What is meant by the term “human nature?” In one sense, it is supremely uninformative. The “nature” of any existent can be defined simply as “that which that existent is.” References to “human nature” do not actually explain human behavior, nor do they imply that humans are universally evil or vicious.
In response to my essay, “Profit is Moral,” I was recently asked whether my ethical praise of profit also applies to cases where the consumer has been in some manner deceived, deliberately under-informed, or invited into a transaction where the other party knew that the consumer would fail to fulfill his side of the bargain.
I believe that honesty is one of the foremost human virtues and a requirement for a workable system of commerce to exist. Thus, the morality of profit applies only to those profits which are made in the course of honest value trades — that is, trades in which all parties knew what they were getting in advance and made at least an implicit benefit-cost comparison of having the thing they planned to obtain versus not having it.
Transactions that are made on the basis of deception, deliberate concealment of information, or the expectation that the other party would in some manner fail to deliver on its end of the bargain are in violation of the principle of honesty and therefore cannot be considered moral; in a free-market society, they would also be of dubious legality, to say the least.
A related situation is where a transaction is made under duress — for instance by a party that was threatened, intoxicated, or otherwise not in possession of a clear ability to give informed consent. It would not be moral for a seller to exploit these circumstances for profit.
How can one succeed in life? How can one become extraordinarily accomplished, prosperous, safe, and happy? Contrary to what most people might think, it is not by following the conventional understandings and definitions of what one ought to do.
The orthodox paths in life have already been tried millions of times. If you want to make something of your life, pursue an unorthodox path. This is not sufficient for success, but it is necessary – so you are doing something right if your approach is unorthodox. I attribute virtually all of my success to date to my numerous departures from orthodoxy.
Not all departures from orthodoxy are created equal, however; some will destroy the individual pursuing them. Any departure from conventional ways must be done for a reason, with a thoroughly considered understanding of why it is superior to what most other people do.
In behavioral finance, there is a well-known tendency of many people to consider themselves worse off after a financial net gain that happens under certain circumstances. For instance, if person A wins $10 million but then loses $8 million, he might consider himself worse off than he would have seen himself as being if he had simply won $1 million. Even though in absolute terms A is twice as wealthy in the first case as he would have been in the second, A will see his current position mostly in relation to the $10 million he once had and will thus consider himself to be in dire straits. This is, of course, an entirely irrational mindset; $2 million is clearly better than $1 million, all other things equal.
I think many people are afflicted by a similar mentality with regard to life itself. It is likely that even a majority of people think that life is not worth living under certain conditions. These conditions are virtually always worse than the conditions of those people’s lives at present – and so a descent into such conditions would entail a diminution of the quality of life. However, people who think that life is sometimes not worth living do not venture to make the proper comparison of lower quality of life to no quality of life. Rather, they compare some hypothetical or actual lower quality of life to a former higher quality of life – even though both are better than an absence of life altogether. In despair over their losses of liberty, privilege, health, loved ones, or any other values, they are willing to abandon everything else of value that they have by choosing to succumb to death. This is as irrational as a person who lost $8 million out of $10 million burning the other $2 million out of the belief that wealth is just not worth having unless there is a certain amount of it.
With regard to enjoying life, I am, of course, not opposed to it – and I, like all human beings, seek out enjoyment in a variety of circumstances. I do, however, try to follow a permanent enjoyment hypothesis, much akin to Milton Friedman’s permanent income hypothesis. That is, I try to sustainably spread my enjoyment throughout my life (and perhaps to increase its sustainable quantity per unit time whenever possible). However, I think it is also important to take care that present enjoyment does not undermine one’s future capacity for enjoyment – and this often requires one to endure a certain level of inconvenience and struggle in order to not suffer much more in the future. Those who maximize enjoyment now at the expense of future enjoyment – or even in a manner that causes great future suffering – are not acting prudently or with foresight as far as enjoying life is concerned.
I was once asked whether some experiences were so worthwhile as to justify a willingness to sacrifice one’s life in order to have such experiences. The question was phrased as follows: “Is it possible that a finite life with experience A is preferred to an [indefinite] life without experience A?” I do not think so and, moreover, I think the dilemma is a bit artificial. A life of indefinite duration will always give one the possibility of pursuing experience A at some point in the future. If one missed having A now, one can always catch up on it thousands or millions of years in the future. No A is worth so much to me that I would be willing to cut off my future ability to exist or to experience anything for it.
Most problems in life are not great clashes of values or principles – either internal or external. Rather, they are technical issues – issues about how in particular to arrange the material world so as to minimize human suffering and maximize possible gain. When the best technical solutions to existing problems are not recognized, this is due more to many people’s stupidity than to their malice.
It is much more intuitive to see the world as composed of grand conflicts of visions – clashes of good versus evil – but the reality is much more tangled and particular. Only by looking at the particular, detailed, and minute – considerations of logistics, technology, communication, and incentives – is it possible to resolve most conflicts so that they do not even get to the “clash of visions” stage – as clashes of visions are simplistic mental shorthand for a large variety of particular technical miscalibrations.
The proper incentive structure to give to each person is such that the costs of any vicious act will be greater than its perceived benefits. I note that these costs can be both external – such as any kind of punishment – or internal – such as a feeling of self-loathing and disappointment for having committed an immoral act. Well-developed internal aversions to vicious conduct reduce the need for external incentives to encourage virtue. A wide variety of institutions, technologies, and patterns of interaction shape both people’s external and internal incentives. Yet what is most important to remember is that we are not fated to be locked into any particular configuration of incentives, motivations, and outcomes. These continually fluctuate and sometimes experience radical directional shifts. In shaping these incentives, we ought to lose the defeatism of those who claim that “human nature” will forever sentence us to suffer evil instead of correcting it. Rather, we must act such that our individual, incremental effects are for the better rather than for the worse.
Exploring the common human motivations for committing immoral acts might lead us to an understanding of how to alter these motivations and direct the “natural” desires of more people toward virtue. For instance, if a person is motivated to steal by a lack of food, then if this person had food, he might not resort to stealing (provided, of course, that he recognizes the change in conditions and does not continue to resort to stealing due to the inertia of habit). On the other hand, the new-found presence of food might get the person to focus on some other attribute he believes to be lacking in his life – say, a car – and steal that. How might it be possible to get such a person to refrain from stealing? Clearly, all people perceive some kinds of inadequacies in their lives. The ways that people’s incentives are structured will lead them to consider whether moral or immoral means are the best ways to compensate for the inadequacies in their lives.
Granting that people always have free will to act virtuously or viciously, what would lead people to want to pursue either course of action? Earlier, I described some incentives for moral behavior that motivate people to pursue virtuous and beneficial courses of action with regard to themselves and others. On the other hand, what motivates vice? The kinds of vice that do damage to others – killing, stealing, infliction of injury, and deception – all seem to stem from some sense of personal inadequacy. Either one does not have enough things and wishes to take away the things owned by others, or one feels slighted, deprived, or persecuted in some manner by others and wishes to correct this perceived victimization by destroying its perceived source.Harm that people do to themselves seems to stem either from a conviction that their lives are not quite worth living or from a simple failure to consider all of the long-term harmful consequences of their decisions.
