Capitalism/Business Ethics Paper Discussion

[Kifle]

Ok, I posted this in another thread but some had problems opening it. Switch file formats to '97 .doc format so that should help.

Anyway, it's an interesting paper that I'd like you capitalists to take a look at and comment on. It has quite a few nice points/arguments that I found rather surprising.

Edit: Apparently .doc is not allowed here. Trying rtf

Ok, wtf. Rtf or TxT aren't allowed either? Is there a way to change this?

[Sarvis]

Maybe you could throw it into google docs and give us the link?

[Kifle]

It's an unpublished paper from a professor from SIU, so I'm not sure about the legalities of posting it on public sites; so, I'd rather keep it off of places like google and what-not. I'll just wait till Shev changes the options (if shar remembers to talk to him) or somebody allows me to put it up on their ftp space somewhere.

[Kifle]

Nipples, Unicorns, bush, explenitive, and Corth.

Do I have your attention now Shev? Is there a way to get this fixed? Did Shar even bring it up?

[Lathander]

I remember reading that paper you posted. I wrote a couple of paragraphs that I have saved in respsonse, but I never finished the whole thing. Whoever the professor is wasn't in the business field and probably not in economics. The trouble with it was the writer lacked an ability to apply things in the real world. The writer understood the basic concepts, but I believe he lacked real world experience.

[Kifle]

Actually, most of his published materials are in business and economics. Most of the classes he teaches are in business and economics (even though he's part of the philosophy department). Seriously, ad hominem is the best you can come up with? I was looking for discourse, not teflor responses.

You want to argue credentials? Fine, do you have a Ph.D. and commonly teach business classes at the graduate level? What are your publications? To say that your understanding of Smith or economics is beyond his based on your assumption that he isn't in the business field is laughable at best.

[Sarvis]

Actually, most of his published materials are in business and economics. Most of the classes he teaches are in business and economics (even though he's part of the philosophy department). Seriously, ad hominem is the best you can come up with? I was looking for discourse, not teflor responses.

You want to argue credentials? Fine, do you have a Ph.D. and commonly teach business classes at the graduate level? What are your publications? To say that your understanding of Smith or economics is beyond his based on your assumption that he isn't in the business field is laughable at best.

Just remember: Lathander once cited a source that disagreed with his own point, then tried to claim the paper really did support his point because the author "hadn't interpreted his data correctly."

So... yeah.

[Lathander]

Touchy, huh?

I read the paper you posted, and from the writing, it was clear that it was someone stuck deep in academia. Part of reading what someone writes is using their tone and verbiage to divine what their background is. Yes, most business people make fun of folks that don't actually do things in business that feel they have the ability to write about it. Most of them are called consultants, and by and large, they are a waste of money.

I'll never forget when the former CEO of our company came to our office. I asked him a question about integrating two divisions of our company. Like any consultant, he threw the question back at me and asked me what I thought. I knew he was an empty suit with that. What I was trying to get at with that question was his vision or even if he had one. Sure enough, he was gone within a year, and I loved reading his press release when he left the firm.

For my credentials, I need to first give a notice that I am not soliciting any business nor does anything I say construe any advice. I have a BS in Finance. I have my CFP and various securities licenses. I manage the office in which I work. I manage quite a bit in assets for clients. In addition, many of those folks are current or former high level folks within companies or governmental agencies who I have the pleasure of speaking to often.

So Kifle and Sarvis, you have my background. Why don't the two of you enlighten us with yours, or you gonna take a "Telfor" as Kifle calls it?

[Lathander]

Sarvis-World - Read things and don't consider if the author veered off course.

Got it!

[Kifle]

Touchy, huh?

I read the paper you posted, and from the writing, it was clear that it was someone stuck deep in academia. Part of reading what someone writes is using their tone and verbiage to divine what their background is. Yes, most business people make fun of folks that don't actually do things in business that feel they have the ability to write about it. Most of them are called consultants, and by and large, they are a waste of money.

I'll never forget when the former CEO of our company came to our office. I asked him a question about integrating two divisions of our company. Like any consultant, he threw the question back at me and asked me what I thought. I knew he was an empty suit with that. What I was trying to get at with that question was his vision or even if he had one. Sure enough, he was gone within a year, and I loved reading his press release when he left the firm.

For my credentials, I need to first give a notice that I am not soliciting any business nor does anything I say construe any advice. I have a BS in Finance. I have my CFP and various securities licenses. I manage the office in which I work. I manage quite a bit in assets for clients. In addition, many of those folks are current or former high level folks within companies or governmental agencies who I have the pleasure of speaking to often.

So Kifle and Sarvis, you have my background. Why don't the two of you enlighten us with yours, or you gonna take a "Telfor" as Kifle calls it?

I'm touchy in-so-far as you gave a very empty response that was "teflor-like" in that it rested firmly on grounds of ad hominem and gave no indication that you actually read the material. You didn't say what exactly you disagreed with. Basically, you could have just said, "I just don't agree with it," and your post would have had the same effect. More to the point, it would be like my son telling me, "Yeah, I read that math book. 1+1 is not 2;" and when I would ask why, he would just say, "Because it isn't." I don't accept these "arguments" as arguments. They are baseless statements of opinion that hinge on nothing but personal bias.

Now, if you would like to actually discuss the material, as I said earlier, I am very curious as what you and others have to say -- mainly because you are on the side of the economic, ideological spectrum that this paper "attacks." If it is wrong, tell me why it is wrong -- not that it just is. To me, this is a very interesting topic and I felt it was a well thought-out paper that lends itself naturally to discussion.

As far as credentials in general go, I brought it up only because I was very sure that he has probably spent more time reading, scrutinizing, and writing on various business and economic topics than yourself. As you wrote, you have a BS in finance. That is a far cry from a Ph.D. specializing in business or business ethics (the topic of the paper). As most people with a bachelor's degree will tell you, as you yourself probably already know, they mean dick as far as their area of study. They are a piece of paper that mainly tells people "I can or want to learn and have a basic idea of the area of study." Furthurmore, I would give you my left nut if you could get published by writing much of anything -- let alone your area of expertise (finance, business, economics). There is a reason for the phenomena that bachelor's degree holders don't get published very often -- they don't know much.

As far as my credentials go, I don't think it quite matters; however, if you think I was calling you out (which I really wasn't), I have a BA in Philosophy. I've helped build a glass-blowing business from the ground up and handle everything that does not include blowing the actual glass (however I also do some prep blowing if it is necessary). I also dibble in the dabble when it comes to computer tech work and building computers for local businesses and home users. Aside from my core studies, I'm bilingual (although it's failing as I hardly use it), have taken multiple business (finance, 2 yrs of econ, contract/business law, administration) courses (3 shy from a business administration bachelors), up to second year calc, multiple law courses (con, civil, business), and your odds-and-ends shit courses (phys/poly sci/thanuk's mom).

