95. Beyond Guardian and Commercial Ethics

Note: This post is the ninety-fifth in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

This week's topic is German philosopher Friedrich Nietzsche and his efforts to discover a 'genealogy' or origin for our moral sentiments.

The first time Nietzsche takes on this question is in 'Human, All too Human,' in the chapter, "On the History of the Moral Sensations." There's two main passages in this chapter that seem relevant to our series on ethics.

The first, is paragraph 94, 'The three phases of morality hitherto':

"It is the first sign that animal has become man when his actions are no longer directed to the procurement of momentary wellbeing but to enduring wellbeing, that man has thus become attuned to utility and purpose: it is then that the free domination of reason first breaks forth. An even higher stage is attained when he acts according to the principle of honour; in accordance with this he orders himself with regard to others, submits to common sensibilities, and that raises him high above the phase in which he is diverted only by utility understood in a purely personal sense; he conceives utility as being dependent on what he thinks of others and what they think of him. Finally, at the highest stage of morality hitherto, he acts in accordance with his own standard with regard to men and things: he himself determines for himself and others what is honourable and useful.; he has become the lawgiver of opinion, in accordance with an ever more highly evolving conception of usefulness and honourableness. Knowledge qualifies him to prefer the most useful, that is to say general and enduring utility, to personal utility, general and enduring honour and recognition to momentary honour and recognition: he lives and acts as a collective-individual."

There are a couple of points to highlight here. The first is the notion of patience or prudence, favouring the long run over the short run as central to morality, in particular to personal morality that maximizes one's utility. The second is the division of morality into a personal stage based on utility and an inter-personal phase based on honour. How similarly this resembles our split between a guardian syndrome filled with precepts governing our relations with others and a commercial syndrome which is primarily concerned with maximizing our own utility (although the commercial syndrome also covers inter-personal relationships manifested via trade).

The second passage is paragraph 45, 'Twofold prehistory of good and evil':

"The concept good and evil has a twofold prehistory: firstly in the soul of the ruling tribes and castes. He who was the power to requite, good with good, evil with evil, and also actually practices requital - is, that is to say, grateful and revengeful - is called good; he who is powerless and cannot requite counts as bad. As a good man belongs to the 'good', a community which has a sense of belonging together because all individuals in it are combined with one another through the capacity for requital. As a bad man belongs to the 'bad', to a swarm of subject, powerless people who have no sense of belonging together. The good are a caste, the bad a mass like grains of sand. Good and bad is for a long time the same thing as noble and base, master and slave. On the other hand, one does not regard the enemy as evil: he can requite. ... Our present morality has grown up in the soil of the ruling tribes and castes."

Unlike the previous quote, which is never really revisited much in Nietzsche's writings, this notion of the twofold origin of good and evil will be discussed in much greater length, first in the chapter 'The Natural History of Morals' in 'Beyond Good and Evil' and finally at book length in 'The Genealogy of Morals.'

As he moves along, Nietzsche seems to become less certain about the morality level of Europe, and gradually begins to attribute the growing prevalence of 'slave' morality in Europe as being due to religious influence, from Christianity and Judaism. But the notion of two different systems of morality, one based on the ability and willingness to take vengeance and one based on non-violence persists in his thinking.

In 'The Genealogy of Morals' Nietzsche identifies certain cultures as 'noble races' that hew to 'master race' morality such as the "Roman, Arabian, German, Japanese nobility", as well as the "Homeric heroes and the Scandinavian vikings." This is contrasted with primarily the Jews, but also on occasion the Chinese as cultures with primarily 'slave' morality. It seems unlikely to be coincidence that the two cultures that Nietzsche identifies as being emblematic of a 'slave' morality that doesn't use violence or take vengeance are two cultures that are renowned the world over for the commercial success of their citizens.

Having said that, Nietzsche never really identifies salve morality with commercial culture. At first I thought that maybe that was just because Nietzsche was so guardian minded that he didn't even acknowledge the existence of commerce (even a guardian-type like Aristotle deigned to denigrate commercial ethics as base and shameful). But as 'The Genealogy of Morals' goes along, Nietzsche shows his awareness of commercial culture as he traces our notions of guilt and personal obligation and even justice back to the "...oldest and most primitive relationship between human beings, that of buyer and seller, creditor and debtor." So it wasn't that he was unaware of commercial ethics, he just didn't link it up with 'slave' morality explicitly.

So, it's not a perfect match, by any means, but still the notion of two ethical systems, one based on 'noble' races that are barbaric and love conquest and take vengeance and have good manners and one based on 'slave' races that shun violence, don't (can't) take vengeance and is associated with successful commercial cultures certainly lends some support to the notion that Nietzsche was working his way towards the notion of Guardian and Commercial ethics, although his remarkably strong guardian mindset may have skewed his observations somewhat.

