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#Post#: 24161--------------------------------------------------
The Ethics of Entrepreneurship and Profit
By: Pinochet88 Date: September 3, 2016, 2:22 am
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Η συλλογική
ιδιοκτησία
είναι η πηγή
των
συγκρούσεω_
7;
εντός της
κοινωνίας
και
μετατρέπει
το Έθνος σε
αρένα
αλληλοσπαρ^
5;σσόμενων
κτηνών
γιατί
αρπάζει τον
πλούτο από
τους
παραγωγούς
και
κινητροδοτ^
9;ί
όλα τα μέλη
της
κοινωνίας
να
επιτεθούν
στους
συνανθρώπο`
5;ς
τους και, εν
προκειμένω,
στους
συνέλληνες,
για να
ικανοποιήσ_
9;υν
τους
σκοπούς της
ζωής τους σε
βάρος των
παραγωγών
και σε βάρος
των
κινήτρων
για
παραγωγή. Το
μόνο
φάρμακο για
την Εθνική
ανοικοδόμη`
3;η
και
κυριαρχία
είναι η
ατομική
ιδιοκτησία
και ο
Καπιταλισμa
2;ς!
[hr]
The Ethics of Entrepreneurship and Profit
Tags The EntrepreneurPolitical TheoryPraxeology
Hans-Hermann Hoppe
In the most fundamental sense we are all, with each of our
actions, always and invariably profit-seeking entrepreneurs.
Whenever we act, we employ some physical means (things valued as
goods) — at a minimum our body and its standing room, but in
most cases also various other, “external” things — so as to
divert the “natural” course of events (the course of events we
expect to happen if we were to act differently) in order to
reach some more highly valued anticipated future state of
affairs instead. With every action we aim at substituting a more
favorable future state of affairs for a less favorable one that
would result if we were to act differently. In this sense, with
every action we seek to increase our satisfaction and attain a
psychic profit. “To make profits is invariably the aim sought by
any action,” as Ludwig von Mises has stated it. (Mises, 1966, p.
289)
But every action is threatened also with the possibility of
loss. For every action refers to the future and the future is
uncertain or at best only partially known. Every actor, in
deciding on a course of action, compares the value of two
anticipated states of affairs: the state he wants to effect
through his action but that has not yet been realized, and
another state that would result if he were to act differently
but cannot come into existence, because he acts the way he does.
This makes every action a risky enterprise. An actor can always
fail and suffer a loss. He may not be able to effect the
anticipated future state of affairs — that is, the actor’s
technical knowledge, his “know how” may be deficient or it may
be temporarily “superseded,” due to some unforeseen external
contingencies. Or else, even if he has successfully produced the
desired state of physical affairs, he may still consider his
action a failure and suffer a loss, if this state of affairs
provides him with less satisfaction than what he could have
attained had he chosen otherwise (some earlier-on rejected
alternative course of action) — that is, the actor’s speculative
knowledge — his knowledge of the temporal change and fluctuation
of values and valuations — may be deficient.
Since all of our actions display entrepreneurship and are aimed
at being successful and yielding the actor a profit, there can
be nothing wrong with entrepreneurship and profit. Wrong, in any
meaningful sense of the term, are only failure and loss, and
accordingly, in all of our actions, we always try to avoid them.
The question of justice, i.e., whether or not a specific action
and the profit or loss resulting from it is ethically right or
wrong, arises only in connection with conflicts.
Since every action requires the employment of specific physical
means — a body, standing room, external objects — a conflict
between different actors must arise, whenever two actors try to
use the same physical means for the attainment of different
purposes. The source of conflict is always and invariably the
same: the scarcity of physical means. Two actors cannot at the
same time use the same physical means — the same bodies, spaces
and objects — for alternative purposes. If they try to do so,
they must clash. Therefore, in order to avoid conflict or
resolve it if it occurs, an actionable principle and criterion
of justice is required, i.e., a principle regulating the just or
“proper” vs. the unjust or “improper” use and control
(ownership) of scarce physical means.