Now what does that mean? Honestly, I don't think it means shit. I retarded monkey with a hangover could probably get a bachelor's degree. If the monkey actually tried, it would probably make it as far as a Masters (MBA anyone, seriously).

Anyway, if you want to actually discuss the paper, I'll try hosting it again; if not, you're more than welcome to stay out of the discussion. If the thread dies, I'm sure I can find other places to discuss it at length where I wont run into shit like this; however, there are certain people's opinions on business that I actually respect (yours at times), so I thought I would toss it here.

[Lathander]

Originally, I wrote a meaner reply, but the website didn't go through so I'll write a nicer one.

My fundamental problem with the author of the paper you linked before was the bias that came out in it. As I said, from the writing, the author lacks real world experience. Reading and thinking about something is not the same as experiencing it. The author misunderstands "business ethics". He tries to use the "ethics" portion like a club to say capitalism and business are bad. What the author neglects is he is not talking about "ethics"; he is supposed to be talking about "business ethics".

Now some would argue that business ethics are the same as your general ethics. I believe that is incorrect. Business ethics exist to be applied to a business and should result in maximizing the performance of the company and shareholders. Most take the view that business ethics help a company stay out of trouble and provide a good reputation for the company. This positive reputation can result in fantastic marketing opportunities to rise above the competition. Doing the right thing ends up making you far more money than doing the wrong thing. As I tell people all the time, if you compromise your integrity, someday, a client will sue you and win and you'll be out of the business.

Here are the two paragraphs I wrote earlier:

You’re missing a number of things when it comes to business ethics. First, the appearance of being a good community member can be a great marketing boon. It gets your name out there in the community and associated with a good charity. In addition, it provides a networking opportunity and a non-sales selling environment. Any good marketer knows that having good compliance and ethics tends to minimize negative stories as well.

More broadly, one of the beauties of capitalism comes from its sometimes brutal efficiency. One of Jack Welsh’s books tells a great story about this. GE owned an air conditioning division. They were an also ran in that market. They had bottom tier installers, and the morale of the company was bad because they were doing so poorly. GE, in the quest to be first or second in a market or get out, sold that division to the number one A/C company. Some folks lost their jobs, but those that were still there (the majority of the employees) were now with a winning company that lived and breathed A/C.

[Corth]

I'd like to read this paper Kifle. I'm not sure what the issue is. You need a place to host it.. but you don't want it open to the public? Theres gotta be some sort of simple solution to that.

[Kifle]

Here, Corth; try these. I have trouble opening them directly from the site, so you'll probably have to temporarily save it on your computer then open it. It's saved in .rtf, .doc (97), and txt if you still have problems with the others; however, the .txt version loses a lot of formating and is annoying to read imo.

RTF
TXT
DOC

[Kifle]

Honestly, Lath, I'm not even sure we're reading the same paper. I think he touches upon real-world issues rather nicely. Take this secondary quote on page 3 for instance:

It is hardly an exaggeration to say that, with increasing affluence, economics has moved into the very centre of public concern, and economic performance, economic growth, economic expansion, and so forth have become the abiding interest, if not the obsession, of all modern societies. In the current vocabulary of condemnation there are few words as final and conclusive as the word "uneconomic." If an activity has been branded as uneconomic, its right to existence is not merely questioned but energetically denied. Anything that is found to be an impediment to economic growth is a shameful thing, and if people cling to it, they are thought of as either saboteurs or fools. Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to peace of the world or to the well-being of future generations; as long as you have not shown it to be "uneconomic" you have not really questioned its right to exist, grow, and prosper.

I think this rather nicely sums up the difference between you/corth and myself/sarvis. I could directly relate this brand of thinking to previous threads like the forclosure topic, environmental issues (oil, global warming). So, again, I'd like to hear an honest response from you concerning this issue atm. If you have others, I'd like to hear them as well; however, I think this is the first good point the paper elaborates on.

You have to remember that this is not exactly pure philosophy that he is doing -- such as metaphysics or epistemology. This is more the Popper/Foucault/Ziman type of philosophy that studies history and attempts to make sense of real-world data. This is more sociology/history than a rambling philosophical treatise.

I'll write more when I have time. There are certain points of the paper that I'd like to be more closely examined.

Edit:

The next chunk that I found pretty interesting is that it is seen in society that ethical systems are largely determined by virtue or intentions; however, in economics, conventional morality disappears and is replaced by utilitarian "ethics" determined only by end result -- economic growth, gain, and promotion.

In on of my business admin courses a few years ago we were covering the ethics chapter and were given two case studies. One was Johnson & Johnson and another was some defunct company. The issue was the recalling of faulty and possibly dangerous products. Now, the question I have is which do you two (and others) business oriented people see this decision? Do you think it falls more in-line with conventional ethics or this idea of economic utility or self-interest? In the study, Johnson was quick to recall so the loss of trust was not major while the other company fumbled the issue and is now defunct.

Which leads to what he writes here:

First, it helps identify some of the mystique and seductive lure that free market theory has exerted on the Western mind--its promise of a mythical land beyond good and evil (obviously not in the Nietzschean sense), where one is free from the burden of ethical decision-making and moral responsibility. Individuals need not exercise any moral deliberation: they need only calculate their own self-interests, and the market magically harmonizes these interests into the greatest possible social good

Again, I'll have more later, but the wife wants to go out to eat.

[Kifle]

The next portion I thought was interesting and I would love to see an argument against is:

"the coincidence of equilibrium and optimality." This assumption is contradicted, both theoretically and empirically, by the many aggregate paradoxes well known to mainstream economists: e.g., one acts out of rational self-interest to protect against unemployment in recessionary times by increasing one's net savings, but in the aggregate such behavior only exacerbates the very unemployment against which individuals are trying to hedge--market equilibrium simply does not approximate optimum utility in such instances.

I could see that while saving money in banks by use of CD's, IRA's, and other fixed-time investments, the bank reintroduces the monies into the market through other investments (mortgages, stocks, etc.) Now, this would be a nice counter-argument; however, do these savings plans counter the effects of withdrawing the money out of the market? More importantly, what of those people who prefer to store their cash privately (e.g. matress stuffers, safes, deposit boxes, etc.)?

Now, the first part of the paper that made me think of you guys was this:

This "natural price" includes, along with wages for labor and rent for the use of land, a certain amount of "ordinary profit," the minimum amount necessary to insure that owners of stock will continue to make available sufficient quantities of the instruments of production to maintain equilibrium output levels--"four or five percent," Smith tells us, under normal circumstances. Market prices above natural prices yield what Smith termed "extraordinary profits." But as the "desiring machine" of the market, to borrow DeLeuze's wonderful mixed metaphor for capitalism, drives market prices toward natural prices, extraordinary profits evaporate. But extraordinary profits are what manufacturers and merchants want, market equilibrium is what they abhor, and so in a free market economy the lure of extraordinary profits provides a powerful incentive for manufacturers and merchants, those whom today we often term "capitalists," to disrupt those very conditions of perfect liberty.

