What economics teaches is not that greed is good, but that good incentives transform this questionable motive into awesome results. Greed plus property rights plus competition plus rationality plus reputation is good. Greed alone is film noir.
In Public Choice, also known as "economics of politics," we usually assume that politicians are motivated not by greed, but by power-hunger. Of course, we rarely utter the word "power-hunger." Instead, we call it "vote maximization," just as we call greed "profit maximization." But when Public Choice pictures politicians, it pictures humans filled with lust for power.
Is this a reasonable picture of politicians' psyches? Absolutely. That politicians crave power is as undeniable as that businesspeople crave profits. If you look at political history before the rise of democracy, we see virtually nothing other than dictators struggling to cement their power internally and expand their power externally. When these dictators lost wars, they lost territory and subjects, because virtually every dictator wanted to rule over as much land and as many people as possible.
Under democracy, politicians are less candid about their motives; they need us to like them, and power-hunger is not likeable. But given its ubiquity throughout most of political history, can we really believe that the motive of power-hunger is no longer paramount? One of my favorite political insiders privately calls politicians of both parties "psychopaths" - and he's on to something. Rising high on the pyramid of power is hard unless the love of power fuels your ascent.
In a randomly-selected social environment, power-hunger - like greed - is brutal. Just look at the history of warfare in all its hideousness - the endless bloodbaths over slivers of territory. Remember how leaders terrorized their rivals, their potential rivals, their imagined rivals. It's sickening. If Fargo were a war story, and Marge Gunderson hunted war criminals, she might have sadly mused, "So that was Sarajevo on the floor in there. And I guess those were your accomplices in the mass grave. And those three hundred thousand people in Bosnia. And for what? For a little bit of power. There's more to life than a little power, you know. Don't you know that?"Democracy gives power-hungry politicians far worse incentives than the market gives greedy businesspeople.
In dictatorships, the causal chain from power-hunger to bad results is obvious. The fundamental question of Public Choice is: Does democracy motivate power-hungry politicians to do good despite their bad intentions? My admirable nemesis, Donald Wittman, tirelessly argues Yes, but to no avail. Democracy out-performs dictatorship, but that's damning with faint praise.
Once you thank the stars you aren't ruled by Louis XIV or Lenin, a grim truth remains: democracy gives power-hungry politicians far worse incentives than the market gives greedy businesspeople. Above all, voters - unlike consumers - have no incentive to be rational, spurring power-hungry politicians to preach and practice endless demagoguery. It's gotten worse lately, but it's always been terrible. Democracy hasn't turned politicians into decent human beings; it's only gilded their age-old power lust with altruistic hypocrisy.
So what can we do about our predicament? There are no easy answers, but I know where to start. Like alcoholics, we must admit we have a problem. Throughout history and around the world, the wicked rule. We should stop admiring them - especially the politicians on "our side" - and see them for the reprobates they are.