Entrepreneurship and Capitalist Culture – Myths and Truths – Part 2


Leandro Castelluccio

The following essay is a continuation of Part 1, where I reflect on the reasons why I consider capitalism wrongly judged, and why, from my consideration of ethics and human welfare, capitalism is a very important model and of relevance to optimize personal reward in the long term.

The search for profit and social responsibility

Sometimes it is criticized that in a free market companies only seek benefits, profits, and do not worry about social responsibility or to provide services in areas that are not profitable. For clarity, I return to the example of the desert island, which can be found in part 1 of the essay. In general terms, if someone is alone on a deserted island, asking the subject that their actions not to mean a profit, asking that there be no benefit, is asking the person to resign and die, if the person makes a fishing rod and does not seek food with it, the person does not survive. All actions that involve gains improve the state of life of the subject. To have water, food, shelter, any sign that alerts others to one’s presence on the island, etc., all these are profits, benefits, that result from these actions. The same applies to modern society, to seek the benefit is to seek an improvement in the person’s state of life. Judging the benefit as something bad is destructive if we put it into practice. And we do not have to think only of a material profit or gain, in the sense of acquisition of goods, for example, we can consider the profit in a broader or more general conception. If one embarks on the study of a particular profession, one wishes to obtain a long-term gain: the development of personal abilities, well-being and satisfaction, etc. One wants a gain, if embarking on such a career is nothing but costs and losses for the person, if wanting a benefit is bad,  a selfish or “capitalist” mentality, then there is no place for satisfaction in one’s life.

The best social responsibility in turn, in its positive sense, so to speak, lies in the advances and innovations that the freedom to produce naturally reverberates in society. Social responsibility, in the sense of not harming others with one’s productive activity, can be controlled by mechanisms such as justice or penalties through monetary transactions when there are certain externalities (costs of the production process that are not directly assumed). In turn, the same area of ​​competition fostered by capitalism helps to eliminate inefficient industries in favor of efficient and lower production costs.

This has an important philosophical connotation. Solidarity and concern for others are encouraged as characteristics of the new workers of the modern era (which is not a negative thing), however how much impact does this have instead of encouraging the intellectual and creative qualities that make people discover or develop drugs that improve the lives of millions of people, for example? 

But the free market does not work ideally?

Sometimes it is stated that in order for the free market to work ideally, certain conditions must be met that rarely occur in practice. But what does it mean that it works ideally? This can be interpreted as if it were thought that the free market is a system that must guarantee something, that if in this system there is a certain group of conditions then that end will be guaranteed, and hence the system works ideally. But if those conditions are not given by nature, then the end will not be guaranteed, then the system does not work and must be discarded or regulated. This would be the reasoning. The end that I suppose that many take into account and that must be fulfilled is that of the welfare of the people. The free market, in my opinion, does guarantee something, that is, as I mentioned in the first part, the possibility of high reward states. The nature of high rewards, of self-esteem, for example, and how to obtain it, includes independence and what one can do, not coercion, which goes against it, and which is part of a market not free. If one does not have the possibility to carry out what one can do, for example, as long as one does not deny the possibility of others using spaces and objects for their purposes, then one can cultivate self-esteem, otherwise it self-esteem not cultivated. But the free market does not guarantee the high reward states itself, this will depend on the particular achievements of the individuals. 

Outside of this, the free market should not be thought of as a way to guarantee a particular end, but as a state of affairs that gives the possibility that people can pursue their ends. And as I remarked earlier, well-being is not guaranteed automatically because there are people producing and exchanging freely, nor if controls or conflicts are established, welfare depends on the productive capacity of people, on innovations, on intelligence, on creativity, on effectiveness, etc. That certain issues are not guaranteed automatically in a free market does not make it less desirable and that the market (people and their exchanges) has to be regulated. There is a false dichotomy of which I speak in a previous essay (“The fallacy of poverty and the utilitarian justification of freedom“), regarding the assumed fact that to guarantee that there is no poverty, for example, it is necessary to regulate the freedom of people to produce and exchange goods, that is, to limit the free market, since it is precisely by allowing this possibility of production and free exchange that poverty is better fought, the optimal welfare state does not exclude the free market, one thing leads to the other. The opposite situation is not the most optimal, a world without poor people, but where people are not free (consider that we can give everyone a house if we force people to build them, for example, but this is not an ideal world).  