I would like to pay special attention to Adam Smith's ideas of ordinary and extrodinary profits, and how this aspect of his economic system has been largely ignored by capitalists and those teaching business courses. To me, this would be akin to reading the bible and saying, "God said: Thou shalt kill" without ever telling people you removed the word "not."

Later:

Indeed, Adam Smith was well aware that manufacturers and merchants would be those persons most likely to undermine the conditions of perfect liberty and to disrupt the market mechanism. It was they who frequently sought special legislation for their private advantage and at the expense of the public, and it was Adam Smith who described the "merchants and manufacturers" of his day as

an order of men , whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

Indeed, one of my own economics professors, the late Robert Faulhaber, promised an "A" to anyone in the class who could find anywhere in the entire corpus of Adam Smith a single kind word about those whom today we would call "capitalists."

Again, I find it rather amusing and confusing that those in favor of strict free-market often defend these types of companies while quoting smith and using his invisible hand often in the same paragraphs. I would like to see a defense of this type of thought.

[Sarvis]

At this rate you could just cut and paste the entire paper into a post... ;)

[Kifle]

At this rate you could just cut and paste the entire paper into a post... ;)

The thought had occured to me, but I'm leaving out quite a bit :)

[Corth]

Kifle,

I gave it a shot. I tried to read it. Got through maybe 3 pages. Honestly, it reminded me of why I hated philosophy so much when I majored in it. I'm kind of on the same page as Lathander here. Its so entirely academic that it has no bearing on the real world. Its a well crafted paper written for other academics.

I'm happy to discuss or debate the ethical implications of the free market. If you want to adopt some of the author's specific arguments I'll respond. But I wouldn't know where to begin giving you a reaction to that paper.

[Corth]

There is not, and will never be a truly free market. It would not be acceptable to society, for instance, to allow people to peddle alcohol and pornography to children. There might be a lot of money to be made doing so, but we do not find that line of business to be acceptable. In fact, we enact laws punishing such activities.

Ethics are imposed upon actors in the so-called 'free market' through such legislation. When duly elected legislators decide, for instance, that it is not acceptable to drill for oil in Alaska, then the free market is constrained due to a moral value imposed by society.

What you have here is an essential conflict between freedom and coercion. The free market verses the coercive power of government. Business ethics lie at the intersection between freedom and coercion.

So at the outset, I'm going to surprise Sarvis and acknowledge that an unfettered free market would be an outright disaster. I may be a Libertarian, but I recognize that society has certain values that it should be able to defend at the expense of the 'free market'.

The 'free market', however, isn't the only party that gets constrained. Society often needs to constrain itself in favor of the market.

There is only so much wealth (defined broadly) out there. Not everyone can have everything they want. There is a fundamental scarcity of resources. The market is unquestionably the most economically efficient way to allocate resources. When society constrains the market, a misallocation occurs. If this happens a lot, society is hurt because less wealth is created. Our standard of living goes down, or does not increase as quickly as it otherwise would.

Thus, society constrains itself for its own good. If society didn't have anything to lose by constraining the free market, there wouldn't be anything to argue about. We could just outlaw all carbon emissions and tell employers that all workers must be paid at least $100,000 per year with full benefits. Of course, if the government made such laws, the economy would immediately collapse and no wealth would be created. Thus, society must limit its imposition on the market.

[Sarvis]

So at the outset, I'm going to surprise Sarvis and acknowledge that an unfettered free market would be an outright disaster.

I'm not surprised, I always knew I was winning. ;)

You're right on the overall point, to an extent. The free market is good for building wealth, and does lead to an improvement in standard of living... IF properly... supervised, for lack of a better word.

You bring up carbon emissions as something worthless that is harming our standard of living, yet if you look at countries like China and Mexico that have few, if any, pollution laws can you honestly say their standard of living is higher for it? Olympic athletes don't want to compete in China because the air quality is so bad they are afraid it will limit their performance or even cause long term damage!

Capitalism is great at creating wealth, but bad at everything else. What's "worse" (again, lack of a better word) is that most of the wealth it creates is at the top of the food chain. You can talk all you want about the lack of economic growth in heavily socialist countries like Germany, but can you compare the quality of life for the average german against the average American and prove we come out ahead?

Let's see, child poverty? Nope, we're just below Mexico on that.
Children maltreatment deaths? Nope, 2nd only to Mexico again. Go private medicine!
Ooh, this one's fun and interesting: working time to buy milk. Still one minute behind Germany, despite much more of their income going to taxes!
Oh wait, actually the heavily socialist Germany apparently pays fewer income taxes than we do: http://www.nationmaster.com/graph/tax_c ... income-tax

Ok, ok... maybe all this improved standard of living due to our free market roots has given us less crime. Well, nope: http://www.nationmaster.com/graph/cri_a ... per-capita

Maybe we have more HD tv's or something, or truck nuts. Not sure if that actually counts for much though.

(I didn't cherry pick the stats, I just picked random crap until I got bored.)

[Corth]

I didn't bring up regulating carbon emissions as something worthless that is harming our standard of living. Read again what I said.

You say that capitalism is great at building wealth, but bad at everything else. I think you are speaking way too abstractly. Capitalism is great at giving people what they want. You want a huge TV that you can use with your kickass gaming system? Nobody is going to invent those things without a profit motive. You want an electric car? Now that enough people are willing to pay for one, manufacturers are racing to release plug ins. Where there is a need, there is profit, and the invisble hand of the market seeks to meet that need.

The 'bad at everything else' line is silly. An unfettered free market will have some unacceptable results.. for instance, marketing porn and alcohol to minors, dumping of toxic waste, etc. That is one of the reasons why we have laws. To impose certain values upon business. Making it illegal to dump toxic waste DOES reduce the efficiency of the market, but the cost is well worth it from society's perspective. The trick here is balancing the unquestionable benefits of capitalism and the free market, with societal values that are undermined by it.

[Kifle]

Ok, in droping the majority of the paper, I guess I'd at least like to discuss two points:

1) That the title business ethics is a misnomer in a way in that it implies that business constrains itself by some guiding ethical principles other than egoistic tendancies. As the paper alludes to in the later pages, the ethics of a free-market are not governed by the businesses. More precisely, businesses should be concerned only with self-interest while the moral/ethical problems are largely placed on societies shoulders as consumers -- those that truely drive the economic vehicle.

If this is true, the distribution of wealth that we see today should not be blamed on the businesses, but rather the consumers. Those of us who bitch and moan about low wages, poor healthcare, lopsided wealth distribution ratios, etc. are actually the problem in aggregate.

Following this line of logic we could then deduce that the true cause of economic strife witnessed in the developed world is in large part due to decadent lifestyles, a degraded sense or morality, and overall gluttonous consumerism.

Now, this is where the real question is posed: Is this a product of the business or the consumer? Did business actively instill this idea of consumerism into the heads of the masses, was it always around, or does the blame lie on the shoulders of the consumers? Who is really to blame for the current economic situation?

