Editor’s note: this article was co-authored by Dr. Anne Bradley, and adapted from an op-ed published in March. You can read the original article here.
This March, Greg Smith, an executive director at Goldman Sachs, announced his resignation in the pages of The New York Times. His reasoning: the company’s employees and culture had morphed into a gross entity that sidelines the interests of the client in favor of making a quick buck.
By Smith’s account, Goldman Sachs’ culture had become “toxic and destructive.”
Without taking sides, we can say Mr. Smith’s consternation gets to the important and often misunderstood difference between greed and self-interest. It is important to understand this distinction, because self-interest, rightly understood, guides us in setting proper priorities. It helps us live a life of significance characterized by service to others.
Greed vs. Self-Interest
From a Christian perspective, greed is not good. Jesus says in Luke 12:15:
Beware and be on your guard against every form of greed; for not even when one has abundance does his life consist of his possessions.
Greed traditionally has been counted as one of the seven deadly sins, an excessive desire for possessions that allows us to hurt ourselves and others.
Self-interest is very different. Every time you take a breath, eat a meal, or brush your teeth, you act in your own self-interest. That’s good, not bad.
Paradoxically, greed – because it’s spiritually self-destructive – is contrary to your self-interest. Not so with self-denial. In his paper C.S. Lewis, Greed, and Self-Interest, Art Lindsley, IFWE’s vice president of theological initiatives, argues that ” self-denial is in your self-interest.”
Jesus says in Mark 8:35-36,
For whoever wants to save their life will lose it, but whoever loses his life for me and for the gospel will save it. What good is it for someone to gain the whole world, yet forfeit their soul?
Our chief end is to know, glorify, and enjoy God. If we’re selfishly fixated on ourselves, we miss what we are created for.
Self-Interest and Economics
This paradoxical biblical principle, that self-denial is in our self-interest, is also an important economic principle:
- The greedy miser who hoards his wealth closes himself off to greater economic gains.
- The greedy merchant who swindles his customers is not likely to maintain profitability.
On the other hand, if we seek to meet the needs of others – whether we are hedge fund managers or plumbers – we are likely to reap personal benefits.
Markets harness our narrower self-interests for the common good. They bring together the most willing suppliers with the most willing demanders, and exchange takes place. You freely pay the grocer for groceries, he freely sells them, and you both end up better off than you were before.
Profits and losses are important feedback mechanisms within the market system. They act as signaling devices to let companies know whether they are meeting the needs of the consumer.
When a company starts to disregard its customers, it will eventually lose them and lose profits as a result. At that point, it can do one of two things:
1. Alter its corporate behavior and try to gain those customers back, or
2. Continue on the selfish path and eventually shut its doors.
In his resignation op-ed in The New York Times, Greg Smith seems to get this. “Make the client the focal point of your business again,” he tells Goldman Sachs. “Without clients you will not make money…Weed out the morally bankrupt people, no matter how much money they make for the firm.”
In business as in faith, in order to gain our life, we must first lose it.
How is self-interest different than greed? How might self-interest help you re-evaluate your priorities? Leave your comments here.