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The Zero-Sum Problem

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Eric M Posted: Wed, Feb 23 2011 10:30 AM

It occurs to me that the primary difference between the Right and the Left (or libertarians and statists, as the case may be) has to do with the question whether the pursuit of wealth is a zero-sum game.

The Right will argue that the pursuit is not a zero-sum condition and use this premise to form the case for the free market, while the Left will argue that the pursuit is a zero-sum game and use this premise to form the case for widespread government intervention. One could speculate that if the Right viewed the pursuit as a zero-sum game, they would respect the case for statism more; and, likewise, if the Left saw the pursuit as a non-zero-sum game, they would respect the free market more.

In attempt to get to the bottom of this divide, then, it seems necessary to understand exactly why the two sides see the situation so differently with respect to it being zero-sum. Is either one right and the other one wrong? Is it possible that they’re both right or wrong and they're just using different definitions of the term 'zero-sum'?

I have a hypothesis, but would love to hear what anyone else on this forum has to say about it as well. Your input is appreciated.

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Autolykos replied on Wed, Feb 23 2011 10:58 AM

I'd just like to point out that there are people on the Right who also tend to view wealth as a zero-sum game. They just view it in different terms from how people on the Left view it. Instead of viewing it as a zero-sum game between socioeconomic classes, those on the Right tend to view it as a zero-sum game between geographically distinct groups of people (e.g. nations) and/or between organizationally distinct groups of people (e.g. corporations).

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Eric M replied on Wed, Feb 23 2011 11:04 AM

Autolykos, good point about those on the Right. One premise of this discussion must be that the term 'zero-sum' has become rather ambiguous and as such the cause for much misunderstanding in debate.

Question: How would you define 'zero-sum', and how does that differ from the definitions of others?

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cporter replied on Wed, Feb 23 2011 11:06 AM

What Autokylos said. Both "sides" fall prey to the same fallacies, they just manifest in slightly different arguments. As for 'why", the most likely reason is that none of them have ever spent a moment of honest thought on the subject. All you have to do is look around to realize that we're better off now than a a hundred years ago.

edit: I don't think they use the term ambigiously at all. I think they have no capacity for understanding capital, investment, or mutually beneficial trade.

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Eric M replied on Wed, Feb 23 2011 11:10 AM

cporter, thanks for your input. Would it be safe to say that you don't see the pursuit of wealth as a zero-sum condition in any sense of the word?

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cporter replied on Wed, Feb 23 2011 11:22 AM

Yes, that would be safe to say. There is only one possible definition of zero-sum. Gains are offset by equal losses. It's a convenient enough term that the definition is pretty much evident just from considering the words contained in it. Pursuit of wealth cannot be zero-sum. Even in an individual transaction one party could have buyer's remorse but utils don't exist so you can't construct a zero-sum formula for the system.

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Eric M replied on Wed, Feb 23 2011 11:42 AM

Is the pursuit of money a zero-sum game?

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cporter replied on Wed, Feb 23 2011 12:04 PM

No, thanks to the Fed! cheeky Sorry, a little inflation humor there.

Seriously, assuming 0 inflation, then the collection of money is a zero-sum game. If there's a million dollars in existence then there's only ever a million dollars in existence regardless of distribution. But money isn't the same as wealth, and we can still become wealthier with stable money.

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John James replied on Wed, Feb 23 2011 12:09 PM

You're close.  I think the zero-sum game fallacy certainly plays a large role.  But I think the real difference runs much deeper than that.  I think this does a nice job looking into and explaining it...

 

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Eric M replied on Wed, Feb 23 2011 12:22 PM

Cporter, there's nothing like a little inflation humor to get the day started right!

But I think this gets to the heart of the problem. For all intents and purposes, the pursuit of money is a zero-sum game. If one person gains some amount of it, another person must lose an equal amount. It is only valuable if it retains this key characteristic (which is why inflation is so harmful to a currency).

The problem is that, in an interdependent society, obtaining money has become an essential step to the goal of obtaining wealth. Whereas wealth is plainly non-zero-sum, there is a zero-sum barrier in front of it. And this, in my estimation, is what makes the pursuit of wealth seem like a zero-sum game.

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Eric M replied on Wed, Feb 23 2011 12:26 PM

John James: Sowell is awesome, and I have recently enjoyed Whittle's work. Conflict of Visions is in my queue.

Question: How would you sum up the conflict of visions in a brief sentence, then?

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John James replied on Wed, Feb 23 2011 12:31 PM

Eric M:
Whereas wealth is plainly non-zero-sum, there is a zero-sum barrier in front of it. And this, in my estimation, is what makes the pursuit of wealth seem like a zero-sum game.

You may have touched on it right there.  People understand that money itself is zero-sum...but they lack the understanding to go just one level deeper and realize that doesn't matter...as wealth is not.  And wealth is what is important.  They don't get past "stage 1" (another h/t Thomas Sowell.)

But I still say the difference between Right and Left /  libertarians and statists is the conflict of visions about what man is.

 

Eric M:
Question: How would you sum up the conflict of visions in a brief sentence, then?

I would sum it up in basically that, the leftists/statists operate under the belief that man is a virtuous creature...and that the only problems in the world stem from the institutions we currently have...and therefore if only we could set up the right institutions, all the world's problems would all but completely disappear (unconstrained vision).  Conservatives/libertarians essentially believe that it is man himself that is flawed, and that therefore there is no such thing as the "right" institutions, because no matter what you set up, it will still be flawed man running them...so there is no solution, just tradeoffs (constrained vision).

