Friday, December 16, 2011

Ideas and business part i: Selfisness and making money is moral

So far I have written articles only relating to investing and business. But after continuously hearing about the morally bankrupt Occupy Wall Street protesters and the socialist rhetoric from the left on the news, I decided that I wanted to write a series of article about philosophy and ideas. Don’t get me wrong, these articles are still related to business as I believe the right ideas can help a person achieve success in business. The first article in the series will be about the morality of selfishness and profits, the second article will be about facing the facts of reality and how we can and should think for ourselves, and the third article will be about the freedom to achieve.

First off, let me just say that I do agree with the OWS protesters that cronyism is bad and that the banks shouldn’t have been bailed out. I, however, do not agree with the anti-capitalism stance of these degenerates as I believe that  capitalism is the only moral system, and that any other system is a system where the creators of wealth are chained up (through regulations) and forced to sacrifice themselves to others (wealth redistribution, taxing “the rich” to give to “the poor”). Capitalism also happens to be the system that lifted the most people out of poverty by giving them the freedom to rise on their own and make something of themselves.    

I disagree with how the OWS protesters are against property rights and, by extension, against freedom and individual rights. Men cannot be free if they do not have a right to their property and the right to make a profit. When you take away a man’s right to the fruits of his labor, you turn him into a slave. I disagree with how the OWS protestors are segregating people into either the 99% group or the 1% group. There’s no such thing as the 99% or the 1%, there’s only individuals. I disagree with how the OWS protesters are against success and achievement. Finally, I disagree with the method used by the protestors. First of all, if you want to get your ideas across, you use reason and debate about it, protest should be one of your last resorts. Secondly, while you do have the right to assembly, you have no right to intrude on other people’s properties. If those spoiled brats want to act like idiots as a collective, they are free to do so, as long as they do it on their own properties.

Before I go on any further, let me give credit where credit is due. The ideas that I’m going to talk about in this series of articles are ideas that I learned from the work of Ayn Rand and other voices of reason such as Yaron Brook, John Allison, and Leonard Peikoff. You can get podcasts and videos of their talks and lectures at this website here.

I’m an objectivist, in other words, I’m someone that brings reason into every aspect of my life. I believe that the ideas that I’m going to talk about are important to the businessman as well as to solving today’s biggest problems.

Side note: I’m a recent objectivist, so some of my previous articles may contain ideas and messages that are consistent with the garbage you would get from the liberal media. Just ignore those ideas and messages.

Being selfish and making money is moral

Selfishness, or acting in one’s own rational, long-term self-interest is a very good and moral thing. We have to act in our own self-interest to be successful; if an individual does not act enough in his self-interest, he dies. The same principle applies to business. If a company continuously sells its products at a loss, keeps too many employees on its payroll, and maintains loss making projects all in the name of self-sacrifice and the greater good of society, it will become uncompetitive and it will go bankrupt (or go to the government for a bailout).

A businessman of integrity and self-esteem is someone that pursues the rational, long-term interest of his business and doesn’t sacrifice his business for whatever reason. While that businessman might take care of his customers and employees, forge long-term commitments with suppliers, launch projects that help the poor, as well as implement other initiatives, that businessman never forgets that all those initiatives are just a means to a selfish end, and that end is to make money and to keep doing the work that he loves.    

There’s always this accusation that more innocent people will be exploited if businessmen started acting more selfishly. Nothing can be farther from the truth. You’re not acting in your rational self-interest when you exploit others; in fact, you’re being stupid when you exploit others. If you’re the kind of businessman that cuts corners and sells a lousy product, then you will lose a lot of customers, and that will translate to poor long-term profits or maybe even losses and bankruptcy. If you’re the kind of businessman that defrauds his customers and violates the terms of the contracts you have with your employees, then you’ll get sued or sent to jail.

A cheat or a fraud will not be able to take pride in his work or his life. He will never feel a sense of achievement and he will not have any self-respect. He will never attain happiness which is the end goal of any business or productive work. The cheat would have set out to fail. So, no, I don’t believe for a second that you’re being selfish or acting in your rational self-interest when you exploit others.       

Profits are a great thing. You’re a good person for making money, as it means that you’re leading a productive life and creating value that didn’t previously exist. It really pisses me off when people get angry because a certain businessman is worth $X billion or a certain company made $X billion last quarter. People (especially from the liberal left) will say stuff like corporations profit at the expense of its customers or employees, and that companies should be forced to “give back.” It’s just wrong on so many levels. First of all, an employee that feels exploited is always free to look for another job, and a customer that feels he’s not getting his money’s worth is free to take his business elsewhere.

In terms of the idea that businesses are morally obligated to give back to society, I argue that a company earned its wealth by means of voluntary trade with parties that freely decided it’s in their own interest to deal with the company. The businessman conceived of the idea for his business, assumed all the risks, and turned his idea into reality through careful planning, meticulous execution, passion, dedication, hard work, and perseverance. Every dollar that the businessman earns rightfully and morally belongs to him, and the idea that anyone else has a claim on part of the businessman’s profits can only be taken seriously in a morally bankrupt entitlement state where theft is legalized.

And while this is a secondary issue, businessmen do make the world a better place. They create jobs and improve our standard of living. Pharmaceutical and technology companies have increased our lifespan and made us much more productive, companies like Wal-Mart saves us money, and Coca-cola creates a product that brings enjoyment to millions of people every day. And that’s just the tip of the iceberg. Private businesses are responsible for much of the prosperity and wealth created in the world. And it is simply disgusting how deluded and ungrateful people can get when they demonize the businessman and say that companies exploit society, when the businessman is the one that’s responsible for making our lives so much better.   

I believe that a businessman should make decisions based entirely on the rational, long-term self-interest of the company (and by extension the businessman’s own self-interest) to make the company as productive as possible; this is a means to an end as a competitive company will allow the businessman to achieve the end goal of running a business: making a profit, both in the form of money and in the form of enjoyment and happiness that the businessman takes in the productive work involved in running the business. Businessmen should not feel guilty or apologize for making money, but should, in fact, take pride in their achievements, their ability to bring into this world value that didn’t previously exist. Finally, the businessman should know that his success is the result of his own virtues, and that every dollar he earned through voluntary trade morally belongs to him and to him alone.    

Thank you for reading, and may you always sustain good returns on your portfolio. Take Care.

Side note: I’m completely against cronyism, and I disagree with all forms of government bailouts or assistance. I don’t care if it’s Wall Street, the automakers, small businesses, farmers, green energy, or etc. Nobody should get help from the government; nobody should be allowed to steal (government does not create any wealth; the only way government can give someone monetary assistance is by taking from someone else). However, I’m not against tax breaks as I don’t consider tax breaks to be a form of government assistance. Taxes are a form of extortion; the government is merely giving back what they stole when it gives someone a tax break.

When I refer to businessmen in this article, I’m not talking about the dishonest businessman that got ahead through political connections and cutting corners. I’m talking about the men and women who made their fortunes through their own effort.