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Post 0

Thursday, August 3, 2006 - 12:17pmSanction this postReply
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Mr. Stolyarov further refutes the idea that the pursuit of profit can ever harm other people.
No refutation was given.
[H]e shows how the profit motive always either benefits or at least does not harm others.
The correct word is "usually", not "always."  Also, the pursuit of profits can bring harm to people, e.g. cigarette smokers.
A man can only make a profit in two ways. He can pursue an action which benefits himself but is irrelevant to other people. That is, he can embark on a solitary self-improvement program or in a direct transformation of inanimate objects without the participation of other people. Or he can pursue an action in cooperation with other people in order to achieve a mutually beneficial objective. He can embark in a voluntary trade with another individual or collaborate on a project or participate in a mutually valued friendship. In the first case, no other person is harmed, and many indirect benefits will flow to other people as a result of the individual's self-improvement and improvement of inanimate entities. In the second case, other people are directly benefited; they earn a profit in return for helping the individual make a profit.
Really? Has Mr. Stolyarov ever heard of anybody profiting at the expense or harm of others? What about fraud, false advertising, shoddy products and services? While free market trades are usually mutually beneficial and a free market is better than the alternatives, profit is not as morally pure as painted by this essay. It depends on how it is made. Were all of Enron's profits moral?
Moreover, pure entrepreneurial profit on the free market is gained by observing and eliminating arbitrage opportunities caused by widespread errors of perception.

Far more profits are made by invention and improvements in efficiency.




Post 1

Friday, August 4, 2006 - 12:19amSanction this postReply
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Mr. Jetton,

You wrote: "No refutation was given."

The passage you quoted from my article was intended to be my refutation. Hence, I did give one. You just did not find it compelling. I think this was because I tried to write a rather short introductory article on this issue, aimed at non-Objectivists. Thus, I chose to leave out many definitions and subtle distinctions that I would have put into a longer and more in-depth treatise on this subject.

You wrote: "The correct word is 'usually', not 'always.'  Also, the pursuit of profits can bring harm to people, e.g. cigarette smokers."
 
When looking at my words, modify "harm" with the adjective "coercive," and my intended meaning will be communicated more clearly. I am sure you will not disagree on that point. But there is more.

It is true the smoker who buys a cigarette and smokes it is biologically harmed as a result, but the entrepreneur who sold him the cigarette bears no responsibility for this. The entrepreneur merely sells the product; he has no oversight and no sovereignty over how the buyer will use it afterward. Some buyers might remain non-smokers their entire lives but might like to collect cigarettes and put them on display. Some buyers might want to purchase cigarettes with the express purpose of destroying them so as to reduce the overall quantity of cigarettes in circulation. The entrepreneur does not know what the buyer will do with the product; he furthermore does not compel the buyer to use the product in any definite way. Thus, his pursuit of profit does not harm anyone-- even if he sells goods that have the ability to inflict harm if used in certain ways.

The same argument can be used to justify a gun salesman's profits-- even though some of the guns he sells might be used to commit murder. The gun salesman is certainly not responsible for his consumers' illegal and immoral uses of his product.

"What about fraud, false advertising, shoddy products and services? While free market trades are usually mutually beneficial and a free market is better than the alternatives, profit is not as morally pure as painted by this essay. It depends on how it is made. Were all of Enron's profits moral?"

Fraud and false advertising are varieties of coercion and are indeed immoral. Yet they are outside of the scope of profit as discussed and advocated in my article. In it, I clearly defend only "voluntary, non-coercive, individual profit-seeking activities." The types of deceptions you describe cannot be voluntary-- as the deceived individuals would not consent to participate in them had they known all the facts and had they not been lied to.

Furthermore, it is the task of a just government to make such fraudulent activities unprofitable by imposing severe punishments on their perpetrators. The laissez-faire system I advocate would have a government vigilant against such abuses-- thus creating an environment where only honest, truly voluntary agreements could bring real profit.