Logically, what is required to avoid all conflict is clear: It
is only necessary that every good be always and at all times
owned privately, i.e., controlled exclusively by some specified
individual (or individual partnership or association), and that
it be always recognizable which good is owned and by whom, and
which is not. The plans and purposes of various profit-seeking
actor-entrepreneurs may then be as different as can be, and yet
no conflict will arise so long as their respective actions
involve only and exclusively the use of their own, private
property.
Yet how can this state of affairs: the complete and
unambiguously clear privatization of all goods, be practically
accomplished? How can physical things become private property in
the first place; and how can conflict be avoided from the
beginning of mankind on?
A single — praxeological — solution to this problem exists and
has been essentially known to mankind since its beginnings —
even if it has only been slowly and gradually elaborated and
logically re-constructed. To avoid conflict from the start, it
is necessary that private property be founded through acts of
original appropriation. Property must be established through
acts (instead of mere words or declarations), because only
through actions, taking place in time and space, can an
objective — inter-subjectively ascertainable — link be
established between a particular person and a particular thing.
And only the first appropriator of a previously unappropriated
thing can acquire this thing as his property without conflict.
For, by definition, as the first appropriator he cannot have run
into conflict with anyone in appropriating the good in question,
as everyone else appeared on the scene only later.
This importantly implies that while every person is the
exclusive owner of its own physical body as his primary means of
action, no person can ever be the owner of any other person’s
body. For we can use another person’s body only indirectly,
i.e., in using our directly appropriated and controlled own body
first. Thus, direct appropriation temporally and logically
precedes indirect appropriation; and accordingly, any
non-consensual use of another person’s body is an unjust
misappropriation of something already directly appropriated by
someone else.
All just property, then, goes back directly or indirectly,
through a chain of mutually beneficial — and thus likewise
conflict-free — property-title transfers, to original
appropriators and acts of original appropriation. Mutatis
mutandis, all claims to and uses made of things by a person who
had neither appropriated or produced these things, nor acquired
them through a conflict-free exchange from some previous owner,
are unjust.
And by implication: All profits gained or losses suffered by an
actor-entrepreneur with justly acquired means are just profits
(or losses); and all profits and losses accruing to him through
the use of unjustly acquired means are unjust.
II.
This analysis applies in full also to the case of the
entrepreneur in the term’s narrower definition, as a
capitalist-entrepreneur.
The capitalist entrepreneur acts with a specific goal in mind:
to attain a monetary profit. He saves or borrows saved money, he
hires labor, and he buys or rents raw materials, capital goods
and land. He then proceeds to produce his product or service,
whatever it may be, and he hopes to sell this product for a
monetary profit. For the capitalist, “profit appears as a
surplus of money received over money expended and loss as a
surplus of money expended over money received. Profit and loss
can be expressed in definite amounts of money.” (Mises 1966, p.
289)
As all action, a capitalist enterprise is risky. The cost of
production — the money expended — does not determine the revenue
received. In fact, if the cost of production determined price
and revenue, no capitalist would ever fail. Rather, it is
anticipated prices and revenues that determine what production
costs the capitalist can possibly afford.
Yet the capitalist does not know what future prices will be paid
or what quantity of his product will be bought at such prices.
This depends exclusively on the buyers of his product, and the
capitalist has no control over them. The capitalist must
speculate what the future demand will be. If he is correct and
the expected future prices do correspond to the later fixed
market prices, he will earn a profit. On the other hand, while
no capitalist aims at making losses — because losses imply that
he must ultimately give up his function as a capitalist and
become either a hired employee of another capitalist or a
self-sufficient producer-consumer — every capitalist can err
with his speculation and the actually realized prices fall below
his expectations and his accordingly assumed production cost, in
which case he does not earn a profit but incurs a loss.
While it is possible to determine exactly how much money a
capitalist has gained or lost in the course of time, his money
profit or loss do not imply much if anything about the
capitalist’s state of happiness, i.e., about his psychic profit
or loss. For the capitalist, money is rarely if ever the
ultimate goal (safe, may be, for Scrooge McDuck, and only under
a gold standard). In practically all cases, money is a means to
further action, motivated by still more distant and ultimate
goals. The capitalist may want to use it to continue or expand
his role as a profit-seeking capitalist. He may use it as cash
to be held for not yet determined future employments. He may
want to spend it on consumer goods and personal consumption. Or
he may wish to use it for philanthropic or charitable causes,
etc.
