Thursday, June 7, 2018

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).

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