September 24, 2025 • 23 mins
Greed was long seen as a selfish vice, undercutting our happiness and our life satisfaction. Yet today, the pursuit of money is a driving factor in all of our lives. How did the love of money go from a vice to a virtue?
Paul Vigna is a reporter for The Wall Street Journal, and a 25 year veteran journalist, as a reporter, editor, and photographer, covering the cryptocurrency sector, bitcoin, other digital and blockchain-related technologies. He is the author of “The Almightier: How Money Became God, Greed Became Virtue, and Debt Became Sin.”
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. The point is, ladies
and gentlemen, that greed, for lack of a better word,
is good. Greed is right, Greed works, Greed clarifies, cuts through,
(00:23):
and captures the ess of the evolutionary spirit. Greed in
all of its forms, greed for life, for money, for love,
knowledge as marked the upward search of mankind, and greed.
Speaker 2 (00:38):
For the love of money is of all evil. Reed
was long seen as a vice, as selfish, as a
waste of our time. It undercuts both our happiness and
our life satisfaction. Yet today the pursuit of money seems
to be everywhere. It's a driving factor in all of
our lives. How did the love of money go from
(01:01):
a vice to a virtue? I'm Barry Ridoltson on today's
edition of At the Money. We're going to discuss how
greed became good. To help us unpack all of this
and what it means for you, let's bring in Paul
Vinya of The Wall Street Journal. He's published numerous books
on money and cryptocurrencies. His latest book is The Almightier
(01:24):
How Money Became God, Greed became virtue, and debt became
a sin. It's out by the time you're hearing this. So, Paul,
when did greed become good? And how did this happen?
Speaker 3 (01:38):
So I think people think that greed became good, that
idea sort of came about in the eighties, and you
have the Wall Street clip Gordon Gecko. You know, greed,
for lack of a better word, is good. And the
eighties were the greed decade. And a lot of people
will say, you know, you have the election of Reagan,
the Conservatives. It all changed in the eighties, and we've
(02:01):
been living in that world. And I grew up in
the eighties. You did, too, Barrio. I was a teenager
in the eighties, and I had absorbed a lot of
those those beliefs and those ideas also. But what I've
discovered is that you actually can trace that idea further back,
much further back. I'm not talking about the robber barons
(02:24):
and the Gilded Age in the eighteen nineties, where you
can find it. I'm not talking about the you know,
the Mississippi Bubble in the seventeen hundreds where you can
find it. You can trace that idea back specifically almost
to the year at least of the decade to the
(02:44):
fourteen twenties, and there was a Florentine writer named Poggio Bracciolini,
and he wrote a dialogue. And the dialogue contains, among
the many, many things in the dialogue, it contains this sentence.
I'll just say the sentence. He says, avarice sometimes is beneficial.
(03:05):
It is almost word for word what Gecko says in
Wall Street. Gecko says, greed, for lack of a better word,
is good. Avarice sometimes is beneficial. That idea was incubated
in Florence in the fourteen twenties. Florence was a mercantile city.
It was a republic, and there were a lot of
(03:26):
merchants there. It was basically driven by commerce, and those
merchants had this belief. They couldn't talk about it, they
couldn't express it, they couldn't really show it because the
church's stance was usury is evil, it should be outlawed.
Greed is the root of all evil. You know. It
(03:47):
was very, very dangerous to come out and say greed
is good.
Speaker 2 (03:50):
So let me ask you about some other historical figures
who might have become forgotten, who philosophized on this topic
the economic thinkers who rebranded greed from a deadly sin
to a driver of social benefit. You mentioned Bracciolini, who
else were key thinkers in this space?
Speaker 3 (04:12):
So it's interesting because the one dialogue that really states
at the best is the one from Bracchiolini. So I
spent a lot of time talking about that. But what's
interesting is that he ran in this circle of influential
thinkers and doers that included a banker that most people
probably know the name of at least named Cosmo de Medici,
(04:34):
and a man who would become pope, who would become Pope,
Nicholas the fifth. He was a bishop and he was
a Cosmo was actually he was a supporter of this bishop.
Nicholas the fifth becomes Pope, Cosmo becomes the most important
banker in Europe, and actually one of the most important
politicians in Europe, and they take this idea and they
(04:59):
run with it. Cosmo employs this in his bank. In
his personal life, he makes a lot of money, he
spends a lot of money. He shows people that you
can be greedy, you can pursue wealth for yourself, you
can become very, very rich, and you can then become influential.
He supports architects, he supports artists, he supports all kinds
(05:22):
of public works projects. That becomes a very you're talking
about culture, that becomes a very influential cultural example to
people in Europe.
