A Conversation for Beating the Odds
Ethics & the Stock Market
rdarmand Started conversation Aug 24, 2002
I found the following statement in an otherwise entertaining piece:
'The idea of the stock market is that you lend someone your money, they use it to try and build a profitable company, increasing the value of your share. This practice is fairly unethical, as in effect you are making money from other people's labours by simply being rich enough to have money to give away (and shouldering some of the risk).'
Since it is founded in jealousy, envy and general covetousness of what others possess, I suppose this degree of density will always be with us. But that doesn't mean it should be ignored.
The writer of the paragraph quoted above seems to think that being rich is a matter of chance. Some people, he thinks, go for a walk and fall into a diamond mine, or just happened to be standing in the right place when a sack of notes falls from the sky.
Every pound, dollar and deutschmark in somebody's clenched fist was laboured for, sweated for, generated by work, the investment of self. And, if it is in my clenched fist, it is mine. This must be true in order for men to be free. A slave belongs to another; thus, his time, labour and what he produces belong to another. A free man belongs to himself; thus, his time, labour and what he produces belong to him. Take away a man's produce by any means other than free exchange, and you make that man your slave. He is no longer free.
If I sacrifice a few pleasures and so save a bit each week, in a little while I'll have enough to interest some entrepreneur looking to borrow. Each of us has something that is his and belongs to no one else: I have my money, and he has his idea. Neither of us can get on without the other; but by working together we may both benefit.
It makes no difference whether the money I invest was earned by me or my father. If my father earned it and gave it to me, it was his to do with as he wished. To call me "simply rich enough" to be able to invest, as the writer of the quoted paragraph does, is to dishonour my father's labour and thus his life.
The writer of the quoted paragraph does not understand money. Worse, he does not understand freedom.
Ethics & the Stock Market
Noggin the Nog Posted Aug 24, 2002
But who by? If you're REALLY rich almost certainly by someone else.
Noggin
Ethics & the Stock Market
Otto Fisch ("Stop analysing Strava.... and cut your hedge") Posted Aug 24, 2002
Sorry, but there are very strong arguments for the view that being rich is largely a matter of chance. I have medium term plans to write a guide entry on this.
Libertarians always talk as if the only thing that is needed for the gaining of wealth is hard work. The idea here is that it's possible for anyone to become very rich, if only they work hard enough. This, I think, is a really peculiar view. What makes people rich (in addition to hard work) is talent and opportunity. The wealthy like to pretend that it's all hard work, but surely no-one would suggest that any of the self-made billionaires got there solely through hard work? Surely it's wrong to suggest that any of us (if we worked hard enough) could have been Bill Gates or Rupert Murdoch? In my experience, the people who work the hardest in western societies are often the ones paid the least.
Do people deserve their talents? Do people deserve that their talents are sought after? I suggest not. Talent is largely a matter of nature and nurture - and we don't have much say in either of them. It's true that people can either make the best of what they have or not, but perhaps even the ability to work hard and have ambition is the product of nature and nurture. An American political philosopher called John Rawls described this as "the natural lottery". If we don't deserve our talents, how can we be said to "deserve" what we "earn", to the extent that people should be allowed to keep all of whatever others will pay for the use of their talents, regardless of the consequences for others or for the environment.
The truth is that resources are limited. If a small group of people have most of the resouces, restricting the life chances and options of others, how can this be regarded as a system which promotes freedom?
And I'm afraid that you can't just dismiss criticism of libertarianism as "envy". It's not an emotional objection, but a logical and philosophical one, and you can't dismiss an argument by assigning a motivation to the person putting forward the argument. (see A800425 for why this is)
There's also a really odd view about freedom at work here, but this is probably enough for now
TTFN...
Otto
Ethics & the Stock Market
Martin Harper Posted Aug 27, 2002
> "being rich is a matter of chance"
By chance, I was born in the west. That chance alone put several multipliers on my expected earnings.
By chance I was born caucasian male. Even in these more tolerant times, that's a statistically significant edge.
By chance I have comparatively wealthy parents. More importantly I had parents who cared about my education and well-being.
By chance I had a grandparent who worked very hard and I inherited a lot from him.
By chance I had a decent brain that got me good grades at school and uni.
I can't speak for everyone, but for myself I'm *very* grateful for the circumstances and opportunities I had - opportunities that the vast majority of the world's population simply don't have.
--
Being rich is a matter of:
* hard work - and by all means let's reward that.
* natural talent - and it doesn't seem unreasonable to reward that.
* luck - Bill Gates was in the right position at the right time
* crime - it continues to pay.
* corruption - especially in developing nations, but to a lesser degree in developed nations.
* exploitation - 'free exchange of labour' means little when it's a choice between making that free exchange, or starving in the gutter.
* war - a lot of money is made by taking it from conquered nations. In particular land, but also natural resources and straight-forward pillaging.
These factors are, if you like, the fundamental basis of wealth. And if this was all that wealth was based on, then there would be no great inequality. There are two other factors which act as multipliers, though, and these are the critical ones.
** compound interest - wealth begets wealth **
Put simply, there is a fundamental limit on how much happiness you can buy with money. Once you are a millionaire, the vast *vast* majority of your wealth is going to be re-invested to earn more wealth. Compare that to someone on the minimum wage - if sie trys hir hardest, sie might be able to scrape together a tiny percentage of hir wealth to invest.
The problem is essentially that expenditure doesn't scale with income, so any small inequality (by chance or hard work) breeds further inequality. It doesn't help that the rich give a smaller proportion of their income to charity: ~1% to the average of 4%.
** inheritance **
Would I dishonour your father? I don't know him. Maybe he made his money through hard work. Maybe he made it through crime and exploitation. Who knows?
What I do know is that the further back in time you go, the more likely it is that money was made in unpleasant ways. 'old money' is dirty money. In a society with low social mobility between generations, all riches are suspect. In a society with high social mobility, this is less of a concern.
As they say, TTFN
-Martin
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