Natural Selection, Capitalism and Government Intervention

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The Oxford Libertarian Society, after a brief hiatus, has recently launched its “Hayek Discussion Group”, which seeks to “encourage graduate students and scholars alike to submit abstracts. We are looking for interesting and innovative works which challenge the contemporary thinking about how society should be ordered”. Below is the first submission offered by Justin E Lane, D.Phil. student in the Institute of Cognitive and Evolutionary Anthropology, University of Oxford, followed by some comments.

Topic: “Evolution and governmental policies: How the process of natural selection can serve as a basis for fiscal policy.”

Abstract: Many scientific theories can, and have, been used to inform political thought. I would like to propose that evolution by natural selection can inform the formation of policies in capitalist economies. As the basis for this argument, I would defend that capitalist free markets are the most “well-suited” or “natural” forms of economies as they are operational analogies to natural processes. This knowledge of evolution can be particularly informative in discussions of authority and law, but this discussion will concentrate on its theoretical application to the idea of “the free market” and how, if left alone, it will act in a naturally selective manner not unlike evolutionary processes in the animal kingdoms. I would also like to raise the question, when-or if-, it is appropriate for governmental bodies to ever step in to guide this process in a more controlled selection process. In conclusion, the interplay between fiscal policy –including energy policy and resource allocation- inform national security interests and how a similar foundation can begin to inform these issues as well.

Given that Lane has not had a chance to fully elaborate these thoughts it is appropriate that the initial comments are relatively brief. Unfortunately brevity cannot mask the flaws in this attempt to justify capitalism.

At the foundation of the capitalist economy is the individual human, the being that desires, chooses and acts. He is conscious, thinking, discriminating, preferring, reasoning and the content of all of these aspects in his mind can change from one minute – nay, one second – to the next. Indeed, the processes of production, trade, consumption, saving and investment are all synonymous with progress, that they are entered because the acting individual views the result as a greater or more valuable thing than what existed before.

Natural processes, however, lack all of these features. They are purposeless, occurring and repeating while being empty of any desire or conscious thought behind them. There is no achievement or progress in moving from one stage to the next, and there is no one to say that the latter stages are any “better” than the original. Events may be regular, they may be measurable and they may be predictable or non-random but they are neither valuable nor achieving anything.

Evolution is precisely one of these inherently purposeless processes. It is neither “good” nor “bad” that natural selection occurs; it is merely an unconscious unfolding of events initiated by unmotivated influences. It doesn’t lead to anything “better” or “higher” than what proceeded before – it takes a desiring, choosing, acting human to determine this. Selection in the market economy is therefore entirely unlike natural selection – it is the result of choices motivated by desires, to achieve something that is inherently better than what preceded it.

Any justification, therefore, of a capitalist economy that relies on its alleged process of “natural selection” simply raises the question why should we desire the outcomes of these selections? Why are these outcomes “better” than any other and for whom are they better? In short, the theory presented in this abstract merely restates the very starting point of political discourse – is individual, uncoerced action “better” than action coerced by the state? This is a question that Lane, in his penultimate sentence, appears to introduce as a mere secondary issue when in reality it is the crux of the entirety of political philosophy; indeed, his position is akin to that of an historian who says “Oh I would also like to look at what happened in the past”. As he provides no justifiable answer whatsoever to the all-important issue we are very firmly still at square one.

Lane’s second error lies in the belief that scientific theories may legitimately inform political thought. If it is accepted that theories applicable to unconscious, purposeless matter are also applicable to thinking, desiring, choosing and acting humans then one accepts that other such theories and analogies may, in principle, be valid. Hence, as Lane’s abstract provides us with no reason to accept the contrary, why should they not be tried and tested?

It is the opening of the Pandora’s Box of such positivist methodology that has led to some of the most horrific and overwhelming conquests of the individual by the state. Not only did the Communist experiment in the former USSR take an eye-wateringly drawn out seventy years to be “proven” false at the cost of tens of millions of lives, but we are continuingly plagued by constant testing and tampering by so-called economists who, in their hubristic ignorance of the correct methodology for their science, continually expect the results of their interjections into human behaviour to be qualitatively and quantitatively inline with their hypotheses. And if not then why not just adjust it slightly and try again and again and again until something “works”?

Perhaps Lane is scratching the surface of a natural law justification for private property and free enterprise – that the free market is the only way that an individual can truly flourish according to his nature? May be so, but his way of describing it in the abstract is, at best, confused and, at worst, simply incorrect. If he wishes to proceed with justifying capitalism in the same vein then he should call for a swift denouncement of positivism and any analogising of the market economy to scientific or “natural” processes and turn his attention instead directly to the natural law tradition.

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The Scourge of the Collective

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By the far the most significant error with any political, social, economic or philosophical discourse today is that all questions, issues and problems are posed by starting not from the individual but from the collective as the most significant unit in the discussion. Time and again, even among liberal and libertarian circles, hot topics are posed as any of the following: “Should we do V?”; “Should society allow X?”; “Should the Government intervene in Y”? “Should everyone be forced to do Z?”

Such a way of tackling these problems assumes that there must be an answer that is applicable to everyone. That, for everyone, either one of A or B must apply but individuals (those selfish, unfeeling, heartless and greedy morons whose interests must always be subjugated by the “good of the people”) are never able to choose which one of those they might prefer. Indeed, for libertarians and liberals to accept the false dilemma by entering these discussions results in them conceding the basic assumption of the statist opposition, that is that the individual is subordinate to the collective.

Here are some common examples. Please note that the discussion of each is not intended to resolve the issue at hand, merely to demonstrate the correct way of posing the question.

1. Should we intervene in other countries’ affairs?

Anyone attempting to answer this question is invited to argue, in the face of brutal oppression or of invasions of countries elsewhere, that either everyone must be forced to pay for or participate in “our” intervention or everyone must not. In short, a more honest way of stating the question is “should the Government confiscate the fruits of our productivity (i.e. tax) us to pay for military aggrandizement abroad?”

But why should we all have to intervene or all not have to intervene via the Government? If I believe so strongly that the aggressive violence on the part of state leaders or armies overseas is so unjust and must be repelled then what is stopping me from sending my financial help with money that I have earned to this cause? Indeed, what is stopping me from resigning from my current life and flying out to act as a freedom fighter in defence of the helpless civilians? On the other hand, if I believe that whatever is going on abroad is none of my business or I have (in my view) much greater pre-occupations at home and that my financial resources are best devoted to these why should I be taxed to fund a cause that others find important but I do not? What right does anyone else have to money that I have earned but they have not? Further, actions always speak louder than words. If you believe so strongly in something then you should be able to put your own money where your mouth is. If you are only willing to do so with other people’s money then perhaps it isn’t that much of a just cause after all?

In short, the problem should be discussed as follows. If the individual wants to support a cause abroad should he be prevented from doing so if it inflicts no violence or aggression on any other individual? If he does not wish to support such a cause then should he be forced to do so when his antipathy is similarly free of violence and aggression?

2. Should we allow the buying and selling of organs?

Again, the question is not “should we permit or ban the trade of organs?” It’s “should I be prevented or permitted by you from trading what is a part of my person or property with another individual on terms agreeable to ourselves that inflicts no violence or aggression on anyone else?” Answers on either side must therefore be directed to the question of what justifies one individual or group of individuals being able to violently enforce their point of view on others who do not share this point of view.

3. Should we regulate industry X?

The story is always the same. Something terrible happens, a plane crash, a building falls down, or someone loses their life savings through the collapse of some hair brained investment scheme. The clamour is always for us to regulate more, usually in the name of safety, to prevent such disastrous consequences from ever happening again. In practice what this means is that the Government should be permitted to tax all of us in order to more closely supervise industry X, industry X being whichever industry is deemed to have caused the unfortunate event.

As tempting as it is to launch into a discussion of the fact that regulation itself consumes valuable resources and hence is also a part of the market process, plus that regulations are often the very cause of the problems that they seek to ameliorate (or at least the existing regulations fail to detect problems that should have been obvious within their existing scope – Bernie Madoff for instance), we shall stick to the problem of how these questions should be posed correctly. If I think that industry X should be regulated then why can’t I pay, with my own resources, a consumer watchdog to keep an eye on industry X and report to me any potential problems? Or, as would more likely be the case, why do I not just refuse to purchase products from industry X and insist that, before I return as a paying customer, they must conform to the standards laid out by regulator Y? (Underwriters Laboratories is a good example of this arrangement). Should my desire to see industry X regulated allow me to command the resources of people who wish to have nothing to do with industry X, or are happy to accept its products unregulated at the price for which they are on offer?

4. Should we ban smoking in public places?

The loaded phrase in this question is “public places”, a good definition of which is as follows:

“Generally an indoor or outdoor area, whether privately or publicly owned, to which the public have access by right or by invitation, expressed or implied, whether by payment of money or not, but not a place when used exclusively by one or more individuals for a private gathering or other personal purpose.”

The problem is that most premises that are within the scope of this definition of “public place” in various pieces of legislation are not places that are paid for and maintained by public money (taxes). They are privately owned and operated places to which members of the public usually do not possess a right to enter but rather are invited to do so in order to carry out trade. Shops, bars, restaurants, gyms, etc. are all good examples of this kind of premises that are categorised as a “public place”. No one is forced to enter these places, to purchase products that are sold there or to pay for their upkeep. In short all activity that goes on there is entirely voluntary.

The question, therefore, is not whether “we” should ban smoking in “public places”. It is “should I, as an owner of private premises into which the public are invited, be forced by you and others to allow or prevent my invited visitors from smoking when you have no obligation to enter, pay for or maintain these premises?” Alternatively “why if I prefer or prefer not to smoke when I am an invited visitor to certain premises should I be not able to find premises that suit my desire accordingly when you need not enter, pay for or maintain these premises?”

In conclusion, the common element running through all of these questions is the absence of violence and aggression involved in the acts concerned. In short all of the questions can be posed as “Should X prevent Y from doing activity Z when Y carrying out activity Z inflicts no violence or aggression on X?” Posing the questions in this way strips naked all collective thinking and exposes it for what it really is: the violent enforcement of the values, tastes and morals of some people upon people who do not share the same.

Finally, the words of Ludwig von Mises in these regards are instructive:

Individual man is born into a socially organized environment. In this sense alone we may accept the saying that society is-logically or historically-antecedent to the individual. In every other sense this dictum is either empty or nonsensical. The individual lives and acts within society. But society is nothing but the combination of individuals for cooperative effort. It exists nowhere else than in the actions of individual men. It is a delusion to search for it outside the actions of individuals. To speak of a society’s autonomous and independent existence, of its life, its soul, and its actions is a metaphor which can easily lead to crass errors.

The questions whether society or the individual is to be considered as the uitimate end, and whether the interests of society should be subordinated to those of the individuals or the interests of the individuals to those of society are fruitless. Action is always action of individual men. The social or societal element is a certain orientation of the actions of individual men. The category end makes sense only when applied to action. Theology and the metaphysics of history may discuss the ends of society and the designs which God wants to realize with regard to society in the same way in which they discuss the purpose of all other parts of the created universe. For science, which is inseparable from reason, a tool manifestly unfit for the treatment of such problems, it would be hopeless to embark upon speculations concerning these matters. (Human Action, Scholars Edition, p. 143)

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Saving One Life or Saving Many: An Apparent Moral Dilemma Unravelled

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An oft-posed moral dilemma runs something like this:

A runaway train is careering at full speed towards one of two sets of people on the track. Ahead of the train’s current position the track divides into two, the direction of the train being controlled by a set of “points” (sometimes called a “switcher”). After the divide one person is trapped on the first track and five people are trapped on the second track. Person A has no ability to stop the train, but he can control the switcher so that he can divert the train from one track to the other. Doing so will necessarily cause the train to strike and kill the people on that track but will save the people on the other track. What should A do?

Nearly every discussion of this problem launches head first into tackling the issue of whether five lives should be saved at the expense of one or vice versa. Seldom considered is whether A should do anything at all and whether any of the six people in peril have a right to command his assistance. We will therefore postpone discussion of the “many versus few” problem until this more fundamental issue has been resolved.

Ignoring, then, the fact that A’s assistance to the people on one track will necessarily cause the deaths of the people on the other, if A can be said to have an obligation to help any of the six people then this obligation must vest in these people a corresponding right to be helped. This right is manifest in the six people being able to demand the use of A’s resources, diverting them from what A would prefer to do with them towards what the six wish to do with them.

But where does this obligation and corresponding right come from? In the first place, if A did nothing and the train crashed into some or all of the people, A would not have caused this. The train was already running away, the people were already trapped on the track. No positive act of A has done anything to cause this situation. Regardless of whatever else A was doing the train would still have crashed and killed them.

It could still be argued that A’s failure to intervene was an active cause of the crash, i.e. what he didn’t do as opposed to what he did do was a necessary factor. The problem with this, though, is that there are thousands, if not millions, of other things that didn’t happen to intervene and prevent the crash. The train didn’t run out fuel; the wagons were not heavy enough to slow the train down the train to a safe speed; a meteor didn’t fall from heaven and crush the train in its path. Why is the lack of A’s intervention any more of an important absence than any of these examples? It might be retorted that A was in the position to act, that he had the ability to change the outcome whereas everything else depended upon the intervention of nature. But another cause of the crash was the fact that everyone else in the world didn’t help either. Why are they not equally obliged as A is to intervene? May be they didn’t have the ability that A did to prevent the outcome successfully or may be they were too far away, but how far away and how “impossible” does it have to be for them to intervene before the positive obligation for A to do so alone becomes active? How can this be measured non-arbitrarily? At what point do we single out A as being morally culpable?

Indeed, in the absence of any positive act of A being the cause of the crash, the only potential basis of the right of the six people to his intervention is that they have a “need” and A has the ability or “means” to fulfil it. Ignoring then the fact that other people in the world may also have the power to intervene is this a solid basis for this alleged right? The first problem is, again, one of measurement – how do we judge A’s “means” to intervene? Does he have to possess resources that will fully ameliorate the problem or is he still required to act if he can partially intervene? What about his knowledge? What if he doesn’t know what his actions will do or whether they will have any effect? Is he still obliged to do something? The second, more pressing problem, is judging the “need” of those who wish to be helped. What should the “need” consist of? Must it be urgent and life threatening? If so, how urgent and life threatening? Where precisely and non-arbitrarily is the cut off point, one side of which A has no obligation or culpability at all and on the other side he does? What if the “need” consists only of something that affects the quality of a person’s life rather than the life itself? Should this be included or excluded? And again at which level of “quality” and under whose judgment of it should A be deemed as being obliged to intervene?

Lest anyone considers all of the preceding paragraph to be too abstract this type of analysis relates directly to the redistributive efforts of Governments through taxation and the aggrandizement of the welfare-warfare state. The poor have a “need” that can be fulfilled by taking from the rich. People who are oppressed abroad “need” to be saved from the horrors of an evil dictator or an invading foreign power so we are taxed in order to pay for military help to be deployed.

Aside from the question of whether this is just, the economic effect of determining rights and obligations by “need” and “means” can only be wealth destroying. If X has a “right” to have his “needs” met by Y’s “means” then X producing the means to meet these needs himself will become, to him, relatively more costly and less beneficial. He will therefore produce fewer means. Similarly, if Y knows that a part of his productivity will be confiscated to meet X’s needs, then production of these means will become, to him, relatively more costly and less beneficial and he too will produce less. Further, because being in the position of having “needs” is now rewarded with other people’s resources, having “needs” instead of “means” becomes a more attractive option. There will therefore be more people with “needs” and fewer people with the ability to meet them. Overall, therefore, societal wealth will decline. Applying this to the runaway train scenario, if the six victims know that they have a right to be helped in the event of peril, relatively they will have less of an incentive to prevent the perilous situation from arising in the first place. Similarly A, knowing that he will be obliged to divert some of his resources to helping the six will, relatively, avoid putting himself in the position of being able to help by producing less. The result will be more needs and fewer resources to meet them and, hence, decreased societal wealth.

Therefore, in the absence of any positive cause by A of the runaway train (or any contractual agreement that stipulates A will intervene) none of the six person’s has any right to A’s intervention at all and correspondingly A has no obligation to provide such intervention.

Let us now, however, turn to another aspect of any intervention by A – the fact that saving one set of persons will necessarily mean that the other set is killed. Ignoring for the time being the fact that one of the tracks contains more people than the other, if any of the people have a right to intervention then what this entails is that the act of saving them will cause the deaths of one or more others1. What right does of the any of the six people have to be saved at the expense of another’s death? A person might be said to have a “right to life” but what of the “right to life” of the other person? Why is this not important? Furthermore, if A intervenes his intervention will now be a positive cause of deaths of other people. How can this be a moral obligation?

However, the live issue, and the one that always forms the core of the debate, is the fact that one of the tracks contains more people than the other and hence diverting the train onto this first track will kill more people. Is A, if he intervenes, justified in saving more lives at the expense of killing fewer?

There are numerous problems with arguing in the affirmative. First, how we do know that five lives are worth saving more than one? If something is worth something then by definition it is, in some way, valued. But valuations are made by individual human beings and so precisely whose valuation of these lives are we talking about? We could start by only considering the value that the potentially doomed people have of their own lives. But the problem is how do we measure this value and compare it between the individuals? In other words just how we do know that the five people together value their lives more than the single person does? What is the measurement of this value and how do we add it together? What if the five people were all suicidal or indifferent to living whereas the other individual possessed a great zest for life and the last thing he would ever want to do is extinguish it? Is it not possible, in that case, that killing the five would be a better outcome than killing the one? In any case it is never possible to determine as valuations are ordinal not cardinal and can never be added, subtracted, multiplied or whatever for not only a lone individual but also across many individuals.

Further, if we argue that saving a greater number of people is the correct moral choice must we not also consider how many people would be negatively (or even positively) affected by the deaths? What if the single person had a large and close family who would be devastated at his death whereas the other five were single and there is no one to grieve for them? Or what about their past or potential contribution to “society”? If the five people are lazy and idle vagrants who have never wanted to do a day’s work in their lives and have always eaten from the hand of the taxpayer whereas the single person is hard working and productive, wouldn’t more people benefit from the deaths of the five rather than the one? Or, rather, wouldn’t the deaths of the five be less of a tragic loss rather than the death of the one? What if the five people were Hitler, Stalin, Pol Pot, Mao, and Kim Jong-Il whereas the single person was Mother Teresa? Surely we would be justified in letting all of them die if we can save the saintly nun?

Moreover, where the identities of the people are unknown to A how is he supposed to judge all of this in the heat of the moment (assuming he could at all)? Indeed how is he supposed to act morally at all in making this decision?

However, to reiterate, whose valuations are considered is irrelevant as the main problem with any type of “many versus few” analysis is the impossibility of making inter-personal utility comparisons. Even if we say that we are morally justified in killing the people whose lives have the least value to both themselves and others there is no measurement of this value and if there is no measurement then these values cannot be added to together and compared. We cannot, therefore, say that killing any number of people leads to a “better” or more moral outcome if it kills others, how ever many this may be. Any argument to the contrary must necessarily be based on these subjective, immeasurable valuations.

A possible reductio of these points might be something like this: what if the choice was between killing all the people in the world against killing only a handful? Surely it would be better to let the few die in order to save the entire world? But we are simply confronted with the same problems – better to whom and how do we measure it? What of the people (extreme environmentalists, for example) who consider the human race to be a filthy, disgusting, depraved parasite upon the Earth, engaging in endless destruction of the planet and of each other? What of those who believe that a drastic reduction in population is necessary if the world is to continue following a sustainable path? How do we know that the strength of these people’s desire to see the population largely killed off is less than the desire of everyone else to continue living? What if the few survivors pledged their dedication to building a new human race free of the flaws (real or imagined) of the present human race, resulting in a world without war, conflict, poverty and the like? Wouldn’t that be a “better” outcome than saving the present world?

In conclusion, therefore, none of the people on the tracks has any right to any intervention by A; none of them, further, has any right to be saved if such an act kills others; and, finally, A is not justified in saving people at the expense of killing fewer people.

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1 We should point out that if A did not intervene at all and the train careered onto its pre-ordained track then some people would be saved and others would be killed. But in this case the saving of some is not the cause of the death of the others – it was merely a case that some people were in the wrong place and others were in the right place, in just the same way as a person in the middle of the street is likely to get hit by a car while those on the pavement will not. What we are discussing here is the right of any of the people on the tracks to be saved through an intervention that necessarily will kill other people.

Greed

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All too often one hears the repeated lament that the reason for boom and bust, widespread poverty, the increased inequality of incomes, endless warfare and whatever else happens to be plaguing the world today in the eyes of the saintly commentator are because people are afflicted by greed. “If only people weren’t so greedy then everything would be fine!” chants the typical appeal.

However even a brief thought will reveal the empty nature of this word as a basis for criticism of the current social, political and economic order. This is not to suggest for a moment that the order is perfect or even right, nor that some people are not endowed with malicious intent. Merely that pursuing the problem with reference to “greed” is simply meaningless.

There seem to be two strands to any accusation of “greed”. First, that the alleged perpetrator desires to “possess wealth, goods, or objects of abstract value with the intention to keep it for one’s self, far beyond the dictates of basic survival and comfort” (as Wikipedia puts it) – i.e. that greed is the desire for some form of excess. Secondly, that only some people are afflicted by this menacing motivation whereas the rest of us are apparently content to languish in undemanding modesty.

Taking the first problem, if some people want or desire some kind of excess then we are entitled to ask excess of what. If something is excessive then what we are measuring, what is the unit of measurement and at what point of the scale is acceptability divided from excess?

One plausible possibility is that we attempt to gauge the value that a person’s desires or possessions would bring to him/her subjectively, what might be called “psychic income”. But why should this condemn a person as being the epitome of moral filth? If I get an immense amount of utility out of something that is, to all intents and purposes, useless to other persons what harm is this causing? Is it wrong for me to gain pleasure where others do not? What if I possess an object that gives me unimaginable psychic income, that makes me the happiest person alive, yet is, to everyone else, of little or no value? What has it got to do with anyone else that I enjoy this thing so much? This may sound like an exaggeration, but when you consider that many people have in their possession objects that to them carry great moral sentiment – wedding rings, photo albums, etc. – whose market value is but a pale reflection of the value they hold for the owner then it is not so far fetched.

In any case, even if gaining “undue utility” from an object was reprehensible, how do we measure this excess of subjective value? What is the cut off point? Utility is ordinal not cardinal – we can only rank things in order of how much we value them, not in precise quantities of value. A simple order never gives us any clue about how much something is valued, only how it is valued relative to anything else.

A second possibility is that we attempt to determine a person’s greed by the market value of his desires or possessions. But the market value of an object is simply a hypothetical price that someone might pay if offered the object for sale. It is dependent entirely upon the valuation of everyone else and is subject to constant and unceasing change. Indeed, strictly, market prices are only estimates. Real prices are historical events that bear no relation to future events. But leaving that aside let’s assume that a person’s possessions and/or desires command an exceptionally high market price. All this tells us is that everyone else values those possessions or desires extremely highly also. Why is a person to be condemned for this? Is it my fault if everyone also wants what I want or have? What if my family photo album was discovered to contain the prized, lost work of a celebrated artist or my wedding ring was found to contain a precious mineral and suddenly these objects, overnight, go from being practically worthless to potentially fetching millions of pounds in a sale. Am I now guilty for wanting or possessing these objects? Why should the fact that other people have changed their view of my possessions condemn me as being “greedy” for wanting to retain this property for myself? Should I be divested of my photo album and my wedding ring and the proceeds distributed to combat my alleged greed?