Speaker 2 (05:32):
So following the Medici family in Florence, which at the
time was probably the wealthiest city state in Europe, we
eventually go forward to John Calvin and Protestantism, and Calvin
holds that wealth is a sign of divine favor. This
is the exact opposite of greed is a sin. This
(05:53):
is not wealth proves that the Gods are smiling on you.
Speaker 3 (05:57):
Yeah, and I'll go through a couple hundred years of
history very quickly here. So, uh, these Florentines start saying
greed is good, and they show it as an example,
and it kind of takes off. It takes off in
the Catholic Church, which starts employing it. The Catholic Church
starts raising a ton of money and spending money at
the same time. They really buy this. This I call
(06:18):
it in the book the Ethos of Beneficial Greed. They
start buying into it, and of course it all becomes excess. Right.
A Medici, a Medici becomes pope, Pope Leo the tenth,
and he is just he's horribly uh, he's terribly corrupt.
He's a really bad pope, and he spends a lot
of money, and he is actually the bags of the
(06:40):
antagonist of Martin Luther. Like the whole Protestant Reformation is
a rebellion against the excesses of Leo the Tenth and
the Catholic Church. But what's interesting is that once the
Protestant Reformation takes off the idea that what they really
are against is the excesses, they're not actually against the
(07:01):
idea of money. And John Calvin comes along, and John
Calvin is very very clear, and what he says is
God controls everything. Every down to the last hair on
your head is determined by God. And I don't have
a lot of hairs on my head left, you know.
So there's that God controls everything. God everything that happens
(07:23):
happens because God wants it to happen. If you have money,
it is because God wanted you to have money. So
whatever job you have, you should do it to the
best of your ability, and you should go out there
and make as much money as you want, because that
is what God wants for you. He doesn't want you
to spend it the way the Catholics do. And I'm Catholic,
(07:45):
so if anyone's upset about, you know, Catholic bashing, I'm
just being historical here. He doesn't want you to spend
it the way those you know, profligate Catholics do. But
God wants you to have it and then want you
to put it to good uses, you know, help the
poor health, indigen you know, do good things with it.
But if you have it, God wants you to have it.
(08:05):
That idea becomes at that point becomes deeply, deeply embedded
in our culture.
Speaker 2 (08:11):
Let's let's fast forward to people like Richard Baxter and
even Ain Rands. How does the thought that greed is
good progress over the next few hundred years?
Speaker 3 (08:21):
So over the next few hundred years, and again I'm
gonna do this very fast. If people want the whole thing,
they can they can buy the book, thank you very
much in advance. Yes, I'm greedy too, I want to
sell my book. So Calvin is influential. Another Protestant theologian
named Richard Baxter takes it a step further and he
starts explaining how businesses operate, and how you know, the
(08:43):
pursuit of wealth is employed as a tool of God's
will and he and then who takes that even a
step further is Adam Smith. Who's Smith's whole idea really
is that the economic system we have, which had existed
for a few hundred years by the time Smith came around,
the economic system we have is a moral system. This
(09:05):
is how it works. This is what's good about it.
By all these people out there doing these jobs that
they're supposed to be doing, the division of labor, this
is all moving us towards a better relationship with God.
That idea is, at the very least it's moralistic in
Smith's worldview. If not outright religious, he kind of secularizes
(09:28):
it a lot.
Speaker 2 (09:28):
So let's address that exactly, because I have to ask
the question, what's the relationship between the rise of capitalism
and the read definition of greed or at least motivated
self interest as a virtue.
Speaker 3 (09:45):
Well, I actually think, and I state this quite clearly
in the book, I think this change in attitude toward
greed is actually what creates capitalism. There's a line in
the book I say capitalism didn't create greed greed created capitalism.
What you see in Farnance and the fourteen hundreds. Now
I'm going backwards a little bit, but to the start
(10:06):
of it. That is the first time you see people
employing capital consciously as a tool for themselves and for society.
It used to be just about the nobility and the
kings and the rich, you know, accruing wealth, and it
was all for them. Now you see this idea that wait,
wait a second, we can actually anybody, commoners or nobility
(10:29):
can pursue wealth, and that can be a tool to
help us in our own lives and to help society.
That is the cornerstone of capitalism. Greed is good barry.
That explains capitalism as it actually operates. That is not
how the textbooks tell you it operates. Actually went through
the textbooks and I looked and like, the word greed
doesn't appear in them at all.
Speaker 2 (10:50):
Well, it's motivated self interest, and it's homo economists and
all that stuff.
Speaker 3 (10:55):
But it's always kind of like schluffed off to the side, right, I.
