The Anti-Capitalist Appeal of Altruism and The Pro-Capitalism Alternative

by | Jan 3, 2016 | Philosophy

How is it possible that business students—some of them with significant business experience—have never heard of the moral code of rational egoism?

I taught two business ethics courses last fall: one to undergraduate business students, and the other to an Executive MBA class. It was a lot of fun: the students were keen to learn and discuss. But I was saddened, again, by how much they had been exposed to altruism, the moral code of self-sacrifice, and took it for granted at the beginning of the semester. (I can’t claim that they all, or even a majority, rejected altruism at the end of the semester, but at least none could take it for granted anymore).

Even sadder was the lack of exposure the students had had to any legitimate alternatives to altruism. They all ‘knew’ that either you sacrifice yourself to others or others to yourself, with the former being the ethical, noble choice, according to the prevailing view of morality. But how to reconcile altruism—giving up your self-interest, your values for the sake of others—with the self-interested goal of profit maximization through production and trade of material values in the business context?

Some students thought that businesses in the industrialized world paying above-market wages in developing countries was a good thing to do, to alleviate poverty and to improve to lives of workers, with some sacrifice of profits. (They probably would agree with government imposed minimum wages for the same reasons). Others thought that profits should be given up for the cause of fighting climate change (which the majority of the students considered a self-evident truth not worth even debating any more)—as opposed to respecting others’ individual rights. And yet others were willing to commit, by government decree, their fellow citizens’ money to sponsor refugees from Syria and any economic migrants seeking better life for themselves—as opposed to letting others choose private sponsorship or not.

My introduction of rational egoism—the idea that one should pursue one’s own happiness and interests, with neither sacrificing oneself to others or others to oneself, came as a revelation to many, if not to most, students. It also resonated, as the comments a number of them made after the courses were over suggested. They said that they had never heard of such an idea, only of altruism or the cynical exploitation of others. With exploiting others having little appeal (although some students claimed exploitation is the nature of business, and everybody else is doing it, leaving little choice to those who want to be successful), altruism was the default alternative.

Now, the question is, how is it possible that business students—some of them with significant business experience—have never heard of the moral code of rational egoism (developed by Ayn Rand on the foundation of laid by Aristotle), that so obviously is the only moral code that makes long-term profitability and survival of business possible? Not only does rational egoism help business maximize long-term profitability, it also leads to win-win outcomes to all with whom a business firm trades: employees, customers, suppliers, creditors and investors.

The answer lies in the sorry state of today’s culture that holds altruism as the moral code. That culture is reflected everywhere: what parents teach their children, what they learn about morality in elementary school, what universities, including business schools, teach their students. Everywhere children and students learn that selfishness is evil and to give up one’s own interests to others is the good. (Peter Schwartz blasts all that in his new book, In Defense of Selfishness, with a one simple question—and penetrating analysis: “Why?”).

Besides Peter Schwartz’ book and a small group of people defending rational self-interest, my courses (and my book) are a drop in the current that moves to the opposite direction, but it is extremely gratifying to see the students to start questioning the prevailing morality. They may be the ones that will challenge the status quo in business, by starting to question why business should sacrifice values instead of creating them. They might the ones to start defending the moral right of business to create material values, trade, and maximize profits. It is my sincere hope that they do, as the future of the world amidst the doom of interventionist governments, spurred on by the climate alarmists, looks bleak at the moment.

We are capable of making choices and can therefore reject altruism and the misery it brings. We can embrace rational egoism instead. If we do, the future be more prosperous, healthy, and happy.

4 Comments

  1. A somewhat orthogonal view: You cannot give what you do not have. Profit is the measure of economic efficiency. That being that if an economic enterprise produces something of high value but have low costs of raw materials and of production, their “value added” is high. This is good thing, not a bad thing.

    But one of the hard truths of life and society is that some people, due to circumstances beyond their control, just cannot create any economic value. How we we propose that a person who literally cannot earn enough to pay for their food, clothing and shelter, should pay the economic costs with just simply being alive? The only answer was part of the Leviticcal Law thousands of years ago: people who were prosperous had a moral (but not a legal) obligation to be charitable. While there also was a provision that farmers must allow the poor to “glean” the harvested field, and that the corners of the field must not be harvested, the farmer did not have to worry that the next year, the definition of “corner” would be enlarged.

    Apart from minor concessions like those, none of the Levitical Law destroyed private property rights. Indeed one point was that the legal system must strictly treat rich and poor alike. To not allow the wealthy to oppress the poor, but also the reverse.

    In places it can be a bit tedious, but it is a journey in justice and love to read the Book of Leviticus. It served Israel for over a thousand years.

  2. Please allow me to add that if “altruism” is limited to being voluntary, that is a good thing. But with creeping socialism, the general aphorism that people should be generous in their help to those in need, we find it too easy to give that function to government. But government doesn’t have any assets of its own and can only give what it has taken by coercion and the threat of deadly force from others. Under socialism, “altruism” which respects private property is turned into a system that must destroy property rights to function.

  3. The next time you teach a class on the first day assign “The Virtue of Selfishness” for them to read.

  4. Thought provoking article. I am currently an MBA student, and I agree that this is a discussion that should be part of every curriculum.

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Intermarket Forecasting
Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. How to Be Profitable and Moral” is her first solo-authored book. Visit her website at profitableandmoral.com.

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