2) That the american ideas of capitalism, which seem to be your guidling principles through most of the years of economic discussion, are not those expressed by Smith at all. That what you, Lathander, Kiryan, and others have said in the past about profit gains in the past are what Smith would classify as "extrodinary profits." In this sense, as the paper points out, is anti-capitalistic in its original sense and theory. I honestly don't think I can write it any better than he did, so I'll just refer you back to my second quoted post -- it's the second or third snipet.

The question here is, can Smith and his ideas truely be relied upon with much credability or accuracy when one of its main principles is ignored? A better question would be, if business constrained itself to the 4-5% profit margins by raising minimum wages, lowering product cost, etc., would the market be in better shape? By this I mean, would it produce more universal utility -- especially in the areas of poverty, wealth distribution, etc?

I have a feeling someone will bring up scarcity of resources. I am aware of this principle and I do agree to an extent; however, not all products are guided by this principle explicitly (types of cars and things of that nature) or intrinsically (property and the such). In these cases it is more, in my opinion, an inflated case of greed and self-interest -- self-interest without the human qualities of sympathy and kindness and the presence of ubiquitous egotism. In this last sense, it is as though delusions of grandeur are accepted as normative and inherent in the human condition -- that the business men (and now consumers as a trickle-down effect) have become socialized megalomaniacs.

Anyway, I've rambled enough for now, and I hope this is less academic than the paper (still confused as to the difference -- maybe I've been in the system too long to realize).

[Alta]

I doubt I belong posting here, but after reading this paper aloud to my 7month old, I figure, what the heck:

1) Very interesting... but stupid. What came first, the chicken or the egg? Neither the chicken nor the egg caused our current economic situation. Was it the sheep or the wolves? I say it was the shepherd.

2) No. The limitations you are suggesting would not close the gaps between poverty and wealth distribution. They would limit: go ahead, give more power to the shepherds and keep yelling at the wolves for mistreating the sheep. If you make these sorts of limitations, the wolves would just find something else to eat.

I have turned your business ethics discussion into a fable. I spend way too much time around children.

[Corth]

I agree that business is (and should be) based upon self interest. Ethics are imposed externally by legislation.

If this is true, the distribution of wealth that we see today should not be blamed on the businesses, but rather the consumers. Those of us who bitch and moan about low wages, poor healthcare, lopsided wealth distribution ratios, etc. are actually the problem in aggregate.

Sure. Business itself is only self-regulated by self interest. If you believe that higher wages should be mandated, that employers be required to provide additional healthcare benefits, that wealth should be redistributed, etc., then you should be trying to elect politicians who will make it happen. Others, like myself, will strongly argue that in the long run such measures will only serve to decrease our standard of living, and will try to elect politicians who will vote against such measures. Now we have a policy debate rather than an ethical one. Society needs to figure out to what extent it wants to constrain the free market.

I'm not going to address the 'consumerism' issues you raise. Thats where we start leaving the real world and enter fantasyland. If society has an issue with the idea of 'consumerism', then it should create a regulatory agency to review all marketing materials. Not going to happen any time soon.. 1st amendment can be very inconvenient!

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits. If I am making extraordinary profits, for instance, operating the only gym within a 50 mile radius, eventually someone else will open up another gym nearby and charge less in order to steal my customers. In that way, prices moderate over time. On the other hand, if a company has a monopoly on something, then prices will not moderate, as there is no competition. In that instance, society steps in and constrains the market by regulating under what circumstances a monopoly will be allowed, and if so, what the monopoly is allowed to charge.

[Sarvis]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits.

Tell that to Exxon-Mobil!

[Sarvis]

I doubt I belong posting here

Why? This place isn't some exclusive club or anything, and frankly some fresh viewpoints are probably a good thing.

1) Very interesting... but stupid. What came first, the chicken or the egg?

The egg. First, there were eggs long before chickens. Dinosaur eggs, lizard eggs, fish eggs.

Second, The first chicken had to have hatched from an egg.

There's an entire class of those philosophical "NP-Complete" questions that are so easily answered I don't get the point of them.


(Not answering 2 because I haven't read Kifle's entire post yet, sorry!)

[Sarvis]

I didn't bring up regulating carbon emissions as something worthless that is harming our standard of living. Read again what I said.

Right, you said limiting them would cause our economy to collapse instantaneously. If you can be hyperbolic, I can use it as a jumping point to a logical argument about how such legislation can improve our quality of life even if it doesn't lead to more wealth.

Can't I?

You say that capitalism is great at building wealth, but bad at everything else. I think you are speaking way too abstractly. Capitalism is great at giving people what they want. You want a huge TV that you can use with your kickass gaming system? Nobody is going to invent those things without a profit motive. You want an electric car? Now that enough people are willing to pay for one, manufacturers are racing to release plug ins. Where there is a need, there is profit, and the invisble hand of the market seeks to meet that need.

The 'bad at everything else' line is silly. An unfettered free market will have some unacceptable results.. for instance, marketing porn and alcohol to minors, dumping of toxic waste, etc. That is one of the reasons why we have laws. To impose certain values upon business. Making it illegal to dump toxic waste DOES reduce the efficiency of the market, but the cost is well worth it from society's perspective. The trick here is balancing the unquestionable benefits of capitalism and the free market, with societal values that are undermined by it.

I don't think capitalism is even great at getting people what they want. Do you know many people who wouldn't want a flying car, for instance? Ok, more realistically? Where's my universal game system that let's me play anything I want without buying 3 consoles? Where was my access to proper healthcare when I was growing up? Where are the houses for impoverished families, the jobs for displaced workers, the xTreme BBQ Doritos I used to absolutely love?

Libertarians sometimes throw about the term "tyrrany of the majority," but how is the free market not such a tyrrany? Products and services are only available if enough people want them for it to be profitable. I'll grant that this is realistic, and probably the only option... but it hardly paints capitalism as a system that gets people everything they want!

In fact, boiling down your argument might lead to a statement like "anything worth doing is profitable." Is that something you'd really agree to? Think of the AIDS epidemic in Africa. Certainly a company could develop a cure, but would they then wipe out the disease in Africa? It wouldn't be profitable, as most of the victims have no money! Nevermind that the entire world would be improved with the disease eradicated...

[Kifle]

I doubt I belong posting here, but after reading this paper aloud to my 7month old, I figure, what the heck:

1) Very interesting... but stupid. What came first, the chicken or the egg? Neither the chicken nor the egg caused our current economic situation. Was it the sheep or the wolves? I say it was the shepherd.

2) No. The limitations you are suggesting would not close the gaps between poverty and wealth distribution. They would limit: go ahead, give more power to the shepherds and keep yelling at the wolves for mistreating the sheep. If you make these sorts of limitations, the wolves would just find something else to eat.

I have turned your business ethics discussion into a fable. I spend way too much time around children.

