, set the capitalist up for a fall. Gekko successfully uses both money and sex (provided by his ex-girlfriend, who has herself been bought) to corrupt Bud Fox, a young up-and-coming stockholder. Gekko's dishonesty eventually backfires, undermining Bud's allegiance. With the support of his irascible but lovable working-class father, Bud provides the evidence and testimony that will send Gekko to jail.

In the second half of 2008, a financial crisis rocked the U.S., and then the world, resulting in the threat of bankruptcy for banks and insurance companies deemed too big too fail. The Bush administration and the Congress enacted a government bailout of unprecedented size and scope, at a huge cost to taxpayers. Confidence in both the self-regulation of the market and in corporate management suddenly collapsed.

The new concerns about economic vice echoed those heard less than a decade earlier, in the wake of the so-called dot-com bust of 2001. At that time the chair of the U.S. Federal Reserve Bank, Alan Greenspan, laid blame on an ‘‘infectious greed” within the business community. ‘‘It is not,” he explained, ‘‘that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously.’’⁴ Many great thinkers have worried about the size of those avenues and the speed with which we travel on them. The pursuit of individual self-interest can be a positive force. Under what circumstances does it become a vice?

Most efforts to answer this question dwell on the vice of most obvious economic relevance—greed. Alan Greenspan has never expressed concern about infectious lust, though some political figures have met their downfall from it. Lust, like greed, represents the pursuit of self-interest beyond virtuous bounds. Sexual self-interest may seem distinct from economic self-interest, but it can have important economic consequences for gender inequality, family formation, and population growth. The avenues to express lust as well as greed seem wider than they once were, especially for women. Lust is to feminist theory what greed is to economic theory—a marker of contested moral boundaries.⁵

Gender, Vice, and Virtue

Feminist theory offers important insights into the discourse of economic and sexual self-interest. It helps explain forms of gender inequality that long predated capitalist relations of production, and were, in some respects, weakened by them. Attention to gender inequality reveals a moral double standard that regulated women’s economic and sexual behavior more force­fully than men’s.

Some critics of capitalism describe it as a system that displaced more virtuous and egalitarian societies, Gardens of Eden in which individuals were free of economic sin.⁶ But the historical record shows that the individual and collective pursuit of gain shaped the evolution of human societies long before money was invented or labor paid a money wage.⁷ The patriarchal family-based economies that often emerged in agrarian societies gave males considerable control over the labor of women and children, creating incentives for coercive pronatal- ism.⁸ The emergence of individual wage employment gave women and young adults new opportunities outside the home that gradually weakened patriarchal power.

Still, the notion that capitalism represented a purely liberating force seems far-fetched. One can agree that capitalists can be virtuous but disagree that they have ‘‘improved our souls”.⁹ New forms of collective power counter­balanced new opportunities for individual autonomy, and the benefits of economic growth were unequally distributed. Over the course of capitalist development women gained ‘‘self ownership” but remained subordinate to men in large part because they continued to specialize in producing some­thing that could not be easily bought and sold—the next generation of citizens and workers.

The net effects of capitalist development depend in part upon its social context—capitalism compared to what? They also depend on political details like democratic governance, civil rights, and social safety nets. Karl Marx and Friedrich Engels famously declared capitalism a progressive force for change up to some point at which it would, they believed, inevitably collapse. Modern critics are more likely to emphasize adverse effects on families, communities, and the global ecosystem.

All societies face a problem that is simultaneously moral and economic: how to balance individual interests against those of family, friends, and other beings. Robert Nelson describes the particular challenge of market societies as follows:

The requisite normative foundation for the market requires a dual attitude with respect to self-interest—strong cultural inhibitions against the expression of self-interest (of opportunistic motives) in many areas of society, but at the same time strong encouragement for another powerful form of ‘‘opportunism”, the individual pursuit of profit within the specific confines of the market.¹⁰

Capitalist societies have typically glorified the pursuit of individual self­interest, especially for men. Yet markets depend on civility, trust, and the rule of law. The pursuit of short-term self-interest can lead to long-run losses, especially when individuals can’t coordinate their efforts. Markets operate within a complex matrix of other crucial institutions, including the family and the state. Competition among groups requires cooperation within them: social identities shape individual interests. Perhaps because they emerged from patriarchal antecedents, capitalist societies have typically relied on much stricter regulation of women than of men. Restrictions on women’s freedom to compete have been accompanied by normative encour­agement for women to devote themselves primarily to the care of others.

