Is Money the Root of All Evil?

WalletHub is running a fun little debate on the question: “Is money the root of all evil?”

I’ve got a response up, as does Kevin Vallier. (Jeff Moriarty‘s is also quite good).

Here’s an excerpt from my piece:

If anything, money actually lessens the evil effects of greed by channeling it away from socially destructive practices, and toward socially productive ones. Money is a medium of exchange – of trade. And in societies without trade, the most common way of getting what you want from someone else is to take it by force. At best, that kind of violence and theft produce a zero-sum game where one person’s gains equal another’s losses. At worst, they produce a negative-sum game, and a Hobbesian society in which the life of man is “solitary, poor, nasty, brutish, and short.”

But trade is different. When you trade with someone else – whether through barter or money – the only way to get what you want from them is to offer something that they want more. Trade is therefore only possible when both parties value what they receive more than what they give up. And in this way, the possibility of trade fundamentally changes the social character of greed. What was once a force that led individuals to help themselves at others’ expense now leads them to help themselves by serving others. After all, as Adam Smith noted over two hundred years ago, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”

Money isn’t wealth (if it was, any nation could make itself wealthy simply by printing more of it). But by creating the possibility of mutually beneficial trade, money helps us to create wealth. On the micro scale, wealth is created every time two people walk away from a transaction better off than they were before. On a macro scale, money and trade provide the incentive for the creativity, innovation and growth that has already lifted so much of humanity out of poverty, and continues to do so today.

None of this is to deny that some people do very bad things in pursuit of money. Or that many people value the things that money can buy more highly than they should. But those vices are reflective of deeper flaws in human nature: flaws that pre-existed the invention of money and will remain with us as long as we are human. Money does not alter our human imperfection. But it does both put a limit on the harm that imperfection can cause, and provide us with a way of redirecting it toward the greater human good. That is something to be celebrated, not decried.

Published on:
Author: Matt Zwolinski
  • Paul Sand

    Ayn Rand almost certainly would have objected (heh) to being referenced on something called “Bleeding Heart Libertarians”, but Francisco d’Anconia’s response in Atlas Shrugged is pretty good on this topic:

  • A. Alexander Minsky

    It should be pointed out that the Bible never says money is the root of all evil. In 1 Timothy 6:10 the apostle Paul wrote that the love of money is the root of all kinds of evil. I don’t think too many folks would take issue with that sentiment.

  • Puppet’s Puppet

    Misquoting the Bible into a rather silly-sounding vague slogan would not seem like the most promising starting point for discussion. “Resolved: Money is the root of all evil” sounds more like something you’d find at an undergrad debating society. (Though Yale’s, from my understanding, used to mix in far more rigorous resolutions, like “Resolved: Certs is two, two, two mints in one.”)

    And indeed, there doesn’t seem to have been a lot of good material generated here. That bit from Cal State Fresno was especially appalling. The best, like Profs. Zwolinski and Moriarty’s, seem to have taken this simply as an invitation to mention some interesting issues that are vaguely suggested by the supposed topic of discussion. I was so hoping for one of the panelists to write something on monetary policy!

  • Pajser

    Private property is necessary element in occurrence of greed; individual wants something someone else has, and it inspires selfish, but overall harmful action. I spent one year in compulsory military service in my country. Maybe someone else did also. In such environment, there is almost no private property, and there is almost no greed whatsoever.

    • Jeff R.

      Given the choice, though, most people prefer having private property to not having it. And by most, I mean, like…everybody. Having stuff is nice. Having stuff that’s mine that I never ever have to share with anyone else is even better.

      • Pajser

        Yes, mostly. However, sometimes they prefer student campuses, nursing homes, hospitals, hotels, travelling life generally – as a way of life with little private property. People easily chose it if they see enough benefits. Which suggests that if people rationally conclude that private property is overall bad choice (not only for themselves, but primarily for others too) they can easily give up of it; unlike of overeating or gambling.