Coercion, the initiation of a conflict (outside of the defense) denies the high states of reward. Even if every person on the planet had a house to live in (ideally), if slave labor had to be used again in modern societies to guarantee such a thing, we could not say that such a cause is worthy of support. No one should receive a penny if someone has to be sacrificed for it, if voluntary consent has to be trampled, if a conflict is established. If one regulates, if one introduces coercion, force, conflict, in human relationships, one could give a house to each person on the planet in exchange for us being slaves and servants of the desires of others and we cannot exercise free will (act according to one’s wishes). This does not mean that someday it will not be possible for everyone to have a house, achieved with the productive, innovative and voluntary work of the individuals. This does go hand in hand with self-esteem, what one can do that is complex and that favors one’s life.

Capitalism and the right to work

Sometimes it is stated that in the free market a fundamental right of the human being such as work is not guaranteed. The invocation of the right to work has its complications. If we consider work, the job as it is understood in modern civilization, as a right, in the sense of a good that is automatically guaranteed, we are taking away the meaning itself from the work that we commonly understand. A job assumes certain ability or certain knowledge, it supposes to be able to do something in particular, and if one lacks this there is no possible work. Work is not something that is guaranteed without any reason, the work must be won, or rather, generated, knowing what to do, how to act, having certain skills or abilities, and if one has to win it, in what sense would it be that the work is assured in a situation different from that of the free market? The generation and availability of jobs on the other hand, depends on the abilities of the people who generate them, the jobs are created, and as they are created, their existence depends on the particular achievements of the people, in this way neither is work something that is automatically guaranteed, if people do not create or produce, what system would guarantee that fundamental “right” to the work that is being talked about? How would the system do it? On the other hand, whose job is it? Who offers it? Individuals, those who create, produce and exchange with others. And in this sense it depends on who offers the job to decide who can occupy it, it depends on that person to decide who would be qualified, who presents the skills or knowledge indicated to meet the demands of the person offering the position.

Today many subjects could occupy a job, the employer looks for the best trained, so there is competition for that position. In these aspects, work is not something that is automatically guaranteed. What is behind this invocation of the “fundamental right to work”? If someone has a job to offer, I wonder who is bound by conflict, by force, to provide it, if it is something that has to be guaranteed automatically. If we think of work as any kind of activity that one can perform that leads to a certain goal, in the free market situation that work would not be impeded, in a situation of conflicts and coercion, it would be different. One can say that this is not the idea of ​​the right to work, that effectively this is not automatically guaranteed, magically so to speak, that what is meant is that work must simply be guaranteed thanks to the person’s actions. The question is: who should guarantee it? One does not have to guarantee a job to another, there is no justification in reality for such a thing in the end, and the obligation to do so does not go hand in hand with the high reward states, and if that is imposed in society, then one becomes a means to the ends of another, and a conflict is maintained, is that the right to work?

The matter is always in the conflict, the policies that involve establishing conflicts. This denies the high reward states, the most to what one can aspire in life. One does not have to live for less, one does not have to live according to the desires of others and one does not have to be a slave in all its possible manifestations. People who do not wait for the voluntary consent of the other or believe that they cannot live waiting for such consent, immerse themselves fully in the use of force and coercion, establishing conflicts. Control, the submission of others to one’s own desires, or directly brute force, are negative aspects of the world that people criticize so much but do not realize that they emerge when one leaves aside the voluntary consent of the other. Many of these people would never force someone to do anything against their will in some aspect of human activity (consider voluntary consent in scientific research or in sexual relationships), but they do not hesitate for a second to trample on the same in some other aspect of human activity. If the words “respect” or “dignity of the human being” have to have some truly comprehensible meaning, it must be this, that of assessing the voluntary consent of the person in the dealings between the individuals.

Many say that the human being is a social being, that one is not disconnected from other people, that does not mean that a subject must be connected with another person as a means to his end, as the slave is with his master, if one being social means to collaborate by force with things that one does not agree with, if it means discarding one’s time and work to live according to the ends of a third party, if it means that life has to be ruled by others, then the nature of being social would not be compatible with the evolutionary motor of life as survival and well-being. The truth is that we are not tied to that kind of life by nature, we are able to think and live according to our ideas, relate to those who are appropriate according to our judgments and act according to our own desires, not those of others. There are many visions of what it means to be social. But if one does not agree with some vision of the human being as a social being, who is going to impose that one lives as such vision demands? Because it boils down to that: at what point will my voluntary consent be trampled?

