11/15/2008 05:12 am ET | Updated May 25, 2011

Bank Regulation Isn't Enough, We Need Parasite Repellent

Sure, it's always a good idea to lock your door when the crime rate is high, but it doesn't reduce the crime rate. The current crisis suggests we need to re-examine the cultural assumptions that keep getting us into trouble.

Capitalism is based on two opposing principles. The first is trust. A 15th century Venetian trader had to trust his Lebanese counterpart to keep his end of the bargain, and vice versa. A lender has to trust his borrower to pay him back. Trillions of dollars change hands daily on the basis of trust.

The second principle is greed. It helps drive the system, but also motivates the violation of trust. And when trust breaks down, as now, it's catastrophic.

The problem with greed is that it's open-ended, infinite, self-reinforcing--a positive feedback loop, like cancer. Those already wealthy tend to be the greediest--they fight taxes the hardest, and donate the lowest percentage of their wealth to charity. Even those most famous for philanthropy only managed to part with a portion of the interest on their huge wealth, while continuing their efforts to make more.

Meanwhile those who lack this peculiar addiction get poorer. Like Alice in Looking-Glass Country, most ordinary people have to run twice as hard just to stay in the same place, as the last four decades have illustrated dramatically. Very little 'trickles down' because the addicted spend every waking hour stopping leaks.

Greed is a powerful addiction--an unyielding force that requires constant vigilance to keep it from destroying the system. It worms its way around constraints, and infects every kind of enterprise with its toxicity. Which is one reason we now have the worst health care system in the industrialized world--a system in which health laws are written by drug company lobbyists, dangerous drugs are foisted on the public by rigged studies, and 'insurance' is little more than an extortion racket--extremely profitable to the insurers, and useless to those who need it most.

We need to question the cultural value our nation places on greed. There will always, of course, be people who feel so emotionally deprived that all the money in the world could never fill the deep hole in their psyches. But this doesn't mean our entire society should be based on greed. Greed is not a social goal, it's a disease. A social goal might be something like, "we will build a beautiful city", or "we will educate all our children", or "we will eliminate carbon emissions". But there's no point at which a society can say, "we have achieved our goal, we have satisfied our greed." To have greed as 'The American Dream' merely means that the most pathologically avaricious Americans become pathologically wealthy.

One way this value is maintained is through the erroneous belief that greed is simply 'human nature'. Of course humans can be greedy, especially when persuade by economists that greed is 'rational', and that success is measured by excess. But there is nothing inherently greedy about humans. It is no more 'just human nature' than its cousin, alcoholism. In fact, for most of our existence on this planet, there was no percentage in being greedy. Hunter-gatherer bands did not--could not--accumulate. They shared or they died. We are genetically programmed to cooperate--it's how we survived in Paleolithic times against far stronger predators.

But we cannot blame all our problems on the pathology of the wealthy, for we, as individuals and as a nation, have been enablers. We have accepted a value ("greed is good") that may have had some utility when our ancestors first arrived here, but does no longer. We need to organize our nation around goals that actually lead somewhere, create something useful, solve some problem.

A university president recently complained that students were no longer interested in science and engineering, but were all going into finance, because 'that's where the money is these days'. Our worship of greed has led to a situation where those who contribute nothing to society, but merely gamble with other people's money, are rewarded with billions, while those who educate our children, plant and harvest our food, or make our clothes, are paid next to nothing. Our present system of greed-worship is a recipe for social suicide. The credit default swappers, the short sellers, the sub-prime scammers, and all the other financial speculators and manipulators we admire so much are merely parasites--ticks that suck useful energy from the body politic to feed their own bloated bodies.

Jarod Diamond, in his study of failed societies, found that many collapsed because a few enriched themselves at the expense of the society as a whole, gobbling up vital resources until the whole system failed. Only those endangered societies willing to re-examine their basic values escaped this fate. Those rushing to grab careers in finance may be sentencing their grandchildren to extinction.

(For more on value change check my website for information about my new book THE CHRYSALIS EFFECT: THE METAMORPHOSIS OF GLOBAL CULTURE).