The Tenth Commandment prohibits coveting, in all its forms. But there’s a problem in relating this to capitalism. Isn’t greed good? Doesn’t it cut through, clarify, and capture the essence of what makes things work? That’s what Gordon Gekko said in the movie “Wall Street.”
But coveting isn’t greed. Covetousness is far broader: it wants what someone else has. They may have a fancy car, and you want their car. They may have compliant or successful kids, and you want your kids to be like theirs. Greed, by contrast, is limited to material things. Coveting is forbidden because it leads to many other personal and social problems.
More significantly, capitalism isn’t based on greed, it’s based on interest. It’s not based on desiring what someone else has; it’s based on doing what’s needed to make a business work. Adam Smith famously noted that it isn’t the benevolence of the butcher or baker that provides our dinner, but their regard to their own interest. People earning money benefit themselves, but they also benefit society by providing goods and services that others value. Their free exchange makes an economy work.
By contrast, coveting and greed don’t lead to any social services. They may motivate commercial activity, but they stimulate other social problems, too. Excessive desire for someone else’s stuff leads to what other cultures call “The Evil Eye.” In investing, coveting someone else’s success can lead you to try to adopt their approach when you’re not prepared to, and often causes people to chase after high-flying markets, buying high and selling low.
Greed isn’t good, and coveting doesn’t clarify. Anyone who has ever watched a couple three-year olds struggle in a sandbox knows this.
Douglas R. Tengdin, CFA
Chief Investment Officer
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