Speaker 2 (10:58):
Mean, you're making it a central focus.
Speaker 3 (11:00):
So it is about efficiency, it's about you know system, No,
it's about greed. It's actually about people using greed, and
you can see it winding its way through our culture.
Adam Smith secularizes the idea and people seize upon it.
And then you have this this new nation that had
just formed in the Americas, and they rejected the king,
(11:22):
they rejected the church. They needed something to ground their
new country on. And what they came up with. And
James Madison, one of the founders, makes this most clear
property rights, money, wealth, that is what the nation is
actually founded on. This idea, that that point becomes so
(11:44):
deeply embedded in the culture of America that that is
what are that that is that is the cornerstone of
our history.
Speaker 2 (11:53):
Let's dive deeper into that because the book delves into
the transformation of money from a religious and communal tool
to that exact secular object of faith. Are you saying
that in large part the creation and economic success of
the United States has been one of the key drivers
(12:16):
of the belief that motivated self interest.
Speaker 3 (12:20):
To use a.
Speaker 2 (12:22):
Less polarizing term than greed, right has is that what
led us to a couple of quotes from your book,
Banks are churches of money, and the other quote that
stood out, money isn't like religion. Money is a religion.
So has money secularized greed or has money just kind
(12:45):
of moved into religion's sphere and said, hey, we want
part of this faith based idea.
Speaker 3 (12:52):
Also, I think it's done both. Really it has, and
this is really the argument of the book is that
it has replaced religion as the incentive system around which
a society revolves. In other words, I said, I said earlier,
you know, five thousand years ago, society revolved around the temple,
(13:12):
and it revolved the around the idea of pleasing the gods.
That belief system faded. You can't in the modern world
have a belief I know there are plenty of people
out there that believe in religion, and I'm not trying
to to, you know, attack their belief systems, but you
can't have a system. You can't have a modern society
built around that. At least the United States is a
(13:33):
modern society that is not built around that. That can't
be the foundation, and in fact is not the foundation.
And the history of Europe shows this. Over time, the
authority of kings, which came from the church was was
whittled away and whittled away, and through wars and civil
wars and you know it all faded religion was replaced
(13:56):
by this other belief system, and that other belief system
is centered around money and the pursuit of wealth.
Speaker 2 (14:03):
Let's talk about today. Let's talk about that. We've been
talking about the pursuit of money and assets and power
and influence and all those things that go with it.
What we haven't been talking about is debt. So let's
talk a little bit about the ancient societal views of
(14:23):
debt and how that has transformed in the modern world
where debt is a useful tool, but it also comes
with some ethical and moral baggage. Tell us about how
debt has evolved over the past. I don't know, five
thousand years.
Speaker 3 (14:44):
Sure, I mean part of so debt, money, credit, all
these things are just there tools. There are ways to
help distribute resources. And after money was invented, what you
see is people realize you can use that as collateral
(15:05):
for loans, for lack of a better word, they realize
you can use that if you have a certain amount
of money, which back then really wasn't You don't think
of it as paper money. It was really more possessions.
The money was just a notation on a you know,
clay tablet somewhere, but that you know, you could use
your wealth as a collateral for loans, you could borrow
(15:26):
against it. And then they realized something even more impressive
was that you could collect interest on that and that
if you had that loan going over time, the interest
would collect interest on the interest. You could collect interest
on the interest compounded interest, which is, you know, all
of modern finances based on that idea that was incredibly
(15:51):
attractive in the ancient world. And you then have loans
and you have networks of lenders, and because everyone understood
that the money was coming out of the temple, that
basically the money was something owed to the gods. Your
debts were to the gods. So there was a very
(16:11):
strong moral component to debt from the very beginning. You're
not paying your debt, you're basically thumbing your nose at
the gods, and the creditors could come in and basically
do whatever they want. They can take your land, they
can sell you into indentured servitude, they own you like.
Not paying your debts was a really deep sin.
Speaker 2 (16:33):
And yet we would have these demands on a regular
basis for a debt jubilee, erasing the ledger rebooting the
financial system. Whatever happened to the concept of I think
in some systems it was every fourteen years, eleven years,
some fifty years. Tell us about the history of the
debt jubilee and the connoisseur a debt jubilee in eight
(16:57):
o nine, didn't we.