But even under today's quite imperfect system, look at what happened to Enron. The master deceivers at that firm did not profit in the end, in the long-term. The consequences of Ken Lay's scheme backfired to probably kill him. (He did die of a heart attack, but I speculate that it had been in part due to the severe stress that his company's predicament and upcoming trial caused him.)

The true seeker of profit will endeavor to benefit himself in the long term as well as in the short term; he will pursue activities where the two do not conflict. Dishonest behavior, as Rand pointed out, will always be unmasked eventually, to the perpetrator's great detriment.

"Far more profits are made by invention and improvements in efficiency."

These, too, are instances of eliminating arbitrage opportunities. A given good or service can be sold to consumers more efficiently than it is being sold now. The entrepreneur sees this when no one else does (or is in a position to implement the change). He is willing to stake his resources on the success of his proposed technological or structural improvement. If he succeeds, he receives profits as a reward for distributing resources more efficiently than they were distributed before the new technology or methods were available. You would, I think, agree that new improvements make it possible to more effectively meet consumer demand than would have otherwise been the case.

I am
G. Stolyarov II





Post 2

Friday, August 4, 2006 - 5:47amSanction this postReply
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You wrote:
When looking at my words, modify "harm" with the adjective "coercive," and my intended meaning will be communicated more clearly.
My response was to what you wrote. Adding "coercive" doesn't just clarify; it radically alters the meaning.

You wrote:

But even under today's quite imperfect system, look at what happened to Enron. The master deceivers at that firm did not profit in the end, in the long-term.
Andy Fastow, and probably Jeff Skilling, will spend several years in jail. But after getting out, each will still have many millions of dollars of ill-gotten gains.

I wrote: "Far more profits are made by invention and improvements in efficiency."

You wrote:

These, too, are instances of eliminating arbitrage opportunities.

Here is a typical dictionary definition of "arbitrage": The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy.

Calling the invention of the personal computer, Henry Ford's invention of the assembly line, or many efficiency improvements, etc. "arbitrage" is highly unusual.




Post 3

Friday, August 4, 2006 - 6:35amSanction this postReply
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each will still have many millions of dollars of ill-gotten gains.
You can bet they will suffer consequences from their theft beyond jail time.

Ethan




Post 4

Friday, August 4, 2006 - 9:10amSanction this postReply
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Thank you for this article Mr. Stolyarov. Capitalism must be pursued as an ideal.

 I work with impoverished rural people in South Africa; and the morality of profit is very clearly illustrated in the wide-spread growth of the entrepreneurial spirit of once-suppressed people. 

When sociopaths hi-jack this elegantly simple process     http://btlbooks.com/New_Titles/wealthbystealth.htm       what is plan B?

I am Ms Sharon




Post 5

Friday, August 4, 2006 - 3:56pmSanction this postReply
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Mr. Jetton,

You wrote: "My response was to what you wrote. Adding "coercive" doesn't just clarify; it radically alters the meaning."

Maybe it does alter the meaning, if that were the only claim I made or intended to make. However, the clarification I provided after adding "coercive" explained my view that the cigarette entrepreneur does not directly harm the buyers of his product, either. It all depends on what those buyers choose to do with what he sells-- which is outside of his control.

It is always the smoker who harms himself; nobody else makes him do it. So even if you take my words as they were written-- without the modification, "coercive"-- you would still get my intended meaning.

"Andy Fastow, and probably Jeff Skilling, will spend several years in jail. But after getting out, each will still have many millions of dollars of ill-gotten gains."

But who would want to employ them after they have demonstrated to the whole country that they are cheats and frauds? Their millions of dollars will be eaten away quite rapidly by daily expenses-- which do not go away, especially for people who will most likely try to maintain an upper-class standard of living. A permanent loss of earning capacity is damage far greater than any short-term monetary gains through fraud. Mr. Dawe was right on target when he wrote, "You can bet they will suffer consequences from their theft beyond jail time."

