Part 1

Just at the start, I am biased towards the free-market perspective. I'm going to try to give an account of both sides, though what I say on the socialist side is biased towards what I think the strongest arguments are. I'm then going to give an account of some influential American economist views on this. But this is potentially a massive topic, so I'm going to focus on American views in the 19th century. At the end, I suggest a book that has a more comprehensive study, though a reviewer notes that it has some biases. 

A brief history of greed, and the debate over market economies

From a free-market perspective, it is not that "greed is good", it is that "markets channel greed into good". 

Greed is widespread across human societies, both geographicaly and historically.  Many religions have included messages against it, or its downstream impacts. As this is about American Christians, I shall note that Bible's 10 Commandments included: "Thou shalt not covet thy neighbour's house; thou shalt not covet thy neighbour's wife, nor his man-servant, nor his maid-servant, nor his ox, nor his ass, nor any thing that is thy neighbour's", but the other major world religions such as Islam and Buddism have similar messages. There are numerous examples of greed throughout history and across the world (McCloskey, 1994). (This is not to say that greed is the only motive of course, economists and historians throughout history, from Adam Smith to Deidre McCloskey have recognised people have affections, and trust, and ethics.) 

If you think that greed comes from human nature, not from market economies, then a couple of arguments of socialists become less convincing:

• You don't expect changing the economic system to eliminate greed, at least not without some other strong argument. As Jason Brennan (2014) argued, there is a difference between socialism defined as along the lines of "people treating each other well and sharing" and socialism defined as "central planning", or "collective ownership of the means of production" or "production for use not for exchange". We can agree that it is good for people to share and help each other, but disagree that socialist plans for economic organisation are more likely to bring this about than market economies.  The history of attempts at socialist ideals, from Communist countries such as the USSR or China to Israeli kibbutz, to various communes, does show that, at least, human greed occasionally shows up in situations that are trying to get away from market economies. 

• You expect governments to err lots too, as they are made of people, who are greedy. Therefore governments are prone to acting for reasons other than the public interest, and of course there are plenty of historical examples of this happening. Therefore, you do not expect government actions to necessarily lead to better results than market actions. 

Thus many economists, from Adam Smith to Deidre McCloskey to Jason Brennan, have favoured free markets on ethical grounds.  

But, to respond to this, the socialist can well argue that:

*  Market economies are dependent on at least some constraints on greed, on people respecting property rights rather than stealing things, on judges making non-corrupt decisions. And there are wide variations in corruption around the world and within a country over time: Transparency International has been publishing an annual index of perceptions of public corruption by country each year since 1995 (obviously a noisy estimate). If we can have honest independent judges, why not other honest, independent politicians and government bureaucrats? 

• Some government actions, like transferring money to the poor, are fairly administratively simple and can be done in ways that are pretty transparent. 

• The evidence for private superiority of provision of some complex services like healthcare or education are suprisingly weak too, at least in countries with competent governments, such as relatively uncorrupt ones. (See Dronkers and Robert 2008). As markets are poor at managing externalities that can't be turned into private property rights, and are poor at providing public goods, governments, even imperfect governments, might be better than none. And, more optimistically, we can hope to build on existing successes to build an even better, alternative system. 

There's more to be said on the socialist side, but I am stopping here for reasons of space. 

The two lines of arguments can of course be synthesised into a general view of using markets to do what markets are best at, and governments to do what governments are best at, and other institutions to do what they are best at. (The pessimist can think of this as picking the least bad option.) There's much individual variation in what people think is the best institution for any particular problem.