Speaker 3 (16:59):
In a way? In a way? So what happens is
these these creditors start amassing these giant loans. They are
becoming extremely wealthy. But you see this from society, city
state to city state that and look, this is something
that happens today. Right. People get they take on a loan,
they have to pay interest on it. The interest is
(17:20):
too high. It compounds. You know, you start off with
I borrowed a little bit of money. Fifteen years later,
twenty years later, you're still paying it off and you're
deeper deeper in debt. What the people realized in the
ancient world was that money that loans had a way
of growing beyond the ability of people to pay them,
no matter what they were trying to do. This whole
(17:41):
concept of compound interest just it becomes a problem, and
it becomes a societal problem. At some point, a king
who wants his subjects to work for him and be
in his army. But he doesn't have them because they've
all lost their farms, because they've all been sold into
slavery because of their debts. Terrible society. So the Kings
(18:02):
developed this relief valve, which is basically a debt jubilee.
Every once in a while in the Misaic Codes it
got codified and they put a timeframe on it. But
earlier than that, you would just have kings. Whenever they
felt things were kind of too bad, or they took
over a new city and they wanted to start over,
they would declare a debt jubilee. All the debts were
(18:25):
wiped out. If you lost your farm because of debts,
you got it back. If you were sold into slavery
because of debts, you were released from slavery and put
back on your farm. It was a way for the
society to start over, because what they realized was that
debt had this just inescapable habit of overwhelming the entire society.
Speaker 2 (18:47):
So we've seen the rise of capitalism, and while globally
it's raised millions of people, arguably billions of people out
of poverty and raised standards of living worldwide, at the
same time, we've never seen greater wealth inequality, greater income inequality,
(19:08):
not just here in the United States but around the world.
How do we explain the virtues and vices of global capitalism?
Why how do we explain the virtues and vices of
global capitalism where on one hand it's raising all these
people out of poverty, yet on the other hand, it
(19:28):
seems to be creating this yawning chasm between It used
to be the haves and the have nots, Now it's
the haves and the haves a lot more.
Speaker 3 (19:38):
Yeah, So I think two things, and I'll try to
get to them quickly. I think one, and it was
a really important thing that I state in the book.
I'm not writing this book as some kind of attack
on money and capitalism and greed. I'm trying to explain
a system, a system that we are all part of.
This book is not just to say Bernie made Off
(19:59):
was bad, was bad. Gordon Gecko's a villain. Those you know,
the robber Baron, Cornelius Vanderbilt, They're bad, They're terrible. Money
shouldn't exist. No, No, I'm not trying to do that.
You know, I'm selling the book. I'm not giving it away.
I could have given the book away. I'm not. I'm
selling it. I'm part of the system too. I'm just
trying to explain how the system works because part of
(20:23):
this is, and I said this money is actually a
very effective tool. It's a good thing. Society flourishes after
money is invented. Like you said, Barry, it has. Capitalism
has pulled a lot of people out of poverty, has
made a lot of people's lives better. It stimulates people
(20:44):
to go out there and do things, and create things
and build things. Those are all good things. I'm not
This book is not anti capitalist. It is. What it
does argue is that the problem is that we have
mythologized money and we have come to worship it as
a replacement for God, and that god worship of money
(21:07):
has created all the imbalances that we have in society
today and that you see in society today. And then
people on both sides of the system recognize. I mean,
you can hear that exact argument from people who are
on the right and from people who are on the left. Everybody,
i think recognizes that there is a problem today. Most people, though,
don't understand what the system is, so they don't understand
(21:30):
how to combat it correctly, and that's why you get
a lot of social programs that seem to go nowhere.
That's why you get this seeming inescapable growth of inequality,
because we don't understand the system. The other thing I'll
say is another part of the problem, I think is
that when capitalism was created, especially you know, certainly in
(21:53):
the fourteen hundredth and even in eighteenth century, the conditions
in which it was created were completely different from the
conditions in which we live in today. Resource scarcity was
a real issue back then. Certainly going back through time,
it was even worse. You know, most societies were one
great catastrophe away from being destroyed and wiped out forever.
(22:13):
They were going to disappear. In the last one hundred years, definitely,
in the last hundred years, technology has changed our means.
We can grow enough food, we could build enough housing,
we could provide enough education, healthcare, electricity. We have the
means and the capability of providing the basics that every
(22:34):
single person in the world needs to have just a
decent life. Our economics was not built with that in mind,
and I think our economics has not kept up with
changes and doesn't recognize that. And I think that is
another big problem. Our conditions have changed, but capitalism has
not changed enough to meet those conditions, and I think
(22:57):
that is causing a lot of the frictions that are
going on in the world today. And my hope also
in writing this book was to make that clear.
Speaker 2 (23:05):
So to wrap up, how did greed become a virtue?