It is small wonder, then, that conservatives bemoan the decline of the traditional family and sometimes describe feminism as a threat to western civilization itself. 11 As women have gradually gained individual rights comparable to those of men, the relative weights we place on individual rights and social obligations seem to have shifted.

Gender differences have shaped ideologies of self-interest, including concepts of greed and lust. Following many other historians of economic thought, I define ideology as a set of rationalizations produced by powerful groups to glorify their own importance and advance their interests.¹² I do not believe that such rationalizations are imposed unilaterally from above. Rather, they represent forms of social regulation that evolve over time, reflecting conflict and negotiation among groups with varying degrees of power. 1³ Collective interests based on gender are particularly relevant to the persistence of a moral double standard for men and women that gradually proved susceptible to women's individual and collective efforts to reconfig­ure it.

Intersections between gender, vice, and virtue help to explain the moral regulation of economic life and, therefore, the process of economic growth itself. If ideologies are key, so too are the ideas that underlie them. One way to study these ideas is to ask how other thinkers have confronted them.

The Dimensions of Desire

The first principle of conventional economic theory, which I have taught introductory students for many years, is that we all benefit if everyone pursues their own self-interest. The next principle is that there are many exceptions to this rule. Yet this pedagogical sequence usually unfolds with­out much discussion of the distinction between self-interest, which most people today view in positive terms, and selfishness, which still carries negative connotations.

I first became interested in this issue when I noticed that many economists have praised men for pursuing their self-interest, but criticized women for being selfish.

Both vices are characterized by a dangerous intensity. In an early diction­ary of the English language, Samuel Johnson defined the adjective greedy as ‘‘eager, vehemently desirous'', and the verb lust as ‘‘to desire vehemently''.¹⁴ He located both vices in the body. Greediness began with food; its synonyms were ‘‘ravenousness'', ‘‘voracity'', and ‘‘hunger''. Lust included carnal desire. Today the meaning of greed comes closer to avarice, a desire for money, with which, of course, food can be purchased. The meaning of lust now implies animal urge. Both greed and lust are still defined by adjectives such as ‘‘inordinate'', ‘‘insatiate'', ‘‘excessive'', and ‘‘unrestrained''.¹⁵ They invoke moral categories: wanting more than one needs or deserves.

However, the effort to define greed or lust in quantitative terms—as wanting ‘‘too much” or going ‘‘too far”—leads us astray. Most people use these pejorative terms to describe behavior that is either harmful to others or to one's own future health and happiness. Making a lot of money every day does not imply that you are greedy, and having a lot of sex every night does not imply that you are lustful. What matters is how you treat others along the way. John Stuart Mill (admittedly one of the heroes of the following chapters) argued in his classic essay ‘‘On Liberty” that individuals should be allowed to pursue their own interests so long as they do not infringe on the rights of others to pursue theirs.

Another misleading convention lies in the putative contrast between self­interest and altruism, which are often described as if they represent extreme ends of a spectrum. But self-interest is not the opposite of altruism, because it can be altruistic. If you love someone else, their interests can become your own. If you have altruistic preferences, making other people happy can increase your own happiness. Consider a different picture of the motiv­ational spectrum, with one end representing perfect selfishness or lack of concern for anyone else and the other perfect selflessness, complete lack of concern for one’s own welfare. In between lie complex combinations of self­regarding and other-regarding preferences—the motivational terrain which most of us inhabit.

Another useful way to unpack the term ‘‘self-interest’’ lies in separate attention to the meaning of the ‘‘self’’. If we think of the ‘‘self’’ as an entity entirely separate from others, literally coinciding with the physical body, and defined largely in terms of its physical desires for food or rest or sex, then self-interest will seem predominantly selfish. But if we think of the ‘‘self’’ as an entity connected to others through ties of affection and obligation, its boundaries become less clear. Christian theology describes married couples as ‘‘one flesh’’. Loved ones become a part of us. Under these conditions, to act in one’s self-interest is hardly selfish. On the other hand, one can identify with a group that pursues collective interests at the expense of others. Altruism is not necessarily virtuous.