What can be unambiguously stated about a capitalist’s profit or
loss is this: His profit or loss are the quantitative expression
of the size of his contribution to the well-being of his fellow
men, i.e., the buyers and consumers of his product, who have
surrendered their money in exchange for his (by the buyers) more
highly valued product. The capitalist’s profit indicates that he
has successfully transformed socially less highly valued and
appraised means of action into socially more highly valued and
appraised ones and thus increased and enhanced social welfare.
Mutatis mutandis, the capitalist’s loss indicates that he has
used some more valuable inputs for the production of a less
valuable output and so wasted scarce physical means and
impoverished society.
Money profits are not just good for the capitalist, then, they
are also good for his fellow men. The higher a capitalist’s
profit, the greater has been his contribution to social welfare.
Likewise, money losses are bad not only for the capitalist, but
they are bad also for his fellow men, whose welfare has been
impaired by his error.
The question of justice: of the ethically “right” or “wrong” of
the actions of a capitalist-entrepreneur, arises, as in the case
of all actions, again only in connection with conflicts, i.e.,
with rivalrous ownership claims and disputes regarding specific
physical means of action. And the answer for the capitalist here
is the same as for everyone, in any one of his actions.
The capitalist’s actions and profits are just, if he has
originally appropriated or produced his production factors or
has acquired them — either bought or rented them — in a mutually
beneficial exchange from a previous owner, if all his employees
are hired freely at mutually agreeable terms, and if he does not
physically damage the property of others in the production
process. Otherwise, if some or all of the capitalist’s
production factors are neither appropriated or produced by him,
nor bought or rented by him from a previous owner (but derived
instead from the expropriation of another person’s previous
property), if he employs non-consensual, “forced” labor in his
production, or if he causes physical damage to others’ property
during production, his actions and resulting profits are unjust.
In that case, the unjustly harmed person, the slave, or any
person in possession of proof of his own un-relinquished older
title to some or all of the capitalist’s means of production,
has a just claim against him and can insist on restitution —
exactly as the matter would be judged and handled outside the
business world, in all civil affairs.
III.
Complications in this fundamentally clear ethical landscape
arise only from the presence of a State.
The state is conventionally defined as an agency that exercises
a territorial monopoly of ultimate decision-making in all cases
of conflict, including conflicts involving itself and its
agents. That is, the state can legislate, can unilaterally make
and break law; and by implication, the state has the exclusive
privilege to tax, i.e., to determine unilaterally the price its
subjects must pay it to perform the task of ultimate
decision-making.
Logically, the institution of a state has a twofold implication.
First, with a state in existence all private property becomes
essentially fiat property, i.e., property granted by the state
and, by the same token, also property to be taken away by it via
legislation or taxation. Ultimately, all private property
becomes state property. Second, none of the state’s “own” land
and property — misleadingly called public property — and none of
its money income is derived from original appropriation,
production, or voluntary exchange. Rather, all of the state’s
property and income is the result of prior expropriations of
owners of private property.
The state, then, contrary to its own self-serving
pronouncements, is not the originator or guarantor of private
property. Rather, it is the conqueror of private property. Nor
is the state the originator or guarantor of justice. To the
contrary, it is the destroyer of justice and the embodiment of
injustice.
How is a capitalist-entrepreneur (or anyone, for that matter) to
act justly in a fundamentally unjust, statist world, i.e.,
confronted and encircled by an ethically indefensible
institution — the state — whose agents live off and sustain
themselves not from production and exchange but from
expropriations: from the taking, redistributing and regulating
of the capitalist’s and others’ private property?