Well motivated self interest has allowed us to lift billions
of people out of poverty. Capitalism has shifted the dominant
thesis of just living in the world from one of
scarcity to one of abundance. And we've managed to take
(23:28):
what was once perceived as a vice and turn it
into a virtue by building an entire economic system around
rewarding success, rewarding the appropriate allocation of resources by companies,
by governments, and by people. I'm Barry Retolts. You're listening
(23:48):
to Bloomberg's At the Money
Bloomberg Audio Studios, podcasts, radio news. The point is, ladies
and gentlemen, that greed, for lack of a better word,
is good. Greed is right, Greed works, Greed clarifies, cuts through,
(00:23):
and captures the ess of the evolutionary spirit. Greed in
all of its forms, greed for life, for money, for love,
knowledge as marked the upward search of mankind, and greed.
Speaker 2 (00:38):
For the love of money is of all evil. Reed
was long seen as a vice, as selfish, as a
waste of our time. It undercuts both our happiness and
our life satisfaction. Yet today the pursuit of money seems
to be everywhere. It's a driving factor in all of
our lives. How did the love of money go from
(01:01):
a vice to a virtue? I'm Barry Ridoltson on today's
edition of At the Money. We're going to discuss how
greed became good. To help us unpack all of this
and what it means for you, let's bring in Paul
Vinya of The Wall Street Journal. He's published numerous books
on money and cryptocurrencies. His latest book is The Almightier
(01:24):
How Money Became God, Greed became virtue, and debt became
a sin. It's out by the time you're hearing this. So, Paul,
when did greed become good? And how did this happen?
Speaker 3 (01:38):
So I think people think that greed became good, that
idea sort of came about in the eighties, and you
have the Wall Street clip Gordon Gecko. You know, greed,
for lack of a better word, is good. And the
eighties were the greed decade. And a lot of people
will say, you know, you have the election of Reagan,
the Conservatives. It all changed in the eighties, and we've
(02:01):
been living in that world. And I grew up in
the eighties. You did, too, Barrio. I was a teenager
in the eighties, and I had absorbed a lot of
those those beliefs and those ideas also. But what I've
discovered is that you actually can trace that idea further back,
much further back. I'm not talking about the robber barons
(02:24):
and the Gilded Age in the eighteen nineties, where you
can find it. I'm not talking about the you know,
the Mississippi Bubble in the seventeen hundreds where you can
find it. You can trace that idea back specifically almost
to the year at least of the decade to the
(02:44):
fourteen twenties, and there was a Florentine writer named Poggio Bracciolini,
and he wrote a dialogue. And the dialogue contains, among
the many, many things in the dialogue, it contains this sentence.
I'll just say the sentence. He says, avarice sometimes is beneficial.
(03:05):
It is almost word for word what Gecko says in
Wall Street. Gecko says, greed, for lack of a better word,
is good. Avarice sometimes is beneficial. That idea was incubated
in Florence in the fourteen twenties. Florence was a mercantile city.
It was a republic, and there were a lot of
(03:26):
merchants there. It was basically driven by commerce, and those
merchants had this belief. They couldn't talk about it, they
couldn't express it, they couldn't really show it because the
church's stance was usury is evil, it should be outlawed.
Greed is the root of all evil. You know. It
(03:47):
was very, very dangerous to come out and say greed
is good.
Speaker 2 (03:50):
So let me ask you about some other historical figures
who might have become forgotten, who philosophized on this topic
the economic thinkers who rebranded greed from a deadly sin
to a driver of social benefit. You mentioned Bracciolini, who
else were key thinkers in this space?
Speaker 3 (04:12):
So it's interesting because the one dialogue that really states
at the best is the one from Bracchiolini. So I
spent a lot of time talking about that. But what's
interesting is that he ran in this circle of influential
thinkers and doers that included a banker that most people
probably know the name of at least named Cosmo de Medici,
(04:34):
and a man who would become pope, who would become Pope,
Nicholas the fifth. He was a bishop and he was
a Cosmo was actually he was a supporter of this bishop.
Nicholas the fifth becomes Pope, Cosmo becomes the most important
banker in Europe, and actually one of the most important
politicians in Europe, and they take this idea and they
(04:59):
run with it. Cosmo employs this in his bank. In
his personal life, he makes a lot of money, he
spends a lot of money. He shows people that you
can be greedy, you can pursue wealth for yourself, you
can become very, very rich, and you can then become influential.
He supports architects, he supports artists, he supports all kinds
(05:22):
of public works projects. That becomes a very you're talking
about culture, that becomes a very influential cultural example to
people in Europe.
Speaker 2 (05:32):
So following the Medici family in Florence, which at the
time was probably the wealthiest city state in Europe, we
eventually go forward to John Calvin and Protestantism, and Calvin
holds that wealth is a sign of divine favor. This
is the exact opposite of greed is a sin. This
(05:53):
is not wealth proves that the Gods are smiling on you.