You very much belong posting here. As Sarvis said, fresh ideas are always good regardless of whether we agree with them or not. That's what a discussion is :P

I wont go into the egg debate either. Sarvis answered that one just as I would; however, in the context you presented the almost-paradox, I don't think it quite fits. The objective of any science is usually to find the efficient causes of things (ball hitting another ball caused the ball to move). If we are to give economics the label of science, I find we should also hold it to the same stringent procedures and expect the same types of theoretical outcomes and predictability. In its current incarnation, I don't believe either is necessarily true, so I have posed questions that would in turn cause the science to push itself towards those ends. Those questions must be answered in order for any economic discussion to have any semblance of credibility in the area of "hard sciences."

As for number two, I think you missed my point. I'm in no way calling for a planned redistribution of wealth a-la legislature, windfalls, etc. (maybe to an extent but not entirely). To answer the question you have to understand what I meant by consumerism and how in this discussion I would like it to be seen as the driving force behind profits and the free-market rather than, as your metaphore put it, the sheep that are controlled by shepards (gov) or threatened and opressed by wolves (business). I'll get into this in my reply to corth if you care to stick with the discussion. The more the better.

[Alta]

I am enjoying this. Please continue, Kifle.

[Kifle]

I agree that business is (and should be) based upon self interest. Ethics are imposed externally by legislation.

I apologize for the point-by-point, but it will probably be easier to read. Anyway, I agree that business should be based upon self-interest; however, it should be governed by enlightened self-interest. By this I mean something akin to Plato's right opinion. Self-interest - kindness + gluttony/greed = disaster -- what we currently see as the mantra of business by and large. As Smith was aware, business men (capitalists) do not limit themselves by the virtuous aspects of normal society (by and large); therefore, it is necessary at times to prevent their greed from oppressing the masses -- monopoly, oligopoly, etc.

Sure. Business itself is only self-regulated by self interest. If you believe that higher wages should be mandated, that employers be required to provide additional healthcare benefits, that wealth should be redistributed, etc., then you should be trying to elect politicians who will make it happen. Others, like myself, will strongly argue that in the long run such measures will only serve to decrease our standard of living, and will try to elect politicians who will vote against such measures. Now we have a policy debate rather than an ethical one. Society needs to figure out to what extent it wants to constrain the free market.

See, here is where I think government could be taken out of the picture. As I alluded to in previous posts, I believe it could be mostly (except cartel, monoply, etc. legislature) be regulated by the consumers. At the risk of sounding like I'm running too far into fantasyland: If consumeres were less "consumerized" (i.e. wanted shiny bling, had to have the latest phone, etc.), and cared more about the common good (everybody getting healthcare, higher minimum wages or average wages), then I think there would be a dramatic shift in which companies survive, have to restructure, etc. I'm trying to summarize my thoughts here because the youngest is tugging on me to go to the pet store, so bare with me.

Company 1 charges 50 dollars a phone that costs 10 to make. That's a 500% increase in profit. To me, that is quite extrodinary (obviously not realworld data). In the case of consumerism, if the public were educated, not driven by shiny objects like retarded monkies, etc. There is no way many people would ever allow themselves to be duped into buying a 10 dollar phone for 50. They would choose not to buy it until the prices dropped to acceptable levels. In the real world, people just buy a 50 dollar phone (lets say 50 is expensive for the sake of argument). The same could be said for environmental issues such as toxic chemical dumping, air pollution, etc. Now, this breaks down when it comes to necessities (food, gasoline, etc.) This would fall under the categories of government regulation.

I'll post more later when I have the time. Just keep in mind that I'm not exactly wanting business to change nor do I think moving away from an ethical system built around self-interest is a good thing. Also, I'm not sure Smith was correct in his assessment of "ordinary profits." 4-5% seems a bit low and I think it would more than likely end up stifling progress unless you take greed out of the question. But, then again, if things costed less and there was a much larger middle-class, who knows?

Ok, going now. Bbl.

[Kifle]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits. If I am making extraordinary profits, for instance, operating the only gym within a 50 mile radius, eventually someone else will open up another gym nearby and charge less in order to steal my customers. In that way, prices moderate over time. On the other hand, if a company has a monopoly on something, then prices will not moderate, as there is no competition. In that instance, society steps in and constrains the market by regulating under what circumstances a monopoly will be allowed, and if so, what the monopoly is allowed to charge.

See, here inlies the problem though. The gym should, in a perfect world according to Smith, only recieve 4-5% profits from services rendered; however, in the real world, the profit margins, I think it's safe to assume, surpass that by quite a bit. It is my belief that the "free-market" that is realized in this country, and increasingly in the rest of the developed(ing) world, is a perverted incarnation of the "free market" in that the playingfield has been weighted in favor of the businessmen. I think there is substantial evidence that this has happend soley by looking at the courses education and the media have been heading.

For the free market to work as a realistic economic system, there first must be a guiding moral fiber within society -- as Smith himself realized. In this day and age, personal gain at the cost of others' well-being is the flavor of ethics. We buy things without regard to environmental issues and whether or not it's a fair price (rather that we, personally, can afford it). This last point is the most important.

To elaborate on that, lets look at your gym example. In most small towns (5-10k pop) there is enough money for a gym to mantain itself under the assumption of 4-5% profit gains; however, you will never see a gold's gym, balley's, etc. in these towns because 4-5% is not enough for them. These places only offer their services in areas where there is a larger density of affluent citizens with enough disposable income to "afford" the services. Now, these towns are not devoid of gyms. You can usually find a local hole-in-the-wall gym with more affordable prices for the lower-middle and lower-class families. The same goes for coffee shops. We all have one, but how many small towns do you drive through that have a starbucks? This is because these larger corporations are used to a certain percentage of profits -- not that the profits are non-existant. In these cases the free-market is better witnessed because extrodinary profits are harder to actualize and shop owners are forced by the market to offer services at a more fair price that falls much closer to those idealized by Smith himself.

In larger cities, however, it is much different and the market becomes warped (you can draw an analogy from quantum mechanics vs. newtonian mechanics). It is here that we have the highest density of wealth (New York/LA) and it is here that you will find a larger gap between wealth and poverty with a disappearing middle-class. This is the market you usually refer to, but it must be realized that it can not be, for reasons stated, associated with true free-market economics that Smith theorized. Therefore, I think you will see that Sarvis, myself, and other proponents of a more even wealth distribution, corporation regulations, etc. only do so, not in spite of free-market economics, but, rather, in spite of uncontrolled greed and dissolution of true free-market economics.

[Corth]

Right, you said limiting them would cause our economy to collapse instantaneously.

I said ABOLISHING them would cause our economy to collapse instantaneously. Do you dispute that?

[Corth]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits.

Tell that to Exxon-Mobil!

Heheh, Sarvis. At $140 per barrel oil, you can rest assured that lots of oil exploration is underway. Hopefully that will bring down prices. Unfortunately, god (or mother nature, pick your deity) only put so much of it in the ground. I'm sure you would love it if there magically was an unlimited supply for everyone. Unfortunately, thats not the case, so unless you have a better idea for allocating the scarce resource (rationing?) Exxon-Mobil and its competitors will continue to sell it to the highest bidder.