Does capitalism promote the bad aspect of our nature?

It has been stated that in a free market people can tend to fraud, that there is no guarantee that a product is not altered or that it is a danger to people and that this information is hidden from the public. It has been said that the free market encourages these behaviors. In the case that there is a free market, that does not mean that a State would not act to defend people when the high reward states are denied. Justice is necessary and it would act in case of fraud. It is wrong to consider that something like fraud belongs to the system itself, to say that it is something that tends to be in the free market, fraud is not of the system, in a free or regulated market people can commit fraud equally. Fraud goes hand in hand with destruction in the long term, who cheats ends up suffering the consequences. For those interested in survival in the long term, for those who bet on high reward states, fraud is out of the picture, fraud is not the way. People do not have to accept a product having as a guarantee of their safety the simple good will of the producers, one can demand information, as to evaluate the risks oneself. If the producers are interested in continuing to produce and obtaining benefits, it is in their interest to be open in that sense, to provide information, evidence, that indicates that the product is safe, for example. If the producer does not do it, one does not have to buy the product, and that is to the detriment of the producer. That a company merits a quality certificate on its products is a great achievement, who offers a better product, with such insurance, triumphs over the competition. A scheme of companies that dedicate themselves to provide evaluations supported by evidence accessible to the public on the products offered in the market is a healthy and useful endeavor in the free market. Those who agree to be evaluated demonstrate transparency in their activity.

The latter may even consider that it is legitimate as something carried out by the State, that is, as a service of the State, provided that it is not monopolistic, and if the financing of the initiative is voluntary and the companies are not obliged to be evaluated. Despite this, I believe that it is a mistake to think that there would be no transgressions in case of fraud if the State is regulating the security of the products or if there are companies that are dedicated to providing evaluations, for example if we think about bribes and that these are accepted by members of the State or by companies that provide evaluations when a product is harmful and it’s about keeping that secret. The regulation by the State is not a guarantee that the products are not adulterated, that there is no fraud and risks for people. Or let’s think about the case where the State regularizes medicines. I think that medical science, for example, is going much faster than a State entity can get to regulate, should people let the improvement in their quality of life be stalled or stopped by the State? If a drug can provide enormous benefits to certain people, let’s put the hypothetical case that it can even be the difference in a given moment between the life and death of a person, why a subject could not obtain it and the company sell it, without the approval of the state regulator? Perhaps in the expectation of such approval many lives are lost, it is essential for people to be left with the option to act based on their judgments, to use spaces and objects for their purposes, to be able to exchange, this regulation that implies a conflict in this case, denies the possibility of high reward states.

Fraud, deception, can be the order of the day, in regulated systems or not. The important thing is that there is a State that defends the possibility of high reward states of individuals, it is important to encourage and maintain this function, make the corresponding complaints with evidence and arguments. And beyond the evaluations that a group of subjects can do, the one that always has to think in the last instance is oneself, trying to understand the evidence and the arguments to support one’s evaluations. One cannot simply reject his intellect and let oneself be guided by the conclusions of others, nor of the members of the State or a set of companies, that does not go hand in hand with the high states of reward. And in the case that one decided to use a product, knowing its possible benefits and risks, there would be no justification in reality establishing that one could not use it and that the producer can not offer it, and that based on that, to deny one such possibility. Doing so would be against the possibility of high reward states. 

Capitalism and individualism

Some will say that perhaps the problem lies in the individualist vision that permeates the free market, that perhaps the problem is that the individual is thought to be disconnected from society, that what is important in the free market is what happens to the individual, and that’s why the good of society as a whole does not matter. So, is it the problem that people are getting tired of individualism? Some people criticize the positions of others, their standards and their criteria, even if these others do not harm them or establish conflicts. Many say, “I am tired of individualism, of selfishness, that everything is “I” and others do not matter”. But a question is necessary: ​​what is one going to do about it? To think and maintain certain values ​​is in the freedom of the people, if one does not like what another thinks, the maximum that one can do without attacking the high reward states in that person, or the possibility of them, without the attempt against their rights, is to persuade people, through arguments and evidence, that their position is wrong. It may happen that after a hard reflection, a person does not reject individualism, what will one do then about it? Many will say that one is too individualistic, selfish, that one does not think of others, that one does not have any kind of social conscience, but the question remains, what is one going to do about it? For what many have done is to control and oppress, because it is the only thing that many can do outside of persuasion. Many will say what one is, which in itself often involves the mistake of assuming intentions that are not such, and that helping others even if it involves an attack on one’s freedom is justifiable. Such justification is actually the desire of a person, one does not have to accept it, one does not have to see one’s life conditioned to that idea.