Since private property is just, every action in defense of one’s
private property is just as well — provided only that in his
defense the defender does not infringe on the private property
rights of others. The capitalist is ethically entitled to use
all means at his disposal to defend himself against any attack
on and expropriation of his property by the state, exactly as he
is entitled to do against any common criminal. On the other
hand, and again exactly as in the case of any common criminal,
the capitalist’s defensive actions are unjust, if they involve
an attack on the property of any third party, i.e., as soon as
the capitalist uses his means to play a participatory role in
the state’s expropriations.
More specifically: For the capitalist (or anyone) in the defense
and for the sake of his property, it may not be prudent or even
dangerous to do so, but it is certainly just for him to avoid or
evade any and all restrictions imposed on his property by the
state as best he can. Thus, it is just for the capitalist to
deceive and lie to state agents about his properties and income.
It is just for him, to evade taxfpayments on his property and
income, and to ignore or circumvent all legislative or
regulatory restrictions imposed on the uses he may make of his
factors of production (land, labor, and capital).
Correspondingly, a capitalist also acts justly, if he bribes or
otherwise lobbies state agents to help him ignore, remove or
evade the taxes and regulations imposed on him. He acts justly
and above that becomes a promoter of justice, if he uses his
means to lobby or bribe state agents to reduce taxes and
property regulations generally, not only for him. And he acts
justly and becomes indeed a champion of justice, if he actively
lobbies to outlaw, as unjust, any and all expropriation, and
hence all property and income taxes and all legislative
restrictions on the use of property (beyond the requirement of
not causing physical damage to others’ property during
production).
As well, it is just for the capitalist to buy state property at
the lowest possible price — provided only that the property in
question cannot be traced back to the expropriation of some
specific third party that still retains title to it. And
likewise is it just for the capitalist to sell his products to
the state at the highest possible price — provided only that
this product cannot be linked directly and causally to a future
act of state aggression against some particular third party (as
may be the case with certain weapons sales).
On the other hand, apart from any violation of the just
mentioned two provisos, a capitalist acts unjustly and becomes a
promoter of injustice, if and to the extent he employs his means
for the purpose of maintaining or further increasing any current
level of confiscation or legislative expropriation of others’
property or income by the state.
Thus, for instance, the purchase of state-government bonds and
the monetary profit derived from it is unjust, because such
purchase represents a lobbying effort on behalf of the
continuation of the state and of ongoing injustice, as interest
payments and final repayment of the bond require future taxes.
Likewise and more importantly, any means expended by a
capitalist on lobbying efforts to maintain or increase the
current level of taxes — and hence of state-income and spending
— or of regulatory property restrictions, are unjust, and any
profits derived from such efforts are corrupted.
Confronted with an unjust institution, the temptation for a
capitalist to act unjustly as well is systematically increased.
If he becomes an accomplice in the state’s business of taxing,
redistributing and legislating, new profit opportunities open
up. Corruption becomes attractive, because it can offer great
financial rewards.
By expending money and other means on political parties,
politicians, or other state agents, a capitalist may lobby the
state to subsidize his losing enterprise, or to rescue it from
insolvency or bankruptcy — and so enrich or save himself at the
expense of others. Through lobbying activities and expenses, a
capitalist may be granted a legal privilege or monopoly
concerning the production, the sale, or the purchase of certain
products or services — and so gain monopoly profits at the
expense of other money-profit seeking capitalists. Or he may get
the state to pass legislation that raises his competitors’
production costs relative to his own — and so grants him a
competitive advantage at others’ expense.
Yet however tempting, all such lobbying activities and resulting
profits are unjust. They all involve that a capitalist pays
state agents for the expropriation of other, third parties, in
the expectation of higher personal profit. The capitalist does
not employ his means of production exclusively for the
production of goods, to be sold to voluntarily paying consumers.
Rather, the capitalist employs a portion of his means for the
production of bads: the involuntary expropriation of others. And
accordingly, the profit earned from his enterprise, whatever it
may be, is no longer a correct measure of the size of his
contribution to social welfare. His profits are corrupted and
morally tainted. Some third parties would have a just claim
against his enterprise and his profit — a claim that may not be
enforceable against the state, but that would be a just claim
nonetheless.
source
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