Much has been said already about Boris Johnson’s Margaret Thatcher Lecture for us earlier this week. One of the main contentions seems to be Boris’s comments on the word “greed”. You wouldn’t think it from the media coverage it received, but this actually came in a section in which he was urging the very richest in society to be more philanthropic. He said:
“Gerard Lyons, my economic adviser, thinks we could be looking at growth of 4 per cent next year; and so I hope that in many ways it is NOT like the 1980s all over again. I don’t imagine that there will be a return of teddy bear braces and young men and women driving Porsches and bawling into brick sized mobiles. But I also hope that there is no return to that spirit of Loadsamoney heartlessness – figuratively riffling banknotes under the noses of the homeless; and I hope that this time the Gordon Gekkos of London are conspicuous not just for their greed – valid motivator thought greed may be for economic progress – as for what they give and do for the rest of the population, many of whom have experienced real falls in their incomes over the last five years.
And if there is to be a boom in the 20-teens, I hope it is one that is marked by a genuine sense of community and acts of prodigious philanthropy, and I wish the snob value and prestige that the Americans attach to act of giving would somehow manifest itself here, or manifest itself more vividly.”
This seems to have been interpreted by media across the political spectrum as akin to the Mayor saying “greed is good”. The Guardian, unsurprisingly, has been the driver of the outrage bus, but there have also been conservative voices, such as Tim Stanley at the Telegraph, who has denounced Boris’s thoughts as inherently materialistic and “ideological, believing that value is measured in wealth.”
I think they are wrong. Read the passage above again. Boris was actually calling for the wealthy to be much more noble and community-minded in their outlook. This suggests that greed is not good for its own sake. But actually, in terms of the “valid motivator” sentence, Boris was making a much more subtle argument that is self-evidently true.
Greed is a human phenomenon, and unrelated to economic systems. You get greed in a free-market system. You get greed in a socialist system. You get greed in a mixed system. You get greed in a communist system. I’m sure you get greed in North Korea, whichever system you’d call that these days. The point Boris was making, I think, was that in a market system, greed can actually lead to economic progress. Think of it like this: if I operate in a contestable market and want to make as much money as possible because I’m greedy, then I have to provide a product or service that enough people will be willing to buy. That enough people buy it shows that they value it more than the price – therefore, greed can actually lead to positive economic outcomes that benefit others.
Of course, this is not true if a market is crony-capitalist, or monopolistic, or cartel-like, or all of the other things that competition policy is supposed to eliminate but governments often cause through over-regulation, which restricts new entrants to the market.
So what Boris was saying is not “greed is good” – indeed he doesn’t say that at all, but that “greed can be good economically”, which is self-evidently true. Now, does that mean that we should celebrate greed in an Ayn Rand sort of way? No. But we acknowledge greed often exists, and that a market system is the only system that can harness greed to improve general welfare.
Opponents have long sought to attribute the motive of greed to the Tory right and Thatcherites in particular. But it has never been true. Lady Thatcher personally saw greed as sinful. And if the right was inherently greedy and just out to feather-bed the richest, why wouldn’t those on the right of the Conservative party be in favour of a completely open-borders immigration system, which would provide extremely cheap labour to those nasty capitalists? Why wouldn’t we be in favour of those industrial strategies, which siphon off taxpayer funds to rich vested interests? Why does the right tend to be Eurosceptic, when most big business interests are pro-EU membership?
In fact, what Thatcherism was always about (as Shirley Letwin has written so eloquently) was creating a Britain which had more self-reliant, upstanding individuals who, by virtue of government policy, had more liberty together with personal responsibility for their own lives. Free-market conservatives have never believed greed is a virtue, but that a free market system can at least harness greed to improve the lives of others. This subtle point is something those at the Guardian have never been unable to understand. In fact, we sometimes go further and say that more freedom is good for civil society. As Mrs Thatcher said in her 1996 Keith Joseph Memorial Lecture: “the reality was that the success which free enterprise brought over those years was not just expressed in conspicuous consumption… It also allowed a doubling — that’s over and above inflation — of voluntary giving to good causes.”
View the full speech: