is business good or evil?

above the graph of maximin function

(this point goes to Anna, whom I thank for a productive discussion). her point if I remember, was in the form of a conditional: if a business is successful it has to engage in some form of wrongdoing.

The ethical egoist claims this is a false cause. 

in fact, the opposite is the case. WHY? 1- a business happens out of economic selection. 2- they exemplify the moral principle of HOMO ECONOMICUS.

1- Doing business is not a decision caused by a cabal of neolithic elders in a cave, high on mushroom ecstasy. Business transactions happened out of necessity to ensure human survival!

Ancient economic history tells us there's no human progress without commerce.

Let's go back 20,000 years ago. Commerce starts with the simple practice of bartering. 7,000 years ago. Phoenicians and Babylonians exchanged goods all over Mesopotamia and east Mediterranean Sea. here's a business transaction. 

A needs x, B has x. B needs y, A has y. (x, y) exchange happens. now both A and B are better off than before they started (this is the DNA of business).

This is called supply and demand. Salt was so valuable that Roman soldiers' salaries were paid with it.  Wars are and were fought over commerce. 

Karl Marx acknowledges that the history of mankind is based on economic leaps. In other words, merchants have changed the world.

Where does morals come in?

2- Bartering cannot happen unless there is TRUST. And trust can only occur when individuals keep their word (this is the beginning of the idea of DUTY).

WHY DO EARLY HOMO SAPIENS KEPT THEIR WORD? Not because they love their fellow sapiens, but because they need to succeed in order to survive. This is the basic insight of ethical egoism.

The same goes for businesses and corporations. A business that doesn't follow these basic rules is likely to fail (again, economic selection, what makes a business successful IS NOT success, is maximizing BEST INTERESTS). Maximizing is a concrete economic function given by:
mc = mr (where "c" is cost and "r" is revenue).

persons, groups, ethics, bezos & monopoly

dear class, as always I try to flesh out stuff we don't have the time, or space to properly address in class.

1. are groups persons?

my point to Paola a few classes back is that ethics is not about groups (of persons). definitions first. what's a person? if p is a person, p has 4 properties: reason, free will, autonomy, sentience.

only then we ascribe responsibility. Groups do not, cannot fulfill these properties in the same manner.

example: suppose we had 200 persons breaking into a Wall-mart and 55% of them steal items from the store. We'd have to ascribe different degrees of responsibility one by one. Speaking of the "group's responsibility" may be guilty of false analogy: what is true of the whole is true of the parts ("if A is made up of persons, A is a person") or fallacy of division: what is true for the whole is true of the parts ("if my foot hurts my toe hurts").

now, are corporations persons? as the modern definition of LLC implies:

The primary reason business owners opt to take the LLC route is to limit the principals' personal liability. Many view an LLC as a blend of a partnership, which is a simple business formation of two or more owners under an agreement, and a corporation, which has certain liability protections.

As an individual, I own all my parts, but within a corporation, the parts own the whole. Big  difference.

2. amazon and monopoly

is amazon a monopoly? definitions first: exclusive ownership through legal privilege, command of supply, or concerted action.

First, charging Amazon of being a monopoly doesn't fit with the prevailing definition of monopoly that's currently used by courts and the Federal Trade Commission since the 1970s. this is a crucial point:

The long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power.

if so, a company can grow as much as it wants and control as much of the market as it wants as long as prices are competitive and consumers don't suffer.

Second, keep in mind that Amazon isn't even the largest retailer in the U.S. Walmart IS with profits of half a trillion dollars last year, 3.5 times larger than Amazon's annual sales. 

Critics of Amazon point to Whole Foods' 450 locations leverage (to push out competition in the grocery delivery business). Yet, despite its size, Amazon currently makes up only 3.6% of annual retail revenue in the U.S. which is nothing. Amazon doesn't sell cars or operate restaurants.   

here, a compelling piece by economist charles sizemore. 

economists have tweaked the complex relationship of Amazon with other business as a classic example of "coopetition," a combination of competition and cooperation. "

you're competing with Amazon, but you're partnering with Amazon, you're using their services yourself, so you're a customer of them as an organization. hope this works.

How Amazon employees felt about Amazon? in class, we debated this point. The company gets 3.8 our of 5 in worker satisfaction: a pretty good grade!

so?