[Corth]

I don't think capitalism is even great at getting people what they want. Do you know many people who wouldn't want a flying car, for instance? Ok, more realistically? Where's my universal game system that let's me play anything I want without buying 3 consoles? Where was my access to proper healthcare when I was growing up? Where are the houses for impoverished families, the jobs for displaced workers, the xTreme BBQ Doritos I used to absolutely love?

Libertarians sometimes throw about the term "tyrrany of the majority," but how is the free market not such a tyrrany? Products and services are only available if enough people want them for it to be profitable. I'll grant that this is realistic, and probably the only option... but it hardly paints capitalism as a system that gets people everything they want!

In fact, boiling down your argument might lead to a statement like "anything worth doing is profitable." Is that something you'd really agree to? Think of the AIDS epidemic in Africa. Certainly a company could develop a cure, but would they then wipe out the disease in Africa? It wouldn't be profitable, as most of the victims have no money! Nevermind that the entire world would be improved with the disease eradicated...

Your flying car doesn't exist because nobody has figured out an economically viable way to bring it to the market. If you can figure out such a way, you will become a billionairre. Get to it!

Your universal game system that can play games from all 3 consoles doesn't exist because the Federal Government has made a value judgment that the owners of intellectual property should be able to derive sole benefit from it for a period of time. It would violate patent and/or copyright laws to make such a system. The free market would glady provide such a system if it were allowed. If you don't like it, elect politicians who will change the laws.

The 'free market' certainly made healthcare available to you. If you didn't want to pay for a health insurance policy, thats your own business. Universal healthcare is something that is free. The 'free market' does not provide charity. It provides things in exchange for money.

The free market provides plenty of housing.. even for impovershed families. Not sure why you think there is no such thing. I see plenty of impovershed families that are able to find affordable rentals. You mentioned the other day that you are paying like.. less than $500 per month for your housing. That is ridiculously cheap.

The free market applies to jobs too. If you have something to offer that others need, you will be paid for it. Displaced workers? Go find a job or learn a skill that will allow you to find a job! Again, you are confusing the 'free market' with charity.

The best example, though, is the one you brought up about Doritos. It goes right to your point about the reverse tyranny of the majority. You are right. If Doritos cannot make a profit selling a certain flavor that very few people enjoy, they will stop producing it. Somehow, you seem to feel that you are entitled to something. But why should Doritos produce a product just for your benefit?

As an exercise, if I were you I would try to think of corporations as if they were people. It gets difficult to justify what it is you want out of corporations when you think of them in such a manner. You wouldn't expect your friend to go out of his way to cook a certain dish that only you like.. but Doritos is supposed to keep producing this flavor for your sole benefit. When you think of corporations as a person, its difficult to feel like your owed anything by them. And the thing is, you aren't.

Lets say, Sarvis, that you have in your mind the key to solving the AIDS crisis in Africa. It will take you an incredibly long time to figure it out, and you will never be paid a cent for your work. Maybe you would do it anyway... live on the streets and eat out of garbage cans until you were able to finish your work and get a paying job. However, could anyone fault you if you chose not to? There is no way I could expect you to do it. Likewise, how could you expect Mr. Merck to spend millions of hours working on such a project without the hope of ever being compensated? Of course this example is ridiculous because there is plenty of money to be made marketing an effective AIDS drug (it doesn't just occur in Africa). But assuming that you are right and there is no money to be made from it, how could you believe that anyone is entitled to the fruits of Mr. Merck's uncompensated labor?

[Sarvis]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits.

Tell that to Exxon-Mobil!

Heheh, Sarvis. At $140 per barrel oil, you can rest assured that lots of oil exploration is underway. Hopefully that will bring down prices. Unfortunately, god (or mother nature, pick your deity) only put so much of it in the ground. I'm sure you would love it if there magically was an unlimited supply for everyone. Unfortunately, thats not the case, so unless you have a better idea for allocating the scarce resource (rationing?) Exxon-Mobil and its competitors will continue to sell it to the highest bidder.

So what you're saying is that the free market doesn't actually moderate profits since scarcity and control of resources can easily override the possibilities of competition?

[Corth]

Kifle,

First off, 5-6% profit margin is not exactly the basis of Adam Smith's ideas. Let me put it this way. In most times you can get 5-6% return in a 100% safe US treasury bond. So why start a business in the first place if thats the return on capital you can expect? Your better off simply giving the money to the government!

I can't even imagine wanting to start a business unless I thought that I could potentially make at least a 20% return on my capital. The risk of starting a business demands such a potential return.

That being said, I'm not sure what to make of your points. You see to suggest that actually its the consumers who are at fault for allowing companies to make too much money. I would counter that there is no fault. If people are willing to spend $50 on a phone, then it seems like a fair price. Its not like you are required to only buy your phone from the guy selling it for $50. Companies act out of self interest insofar as they want to make as much money as possible, and consumers act out of self interest insofar as they want to spend as little as possible. I don't know about you, but when I buy something I usually spend at least a few minutes making sure that I am getting the cheapest price reasonably possible.

Now, if you are talking about changing human values so that they don't want certain consumer goods that are currently in demand.. well... again now we're talking fantasyland. People want what they want. Look.. I would never spend $80,000 on a luxury car. I drive little Honda Civics because I like dependable cars that don't use a lot of gasoline and don't cost much. I prefer to spend my money on other things. But if someone wants an $80,000 BMW.. so what? They're money is theirs. They are free to spend it on what they want. I think its a good thing. Everyone in that exchange is happy. Consumer gets a shiny blinged out car that will get him laid. Manufacturer gets 80k. Whats the problem?

[Corth]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits.

Tell that to Exxon-Mobil!

Heheh, Sarvis. At $140 per barrel oil, you can rest assured that lots of oil exploration is underway. Hopefully that will bring down prices. Unfortunately, god (or mother nature, pick your deity) only put so much of it in the ground. I'm sure you would love it if there magically was an unlimited supply for everyone. Unfortunately, thats not the case, so unless you have a better idea for allocating the scarce resource (rationing?) Exxon-Mobil and its competitors will continue to sell it to the highest bidder.

So what you're saying is that the free market doesn't actually moderate profits since scarcity and control of resources can easily override the possibilities of competition?

No, of course the free market moderates prices. Now that oil is $140 per barrel you can be damned sure that producers are bringing as much of it as possible out of the ground to sell at such a price. The problem is that there won't be enough no matter what the producers do. There is only so much that CAN be produced. In the real world we have scarcity.

[Sarvis]

I'm not sure I'm following the 'ordinary profits' verses 'extraordinary profits' debate. A function of the 'free market' is to moderate profits.

Tell that to Exxon-Mobil!

Heheh, Sarvis. At $140 per barrel oil, you can rest assured that lots of oil exploration is underway. Hopefully that will bring down prices. Unfortunately, god (or mother nature, pick your deity) only put so much of it in the ground. I'm sure you would love it if there magically was an unlimited supply for everyone. Unfortunately, thats not the case, so unless you have a better idea for allocating the scarce resource (rationing?) Exxon-Mobil and its competitors will continue to sell it to the highest bidder.

