David Heinemeier Hansson

January 23, 2024

Is greed really seasonal?

As the tech layoffs continue, there’s naturally a search for someone to blame. People are losing their jobs after all, so that must mean someone is acting malevolent, dammit. This is when the age old accusation of greed is trotted out. Companies are only laying off people now because they’re greedy! If only we could eradicate greed, everyone would still have a job, and all would by dandy. Oh please.

The idea that greed is this seasonal affliction that only seem to infect companies and executives occasionally is not a good explanation for these layoffs or, well, anything at all. It’s a cope, as the kids would call it.

The beauty, if you will, of the capitalist system is that it produces progress and wealth without relying on benevolence or bleeding hearts. Adam Smith captured this perfectly in OG economist text, The Wealth of Nations from 1776:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

In the grand scheme of coordination between strangers and acquaintances, most everyone, save for a few saints, has themselves and their families closest. That is, they’re optimizing for their own interests, which is easily mistaken for greed, but is in fact the method that produces our dinner, as Smith would have it.

That’s not to say layoffs are “good” or “fair” or any of the other just-world fallacy term one might seek to apply. Layoffs suck. Most for the people laid off, but certainly also for the companies paying severance, incurring public ill will, and missing their financial projections.

That’s why greed is such a poor explanation for what’s going on. The most greedy executive would have been shrewd enough to foresee all this, never hired too many people in the first place, and booked all the savings from not having to pay out severance as profits.

I think a much better explanation is that nobody knows what the hell is going to happen tomorrow during times of turmoil. And lord have we had turmoil lately. Economists can’t predict whether rates are going up or down, whether people want to buy homes or luxury watches, or even if we’re heading for a recession, a ceasefire, or what the weather in California will be in 2024.


While that’s a good explanation for choices that turn out poorly, it’s a terrible coping mechanism for grieving layoffs. Because it accepts the humanity of everyone involved. That nobody, not you, not highly-paid executives, not stock analysts, have a perfect crystal ball to predict tomorrow. And that no matter how much money you pay a professional CEO, they’ll make bad bets, like hiring too many people in anticipation of growth extrapolations based on yesterday’s weather.

At large scales of coordination, greed is a constant. It doesn’t wax or wane, and it absolutely does not sleep. But it’s also the drive of aggregate progress, even if impervious to individual hardship, and remains the key human leverage for the betterment of all. If you need a more palatable name, just call it enlightened self-interest. That’s a better way to cope.

About David Heinemeier Hansson

Made Basecamp and HEY for the underdogs as co-owner and CTO of 37signals. Created Ruby on Rails. Wrote REWORK, It Doesn't Have to Be Crazy at Work, and REMOTE. Won at Le Mans as a racing driver. Fought the big tech monopolies as an antitrust advocate. Invested in Danish startups.