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About the Author
Tibor R. Machan is a Hoover research fellow, Professor Emeritus, Department of Philosophy, Auburn University, Alabama, and holds the R. C. Hoiles Endowed Chair in Business Ethics and Free Enterprise at the Argyros School of Business and Economics, Chapman University.
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The Business of Commerce
Examining an Honorable Profession
By James Chesher, Tibor R. Machan
Hoover Institution PressCopyright © 1999 Board of Trustees of the Leland Stanford Junior University
All rights reserved.
Historical Views of Commerce
In the case of dyes and perfumes, for instance, we enjoy them but think of dyers and perfumers as servile and vulgar people. — Plutarch
ANCIENT VIEWS OF COMMERCE
As a matter of anthropological fact, the various cultures of the world have and do exhibit particular attitudes regarding, among other things, the different institutions that are part of the culture. In particular, in Western culture the institution of commerce has had a dominant reputation or image, partly because of the articulated opinions of those who have influence over the shaping of institutions. Just as the institution of the family or the church has had a reputation, just as science has had a reputation, so too has commerce been accorded a certain reputation in Europe and elsewhere. What prominent and influential people have thought of commerce throughout history can be discerned, including certain shifts in the image of commerce.
The term image suggests that something may have been amiss with how commerce has been perceived. To understand what exactly, it is necessary to first identify and examine the image. In this and the following sections we explore how commerce has been viewed by prominent thinkers and writers, based on contemporary documents. Although other opinions were no doubt held, what is of interest here is how the main current of thought has evaluated commerce and business as a part of human life.
We can set the stage for our exploration with a particularly illustrative observation from Bertrand de Jouvenel, who noted that "an enormous majority of Western intellectuals display and affirm hostility to the economic and social institutions of their society, institutions to which they give the blanket name of capitalism."
SETTING SOME LIMITS
The origins of this intellectual hostility can be traced as far back as the ancient Greeks, who have had an enormous and sustained influence on Western thought for more than two thousand years. Among them are the familiar names of Homer, Hesiod, Thucydides, Aristophanes, Aeschylus, Sophocles, Pythagoras, Democritus, Socrates, Plato, Aristotle, and others. Following the Greeks, we turn to the Romans and then to the Jews and the Christians, the last exerting the most important influence, which crystallized the dominant perspective on human life in the West. As Victor Hugo so eloquently observed,
On the day when Christianity said to man: You are a duality, you are composed of two beings, one perishable, the other immortal, one carnal, the other ethereal, one enchained by appetites, needs, and passions, the other lofted on wings of enthusiasm and reverie, the former bending forever to earth, its mother, the latter soaring always toward heaven, its fatherland — on that day, the drama was created. Is it anything other, in fact, than this contrast on every day, this battle at every moment, between two opposing principles that are ever-present in life and that contend over man from the cradle to the grave?
The dualistic view that Hugo describes gives prominence to a timeless, unchanging, spiritual dimension of being and applauds only those human actions that point beyond this world, while it demeans nature and actions befitting nature. This view has held sway throughout most of Western civilization.
Ironically, commerce and religion were intimately linked at one time, and we have reason to believe that the origins of commerce go back to the church. "The religious practice of the period [of the Old Testament], which made cattle the most important offering to the gods, also weighed heavily in favor of making animals the most common currency of barter. The great herds which thus accumulated at the holy places could not be consumed but were traded for other goods. Thus the temples became the oldest places of commerce, the celebration of offerings [became] the first fairs."
Despite these early ties of commerce and religion, the bulk of received Christian viewpoint engendered a constant inner division, as Hugo observes. There were a few exceptions, notable for their rarity, such as Saint Bernardino of Siena (1380–1444) who, in his book On Contracts and Usury, defended trade and private property and argued that all vocations provide occasions for sin, not only business.
The ancient Greek view was less radical in its division of body and soul, although clearly some of the prominent Greek philosophers fueled the disdain toward commerce. Socrates, for example, saw the highest goal of human life as the proper ordering of the human soul within its three parts. The highest place belongs to reason because of its unique ability to comprehend the ultimate nature of things; the passions or emotions followed, with the animal appetites at the lowest rung.