The terminology of neoclassical economics also helps clarify these issues. When introductory microeconomic textbooks specify that an idealized con­sumer has no ‘‘interdependent preferences’’ what they mean is that he or she is entirely selfish. Introducing concerns for others in the form of interdependent preferences complicates the story: positive interdependence implies altruism; negative interdependence implies taking pleasure in other people's pain. Since preferences are largely unobservable, many economists would like to minimize their influence on the argument.

Interdependent preferences are key. If people are never selfish, it may seem less risky to encourage them to pursue their own self-interest, because they will always take the welfare of others into account. Adam Smith offered a related version of this argument, based on his confidence in natural moral sentiments. However, much depends on which others people care about. Individuals who care only about their own family members pursue dynastic interests. Individuals who care more about others with the same skin color as their own pursue racist interests. Individuals who care more about others of the same sex pursue sexist interests, and so on. Altruistic motivation helps to explain group solidarity and collective conflict.

Standard neoclassical models assume that individuals know exactly what their preferences are. But we often don't know exactly how much we care for other people. We may adore someone in the morning and be aggravated by them in the afternoon. Many personal relationships, including marriage, come undone. Feelings of identification with groups of other people also wax and wane. Moral values and cultural norms provide more stable and consistent guidelines for behavior than personal preferences, which helps explain why we often comfortably conform to them. Rather than taking values, norms, and preferences as a given, we can explore the ways they co­evolve in different economic environments over time.

Ideological Evolution

The following chapters explore debates over greed and lust in Britain, France, and the United States, over a period of three centuries of capitalist development. They show how cultural constraints on the pursuit of indi­vidual self-interest have been loosened in different ways for different groups in different economic realms. Rather than providing a continuous or com­prehensive history, I single out the episodes and ideas that best illustrate the arguments above. I write with a ‘‘presentist'' orientation, more interested in the retrospective significance of historical debates than their meaning for those who participated in them at the time.¹⁶

Long before the emergence of capitalism the patriarchal feudal and household-based economies of Britain and France enforced obedience to real and symbolic fathers. The pursuit of economic self-interest elicited moral disapproval only when it threatened principles of hierarchical authority based on inherited privileges of family status, age, and gender. There was no evidence that such systems were any less greedy than our own. Greed did, however, take a different economic form, with different economic consequences.

The transition to capitalism did not magically liberate women, or anyone else for that matter. It did contribute to significant improvements in living standards and advancements in human knowledge and technology. But the expansion of markets for labor delivered enormous power to those best positioned to take advantage of them. Early capitalism weakened but did not eliminate patriarchal rules, relying on the subordination of daughters, wives, and mothers both in the home and in the factory. While women gradually gained new rights and opportunities to compete with men, their continued specialization in the care of dependents often left them with little bargaining power, dependent on support from the fathers of their children.

Capitalist societies have never been pure market societies. They have always relied on families for the production and care of their workers. They have always engaged in collective action, including use of military force to advance or defend their collective interests. Over time, most capit­alist societies have gradually developed democratic rules of governance, outlawed property rights in people (slavery), established strict forms of regulation (such as laws against child labor), invested in the human capital of the younger generation (through mandatory public schooling), and devel­oped extensive systems of social insurance. In other words, they have regulated the pursuit of individual self-interest.

Moral discourse plays an important role in the process of regulation. Christian theology listed greed and lust among the Seven Deadly Sins that would be accounted for by the Last Four Things: death and judgment, heaven or hell. By Augustine’s account, God in his goodness and mercy uses our vices both as a punishment and a remedy for sin. But the pursuit of economic self-interest—once easily labeled greed—was partially redeemed by the pro­spect that it would please God and benefit others by promoting economic growth. The motives underlying the search for gain began to matter less than its happy consequences. Economists gained in cultural and moral influence.