Speaker 3 (05:57):
Yeah, and I'll go through a couple hundred years of
history very quickly here. So, uh, these Florentines start saying
greed is good, and they show it as an example,
and it kind of takes off. It takes off in
the Catholic Church, which starts employing it. The Catholic Church
starts raising a ton of money and spending money at
the same time. They really buy this. This I call
(06:18):
it in the book the Ethos of Beneficial Greed. They
start buying into it, and of course it all becomes excess. Right.
A Medici, a Medici becomes pope, Pope Leo the tenth,
and he is just he's horribly uh, he's terribly corrupt.
He's a really bad pope, and he spends a lot
of money, and he is actually the bags of the
(06:40):
antagonist of Martin Luther. Like the whole Protestant Reformation is
a rebellion against the excesses of Leo the Tenth and
the Catholic Church. But what's interesting is that once the
Protestant Reformation takes off the idea that what they really
are against is the excesses, they're not actually against the
(07:01):
idea of money. And John Calvin comes along, and John
Calvin is very very clear, and what he says is
God controls everything. Every down to the last hair on
your head is determined by God. And I don't have
a lot of hairs on my head left, you know.
So there's that God controls everything. God everything that happens
(07:23):
happens because God wants it to happen. If you have money,
it is because God wanted you to have money. So
whatever job you have, you should do it to the
best of your ability, and you should go out there
and make as much money as you want, because that
is what God wants for you. He doesn't want you
to spend it the way the Catholics do. And I'm Catholic,
(07:45):
so if anyone's upset about, you know, Catholic bashing, I'm
just being historical here. He doesn't want you to spend
it the way those you know, profligate Catholics do. But
God wants you to have it and then want you
to put it to good uses, you know, help the
poor health, indigen you know, do good things with it.
But if you have it, God wants you to have it.
(08:05):
That idea becomes at that point becomes deeply, deeply embedded
in our culture.
Speaker 2 (08:11):
Let's let's fast forward to people like Richard Baxter and
even Ain Rands. How does the thought that greed is
good progress over the next few hundred years?
Speaker 3 (08:21):
So over the next few hundred years, and again I'm
gonna do this very fast. If people want the whole thing,
they can they can buy the book, thank you very
much in advance. Yes, I'm greedy too, I want to
sell my book. So Calvin is influential. Another Protestant theologian
named Richard Baxter takes it a step further and he
starts explaining how businesses operate, and how you know, the
(08:43):
pursuit of wealth is employed as a tool of God's
will and he and then who takes that even a
step further is Adam Smith. Who's Smith's whole idea really
is that the economic system we have, which had existed
for a few hundred years by the time Smith came around,
the economic system we have is a moral system. This
(09:05):
is how it works. This is what's good about it.
By all these people out there doing these jobs that
they're supposed to be doing, the division of labor, this
is all moving us towards a better relationship with God.
That idea is, at the very least it's moralistic in
Smith's worldview. If not outright religious, he kind of secularizes
(09:28):
it a lot.
Speaker 2 (09:28):
So let's address that exactly, because I have to ask
the question, what's the relationship between the rise of capitalism
and the read definition of greed or at least motivated
self interest as a virtue.
Speaker 3 (09:45):
Well, I actually think, and I state this quite clearly
in the book, I think this change in attitude toward
greed is actually what creates capitalism. There's a line in
the book I say capitalism didn't create greed greed created capitalism.
What you see in Farnance and the fourteen hundreds. Now
I'm going backwards a little bit, but to the start
(10:06):
of it. That is the first time you see people
employing capital consciously as a tool for themselves and for society.
It used to be just about the nobility and the
kings and the rich, you know, accruing wealth, and it
was all for them. Now you see this idea that wait,
wait a second, we can actually anybody, commoners or nobility
(10:29):
can pursue wealth, and that can be a tool to
help us in our own lives and to help society.
That is the cornerstone of capitalism. Greed is good barry.
That explains capitalism as it actually operates. That is not
how the textbooks tell you it operates. Actually went through
the textbooks and I looked and like, the word greed
doesn't appear in them at all.
Speaker 2 (10:50):
Well, it's motivated self interest, and it's homo economists and
all that stuff.
Speaker 3 (10:55):
But it's always kind of like schluffed off to the side, right, I.
Speaker 2 (10:58):
Mean, you're making it a central focus.
Speaker 3 (11:00):
So it is about efficiency, it's about you know system, No,
it's about greed. It's actually about people using greed, and
you can see it winding its way through our culture.
Adam Smith secularizes the idea and people seize upon it.