This hierarchy suggested not a literal supernatural or spiritual realm of reality but rather a higher, intellectual realm. The two realms were clearly thought to be dependent on one another — no realm of intelligible things makes sense without the realm of the visible things that need to be made intelligible. In other words, these forms served as the standards or criteria by which to know and evaluate the many kinds of things that we encounter in daily life. In short, it is arguable that the realm of ideas is abstracted from the realm of those things, events, actions, institutions, and so on that are necessary to make the latter realm understandable. This is one reason it may be wise not to take strictly literally the standard interpretation of Plato's (Socrates') metaphysical position.
What exactly is the Socratic view of wealth? His stance may be reconstructed from considering some of his discussions about the subject. In a conversation with Adeimantus in book four of The Republic, Socrates observes that wealth and poverty are corrupters. Here are some clues:
SOCRATES: Take the other craftsmen again and consider whether these things corrupt them so as to make them bad.
ADEIMANTUS: What are they?
SOCRATES: Wealth and poverty.
SOCRATES: Like this: in your opinion, will a potter who's gotten rich still be willing to attend to his art?
ADEIMANTUS: Not at all.
SOCRATES: And will he become idler and more careless than he was?
ADEIMANTUS: By far.
SOCRATES: Doesn't he become a worse potter then?
ADEIMANTUS: That, too, by far.
Furthermore, in the Republic, Plato recalls Socrates discussing the vulnerable city, explaining it in part by reference to the soul of the impoverished but money-loving man. As Socrates puts it,
Humbled by poverty, he turns greedily to money-making; and bit by bit saving and working, he collects money. Don't you suppose that such a man now puts the desiring and money-making part on the throne, and makes it the great king within himself, girding it with tiaras, collars, and Persian swords? (Book eight, 553c)
Socrates seems to be stressing that, once the soul of a person is infected by these desires, he/she will likely lose sight of the higher, noble things. For example, Socrates notes that "unless a man has a transcendent nature he would never become good if from earliest childhood his play isn't noble and all his practices aren't such." Socrates also makes reference to "the stingy element in [a person's] soul," to "bad desires," and to "unnecessary and useless pleasures." These observations arise in the context of an effort to identify the essence of an exemplary human being by exploring the nature of a good and just community. Socrates argues that the city makes itself vulnerable to tyranny if its goal is a comfortable life aimed at the satisfaction of natural or bodily desires. Thus, vesting power in the wealthy, who seek merely to satisfy the lower needs and wants of the people, will incline the city toward tyranny by making it a weak and easy target of conquest.
Thus (Plato) Socrates regards as unworthy humans' attempts to satisfy their desires for an exciting, pleasant, comfortable, and joyful life on earth. Now, we are not to understand Plato as suggesting that it is always wrong to seek to satisfy these desires but that it is wrong to make them our primary goal since human beings ought to transcend these desires and pursue more noble ones. What are these "nobler" desires? They are the philosophical objective of true understanding, namely, knowledge of the forms of things. However, since this objective is not realizable by most people, Socrates can only conclude that few persons can live a truly noble life. We will return to these passages shortly, but let us now consider Aristotle's position, which is more directly stated.
Aristotle shares at least some degree of Socrates' disdain for those engaged in trade or money making. In book one of the Nicomachean Ethics, he tells us that the "life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else." Elsewhere (book three, chapter 12) he praises the liberal or generous person, claiming that
It is not easy for the liberal man to be rich, since he is not apt either at taking or at keeping, but at giving away, and does not value wealth for its own sake but as a means to giving. Hence comes the charge that is brought against fortune, that those who deserve riches most get it least. But it is not unreasonable that it should turn out so, for he cannot have wealth, any more than anything else, if he does not take pains to have it.
In addition, Aristotle also holds (book one, chapters 8–9 of the Politics) that there is something inherently wrong with commerce:
Hence we may infer that retail trade is not a natural part of the art of getting wealth; had it been so, men would have ceased to exchange when they had enough. In the first community, which is the family, this art is obviously of no use, but it begins to be useful when the society increases. ... For natural riches and the natural art of wealth-getting are different whereas retail trade is the art of producing wealth, not in every way, but by exchange. And it is thought to be concerned with coin; for coin is the unit of exchange and the measure or limit of it. And there is no bound to the riches which spring from this art of wealth-getting. ... [Furthermore] in this art of wealth-getting there is no limit of the end, which is riches of the spurious kind, and the acquisition of wealth.
Aristotle reinforces his suspicions about profit making when elsewhere in the Politics he claims that
Some persons are led to believe that getting wealth is the object of household management, and the whole idea of their lives is that they ought either to increase their money without limit, or at any rate not lose it. The origin of this disposition in men is that they are intent upon living only, and not upon living well; and as their desires are unlimited, they also desire that the means of gratifying them should be without limit.