So what you're saying is that the free market doesn't actually moderate profits since scarcity and control of resources can easily override the possibilities of competition?

No, of course the free market moderates prices. Now that oil is $140 per barrel you can be damned sure that producers are bringing as much of it as possible out of the ground to sell at such a price. The problem is that there won't be enough no matter what the producers do. There is only so much that CAN be produced. In the real world we have scarcity.

I think I missed the part where the profits are being moderated to the 4-5% Smith proposed given that Exxon-Mobil, while *snicker* trying to increase *snicker* supply, is rolling around in more money than Sweden.

[Sarvis]

Your flying car doesn't exist because nobody has figured out an economically viable way to bring it to the market. If you can figure out such a way, you will become a billionairre. Get to it!

Your universal game system that can play games from all 3 consoles doesn't exist because the Federal Government has made a value judgment that the owners of intellectual property should be able to derive sole benefit from it for a period of time. It would violate patent and/or copyright laws to make such a system. The free market would glady provide such a system if it were allowed. If you don't like it, elect politicians who will change the laws.

The 'free market' certainly made healthcare available to you. If you didn't want to pay for a health insurance policy, thats your own business. Universal healthcare is something that is free. The 'free market' does not provide charity. It provides things in exchange for money.

The free market provides plenty of housing.. even for impovershed families. Not sure why you think there is no such thing. I see plenty of impovershed families that are able to find affordable rentals. You mentioned the other day that you are paying like.. less than $500 per month for your housing. That is ridiculously cheap.

The free market applies to jobs too. If you have something to offer that others need, you will be paid for it. Displaced workers? Go find a job or learn a skill that will allow you to find a job! Again, you are confusing the 'free market' with charity.

The best example, though, is the one you brought up about Doritos. It goes right to your point about the reverse tyranny of the majority. You are right. If Doritos cannot make a profit selling a certain flavor that very few people enjoy, they will stop producing it. Somehow, you seem to feel that you are entitled to something. But why should Doritos produce a product just for your benefit?

As an exercise, if I were you I would try to think of corporations as if they were people. It gets difficult to justify what it is you want out of corporations when you think of them in such a manner. You wouldn't expect your friend to go out of his way to cook a certain dish that only you like.. but Doritos is supposed to keep producing this flavor for your sole benefit. When you think of corporations as a person, its difficult to feel like your owed anything by them. And the thing is, you aren't.

Lets say, Sarvis, that you have in your mind the key to solving the AIDS crisis in Africa. It will take you an incredibly long time to figure it out, and you will never be paid a cent for your work. Maybe you would do it anyway... live on the streets and eat out of garbage cans until you were able to finish your work and get a paying job. However, could anyone fault you if you chose not to? There is no way I could expect you to do it. Likewise, how could you expect Mr. Merck to spend millions of hours working on such a project without the hope of ever being compensated? Of course this example is ridiculous because there is plenty of money to be made marketing an effective AIDS drug (it doesn't just occur in Africa). But assuming that you are right and there is no money to be made from it, how could you believe that anyone is entitled to the fruits of Mr. Merck's uncompensated labor?

1) Flying Car: How does that disprove the point that the free market hasn't given us everything we want? You just said that if there's no profitable way to have a flying car, it doesn't happen! My point exactly! There are many things that would be beneficial to people, society and the world in general but which aren't profitable. (Not sure that a flying car is one of those, given that people can't even drive in 2d...)

2) Game System: I don't really think IP laws are the issue here. I suspect the greater difficulty is copy protection schemes the companies place on their software and the vastly different architectures which would have to be reverse engineered at a high cost. Not sure though...

3) Healthcare: No, healthcare was not available to me... even ignoring for your intimation that I should have paid for my own health insurance when I was five. Sure, healthcare was available... but there were no options my family could afford. Saying the free market provided healthcare to me when I couldn't afford it is about as sane as saying it feeds people who dig their food out of garbage cans.

4) Housing: Yes, right now I pay $455/month. I also have the cheapest apartment in the area, the new management has already raised the price of all the other units to $590/month even! Now, let's look at some numbers. Most budgeting sources seem to say your housing/rent cost should be arund 20% of your income. Median income in buffalo is 24536, making $455/month too expensive for about half of the cities population! Let alone the $590 this place costs now, or the $700+ of every other apartment I've checked out in the area.

So come again, tell me how housing is so cheap here? Yeah, it's a lot less than where you live... but we don't get NYC sized salaries either!


5) Doritos: I didn't say they should, remember I was pointing out that the free market does not provide people with everything they want. Try to stay on topic please!

As an exercise, if I were you I would try to think of corporations as if they were people. It gets difficult to justify what it is you want out of corporations when you think of them in such a manner. You wouldn't expect your friend to go out of his way to cook a certain dish that only you like.. but Doritos is supposed to keep producing this flavor for your sole benefit. When you think of corporations as a person, its difficult to feel like your owed anything by them. And the thing is, you aren't.

It's funny, I keep meaning to bring up the same situation to you. Your missing a few things however, like the fact that people often do go out of their way to be nice to each other. Whenever we order pizza we try to accomodate everyone's tastes. People do cook nice dinners for each other, without expecting "payment."

Now let's look at it the other way: Would you hang around with someone who knew the heimlich maneuver but wouldn't perform it on you unless you presented cash up front? How about a friend who doesn't help you move unless you give him $100? Doesn't sound so appealing, does it? Yet corporations with trillions of dollars in resources aren't expected to do anything that doesn't make them more money?

My answer to Mr. Merck's dilemma is this: Maybe he'd be somewhat well served to experience the life those people are leading, which is exactly what you just described. You make it sound like the worst possible fate, yet scoff when someone brings up the possibility of helping the millions of people who actually are living like that? Please.

As for his profits, I never said he couldn't make a profit. He could certainly sell it for a profit in many areas, just not Africa. Tell me, how is it appropriate to let people die because they cannot afford your help? Would you really hang out with a guy who wouldn't perform the heimlich maneuver on you?

[Kifle]

Kifle,

First off, 5-6% profit margin is not exactly the basis of Adam Smith's ideas. Let me put it this way. In most times you can get 5-6% return in a 100% safe US treasury bond. So why start a business in the first place if thats the return on capital you can expect? Your better off simply giving the money to the government!

I can't even imagine wanting to start a business unless I thought that I could potentially make at least a 20% return on my capital. The risk of starting a business demands such a potential return.

That being said, I'm not sure what to make of your points. You see to suggest that actually its the consumers who are at fault for allowing companies to make too much money. I would counter that there is no fault. If people are willing to spend $50 on a phone, then it seems like a fair price. Its not like you are required to only buy your phone from the guy selling it for $50. Companies act out of self interest insofar as they want to make as much money as possible, and consumers act out of self interest insofar as they want to spend as little as possible. I don't know about you, but when I buy something I usually spend at least a few minutes making sure that I am getting the cheapest price reasonably possible.

