Skip to comments.How The Free Market Tames Greedy Investors
Posted on 10/23/2010 12:52:33 PM PDT by WebFocus
From the days of the original Greek Olympics and earlier, to John Maynard Keynes' writing about economic man's "animal spirits," to the latest corporate rivalry between Apple and Google, competition has been in our collective DNA. Competitiveness expressed in a financial context sadly becomes "greed" when combined with character defects that disregard the law, and/or the well-being of one's trading partner: "only when they are both made better off" goes awry.
We need to have impartial third parties that will referee our transactions--this is the essence of government protecting property rights--but ultimately the most effective judge will be the collective wisdom of market participants who stand ready to jump in and offer a better service, with profit being their reward. In this way, the competitiveness (or potential "greed") of the participant is harnessed into providing a benefit in an ever-improving system, with lesser service providers being given their just punishment. It is a process that we need to make as easy as possible.
Entrepreneurs that shun this time-tested method of raising capital, because their investors might make a lot of money, do so at the peril of not achieving their stated goals, which might just include serving the very community Professor Yunus is nobly focused on: fully one half of the world's population.
Finally, we should heed what Jay Richards eloquently discusses in his book, "Money, Greed And God": We must be careful to compare our man-made systems to what is possible here on Earth, not to what is possible only in Heaven.
(Excerpt) Read more at forbes.com ...
We have to re-teach the blessings of a truly competitive market to our current generation and generations to come.