Matt Yglesias reiterates his side of a listserv debate about the ethics of the banking industry:
I was saying that whatever one thought should be done with large financial institutions as a policy matter, surely we could agree that the executives at these institutions are primarily bad people.
It turns out we couldn't agree on that. But my argument is pretty simple. These are people primarily motivated in life by greed. Not just by a desire to make some scratch, mind you. [...] They're multi-millionaires who want to earn millions more. It's possible, of course, that Vikram Pandit really does find being a bank executive to be intrinsically interesting. But a good person, who's primary passion was the life of a bank executive, would be donating the bulk of his massive compensation package to charity. But that's not what Pandit's doing. Rather he, like virtually all executives at major firms, is living a life that's primarily oriented around an ethic of greed.
Now there's a decent argument out there, familiar from Adam Smith and the whole tradition of economics, that a world full of greedy people isn't necessarily quite the disaster that pre-modern ethical thinkers would have thought. This is all well and good. True even. But it's a sign, I think, of a kind of sickness running through American society that we've lost the willingness to just say clearly that ceteris paribus greedy behavior is not virtuous behavior. [...]
A couple of points about this. First, I think there's a false equivalence in Matt's post between behavior that is "not virtuous" and behavior that is "bad." I'm willing to agree that greed -- or simply "self interest" in Adam Smith's words -- deserves no special prize for virtue. I don't think anyone really has much trouble saying that greed is not the same thing as virtue. But that's not the same as saying a self-interested person is a bad person.
Indeed, if you buy Smith's argument (as I take it Matt does) it becomes hard to identify what's so bad about self interest. Smith's point on this subject (as I remember The Wealth of Nations) is twofold. First, self-interest is a part of human nature. And, second, markets have a funny way of transforming that private self-interest into social benefits. That's the oft-cited line about how it's "not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest." These are observations, not prescriptions: Smith is just describing how he sees the world work. What else should we expect?