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Friday, February 11, 2005 - 2:59pmSanction this postReply
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Generally one who is legally a fiduciary is an agent who acts for the wishes of a principal, even if such acts comes at the expense of the agent. Doctors have fiduciary relationships with their patients. They must act in the patient's best interests, even at their own expense. Similarly, corporate officers have a fiduciary duty to the corporation and to the shareholders. Lawyers have a fiduciary relationship with their clients. Government representatives have a fiduciary relationship to their constituency. To me it's obvious that there're selfish reasons for becoming a fiduciary, even though it binds one to be altruistic. Does anyone disagree?

Anyway, the agent has an easy time when he has a fiduciary obligation to just one principal because the principal has only one set of wishes. But once that obligation extends equally to several principals, I think the situation gets more complex. The agent then has several sets of wishes, some of which might clash with others. What is the agent to do? This comes up all the time -- as in the officer who has the fiduciary obligation to the shareholders or the government representative who has a fiduciary relationship to his constituency.

I think egoism fails to offer what the agent should do if he bears a fiduciary obligation to a group with differing sets of wishes. I think a more "collective" ethics is needed. Am I mistaken? If not, then which collective ethics should it be?

I suspect people will take offense to this whole idea, but I'm hoping not.

Jordan




Post 1

Saturday, February 12, 2005 - 2:00amSanction this postReply
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Hi Jordan,

I don't think being a fiduciary binds you to being altruistic - the agent chooses to assume the role and with certain limitations can leave it at will. I'm also not sure why you think fiduciary relationships necessarily entail conflicting wishes - in a partnership (where the partners are in a sense fiduciaries to each other) or in an incorporated company (where the directors are fiduciaries to the shareholders and/or the corporate entity depending how you look at it) disputes can be resolved by majority vote of the partner or shareholders, and the agent will know that this is the case when he chooses to assume the role.

As for a lawyer/client relationship, this might differ in other countries but here the lawyer simply refuses to act for a client who poses a possible conflict of interest with an existing client. In situations where a conflict arises between two existing clients the lawyer would probably have to drop both.

MH




Post 2

Saturday, February 12, 2005 - 7:56amSanction this postReply
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Hi Matthew,
the agent chooses to assume the role and with certain limitations can leave it at will.
Of course. Given that he chooses to stay in the role, he is obligated to be altruistic toward his principal. If the doc chooses to have patients, then he is obligated to be altruistic toward them. Docs undergo triage when there're conflicting wishes among the patients.
I'm also not sure why you think fiduciary relationships necessarily entail conflicting wishes .... disputes can be resolved by majority vote of the partner or shareholders, and the agent will know that this is the case when he chooses to assume the role.
I never said that I think fiduciary relationships necessarily entail conflicting wishes, but it's pretty obvious that many do. The wishes of shareholders or constituencies are not always the same. Consider the doc-patient case above. In any case, why do you think resolving disputes by majority vote is the correct method for a fiduciary egoist?

Jordan




Post 3

Saturday, February 12, 2005 - 9:51amSanction this postReply
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Jordan,

Of course. Given that he chooses to stay in the role, he is obligated to be altruistic toward his principal. If the doc chooses to have patients, then he is obligated to be altruistic toward them. Docs undergo triage when there're conflicting wishes among the patients.
I don't think an egoist who becomes a fiduciary is being altruistic. They would only enter a fiduciary relationship because it suited some wider purpose of theirs. An egoist lawyer for instance would find the practice of law fulfilling, and thus accepts the fiduciary position.

I never said that I think fiduciary relationships necessarily entail conflicting wishes, but it's pretty obvious that many do. 
Fair enough, sorry for the misinterpretation.

The wishes of shareholders or constituencies are not always the same. Consider the doc-patient case above.
Can you give an example of what you're driving at with the doc/patient relationship? Like where a child wants treatment without informing his parents or something?

In any case, why do you think resolving disputes by majority vote is the correct method for a fiduciary egoist?
Well it isn't in all cases but in partnership and companies that generally is how it's done, and it's hard to think of a more rational way. On the other hand, lawyers and doctors follow codes of professional ethics which guide their behaviour; and its easy to imagine situations where the general public would consider the result abhorrent.

MH






Post 4

Saturday, February 12, 2005 - 6:50pmSanction this postReply
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I agree with Matt that being a fiduciary does not necessarily require being altruistic. In my law practice I have never taken a case where the client's interests were in conflict with my own. That wouldn't even make sense to me. In addition to what Matt mentioned about the practice of law being fulfilling, I enjoy the benefit I get from being paid for my time and effort.



Post 5

Sunday, February 13, 2005 - 7:29amSanction this postReply
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 Ignore the example of laywers. I used them to point out what a fiduciary relationship is, but the example doesn't really get at what I'm talking about.  Let's use doctors, representatives, and maybe corporate officers.

But first, There're selfish reasons for being in an fiduciary relationship. But once you're in it, you need to act altruistically toward your client. It's like a micro-ethics inside a macro-ethics. I say it's altruistic because if your wishes clash with the wishes of your client, and if you won't (or can't) get out of the relationship at that point (maybe because you signed a binding contract or swore an oath or something), then the client's wishes should trump yours.

Example: The doc acts altruistically when he stays late to finish the operation on a sick patient and so misses that golf game he's been dying to play.

Example: The representative acts altruistically when he votes to keep out that waste dump in his constituency's neighborhood and so passes up a huge bribe from the waste dump managers.