9. The Efficient Society (Part 3)

Note: This post is the ninth in a series, Parts one, two three four five six seven and eight

In chapter 5 of The Efficient Society, Joseph Heath discusses the virtues of markets, the primary one being that they allow us to solve the question of how much stuff of different types should be produced to make a complex society work, a problem that is too mathematically complex to be solved mathematically but can be resolved by allowing individuals to make their own decisions and then allowing the market prices determined by those decisions signal where more of goods that are in demand are needed and vice-versa.

He notes that it is possible to have trade and markets without necessarily having competitive markets, using the example of the early days of the fur trade in Canada, when the British government gave one company (the Hudson’s Bay company) a monopoly on the fur trade, rather than encouraging competition.

Heath makes a few key points about competition in this chapter:

1) Competition is a way of getting people to put in more effort. It isn’t really tied to capitalism specifically as competition is used in many areas, from Soviet factories that were offered prizes to whoever could produce the most, to Girl Guides who have a competition to see who can sell the most cookies.

2) Competition, by its nature, creates Prisoner’s Dilemma type situations. All will make the effort to achieve something, but it wouldn’t be a competition if there weren’t people who end up losing the competition. Heath explains how businesses in competition with each other are trapped in a Prisoner’s Dilemma since even though they would all be better off to cooperate to keep prices high, each of them has an incentive to undercut the other's prices for their own benefit.

3) Because of its Prisoner’s Dilemma type structure, competition is generally considered a bad thing (why do you have to be so competitive all the time, anyway?) – competition is only good when there is something good produced as a result of the competition.

4) Competitions can only produce a good result, when they follow certain rules.

Picking up the third point in more detail, a competition between two hockey teams is valuable because of the entertainment it provides. Competition between various companies is good because it results in a push for innovation to better serve customers and it serves to lower prices for customers (note these could be considered positive externalities to the competitive process).

Moving to chapter 6, Heath notes that in the market, a proper price signal reflecting the true level of supply and demand is only created when the people in the market follow their self interest. We’ve all been in the situation of trying to decide on where to eat, and each person wants to go along with what the other person wants, but as a result can’t be sure if what the other person is saying is what they really want or just what they think you want. Heath gives the example of electrical generators being sent to Montreal after the ice storm in 1998. There was a backlash against people 'gouging' the residents by offering to ship generators there for an extremely high price, but that high price also has the benefit of signalling the true level of demand and encouraging more people to ship generators there.

(Note that this ties back to chapter 10 of 'No One Makes You shop at Wal-Mart' where we saw that the reason for the backlash in this case is that there is an involuntary component to a transaction involving selling a generator to someone who might otherwise freeze to death or be forced out of their home.)

It is this aspect of markets - that in the market the best action is to pursue your self-interest rather than altruistically pursue a collective good - which Heath believes accounts for the historically 'dishonourable' nature of being in trade or being a merchant (of Venice, or otherwise).

In an interesting passage, he comments on how Nietzsche saw morality as a conspiracy of the weak against the strong, and that Ayn Rand picked up this thread but made it more plausible she "dilute[d] this Nietzschian animus towards morality with a fawning respect for capitalism"

More plausible, In Heath's view because of the point above that when you are in a market, the outcome is better if you compete and follow your self interest rather than being altruistic and cooperating.

He then notes that markets don't require no morality, they just require less morality. He says,

"In order for capitalism to function smoothly, we need to refrain from stealing, from using violence to achieve our ends, from making fraudulent misrepresentations, etc. The list goes on and on. These are all legal and moral obligations. If people did not respect these basic rules, the entire system would fall apart"

Actually, if the list really does goes on and on, I wish Heath would have continued. For now, I'd just note that if you think back to Jane Jacobs' 'Systems of Survival', her list of 15 commercial ethics included 'Respect Contracts', 'Shun Force' and 'Be Honest' which matches up pretty well with Heath's 'refrain from stealing, from using violence to achieve our ends, from making fraudulent representations'.

Both this idea of Heath's that the markets require 'less morality' to function and the contract between Nietzsche and Rand's concepts of ethics are things that I'll likely return to before finishing this series.

More on chapter 6 and the concept of Market Failure in the next post.

The Media, The View from 1878

Some fodder for the post I'll likely never write on the death of the newspaper industry:

"Use of the smallest dishonesty. The power of the press consists in the fact that every individual who serves it feels only slightly pledged or bound to it. He usually gives his opinion, but sometimes does not give it, in order to help his party or the politics of his country, or even himself.

Such little misdemeanors of dishonesty, or perhaps only of dishonest reticence, are not hard for the individual to bear; and yet the consequences are extraordinary, because these little misdemeanors are committed by many people at the same time. Each of these people says to himself, "For such petty services I live better and can make my livelihood; if I fail in such little considerations, I make myself impossible." Because it almost seems that writing one line more or less, and perhaps even without a signature, makes no difference morally, a man who has money and influence can turn any opinion into the public one. Whoever realizes that most people are weak in small things, and wants to attain his own purposes through them, is always a dangerous human being."

(from Human All Too Human, by Friedrich Nietzsche)