As for the definition of arbitrage I used, it is not the conventional definition. It is Israel Kirzner's definition as employed in his theory of entrepreneurship. For a short description of the latter, see "Austrian Economics and Kirznerian Entrepreneurship:" http://www.quebecoislibre.org/05/051215-2.htm

I am
G. Stolyarov II




Post 6

Friday, August 4, 2006 - 5:58pmSanction this postReply
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Ms. Macdonald,

Thank you for your comments. I am glad to know that the South Africans you work with are lifting themselves out of poverty through entrepreneurial innovation and the profit motive. My best wishes go to them in their endeavors.

I, for one, would be interested to learn more about your experiences in this area. Perhaps you could write an article or a brief description of what you do. I am sure others on RoR would find this a fascinating topic as well. 

Thank you also for the interesting link. I admit that I do not have the exact statistics on the extent of corporate dishonesty in the United States and elsewhere, but I would venture to suggest that every field has individuals who try to cut corners, violate their promises, deceive others, and otherwise rise through immoral means. The corporate arena is no exception to this. However, dishonesty is still an exception and not the rule. The vast majority of American corporations are largely honest, productive, and efficient-- otherwise we would not have much of an economy at all.

As for the dishonest ones, they should be punished in proportion to the damage they caused. (The "two teeth for a tooth" rule would be a good guideline in determining how much to fine them-- namely, twice what they stole.)  The government needs to make sure, however, that it punishes only the dishonest individuals who have demonstrated their dishonesty. It should not impose any sort of preventive regulations on the majority of corporations and corporate businessmen who have done nothing wrong.

I am
G. Stolyarov II




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Post 7

Saturday, August 5, 2006 - 8:43amSanction this postReply
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I appreciate your interest in South Africa, Mr. Stolyarov.  You've given me a great idea for a public sign I may post there:
           LIFTING OURSELVES OUT OF POVERTY AND SUPPRESSION  THROUGH ENTREPRENEURIAL INNOVATION AND THE PROFIT MOTIVE;
         BEGINNING WITH QUALITY  EARLY CHILDHOOD EDUCATION

I am helping some two thousand children in one deeply rural community, to do just that.
My best-beloved and I are creating a potential work force of individuals; who are life-long learners and effective problem-solvers.

This is being achieved primarily, through our introduction of the High/Scope Educational approach.  http://www.highscope.org/About/allabout.htm   Our intervention began at one pre-school, and then 9 pre-schools in 2004. It is proceeding now, grade by grade, at 5 existing public schools; and  eventually will be implemented in the local senior secondary school. The first group of children are now in grade two; and we are planning our first graduation ceremonies for those achieving a senior matriculation certificate  (grade 12) in 2016.

We are working completely on our own, and are having the time of our lives; but some days we are fearful of the power we wield, and the possibility of our making irreparable errors. All the adults  have been socialized to be still, quiet and docile, and to fear authority; and we assume a moral burden to do the proper thing; as much for these people, who now have become friends, as for ourselves and our families.

Please don't accuse me of altruism.  I am a retired kindergarten teacher; I can't think of anything more exciting to do with the rest of my life.  One day, I may need eldercare; I am going to have a lot of choice when it comes to retaining some personal care workers.  They will be exceptionally well trained, and....  They might even have my best interests at heart.

I'd be interested in hearing what you have to say Mr. Soilyarov.  You have a formality about you, that may permit an objective yet sensitive discussion of this thing that I am compelled to do.  Can Objectivism explain why it is that I feel as one with these people, who had the good luck of being born where I was sent to find them? 

You should know that I have been thinking along Objectivist ways since I read Ayn Rand's interview in Playboy magazine. Over the years I read some of her non fiction, but I read Atlas Shrugged only last year; and when I read about Galt's Gulch; my breath stopped.  I am creating my own community in South Africa.  Trouble is; I have no experience in creating work.  I have a few ideas, but it would be interesting to hear Objectivists advise me on how to create a proper Objectivist community.  This is no hypothetical situation.  This is the real world. These are real children.