Now I know Objectivism abhors "altruism," which might be why I'm feeling the (polite) resistance from my fellow discussers. Perhaps there is a less contentious word; I just can't think of one. So "altruism" seems appropriate here because the fiduciary, in his particular relationship, must sacrifice his own interests should they clash with his client's. Note again that in the bigger picture, taking this fiduciary relationship (and all its little sacrifices) is selfish, but in the small picture, it's altruistic.

If you reject using "altruistic," that's fine. Then give me a term for someone who takes a relationship that binds him to avoid gains if those gains would result in a loss to the other person(s) in the relationship.

Anyway, let's revisit the doc. He's an emergency room doc. He treates seriously ill or injured folks all day, but sometimes there're too many. The patients can't just vote on who gets to be helped (let's say that some are incapacitated). The doc instead performs triage. Triage is a method of sorting sick and injured people into groups (originally 3 groups, hence "triage") based on their need for or likely benefit from immediate medical treatment. The problem here is that a doc will be screwing over some of his patients for the benefit of others. Here the doc cannot uphold his fiduciary obligations to all of his patients. He needs a method of choosing who will win and who will lose.

I suppose triage could be considered a sort of majority vote, but not really. Still, I don't see why egoism would advocate majority vote although it's hard to think of a better alternative (like Matthew said) . I suppose the majority vote options would be: consensus, then consensus minus 1, then consensus minus 2, and so on until the vote equals 50% + 1. I'm not sure which majority vote the egoist should advocate, if any.

Jordan

(Edited by Jordan on 2/13, 7:32am)




Post 6

Sunday, February 13, 2005 - 12:37pmSanction this postReply
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You are referring to short-term loss in favor of long term gain.... is not altruistic [or 'otherism', as prefer to consider it] when view in that manner.



Post 7

Sunday, February 13, 2005 - 5:01pmSanction this postReply
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Hi Jordan,

 

There’s a couple of responses to your question. The first is the “It’s a Contract!” response. Doctors might be contractually bound to their employer and be required to work late to finish operations. The “It’s a Contract!” cards answers all questions for some, and those types will walk away nodding.

 

But to me, that’s simplistic and not really convincing. So it’s better to ask, “What really is in the self interest of the actor, and is there really a conflict?

Example: The doc acts altruistically when he stays late to finish the operation on a sick patient and so misses that golf game he's been dying to play.

Assuming there is no contractual requirement to finish the operation, is it really in the doctor’s self-interest to play a golf game rather than finishing an operation on a sick patient? What effect will it have on his reputation if a less capable doctor messes it up? How would it affect his relationships with his colleagues to see him “slack off” and leave work behind for others?

Example: The representative acts altruistically when he votes to keep out that waste dump in his constituency's neighborhood and so passes up a huge bribe from the waste dump managers.

Is it really in the representative’s self-interest to accept an illegal kickback and risk criminal prosecution? Is it really altruistic to be a consistent advocate for the concept of property rights?

 

Life is about making choices and many involve trade-offs. But it’s your own hierarchy of value that determines what’s important. I can’t imagine many doctors that would trade their reputation for an afternoon of golf, but maybe there are and maybe golf is more important to them than their career. But I’d say they’re in the wrong career and that they’d soon be out of a career as a result of dissatisfied customers.

 

I think you’re over-mathematicizing the triage example. You’re right, the doctor needs a method of choosing who should get immediate treatment. But I wouldn’t call this the choice between winners and losers, and I wouldn’t say that the guy with the sprained wrist is getting “screwed over” for not receiving priority over the guy who’s just had the heart attack. So it’s simply a case of prioritizing in order of who’s closest to death. Because the last thing in a doctor’s self-interest is to be responsible for fatalities.




Post 8

Sunday, February 13, 2005 - 7:49pmSanction this postReply
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Robert,

You're right, I am referring to the short-term loss for long-term gain. In that narrowed context, when you're taking the loss -- that's the part I want to concentrate on. Don't call it altruistic if you don't want to. I don't care. That's a distraction to what I really want to get at.

Glenn,
I wouldn’t say that the guy with the sprained wrist is getting “screwed over” for not receiving priority over the guy who’s just had the heart attack.
Why not?

I know the "it's a contract" response, but that falls short of what I want to get at. The "prioritize" solution gets closer. But what principles govern that prioritization? For the doc, it sounds like "one ought minimize overall harm to the patients" is the principle. There's a name for this principle: negative utilitarianism although I'm not sure if that's really the principle he's following in triage. There're actually several types of utilitarianism he could pick from.

I'm comfortable ending this thread. I'm not making the headway I want to. I do appreciate that responses though.

Jordan




Post 9

Sunday, February 13, 2005 - 8:15pmSanction this postReply
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If you want some good answers, go to ObjectivismOnline.net. They're an ARI kind of bunch, though. I had a hard time with them.

Craig




Post 10

Sunday, February 20, 2005 - 10:11pmSanction this postReply
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As a licensed real estate agent in the state of Michigan, this question is interesting to me. 

First, the problems associated with the role exist often because of the legal context, inherited ultimately from non-objective law.  Those came over to America from Europe and are based on religious ideas of morality.

The question as stated involves being a fiduciary to a group.  The problem is that different people have different interests. 

In real estate law in Michigan, we recognize the status of "dual agency."  Some brokerages, however, do not like the potentials for problems and decline the role.  Different agents within the same brokerage will represent different sides of a transaction. 

There are agents who do well at bringing people together.  Likewise, there are lawyers who are good arbitrators and who keep everyone out of court. 

Once the group becomes poorly defined, the problems are caused not by the lack of people skills but by an untenable -- and I submit, collectivist -- context. 

The egoist makes decisions as a fiduciary to a group the same way the egoist makes any decision. Perhaps it needs to be shown that anyone can accept responsibilty for a group and be an egoist.




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