And then you have this this new nation that had
just formed in the Americas, and they rejected the king,
(11:22):
they rejected the church. They needed something to ground their
new country on. And what they came up with. And
James Madison, one of the founders, makes this most clear
property rights, money, wealth, that is what the nation is
actually founded on. This idea, that that point becomes so
(11:44):
deeply embedded in the culture of America that that is
what are that that is that is the cornerstone of
our history.
Speaker 2 (11:53):
Let's dive deeper into that because the book delves into
the transformation of money from a religious and communal tool
to that exact secular object of faith. Are you saying
that in large part the creation and economic success of
the United States has been one of the key drivers
(12:16):
of the belief that motivated self interest.
Speaker 3 (12:20):
To use a.
Speaker 2 (12:22):
Less polarizing term than greed, right has is that what
led us to a couple of quotes from your book,
Banks are churches of money, and the other quote that
stood out, money isn't like religion. Money is a religion.
So has money secularized greed or has money just kind
(12:45):
of moved into religion's sphere and said, hey, we want
part of this faith based idea.
Speaker 3 (12:52):
Also, I think it's done both. Really it has, and
this is really the argument of the book is that
it has replaced religion as the incentive system around which
a society revolves. In other words, I said, I said earlier,
you know, five thousand years ago, society revolved around the temple,
(13:12):
and it revolved the around the idea of pleasing the gods.
That belief system faded. You can't in the modern world
have a belief I know there are plenty of people
out there that believe in religion, and I'm not trying
to to, you know, attack their belief systems, but you
can't have a system. You can't have a modern society
built around that. At least the United States is a
(13:33):
modern society that is not built around that. That can't
be the foundation, and in fact is not the foundation.
And the history of Europe shows this. Over time, the
authority of kings, which came from the church was was
whittled away and whittled away, and through wars and civil
wars and you know it all faded religion was replaced
(13:56):
by this other belief system, and that other belief system
is centered around money and the pursuit of wealth.
Speaker 2 (14:03):
Let's talk about today. Let's talk about that. We've been
talking about the pursuit of money and assets and power
and influence and all those things that go with it.
What we haven't been talking about is debt. So let's
talk a little bit about the ancient societal views of
(14:23):
debt and how that has transformed in the modern world
where debt is a useful tool, but it also comes
with some ethical and moral baggage. Tell us about how
debt has evolved over the past. I don't know, five
thousand years.
Speaker 3 (14:44):
Sure, I mean part of so debt, money, credit, all
these things are just there tools. There are ways to
help distribute resources. And after money was invented, what you
see is people realize you can use that as collateral
(15:05):
for loans, for lack of a better word, they realize
you can use that if you have a certain amount
of money, which back then really wasn't You don't think
of it as paper money. It was really more possessions.
The money was just a notation on a you know,
clay tablet somewhere, but that you know, you could use
your wealth as a collateral for loans, you could borrow
(15:26):
against it. And then they realized something even more impressive
was that you could collect interest on that and that
if you had that loan going over time, the interest
would collect interest on the interest. You could collect interest
on the interest compounded interest, which is, you know, all
of modern finances based on that idea that was incredibly
(15:51):
attractive in the ancient world. And you then have loans
and you have networks of lenders, and because everyone understood
that the money was coming out of the temple, that
basically the money was something owed to the gods. Your
debts were to the gods. So there was a very
(16:11):
strong moral component to debt from the very beginning. You're
not paying your debt, you're basically thumbing your nose at
the gods, and the creditors could come in and basically
do whatever they want. They can take your land, they
can sell you into indentured servitude, they own you like.
Not paying your debts was a really deep sin.
Speaker 2 (16:33):
And yet we would have these demands on a regular
basis for a debt jubilee, erasing the ledger rebooting the
financial system. Whatever happened to the concept of I think
in some systems it was every fourteen years, eleven years,
some fifty years. Tell us about the history of the
debt jubilee and the connoisseur a debt jubilee in eight
(16:57):
o nine, didn't we.
Speaker 3 (16:59):
In a way? In a way? So what happens is
these these creditors start amassing these giant loans. They are
becoming extremely wealthy. But you see this from society, city
state to city state that and look, this is something
that happens today. Right. People get they take on a loan,
they have to pay interest on it. The interest is
(17:20):
too high. It compounds. You know, you start off with
I borrowed a little bit of money. Fifteen years later,
twenty years later, you're still paying it off and you're
deeper deeper in debt. What the people realized in the
ancient world was that money that loans had a way
of growing beyond the ability of people to pay them,
no matter what they were trying to do. This whole
(17:41):
concept of compound interest just it becomes a problem, and
it becomes a societal problem. At some point, a king
who wants his subjects to work for him and be
in his army. But he doesn't have them because they've
all lost their farms, because they've all been sold into
slavery because of their debts. Terrible society. So the Kings
(18:02):
developed this relief valve, which is basically a debt jubilee.