  • Farstrider

    Oh no, don’t claim that greed is the engine behind the free market, and therefore the cause of all the good things a free market can produce. Even though this is an obviously true sentiment, people on this board will twist themselves into knots trying to deny it!

  • stevenjohnson2

    The love of money is a desire that cannot even in principle be satiated in the same way the other appetites like hunger, thirst, sleep, sex. Even the abuse of these others is limited by the biological capacity (or lack thereof,) of the individual. The billionaires alive today cannot possibly spend their money to fulfill any widely accepted needs. They want their money for its own sake, or for the power or, possibly, fame, its possession affords. People object to the desire for power because it is in the end aimed at power over them. And for some reason, people find it easy to understand that a vanity that demands fame means sacrificing many other goods to it. And also, fans of famous people are not really respected. The love of money, notwithstanding the Bible, is rarely condemned.

    Libertarianism is a philosophy that touts an economic system that promotes insatiable wants, refusing to draw distinctions with not just satiable wants, but repudiates the very notion of distinguishing wants and needs. (This is usually expressed as the insistence no one else, especially no form of government or economic planning, can identify needs.) For moralists committed to individualism, I should think it a commonplace that libertarianism is hopelessly flawed.

    • Swami

      In a properly structured voluntary market situation the billionaire can only get wealthy by serving the needs and adding value — indeed most likely billions in value — to fellow humans. Most people are able to balance their various desires. But assuming some aren’t, I want a system which requires a person to channel their desires in ways which add value to others. What I have just described is both a description of how markets work and why we have seen living standards increase by a factor of as much as 100X over the past 250 years or so (not coincidentally starting immediately after the writing of the Wealth of Nations and the concept of the Invisible Hand).

      • stevenjohnson2

        Disagree with the premise that a billionaire earned his wealth by serving human needs so much better than other people who don’t. I think that wealth of a certain magnitude allows so many investment opportunities and protects against so many hazards of fortune that getting richer is very much like breathing: As long as you’re alive.

        Further disagree that the possession of vast wealth doesn’t cause distortions in the polity, the society, and yes, the economy that act against average human welfare. Of course, human welfare is not a goal in libertarianism. Unlike libertarians, I deem this a flaw, not a desirable feature.

        And by the way, the increase in human welfare began before Adam Smith and the worship of the Invisible Empire, er, Hand! Yes, Hand! The spread of American food crops across the world alone was responsible for much improvement. As to the industrial development in Europe that ultimately had beneficial effect, the gold stolen by Spain and spewed across Europe played a part in economic growth unexplained by English moral philosophy. For that matter, even in England itself, the conquest of India, its looting and the destruction of the textile industry was more responsible than The Wealth of Nation. Of course, the hideous cost in Indian lives (see Great Bengal famine) asks questions about what we’re about when it’s only certain living standards that even count.

        • Swami

          “Disagree with the premise that a billionaire earned his wealth by serving human needs so much better than other people who don’t”.

          In a market of voluntary exchange, both parties expect to win. Oprah and Michael Jordan and Steve Jobs benefitted billions of people, and they were compensated accordingly. Self amplifying win win value creation. Investors create wealth by putting capital at risk in entrepreneurial endeavors. I hope every billionaire becomes a trillionaire and every millionaire a billionaire as long as they do so by investing in the betterment of mankind by meeting someone else’s need or desires. And every product or service I have bought involves an entrepreneur trying to solve the problem for me and people like me. I am aware that some people throughout history have become wealthy by EXPLOITING others. But markets are the antidote to that not the cause.

          “Further disagree that the possession of vast wealth doesn’t cause distortions in the polity, the society, and yes, the economy that act against average human welfare.”

          I never said it doesn’t affect the polity. Again, proper institutions channel human drive for status and self improvement in socially constructive ways. Improper ones don’t. If you want my list of institutional corrections to the threat of political rent seeking I will gladly offer them up, but they don’t include the disparagement or emasculation or elimination of society’s most productive members as judged by consumers (all of us).