From the eighteenth century to the present, political economy has careened back and forth between the moral poles without much explicit attention to women, their work, or their special concerns. But gender marked the social construction of self-interest, revealing apprehensions about a purely selfish economy (absent the “natural” altruism of the mother). Men constructed a theory of interests that, with poetic circularity, served their own. Early political theorists largely excluded women from their theories of the polity; early political economists largely excluded them from their theories of the economy. Feminists, contesting these exclusions, differed on how underlying asymmetries should be redressed: Liberal feminists argued that women should become more self-interested, while socialist feminists demanded that men should become more altruistic.

Liberal political theory built upon Thomas Hobbes's claim, in Leviathan, that self-interested men forge a social contract for their mutual benefit. The masculine noun was hardly incidental. Most liberal individualists confined their enthusiasm for the pursuit of individual self-interest to men. From their vantage point, women and children inhabited a realm of natural instinct and moral duty. In retrospect, the inconsistency of an ideology asserting obliga­tions for women but not for men seems transparent. But early critics of this moral double standard—and there were some, including Mary Astell and Poulain de la Barre—could not gain a hearing until new economic circum­stances gave women more space for cultural and political maneuver.

In the early eighteenth century, Bernard de Mandeville gave ‘‘Greed is Good'' a comic treatment in his Fable of the Bees. Another of his tracts, advocating public support for prostitution, could have been titled Lust is Good (for young men). But conceptual buffers against both greed and lust proved indispensable to the new science of political economy. Like most other famous thinkers of the Enlightenment, Adam Smith was confident that moral sentiments came naturally to men: the wealth of nations could but strengthen them. However, as Jean-Jacques Rousseau and other skeptics pointed out, one could as easily assume the opposite: wealth could bring corruption.

The early mercantilists recognized that much of a country's wealth lay in the capabilities of a healthy population. Treating families as units of pro­duction, they tallied wives and mothers as productive workers. With the rise of political economy that convention was overturned. Thomas Robert Malthus treated population growth as an unfortunate consequence of unregulated lust.

David Ricardo and others who believed that labor was the most important input into the production of commodities—a common denominator that could help explain relative prices—ignored the fact that labor was also the output of non-market work that lacked an explicit price.

Early political economists—Malthus is the best case in point—worried more about the disruptive effects of lust than greed. With a few notable and entertaining exceptions (such as Jeremy Bentham's secret defense of homo­sexuality) they favored conventional morality and strict social regulation of the pursuit of sexual self-interest. Here again, a double standard based on gender came into play: prostitution, an institution that enhanced men's opportunities for self-indulgence, was widely tolerated. Dissemination of contraceptive information that women might effectively deploy was, how­ever, considered dangerous.

French thinkers like Montesquieu and Voltaire tended to worry more about greed, but less about lust than their British counterparts. In the United States, both democracy and mobility strengthened the ideology of individualism. In the early nineteenth century there concerns about economic morality began to coalesce around the condemnation of slavery as an institution. Abolitionists mobilized considerable outrage against extreme inequalities that created opportunities for greedy and lustful abuse of slaves. Debates over slavery's moral and economic meaning informed the early development of the feminist ideas and shaped the trajectory of capitalist economic development.

Early socialist feminists such as Owen, Saint Simon, and Fourier, dis­missed as utopians, flouted conventional norms of appropriate economic and sexual self-interest and denounced arbitrary inequalities based on both class and gender. Not all of their ideas were far-fetched; their advocacy for democratic governance, public education, social insurance, and gender equality proved at least partially prophetic. Other early socialists such as William Thompson developed theories of collective interests based on both class and gender. Marx and Engels largely sidestepped issues of gender inequality in their efforts to construct a more ‘‘scientific'' socialism. The end result was a simplistic model of convergence between individual and working-class interests that was not borne out by historical events.

John Stuart Mill hybridized socialist feminism with liberal political theory, insisting that women and men should be free to act upon their interests so long as they did no harm to others. Early feminist activists in the U.S., including Elizabeth Cady Stanton, were thrilled to cite a British authority in support of their cause but also made distinctive contributions of their own, calling attention to the undervalued contributions of family work and the economic significance of family law.