The usefulness of people

Many consider people as servile useful agents, consciously or not. It is something that is very ingrained today. One thinks about what to do about one’s life in terms of “how can one be useful to society”, “how can one contribute to society”, “in what aspect can one serve or be useful”. This shifts the center of valuation from the individual, from their self-esteem, to the other, to what others think, to what others value. And while one develops activities that serve others, that is, that have a value for others, the center or main purpose is the development and cultivation of self-esteem and high reward states on a personal-individual level. And in many theories this premise of utility is strongly embedded. Theories where the subjects are valued primarily to the extent that they serve the rest of society, for example, to the extent that some serve as means to the ends of others. If someone were to pose for a moment that the richest people in a nation paid less taxes, I think there would be strong opposition to that idea, in part because many value the individual in terms of the service he provides to society, when his resources are overturned in favor of others. There is also the fact of comparison. Many would feel frustrated if a richer subject pays a lower percentage of taxes than oneself, unfortunately the satisfaction comes in large part if the rich individual now pays more tax percentage. However, one keeps paying the same, one’s situation has not changed, just another one gives more. Why should one feel better if another is now in a worse situation? Maybe that extra money is now invested in one’s life, one can argue, but at what cost? Where is the voluntary consent that is practiced so much in the various matters of the human being? Why is it absent here? Where are the high reward states and their possibility?

One does not have to live for service or utility primarily so that one’s life is worth living, so to speak. The high reward states refer to one’s own developments, for example, what one can do as in the case of self-esteem, which can bring benefits for others, but that there is a benefit for others is not what constitutes self-esteem, it is not what defines it. People are not useful or servile agents who are there to grant what one wants. Is the person valuable to the extent that it is useful for something? This is encouraged to the extent that the value criterion develops at the interindividual or collective level, and not at the personal level, that is, to the extent that the value is the value for another, whereas when the value is the value of oneself for oneself, the sense of life is in the cultivation of personal self-esteem, and there is the value of one as a person. Applying this valuation of oneself to oneself but in an empathic way with others, that is, placing us from the perspective of the other, is the ideal way of valuing others, since we leave aside that interindividual aspect of whether the person is useful for oneself or not. 

People have the possibility to live according to their own goals and do not have to live conditioned to the wishes of others, and one does not have to act according to what others want. This is what individualism manifests in the background, at least a criterion of it, that of the possibility of the person to make his life what he wants. Those who criticize individualism, in many cases, deep down, even if they do not fully understand it, end up unconsciously supporting the notion that people are there as objects to grant them one’s desires. Many people do not concede the fact that one does not have the justification, nor in reality in the last instance, nor based on the high reward states, to make the life of others what one wants, to impose their standards, their goals, their purposes, their criteria, their way of life over that of others. Many do not want to be governed by these standards and prefer to carry out another type of life. If persuasion fails, often those tired of individualism resort to other means: to impose their vision over that of others. They use means such as democracy, the power of the State and arbitrary laws to establish a system according to their anti-individualist ideas, or to impose any idea that others do not accept. It is often said that people are too selfish and individualistic to accept certain “noble” ideas, so they must be applied by force, through the arbitrary power of the masses that imposes on the possibility of the individual to live according to their own standards. And so the “I’m tired of individualism, of selfishness, that everything is “I”, and others do not matter” comes straight to the point of oppression and control, there is no other point, there is no other way, if one thinks different and does not want to change one’s ideas.

That phrase can only express a discontent, but it can not mean a change without oppression and control of people, when the persuasion is left out, people might not change their ideas, for whatever reason, because they believe they are true, because they are certain, or because they simply do not want to take the effort to think whether or not they are right. People are still free to think, control and oppression will come from denying their ability to use spaces and objects for their purposes. 

Why do we separate Church from State but not Economy from State?

