On Greed in General & The Economic Psychology of Greed
One day a countryman going to the nest of his goose found there an egg all yellow and glittering. When he took it up it was as heavy as lead and he was going to throw it away, because he thought a trick had been played upon him. But he took it home on second thoughts, and soon found to his delight that it was an egg of pure gold. Every morning the same thing occurred, and he soon became rich by selling his eggs. As he grew rich he grew greedy; and thinking to get at once all the gold the goose could give, he killed it and opened it only to find, – nothing.
—Killing the Goose That Laid the Golden Eggs—one of Aesop's Fables.
This fable or, more precisely, a version of it is to be found in various tales and fables of various traditions of human existence; the core idea, the moral lesson in such stories is always the same: destroying the source of one’s possession for want of an unquenchable more with the always despairing result of finding nothing. The stories—written or unwritten—are always told, and always transmitted from generation to generation. Therefore, greed, broadly understood as the unquenchable desire of wanting more and more—indefinitely, has been a central preoccupation for many thinkers throughout human history.
Antiquarian writers and philosophers such as Thucydides, Plato, Aristotle, etc. have written, in their various ways, about greed. So did later philosophers ranging from Thomas Aquinas to David Hume, Karl Marx, etc. Although they recognize that greed can be good for social progress, these thinkers condemn it because, on a balance scale, it does more evil than good.
Nonetheless, greed is generally decried without favor. For Mahatma Gandhi, for example, “There is a sufficiency in the world for man’s need but not for man’s greed”. In the same token, the German social psychologist, Erich Seligmann Fromm, describes it as "a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction[1]." Equally, all major religions condemn greed as the source of all evils. Catholicism, for instance, considers it a vice, one of the seven deadly sins while Islam abhors it as an egregious error, an unpardonable evil if only because for greedy people, due to their unquenchable and insatiable desires, enough is never enough. And in most cases, they would do (or make people do) whatever it takes for them reach their never satisfying goals: the end justifies the means, they proclaim. Hence greed or avarice is first and foremost a self-serving desire for excess wealth, status, power, gluttony (food), lust (sex), or other possessions—material as well as non-material. As such, greed has two faces: a face of acquisition of what one does not (yet) have and that of retention of what one already has.
Despite all these cri de cœur (or because of them), however, there are many viewpoints that support greed with good reasons. Indeed, although Karl Marx blames capitalism for being greedy and stingy and inhumane (all of which is true!), many philosophers (from antiquity to modern times) have acknowledged the importance of greed in advancing human knowledge, bettering human conditions and progressing social fabrics. As explained above, many thinkers have a more or less ambivalent position on greed by first admitting the goodness in it and then condemning it because its evils outweigh that good.
Yet, perhaps, the most vivid defense of greed would be found unsurprisingly enough in the 1987 film “Wall Street”. Inspired by Ivan Boesky, Gordon Gekko passionately argues that: "Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind”[2].
In the field of economics, nevertheless, greed is perceived as playing a double-edged-sword role: on the one hand, greed can be (and has been) a determinant factor, and engine of innovation and ambition and creativity, all of which are crucial for a productive and resilient economy. It is not an overstatement, for instance, to say that greed has been an important force, a momentous driver of Adam Smith’s invisible hand and the celebrated theory of maximization, so crucial to economics—microeconomics—to be more precise. Therefore, since greed is thus viewed, through a constructive lens, as a driving factor for economic growth and at large development and progress, it is perhaps not surprising that a lot of research have found economics graduates to tend to be greedier and stingier and meaner. On the other hand, however, it is also seen as the root cause of economic and financial crises. Greed, the argument goes, engineers speculations, financial bubbles, and an unforgivably irresponsible banking practices of the financial wolves (bankers!) in financial markets. That is not all, however. Corruption, deception, indebtedness, theft, and financial frauds and scandals are all associated with greed.
What is remarkably surprising is that until recently[3] psychologists in general, and economic psychologists in particular paid very little attention to this crucially important concept, of which a lot has been written and much more said. Thus Seuntjens, T. et al., (2015)’s deploring disappointment: “Although greed is both hailed as the motor of economic growth and blamed as the cause of economic crises, very little is known about its psychological underpinnings”[4]. And this gap, this silence has been blamed on the difficulties surrounding the tasks of conceptualizing and properly defining greed, both of which are critically important, lest the empirical measurements are doomed to inaccurately capture greed and lead to false conclusions, and potentially devastating policy measures. Surely, studying and understanding the economic and psychological behavior of greed (economic psychology of greed), that intense selfish desire for maximization of possessions, may offer ways to better handle its destructive and negative side and harness its positive and constructive one.
Moreover, the study of economic psychology of greed would shed light on the personality traits and characteristics of greedy people and the economic and psychological impacts of greed, for instance. Such investigation would better explain this phenomenon and help predict people’s behavior towards it and guard against its destructive effects. According to Seuntjens, T. et al. (2016)[5], who empirically investigated the impact of greed adolescents’ financial behavior, for example, greedy adolescents tend to earn more income (constructive impact), but they also tend to save less and borrow more (destructive effects). Yet a lot more is still unknown about the economic psychology of greed.
[1] Fromm, E. (1941). Escape from Freedom New York. Holt, Rinchart & Uinston of Canada Limited
[2] “Wall Street” (1987) at
[3] See Seuntjens, T. et al., (2015), who have been the first to empirically endeavor to investigate greed. Also see Seuntjens, (2016) and Seuntjens, T. et al. (2016).
[4] Seuntjens, T. G., Zeelenberg, M., Breugelmans, S. M., & Ven, N. (2015). Defining greed. British Journal of Psychology, 106(3), 505-525.
[5] Seuntjens, T. G., van de Ven, N., Zeelenberg, M., & van der Schors, A. (2016). Greed and adolescent financial behavior. Journal of Economic Psychology, 57, 1-12;
Further S.
Seuntjens, T. G. (2016). The Psychology of Greed. Ridderprint.
Universität Innsbruck, (2016). Marcel Zeelenberg - Towards an Economic Psychology of Greed: https://www.youtube.com/watch?v=TjYDSUblrdw.