[RC] Part 3: Valuing Community (Rethinking Capitalism)

[Dr. Ernie Prabhakar]

Hi Billy,

On Jul 18, 2005, at 10:09 PM, Avesland at aol.com wrote:

> There was no intention to offend you . I simply tried to tell a  
> good joke.
>

No offense inferred. It was a little off-color compared to our usual  
fare, but still a good joke. :-)


>> I actually think love *is* the fundamental force behind economic  
>> activity. Love can be healthy or unhealthy -- whether loving  
>> myself or loving others -- but that doesn't change the fact that  
>> love really is the most powerful force in the universe.  And, I  
>> argue, ultimately the basis of all economic activity.
>>


> Huh ? Economics rests on a foundation of love ? What have you been
> smoking ?
>

I don't know, but it glows in three colors. :-)


>  Your definition, that "love" can mean self love, has some
> validity, but for me that is almost a Procrustean usage. It has
> the disadvantage that I Corinthians 13 does not apply.
>

Okay, fine, let me use a different term than 'love', because everyone  
has their own definition for love and (understandably) gets uppity  
when I try to redefine it.  In fact, let's use the arbitrary Greek  
letter 'chi', which I introduced for just this purpose in my Manifesto:

http://www.radicalcentrism.org/manifesto.html

I believe value needs to be Created, Recognized, & Normalized:
    Chi:The best human act is the conscious moral choice to use my  
resources to create value for others
    Rho: The next best act is to reward others as they create value  
for me
    Nu: Relative value is best determined by honest collaborative  
inquiry into competing alternatives

In these terms, I am arguing that:
      'chi' (which is similar to 'love') is the primary foundation of  
all economic activity.
     rho' (which is related to 'selfishness') is a vital secondary  
foundation,

Note that rho is needed in order for 'chi' to be sustainable. To be  
precise, it is not love alone that makes the economic world go round:  
it is 'chi' and 'rho' working together.  In fact, I readily admit  
that both of these concepts are reasonably traditional ethical  
principles: I only claim credit for the word "next" :-)

 From this viewpoint, I assert that our usual disjunction of outward- 
directed 'love' vs. inward-directed 'selfishness' is completely  
useless.  It is possible for outward directed love to be completely  
unhealthy (e.g., a smothering parent, or Marxism), and it is also  
possible for inward 'selfishness' to be healthy (e.g., diet and  
exercise, or obeying one's conscience). That is the Libertarian  
argument, after all, which as usual is half-right.

In other words, selfishness and love per se don't matter;  what  
matters economically is whether I am a) creating value for others,  
such that b) I am rewarded.  Even morally, though (a) is more  
important, (b) is also important for reasons of justice and reciprocity.

Further, this question scales both up and down.  Am I part of a  
community that is primarily rewarded as it creates value for other  
communities (e.g., a healthy company)?   You can call that selfish if  
you like, but that is light years away from a community that is  
primarily rewarded for destroying value (e.g., drug dealers);  
terminology like 'selfishness' obscures that crucial moral difference.

Conversely, I also believe this theory scales 'downward' to n < 1.    
In particular, I often think of myself as interacting systems. On the  
physical level, I have nervous, digestive, circulatory, muscular,  
etc.   Sometimes I satisfy my palate (digestive) in a way that hurts  
my arteries (circulatory), instead of creating value (nutrition) --  
i.e., unhealthy eating.  The same arguably holds for the relation  
between body, mind, heart, and soul -- each system functions best  
when it serves the others (and is rewarded for it).

I realize that this seems counter-intuitive, but I argue that is  
because we have been brainwashed by libertarians and economists who  
primarily study large, static enterprises.  They control the language  
of the debate, which makes it hard to think outside the box. However,  
if you talk to anybody who does entrepreneurship or a small business,  
you quickly realize that the essential factor is seeking to be  
rewarded *for creating value* -- and that value creation comes  
first.  And if you look at large value-creating companies like those  
profile in "Built to Last", you'll see the exact same thing:

http://www.amazon.com/exec/obidos/tg/detail/-/0887307396/ref=pd_sxp_f/ 
104-4451630-5746321?v=glance&s=books

Profit is important, but it is the *second* most important thing.   
The first is to create value (e.g., products).    Companies that  
remember this thrive.  Companies that don't eventually die, and  
destroy a lot of value along the way.  It is a subtle shift in  
priorities, but the difference in outcomes is huge.

Just ask Enron.

-- Ernie P.