Now, if you are talking about changing human values so that they don't want certain consumer goods that are currently in demand.. well... again now we're talking fantasyland. People want what they want. Look.. I would never spend $80,000 on a luxury car. I drive little Honda Civics because I like dependable cars that don't use a lot of gasoline and don't cost much. I prefer to spend my money on other things. But if someone wants an $80,000 BMW.. so what? They're money is theirs. They are free to spend it on what they want. I think its a good thing. Everyone in that exchange is happy. Consumer gets a shiny blinged out car that will get him laid. Manufacturer gets 80k. Whats the problem?

I'm not getting how you're denying the 4-5% profit margins in relation to Adam Smith. From the quotes in the paper, it's seems pretty cut and dry. Short of opening Wealth of Nations, which I would rather not have to do, I think it would be prudent to accept that that is what is said. You are, by all means, encouraged to do so if you wish -- I'm just too lazy. This is not to say that I agree with him, however, I used those figures, as did the writer of that paper, to show that capitalism has been grossly misunderstood and molded into something it is not -- an excuse for rampant greed and disgusting treatment of other human beings. I'm sure he's rolling in his grave that his ideas have been used as such -- evidence of that is easily gotten from his works.

As for the return on investment through bonds, CDs and the such, I'm not sure how plausable it would be to relate those to the issue of his writings -- those were different times. However, if we're going to apply his theories to todays economic situations, I will agree: 4-5% seems a bit on the low end. 20%, as you put it, does seem to be a reasonable amount to invest your energy into something to make it worth while without disrupting the economy. You also have to realize that if, say, you were to open a law firm and the firm makes 20% profits, you are not counting in your salary into those figures. Those figures are what the company makes after it pays you. So, a 4-5% profit margin at this point doesn't seem too bad. Depending on the annual income of the company, 4-5% could be quite a bit of cash.

Now, again, on the same subject, this 4-5% would also not include profits gained through investments made by the company. The 4-5% profit would only be cost of services - production costs. Those profits could then be invested into mutual funds, cds, blah blah and increase wealth in that way -- redistributing the wealth into the market through investments. You could also invest your profits into your neighbors house increasing your property value. The handling of the profits, then, is not incorporated into the fixed percentage.

Lastly, I am not advocating the disappearance of certain products. I am only insinuating that glorification of such products increases prices artificially through the use of manipulating status. Lets take the phone example again. The 50 dollar phone is 50 dollars not because of its intrinsic worth nor is production cost; it is 50 dollars because of marketing schemes (rappers think it's cool, rich people adore it, michael jordan was in the commercial, etc.). This is where education, human decency, and morality come into play -- the root of the economic problems in the market of non-necessities. The only reason this company can sell this product for an over-inflated price is because of many reasons, but mainly because of the three listed. When it comes down to it, they buy it because they can afford, not because it's worth it. Now, I'd rather not agrue semantics when we deal with worth as I feel that is an entirely different discussion and it seems you'd like to stay away from philosophical arguments anyway. Analogously, this company is much like a child that tests they waters with how much they can get away with before getting smacked. In this analogy, the parent is the consumer aggregate and the child is business X. The parent's job in this case is to set the child with limits and enforce those limits. The child will attempt to push those limits because in freedom there is temporary happiness (Yay, I got the chocolate! Crap 10yrs later I'm a fatass -- which we could relate to temporary economic gain with the end result being fucked up planet, economic collapse, etc.) So, in summary, it is the consumers responsibility to set limits for businesses because it is assumed that the businesses will do what they can to make as much profit as possible just as a child will be short-sighted when it comes to eating junk food, touching a moving fan out of curiosity, or diving head-first into a shallow pool. And yes, I am making a hidden insult directed towards business owners who give-in to this greed by calling them idiotic children.

Now, it could very well be argued that a major problem this has not worked is because of the, especially in America, view that "I could get rich too if I work hard enough." This false sense of economic perspective leads most to not want to mess with something just in case they make it big. This behaviour is seen in all walks of life, but I will definately give you examples if you would like. The point is, yes, I do believe that the situation of our economy and the myriad problems there-in are largely due to the degredation of ethical behavior and a lack of common decency in the realm of consumers (read: all people). I expect the businessmen to act thusly as consumers because they are in no danger; however, the average person, by adhering to the norms of consumerism designed by big business and propogated by the wealthy (musicians, actors, blue-bloods, media, lawyers, doctors: the affluent) are only digging themselves into a deeper hole than necessary -- the fix would be to get educated and rally; however, short of another ghandi, I doubt that will every happen.

As for your car example, I think I pretty much covered that; however, in this specific case, the BMW took a lot more money to produce (salary, design costs, more stringent safty requirements, better materials of production). So, even if there is a dissipation of inflated worth, the car will still remain more expensive -- but 60k more expensive? That's rediculous.

There was something else, but it was lost in my overly-zealous rant. I'll try to think of it later.

[Sarvis]

Sorry to backtrack, but I was busy today and I wanted to catch this...

I agree that business is (and should be) based upon self interest. Ethics are imposed externally by legislation.

Why should business be based only on self interest? Even if you don't see the pitfalls inherent with letting someone with the wealth (and therefore power) of a large corporation do anything they want, you can't tell me that any entity is always capable of correctly acting in it's own best interest. The bottom line dollar amount is so much easier to see than say, the ulcer you're developing or your wife sleeping with the poolboy because you're always at work. For corporations it's always next quarters profits, not how their affecting the environment or if their current practices are sustainable. Just look at the banks who thought they could clean up on subprime mortgages! They acted in what they thought was their own best interest, and now we're all paying for it.


EDIT: Crap, almost forgot this:

Now, if you are talking about changing human values so that they don't want certain consumer goods that are currently in demand.. well... again now we're talking fantasyland. People want what they want.

Really? So are you contending that all these companies, who are only concerned with profits, spend money on advertising which is completely wasted?

Advertising works. It gets people to buy things they never knew they wanted.

[teflor the ranger]

Having read through this, I will simply comment that the author of the paper himself lacks the intellectual capacity to discuss his own paper. The rest of you may be at a loss. It is furthermore my opinion that the paper Kifle posted is an exercise in gathering the education of a writer that is more educated than intelligent, a rambling hack at philosophy more than a supported thesis.

To refute some of the underlying principles this paper is built on, I say that business ethics is hardly oxymoronic, that economics never 'severed' itself from supposed roots in moral philosophy. Ethics pervade all disciplines and exist in all things. Ethics exist equally in warfare as it does in peace. Doing what is right is impossible without having something to do.

This paper is a demonstration of an academic with little to no real-life experience that cannot seperate corelation from causation. He also did indeed pull a 'Teflor' when trying to assert his credentials.

But he's the one playing professor.

By the way, several posts have been reported for personal attacks against myself. I'll leave it up to the admins to decide what to do about them.