What is Greed?

I was chatting with a friend a few days ago and we were discussing business and investment opportunities. As an off-question my friend asked what I would do if I had Warren Buffett’s money. I half-jokingly said I would build a race track and race around it all day in all sorts of exotic cars. I say half-jokingly because given the chance I would love to do that, but I know there is no way I get get away with doing that while amassing and maintaining that sort of wealth at the same time. My friend laughed and in a light-hearted manner told me, “You’re so greedy.”

I literally paused for a second, but brushed the comment off.

Yesterday I was reading the financial news and saw that Procter & Gamble Co. and Kimberly-Clark Corp. were both going to raise prices on certain items such as diapers and paper towels. The reasons given were from lowered net income from rising costs of goods. Reading some of the comments from one of the stories revealed a common theme:

“Kimberly Clark, symbol of greed.”

“Crony capitalism at its finest.”

“corporate greed at its worst”

Assuming that P & G and Kimberly-Clark are telling the truth about rising costs, is raising prices on consumers justified? Is it corporate greed? I did blog earlier about the realities of rising commodity prices. Should corporations be responsible for eating the costs of rising prices?

Let’s look at the definition of the word greed:

  • : a selfish and excessive desire for more of something (as money) than is needed

Going by the strict definition, it is greed. Then again, going by the strict definition, many other things should be deemed greedy. For example, leaving one job for another job that pays higher is technically greedy. It’s “more of something than is needed.” However, should we be splitting hairs here?

The reason I wanted to talk about greed today is because of the very nature of what we are trying to accomplish as investors. Investors take extra capital or money that they have and invest it in efforts to generate additional capital. Taking extra money and trying to make more money is by definition greed.

I blogged earlier about setting and managing expectations of investments. This is an additional aspect one should also consider – the moral implications of investing. With your investments you should expect to invest in companies that many will consider to be greedy. You will most likely be supporting companies that implement cost cutting measures and other “greedy” tactics.

The question you should ask yourself as an investor is, “Are you OK with that?” If not, you may have to re-consider some of your expectations in investing. Should one even care about what others think of their actions?

I personally think that “greed” is automatically seen as negative or evil by society. I don’t think greed in itself is negative or evil. It’s what you do with it that should be judged as evil or not. Is my fantasy of driving around a race track in exotic cars greedy? Yes it is. Is it evil? I don’t think so.

There are many different views on the subject of greed.

Here is the late economist Milton Friedman’s take on greed:


Here is comedian Lewis Black’s take on greed: (explicit language)


How do you look at greed?

photo credit: 1 2

4 Responses to “What is Greed?”
  1. Mike Meikle says:


    I think because companies have been demonized by popular culture, they get a lot of flack about being “greedy”. However, professional sports stars, actors/actresses and musicians seems to avoid this greedy label for the most part, even though they receive enormous financial compensation.

    Folks have to understand if the cost of making an item goes up, they are going to eventually see that reflected in the price they pay. Companies are there to make a profit. If they don’t make a profit, then they don’t employ people or just fire them to cover costs. The alternative is government controlled companies and shortages on necessities since there would be no profit in making more goods available. (see Soviet Union)

    I believe that people should have the right to go out and become as successful as they can be. If I was a wealthy as Buffet, I would be driving that Bugatti Veyron around the track, especially because I worked very hard to get there.

    • Gian Sorreta says:

      I see you know your exotic cars :)

      I agree with you. Society has ways of picking and choosing who is greedy and who is not. I know I shouldn’t be concerned with what others think about me, but sometimes it does get hard to ignore, especially when it comes from those close to you.

  2. G, I really liked this post! When organizations or individuals work hard or have an extraordinary talent or ability that is rare and therefore make large sums of money, they are almost always labeled as “greedy”. Of course, “greed” has a negative connotation in our society. Yet, if you think about it, much of this “greed” results simply from the law of supply and demand and capitalism. I’m not sure that everyone who denounces “greed” would also denounce capitalism? Additionally, do we really want to cultivate a society that looks down on someone who works hard for success?

    • Gian Sorreta says:

      I hate to get political, but part of me sees part of society moving to cultivate a society that looks down on success. We can see it in sports and sports leagues already.

      Back on topic, there are some instances of greed that are downright evil. For example, looking at the Enron’s and what Goldman Sachs has done in the past leaves a bitter taste in the mouth of many. However, I still believe it is the few bad eggs that give a bad name to the majority.

Leave A Comment