This unravelling of any accusation of greed begins to show the true motivation of the accusers – that it is really based on their envy rather than the possessor’s “greed”. This leads onto the next problem which is the idea that only some people are greedy – the “haves”. Everyone else is spared the condemnation. But would any of the latter turn down the offer to have their wealth increased beyond the so-called “dictates of basic survival and comfort”, even if it meant that no one else’s was? According to elottery-syndicates.com more than 32 million people play the UK National Lottery each week, well over half the eligible population. All of these people want to advance their own wealth to a great height (at least several million pounds worth in the regular lottery game while the jackpots in “Euromillions” game can run to over £100m after repeated rollovers) while leaving everyone else’s in exactly the same place. “Greed” therefore appears not to be an isolated motivation but one that is shared commonly.

Indeed, it is part of the human condition to always seek improvement to the current state of affairs as they are appraised by the individual. Every human action is an attempt to substitute more desirable ends for less desirable ends with the means available. To seek an end to this is to replicate the fallacy on which so many political philosophies have foundered – that the natural condition of man, with all of his qualities and faults, can somehow be moulded or changed. Any viable political philosophy must account for the true nature of man, warts and all. Further, as a result of humans’ unceasing appetite for improvement “the dictates of basic survival and comfort” change with each generation. In the second decade of the twenty-first century no one thinks that you are greedy if you can afford a house, a car, a telephone, a refrigerator and an annual foreign holiday. In the same decade of the twentieth century such possession would have been the utmost display of ostentatious luxury. As demand is often elastic it has always been the case that what has started out as luxury consumption of the rich has inspired entrepreurial activity to mass production until supply can be increased so heavily that even the poor can afford what was once a symbol of great wealth. Any attempted measure, therefore, of “the dictates of basic survival and comfort” is entirely arbitrary.

There are numerous related fallacies to the so-called greed problem. One is the idea that because one person has something another person must necessarily be without – that one person’s gain is necessarily another’s loss. If I have an iPad does that mean that someone does not have an iPad? No, it does not. I have an iPad because I went to work and created goods or services that I exchanged for money which, in turn, I exchanged for the iPad. The iPad only comes into existence because I created the resources that enabled me to purchase it. If I did not it would not mean that someone else would have it – it simply wouldn’t exist. Now there are definitely people in the world who do not fund their lifestyles from such production and voluntary trade but rather from violent appropriation of other people’s product, and some of them are very rich. But this should be dealt with for what it is and condemned accordingly. Per se one individual being a “have” does not mean that another is a “have-not”.

Another thread that seems to weave itself through social and political commentary is the idea that the net wealth of the rich is sitting around in a bank account somewhere, ready to be enjoyed as luxury consumption. This could not be further from the truth. The productive rich (as opposed to those who live off Government privilege and violently appropriated revenues) are rich because they have abstained from consuming what they have and invested it in real, productive assets – factories, machines, equipment, and things that must be run by people with jobs. Their increased net wealth reflects the success of this enterprise. It means more jobs for the rest of us to go to every day and cheaper goods for us to buy when we go shopping. The rich are rich precisely because their investment decisions have proved to be so productive. If this wealth was to be liquidated and distributed amongst everyone else in the name of “sharing” or “combating greed” then you would have to destroy the entire productive apparatus of the economy and place it in the hands of those who do not have the capacity to save rather than consume and, even if they did wish to save, have no or less of a proven ability to direct resources to their most productive uses. In contrast the amount of consumption spending by the rich, if distributed equally, would barely be enough to give everyone a few extra pennies.

In sum all of this reveals that it is a mistake to concentrate on people’s motivations or desires in achieving their ends. If somebody does something that inflicts no violence on either me or my property or if I trade with him peacefully and voluntarily then it is no business of mine why that other person engaged in those activities. What matters to me is the method of achieving those ends. Let us, therefore, banish any more talk of “greed” and focus instead on ensuring that more of our “greedy” entrepreneurs and businessmen make their wealth the honest way – voluntary trade, saving and capital investment that provides us with jobs and affordable products – rather than through violently enforced Government privilege, tax revenue and bailouts that definitely leaves them richer and us poorer.

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