          “And by the way, the increase in human welfare began before Adam Smith….”

          The concept of temporary escape from Malthusian impoverishment was not unknown in history. Google Goldstone’s writing online on Efflorescences (Athens, Rome, Song China, etc). And certainly the opening of soon to be depopulated land of 3 plus continents to Europeans created a situation of short term escape from the two to four dollar a day level of historic averages (skating just above the Malthusian limit). However, the thing which needs yo be explained in history is why this Efflorescence didn’t fizzle out like all those before it. I don’t have space here to explain it, but markets, along with the Enlightenment siblings of science and open access political systems were necessary to not just outrun the Malthusian curse, but leave it in the dust.

          Looting (which has been rampant since the discovery of agriculture) added nothing to the median welfare of people in the Netherlands or Britain.Positive sum, self amplifying networks of cooperation and problem solving were the key. Slavery, rent seeking, and looting were the bad habits we have been slowly trying to shake.

          • stevenjohnson2

            The notion it is the means (a supposedly voluntary exchange on the market that more or less by definition is an equal one,) justifies the ends (the currrent distribution of wealth, income and power) is incorrect: It is always the ends the justifies the means. The real problem of course is the practical difficulty in separating means and ends. Your version is wrong in principle, as well as non-responsive to the ethical question: Is an ethical system that endorses nonsatisfiable wants while denying the ability to distinguish needs capable even in principle of supplying moral guidance? I suggest the moral rhetoric of libertarianism is eristics.

            And the general derangement of your alleged facts doesn’t help your case. Most capital investment is provided by banks creating money in their accounts, not by brave and self-sacrificing billionaire capitalists nobly foregoing consumption. After all, they could wear a thousand suits, eat ten steak and lobster meals, and rent a hundred apartments, and see twenty doctors, and buy ninety books and see a dozen Broadway shows, were it not for their socially beneficial prudence? No, what you imply is utter nonsense. And babble about “political rent-seeking” omits to offer a coherent understanding of this alleged phenomenon, or how economic rent-seeking is miraculously exempt from the evil consequence of political rent-seeking. Again, the means do not justify the ends. The selective definitions of what counts as a political rent does not render the consequences immoral. Nor does a selective acceptance of what counts as a valid title render “economic” rents moral.

            As for stuff and nonsense about open-access political systems, you appear to be wholly unaware that capitalism as a system was a function of the emergence of modern states, national markets with national currencies. This advent of capitalism thus included such contributions to human welfare as the Thirty Years’ War. On the other hand, the opening of access to the political system was closely related to revolutions. The Dutch Revolutions, the Puritan Revolution/English Civil War, the Great French Revolution, the US Civil War, the Mexican Revolution contributed to human freedom. These were the great steps to human freedom, but none of these were libertarian. Quite the opposite!

            The libertarian infatuation with property rights and free markets, led to… not so much. The libertarian notions of acceptable revolution are things like the Glorious Revolution of 1689, the American Revolution, the Meiji Restoration and, probably the best example of all, the Revolutions of 1848. The thing is, if you actually look at the improvements to human welfare from these libertarian (old style liberal) revolutions, they tend to recede back into the imagination. Probably the libertarian utopia was the British Empire, which not only was the terror of the world…but left its own people so starved by free and fair contracts the armed forces had trouble at times finding enough healthy recruits. Again, the means do not justify the ends.

  • martinbrock

    Actual, existing money, like the fiat money described by modern monetary theory? If it’s not the root of all evil, it’s certainly a fertilizer.

  • CJColucci

    Take a cliche that is widely misunderstood, and, even as properly understood, so obviously false that it can’t be taken literally — or is that seriously? — and see if Ph.D.s can say something that a clever high-schooler can’t come up with. Interesting experiment.