The British neoclassical economists Stanley Jevons and Alfred Marshall emphasized individual choices rather than group interests. They hoped to focus the gaze of their discipline on the forces of supply and demand within competitive markets. Yet they believed that women should be prohibited from competition, lest they neglect their moral duties to their families. The neoclas­sical assumption that non-market work, however morally indispensable, was economically unproductive exerted long-lasting influence on census categories and national income accounts. Economic growth came to be defined narrowly as growth in the number and size of transactions passing through the market.

In the early twentieth century, the cumulative impact of increased female labor forced participation, fertility decline, and gender-based collective action became evident. Beyond obvious victories such as the right to vote, women gained something that might be termed the right to sex. Openly advocating contraception, Margaret Sanger and Marie Stopes celebrated application of the concept of self-interest to the sexual sphere. They challenged fears of lust in much the same terms that an earlier generation of economists had challenged fears of greed.

Fertility decline stoked pronatalist concerns, expressed by men as influ­ential as President Theodore Roosevelt. Those concerns provoked serious thinking regarding the limits of a wage-based economy. Individuals unen­cumbered by responsibilities for dependents would always be able to get by on a lower wage than those with children to support. If parents were to be paid a wage based only on the forces of supply and demand, how would they bear the costs of raising children? Patriarchal tradition and Catholic doc­trine supported a so-called family wage for men; those who hoped to more directly support the work of mothers, like Eleanor Rathbone, made the case for family allowances. By the mid-twentieth century the United States, United Kingdom, and France all provided substantial public support for childrearing, either directly or through tax subsidies.

In the twentieth century, debates over the virtues of capitalism versus socialism echoed debates over self-interest versus altruism. The emergence of a welfare state—a public sector providing education and a social safety net—represented a compelling compromise. Yet those on either side continued to push, pull, and wrestle with one another. During periods of war or economic dislocation, those who advocated state intervention, like John Maynard Keynes, won adherents. During periods of economic prosperity, militant individualists like Milton Friedman gained ideological advantage. Yet both economists deployed moral concepts in their analysis of economic outcomes.

After the 1960s, neoclassical economics directly confronted issues such as family decision-making and the development of human capital. In some ways, this theoretical expansion represented the culmination of confidence in the pursuit of individual self-interest. But in the models developed by Gary Becker, the most famous proponent of this view, a moral division of labor remained in place. While perfect selfishness reigns within the market, perfect altruism reigns within the home. No wonder that women must earn less money, on average, than men do; they prefer to specialize in family care. In this model, the instability of the boundaries between the market and the family—exemplified, for instance, by the high probability of divorce— goes largely unexplored. The realms of the environment, the community, and the polity are also nudged out of the picture. These are realms in which individuals might need to coordinate their actions rather than making all their choices on their own.

Efforts to explain persistent economic inequalities between men and women have gradually engendered the new field of feminist economics. The stylized model of rational economic man has been dismembered, replaced by an androgynous decision maker with a complex range of motivations intermediate between the selfish and the selfless. New research in behavioral and institutional economics highlights the economic relevance of social norms as well as the limited influence of market income on measures of reported happiness. It also reveals the significance of efforts to renegotiate the meanings of masculinity and femininity, rather than taking them as a given.

What Should We Want?

It is difficult to know how intellectual debates bear upon the attitudes and desires of ordinary people. Whatever we may learn about the social con­struction of vice and virtue may be approximate and crude. Still, hindsight makes it easier to examine the past than the present, and yesterday’s discourse defines today’s dilemmas. The relationship between economic and ideological transformation cannot be squeezed into simple cause and effect. The development of new economic institutions weakened some aspects of patriarchal authority and promoted the uneven growth of indi­vidualism. But concepts of self-interest embedded in notions of appropriate behavior for men and women shaped the way markets themselves were structured. Concepts of right and wrong, good and bad, virtue and vice inevitably influence the design and regulation of economic institutions—as well they should.

Greed and lust have often been described as natural aspects of human desire. Since at least the eighteenth century, the claim that something is ‘‘natural’’ has implied that it need not and should not be changed. Scientific discourse has reinforced the notion that selfishness is the driving force of biological and social evolution. Ironically, science has also shown us that human nature is more malleable than it once seemed. As we begin the twenty-first century, we have less confidence in nature and more power over it. Genetic engineering and behavior-altering drugs, not to mention more subtle tools such as advertising and media control, have increased the potential to program human desire.