We have reached the point in modern and more advanced nations to come to separate Church and State. It is done by the consideration that neither the State nor any group of individuals have the right to impose their beliefs on others or on other religious doctrines. Many forget that this criterion applies to the rest of human affairs, such as economics, science or education, although the separation between State and Economy, for example, is not promoted. Democracy, in turn, understood as the majority vote as a criterion of greater hierarchy, is a way of imposing one’s ideas, one’s will, one’s standards on the life of others. Controlled democracy, of a republican type, is a different thing. But the will of the majority as the highest criterion is another form of control and oppression, since it leaves to the majority the dictation of what is possible or not in a society. But what belongs to the individual is the subject of the decision of the individual, not of others, whether the majority or any group, one has no justification in reality ultimately, or based on the high reward states, to meddle in the life of others and impose one’s ideas on others.

A group of subjects, whether a large number or not, can not have a vote in the affairs of the individual, not if we defend the high states of reward, that they have that vote, means control and oppression, control over one’s life, one’s freedom. One has to know well what one says, and what it implies in reality. Many will think that effectively people have to be forced, that one’s partisan, social or philosophical ideas must be imposed on others, because they are considered better. If the State was ever to consider the criterion of the high reward states and their possibility, this would not represent the initiation of a conflict in the first instance (the State defends before an imposition initiated before by a subject), as who imposes that one can not can have more than one house, to give an example, because acting on the basis of high reward states implies not to impose on people and ideas or criteria by force. The exceptions, as I emphasized at the beginning of the previous essay (part 1), involve facts where it is necessary to intervene to ensure the possibility of high reward states, for example, the defense of a small child, who has no clear established goals, in front of tutors who mistreat him, where a conflict begins against the guardians primarily, or when one uses the space of another with a purpose opposed to that of the latter, which is to enter a space that allows him to continue with his purposes when the subject owner of such a space denies it. These exceptions arise based on the criterion of high reward states. Apart from these exceptions, there are no primary impositions, only defense against primary impositions (established in the first place), in response to them. The alternative is the denial of high reward states. The criterion of high reward states involves defending people against such impositions. One does not ask for something from others. 

The criteria limits?

Many will say that they do not want to be subjected to this absence of ideas, what they would call a liberal state (in the sense of freedom), where the State does not impose any particular vision outside of those concrete exceptions (which go hand in hand with the high states of reward), which then entails the idea of being controlled, that the State under which they live imposes a system of control on the individual, where some will be submitted to the desires that these people have, but in any case, the oppression to others exists.

And then we go to moral and personal issues, if one says that force should be applied, that people should be controlled because they are too selfish to accept nobler ideals, one ends up being unable to be happy, to live, without destroying freedom or autonomy of others, one must control and oppress others to be safe, comfortable or to not feel any discomfort (although in practice this never really happens). But happiness implies reaching values, self-esteem implies what one can do that is complex, implies independence, not to destroy the possibilities of other people and their rights. Some will say that people do not have rights, but cannot people be free? Many will say they do not want them to be free. If one says that individualism is condemnable and those who think differently must live under one’s criteria by force, is not one selfish for that reason?

It is believed that a situation of free market, that is, individuals exchanging goods according to their wishes and voluntary consent, will remain indifferent before issues such as poverty or inequality, that these things are inevitable. On the contrary, as it is developed in the essay “The fallacy of poverty and the utilitarian justification of freedom“, the most economically free societies are those that have less poverty or where the poor are in better conditions. The main issue is the conflict, in the same way that it is stated that no end justifies the killing of millions of people, it could be said in this sense that no end justifies establishing a conflict, if our criterion refers to high reward states. In a free market if someone wants to give goods to others, voluntarily, the person can do it, but using force or coercion to transfer goods is different. 

Many people who say that pure capitalism has not existed in practice, do not hesitate to assign a huge number of disadvantages to it, such as the ones I mentioned that are established about it, disadvantages that magically arise in the practice of a system that as such it is said that it does not exist in practice. If it is asserted that the theoretical model of pure capitalism has not found its manifestation in economic reality over time, how is it that inequalities, poverty, dehumanization or destruction of the environment are caused by that said pure capitalism? The cause would have to be something else.We must understand that if someone affirms that the “free market situation” must be changed, converting interpersonal relationships into something different, it is a change on the free market in itself, not something else, and what is being attacked is freedom. What does it mean to say that freedom must be changed or corrected? Who will be the proofreaders of freedom? A group of “enlightened”? The society in general? With what authority? Who is awarded the authority to carry out a control of the lives of others? What is the justification? In reality there is no justification ultimately. And if we act on the basis of high reward states, control, subordination of others, is not something to be sought after.

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