Every once in a while in the Misaic Codes it
got codified and they put a timeframe on it. But
earlier than that, you would just have kings. Whenever they
felt things were kind of too bad, or they took
over a new city and they wanted to start over,
they would declare a debt jubilee. All the debts were
(18:25):
wiped out. If you lost your farm because of debts,
you got it back. If you were sold into slavery
because of debts, you were released from slavery and put
back on your farm. It was a way for the
society to start over, because what they realized was that
debt had this just inescapable habit of overwhelming the entire society.
Speaker 2 (18:47):
So we've seen the rise of capitalism, and while globally
it's raised millions of people, arguably billions of people out
of poverty and raised standards of living worldwide, at the
same time, we've never seen greater wealth inequality, greater income inequality,
(19:08):
not just here in the United States but around the world.
How do we explain the virtues and vices of global capitalism?
Why how do we explain the virtues and vices of
global capitalism where on one hand it's raising all these
people out of poverty, yet on the other hand, it
(19:28):
seems to be creating this yawning chasm between It used
to be the haves and the have nots, Now it's
the haves and the haves a lot more.
Speaker 3 (19:38):
Yeah, So I think two things, and I'll try to
get to them quickly. I think one, and it was
a really important thing that I state in the book.
I'm not writing this book as some kind of attack
on money and capitalism and greed. I'm trying to explain
a system, a system that we are all part of.
This book is not just to say Bernie made Off
(19:59):
was bad, was bad. Gordon Gecko's a villain. Those you know,
the robber Baron, Cornelius Vanderbilt, They're bad, They're terrible. Money
shouldn't exist. No, No, I'm not trying to do that.
You know, I'm selling the book. I'm not giving it away.
I could have given the book away. I'm not. I'm
selling it. I'm part of the system too. I'm just
trying to explain how the system works because part of
(20:23):
this is, and I said this money is actually a
very effective tool. It's a good thing. Society flourishes after
money is invented. Like you said, Barry, it has. Capitalism
has pulled a lot of people out of poverty, has
made a lot of people's lives better. It stimulates people
(20:44):
to go out there and do things, and create things
and build things. Those are all good things. I'm not
This book is not anti capitalist. It is. What it
does argue is that the problem is that we have
mythologized money and we have come to worship it as
a replacement for God, and that god worship of money
(21:07):
has created all the imbalances that we have in society
today and that you see in society today. And then
people on both sides of the system recognize. I mean,
you can hear that exact argument from people who are
on the right and from people who are on the left. Everybody,
i think recognizes that there is a problem today. Most people, though,
don't understand what the system is, so they don't understand
(21:30):
how to combat it correctly, and that's why you get
a lot of social programs that seem to go nowhere.
That's why you get this seeming inescapable growth of inequality,
because we don't understand the system. The other thing I'll
say is another part of the problem, I think is
that when capitalism was created, especially you know, certainly in
(21:53):
the fourteen hundredth and even in eighteenth century, the conditions
in which it was created were completely different from the
conditions in which we live in today. Resource scarcity was
a real issue back then. Certainly going back through time,
it was even worse. You know, most societies were one
great catastrophe away from being destroyed and wiped out forever.
(22:13):
They were going to disappear. In the last one hundred years, definitely,
in the last hundred years, technology has changed our means.
We can grow enough food, we could build enough housing,
we could provide enough education, healthcare, electricity. We have the
means and the capability of providing the basics that every
(22:34):
single person in the world needs to have just a
decent life. Our economics was not built with that in mind,
and I think our economics has not kept up with
changes and doesn't recognize that. And I think that is
another big problem. Our conditions have changed, but capitalism has
not changed enough to meet those conditions, and I think
(22:57):
that is causing a lot of the frictions that are
going on in the world today. And my hope also
in writing this book was to make that clear.
Speaker 2 (23:05):
So to wrap up, how did greed become a virtue?
Well motivated self interest has allowed us to lift billions
of people out of poverty. Capitalism has shifted the dominant
thesis of just living in the world from one of
scarcity to one of abundance. And we've managed to take
(23:28):
what was once perceived as a vice and turn it
into a virtue by building an entire economic system around
rewarding success, rewarding the appropriate allocation of resources by companies,
by governments, and by people. I'm Barry Retolts. You're listening
(23:48):
to Bloomberg's At the Money
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