Thanks for listening.  I think that I'll sit back and listen for the next few days.  The grandchildren are due here any minute.

Sharon



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Post 8

Saturday, August 5, 2006 - 9:13amSanction this postReply
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One More Thing

South Africa is littered with small communities such as I have found.  They are far from the bureaucracy of government.  There is no running water, sanitation or electricity; small rivers run through the deep valleys,  the sun shines every day, and it's very windy up in the mountains.

Modern cities that accept debit and credit cards are   2 or 3 hours drive away. 

There's a hilltop for every Objectivist on RoR.  You can start from scratch.  Competition is good.    :?)

Sharon



Post 9

Saturday, August 5, 2006 - 6:29pmSanction this postReply
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Sharon, how do you access this website without electricity?

I am
Dean

Imitations are nothing like the original.



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Post 10

Saturday, August 5, 2006 - 6:09pmSanction this postReply
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Ms. Macdonald,

Thank you immensely for describing your activities. They are not altruistic in the least. First, you love your work and derive genuine satisfaction from pursuing it; it is essential in producing your individual happiness. Furthermore, by teaching young people vital principles for living, you are ultimately creating a better world for yourself. Is that not also the aim of any of us who write in an effort to change the minds of other people and spread rational ideas to them?

If you change the culture of the community in which you work and transform it from one of docility to one of initiative and innovation, you will have added to the world hundreds of rational, productive people from whose endeavors we might all benefit.

It is good to know that the distance of this community from South Africa's government enables you to work there without burdensome bureaucratic supervision and restrictions. May you succeed in teaching many children the values of liberty, reason, and entrepreneurship.

I am happy that my words have inspired you to create the public sign you mentioned. It is an excellent idea, and it will likely spark numerous discussions of the principles this sign contains.

I am
G. Stolyarov II




Post 11

Tuesday, August 8, 2006 - 2:07amSanction this postReply
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Mr. Stolyarov,

Thank you for your encouraging critique. It raises my spirits immensely to know that at least one person in the Objectivist community appreciates what I am trying to accomplish.

I am most grateful for your generous reply.

In peace, development, sustainability, and Objectivism, through quality early childhood education, first.

Sharon



Post 12

Tuesday, August 8, 2006 - 2:54amSanction this postReply
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Hi Dean,

We produce electricity with solar panels; but getting online without landline telephones is still unachievable. With a cell phone, it would take about half an hour or more to download a single page from the internet.  The network towers are few and far between, out in the hinterland; and the only landline telephones are in town.

Our budget is too limited to experiment with satellite telephones; and regardless, we are virtually computer illiterate.  We are in the process of setting up a teachers' resource centre in the town nearest to our schools; but having a new telephone line installed, is much as it was for my great grandparents in the 1930's:  pay for all the poles to your house yourself, or wait until all your neighbours can afford to put in telephones.

I spend three to six months a year in South Africa.  I post on RoR from our home in Canada. To post on RoR from South Africa, would mean driving three hours to the nearest internet cafe, and paying about $5 for each half hour online.

Getting online was a priority for us; until we began to experience all of the obstacles.  It will become more vital as the teachers develop professionally, and as the teachers of the junior grades involve themselves with the programme.  It's all about baby steps in Africa; even South Africa.  The cities are 21st century, but the rural areas are mostly 17th.

Thanks for asking, Dean
Sharon



Post 13

Thursday, August 17, 2006 - 10:28pmSanction this postReply
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For most people, pursuit of profit is considered as greed.  If this is correct, what would the effects of banning profits be in a capitalist economy?



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Post 14

Friday, August 18, 2006 - 6:19amSanction this postReply
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For most people, pursuit of profit is considered as greed. 
You are correct, most people do seem to beleive this.

If this is correct, what would the effects of banning profits be in a capitalist economy?
It is not correct. Banning profit would be the end of a capitalist society.

Almost forgot, Welcome to RoR!

Ethan




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