He maintains that of the two kinds of wealth getting, household management and retail trade,
The former [is] necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural.
By "unnatural" Aristotle does not mean simply "out of the ordinary" — as it would be, say, unnatural for a cat to go swimming. Rather, by "unnatural" here is meant a violation of the most basic moral standards, those objectively identifiable ethics by which we should be guided in living the good life, based on a correct understanding of human nature. Acting against human nature is involving oneself in conduct that thwarts the development or enhancement of oneself as a human being. Going against nature means failing to flourish or, worse, bringing about the diminishing of one's natural capacities. This includes not only acting but also thinking in a way that is inconsistent with human nature.
Aristotle can be shown to be wrong about why people engage in retail trade. He states that they do so because "they are intent upon living only, and not upon living well; and that as their desires are unlimited, they also desire that the means of gratifying them should be without limit." Yet there is no evidence that people do not seek to live well but only on living by means of wealth accumulation through retail trade. In fact, the evidence seems to support quite the opposite observation: Aristotle should have concluded that retail trade ought to contribute to living well, not just to living. Even if it were the case that retail trade contributes to living well per se, it would then perforce contribute to living well since no one can live well without living! Even the most noble life, with or without the elements of trade, will benefit considerably (if only indirectly) from commerce. Thus, those who wish to experience the arts must find the resources to do so. Travel, acculturation, and sometimes even philosophical inquiry require resources, not to mention the pursuit and maintenance of friendships. Commerce is perhaps the only means of earning resources in the modern age, and it is certainly the most efficient, economical, and productive means available to us.
In his conception of human nature, Aristotle elevates the rational element, endowing it with greater significance or nobility than other features of our nature, such as the human capacity for experiencing complex emotions and the satisfaction of physical, chemical, biological, and psychological needs related to a happy life. In short, Aristotle and many other thinkers who came after him, including the very influential Thomas Aquinas, regarded the human capacity to think conceptually and theoretically — our rational faculty — as our most important attribute. For Aristotle, our animal or biological nature was less impressive than our faculty of reason. This may have been part of the legacy of Plato, Aristotle's teacher. Or, quite understandably, it may have been due to Aristotle's observation that rationality is the distinctive feature of human beings, without which we would not be human but just another animal.
Now, in one sense this is quite right: For purposes of understanding human life within the context of nature, that our rationality makes us distinctive is most important, in the way that being winged or having gills or being herbivorous separates one kind of living thing from another. But it doesn't follow from this that for the life of the human individual his or her rationality is more important than, say, nourishment, even if nourishment for us depends on the use of our intelligent minds. We live our lives as one whole, organic being, and it makes sense to care for and nurture all aspects of our being — our health, our emotions, our minds — exactly as the virtue of prudence demands.
Of course, one may perhaps treat what is unique or special about oneself with more care and diligence than those aspects one shares with many others. People typically and not surprisingly tend to themselves and their own more readily than they tend to the concerns of others, and they often enjoy special association with those who share their particular interests. Our distinctions contribute to our individuality, set us apart, and in this sense have greater significance for us than what we have in common with others.
But this should not be confused with attributing greater importance to the distinct element in human nature than to what humans share with other living beings, as Plato and Aristotle seem to have done. Their error was to treat members of their own professional class as deserving of special status, while attributes that they shared with humanity at large were demeaned.
In Plato's and Aristotle's view, that which is special about human beings should be honored more, and, since philosophical and theoretical inquiry are essentially rational activities, philosophy was regarded as the most noble of enterprises. This may explain the tremendous influence that both philosophers have had on the Western tradition of intellectualism and, in time, of spiritualism (though less so with Aristotle, given his metaphysical monism and his inclusion of the natural sciences as subjects worthy of study).
Excerpted from The Business of Commerce by James Chesher, Tibor R. Machan. Copyright © 1999 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of Hoover Institution Press.
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Table of Contents
Introduction: Is Commerce Really Maligned?,
1. Historical Views of Commerce,
2. Commercialism versus Professionalism,
3. Used Car Dealers as Heroes?,
4. What Is Morally Right with Insider Trading,
5. Business Ethics: Texts and Teachings,
6. Individualism and Corporate Responsibility,
7. The Right to Private Property,
8. The Moral Status of Entrepreneurship,
9. Dualism Disputed,
10. Prudence, the Living Virtue,
11. Commerce Morally Affirmed,