Thousands of years ago, markets were a way by which coastal tribes could trade shells used to make jewelry for obsidian used to make knives. Or for tribes in salt rich areas to trade salt used to season and preserve meat for other goods–the origin of the trade routes across the Sahara. Or for exotic spices used to flavor and preserve food to be traded between Indonesia and Holland; breaking the overland trade route that gave Venetian merchants so much power in the import of spices to Europe was a large motivation for the seabound European exploration of the rest of the world.

The main motivation for markets is to create fair places for people to trade with each other to the benefit of both parties.

Now, markets must have rules and governance and when the rules are broken and governance is poor, it can interfere with proper market function to the disadvantage of some parties. Greed can cause people to break the rules: pricing cartels and insider trading are two behaviors we have made illegal and that, when uncovered, we prosecute.

The current obsession that critics of markets have with greed is misplaced. Very few people, if they are being honest with themselves, would take a lower salary than they could get in the open market. Very people would take less for a good they are sellling than what a buyer is offering. It is misplaced to call these people greedy and to focus an analysis of market imperfections on the moralistic condemnation of greed. John McCain, I think, lost a lot of votes when he took that approach.

The proper focus of attention should be on making sure that market rules are fair, transparent, enforceable, and enforced, and that governance is proper. Under these circumstances, it is harder for the subset of people motivated by greed to have their way.

More people, I think, are reaching an insight spelled out by Ghandi:

“Earth provides enough to satisfy every man’s need, but not every man’s greed”