What should we want? If the answer to that question were inscribed in our genes, there would be little point in asking it. But part of what we want is determined by our cultural context. Social norms shape individual pref­erences, telling us how to feel as well as how to act. This programming is decentralized, approximate, and contradictory, which is why we are at least partially aware of it. The physicist Werner Heisenberg, founder of quantum mechanics, pointed out that attempts to measure the location and speed of an electron would modify its location and speed. The same could be said of selfishness. Our very discussion of it may alter its dimensions.

As the intellectual historian Quentin Skinner observed, ‘‘It is common­place—we are all Marxists to this extent—that our own society places unrecognized constraints upon our imagination... To learn from the past—and we cannot otherwise learn at all—the distinction between what it necessary and what is the product of our own contingent arrangements, is to learn the key to self-awareness itself.’’¹⁷ Economists have never argued that greed and lust are good: but they have not tried hard enough to figure out how to discourage both. If we want to care for others, we need to build social institutions that encourage that care, rather than taking moral sentiments as a given. The intellectual history of greed and lust offers some discour­aging insights into the relationship between ideals and reality. However, it also reveals useful efforts to set boundaries on selfish behavior. Tracing the movement of these boundaries over time might help us decide where we think they should be placed. Whether we will ever be able to move them where we want them is, of course, another question.

NOTES TO INTRODUCTION

¹ A video clip can be viewed at http://www.americanrhetoric.com/MovieSpeeches/ moviespeechwallstreet.html, accessed January 2008.

² William Safire, ‘‘Ode to Greed,” New York Times, January 5, 1986, section 4, p. 19.

³ The Economist, October 18, 2008.

⁴ Floyd Norris, ‘‘Greenspan Coins a New Phrase,” New York Times, July 17, 2002.

⁵ Mary Daly, Pure Lust. Elemental Feminist Philosophy (New York: HarperCollins, 1992); Lisa Duggan and Nan D. Hunter, Sex Wars: Sexual Dissent and Political Culture (New York: Routledge, 1995).

⁶ Bill McKibben, Deep Economy, The Wealth of Communities and the Durable Future (New York: Times Books, 2007).

⁷ Jared Diamond, Guns, Germs and Steel. The Fates of Human Societies (New York: W.W. Norton, 2005).

⁸ Nancy Folbre, ‘‘Chicks, Hawks, and Patriarchal Institutions,” 499—516 in Handbook of Behavioral Economics, ed. Morris Altman (Armonk, N.Y.: M. E. Sharpe, 2006).

⁹ Deirdre McCloskey, The Bourgeois Virtues: Ethics for an Age of Commerce (Chicago: University of Chicago Press, 2006), pp. 1, 23.

¹⁰ Robert H. Nelson, Economics as Religion. From Samuelson to Chicago and Beyond (University Park, PA: Pennsylvania State University Press, 2001), p. 3.

¹¹ For more on this theme see my The Invisible Heart. Economics and Family Values (New York: The New Press, 2001).

¹² A. M. C. Waterman, Revolution, Economics, and Religion. Christian Political Economy, ⁱ798~ⁱ833 (New York: Cambridge University Press, 1991), p. 8.

¹³ My emphasis on the discourse of self-interest may reflect the influence of Michel Foucault, but I draw few specific insights from his radically decentered approach in History of Sexuality: An Introduction, vol. 1 (New York: Vintage, 1990).

¹⁴ Samuel Johnson, A Dictionary of the English Language (London: W. Strahan, 1755).

¹⁵ See Oxford English Dictionary, 2nd edn (Oxford: Clarendon Press, 1989), and The American Heritage Dictionary of the English Language, 3rd edn (New York: Houghton Mifflin, 199²).

¹⁶ Quentin Skinner, ‘‘Meaning and Understanding in the History of Ideas,” 29—67 in Meaning and Context. Quentin Skinner and His Critics, ed. James Tully (Princeton, NJ: Princeton University Press, 1988), p. 49.

¹⁷ Ibid., p. 67.