But I would take it from Sowell himself.  Here's a short clip where he answers it at the end, and here's a great interview, which is lengthy, but which you should definitely make the time to watch.

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Zero sum means "for every winner, there is a loser."

And that's how Marx described the world. The evil Capitalist wins [=makes money] by exploiting [=not paying what he is worth] the helpless losing worker.

This zero sum thinking is also implicit in the constant whining about less and less people owning more and more of the wealth. Now if the rich get richer by stealing from others, as in Bush and Obama's bailouts and other govt meddlings [which ultimately boils down to violence], then of course the complaints are justified. But no mention is ever made of WHY the disparity is increasing. It is seen as a bad thing no matter what the cause. That's because there is a zero sum game assumption. If the rich got richer, they must have taken it from the poor somehow or other.

AE sees it all differently. Every voluntary economic transaction means, by definition of voluntary, that the two parties would rather do the deal than not do it. Without coercion. Meaning they both feel they gain by making the deal. So there are two winners, always, not a winner and a loser.

Not only that, Marx's analysis of how the capitalist makes money is flawed. AE shows that both the worker and his employer win. Of course that's a technical discussion. Look around the site for more about that.

In addition, AE points out that the rich are indeed getting richer from the free market, but the poor are getting richer too. Everyones standard of living rises in a free market. This assertion needs proof, obviously, and it's here on the site.

 

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Eric M replied on Wed, Feb 23 2011 1:09 PM

John James:

In consideration of your point about the root of the conflict, I would agree that there is a fundamental difference in the way that those on the Right and those on the Left view man. But I would also argue that that this difference isn't based on some inherent difference in their composition. It is based in a different perception of the world, and, it seems to me, that this different perception boils down to their view of wealth (i.e., whether it is a zero-sum condition). It could be that this concept and that of the conflicting visions is the same. I'll have to read the book to find out.

I would contest the notion that man is inherently flawed and that the best we can do is hope we choose the right trade off (paraphrasing Sowell). Doesn't that kind of mentality lead to apathy and unproductiveness?

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Eric M replied on Wed, Feb 23 2011 1:19 PM

Smiling Dave:

Thanks for your input. You seem to be well-versed in Austrian Economics and have obviously spent a good deal of time on these boards. Perhaps you can help to clarify a point that I'm trying to understand: We all can agree that the pursuit of wealth is not zero-sum (as you point out, wealth has grown for everyone over the last few centuries).

But there are those that still see the pursuit of wealth as a zero-sum game. As I understand it, they believe this because, in an interdependent society, everyone needs to obtain money to obtain wealth, and the pursuit of money is a zero-sum game. And so, they must go through the zero-sum game of money in order to get to the non-zero-sum game of wealth.

Any thoughts on that concept?

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Eric M:
In consideration of your point about the root of the conflict, I would agree that there is a fundamental difference in the way that those on the Right and those on the Left view man. But I would also argue that that this difference isn't based on some inherent difference in their composition.

I want to be clear...I'm not saying the difference in how they view man is the result of some difference in their genetic or neurological make up, or some kind of biological difference that entices them to believe a certain way or something like that.  It's simply like you said, a different worldview...but what I believe Sowell is arguing is that this differing worldview is the result of a differing vision of the nature of man.  In otherwords, they don't view man differently because they view the world differently...it's the other way around.

 

Eric M:
It is based in a different perception of the world, and, it seems to me, that this different perception boils down to their view of wealth (i.e., whether it is a zero-sum condition). It could be that this concept and that of the conflicting visions is the same. I'll have to read the book to find out.

Yeah, and definitely watch that full length interview.  It's always helpful to hear the author discuss his own work.

 

Eric M:
I would contest the notion that man is inherently flawed and that the best we can do is hope we choose the right trade off (paraphrasing Sowell). Doesn't that kind of mentality lead to apathy and unproductiveness?

I don't find that to be the case.  Would you really try to argue that man is a perfect creature, always acting rightly, justly, morally, and kindly...in the best interest of the entire universe?  Because unless you are prepared to argue that contention, then you have to accept the notion that man is not perfect...and therefore ipso facto is flawed.

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Clayton replied on Wed, Feb 23 2011 1:30 PM

It occurs to me that the primary difference between the Right and the Left (or libertarians and statists, as the case may be) has to do with the question whether the pursuit of wealth is a zero-sum game.

The Right will argue that the pursuit is not a zero-sum condition and use this premise to form the case for the free market, while the Left will argue that the pursuit is a zero-sum game and use this premise to form the case for widespread government intervention. One could speculate that if the Right viewed the pursuit as a zero-sum game, they would respect the case for statism more; and, likewise, if the Left saw the pursuit as a non-zero-sum game, they would respect the free market more.

In attempt to get to the bottom of this divide, then, it seems necessary to understand exactly why the two sides see the situation so differently with respect to it being zero-sum. Is either one right and the other one wrong? Is it possible that they’re both right or wrong and they're just using different definitions of the term 'zero-sum'?

I have a hypothesis, but would love to hear what anyone else on this forum has to say about it as well. Your input is appreciated.

Wealth is zero-sum on a short enough time horizon. In a failing economy, wealth is even negative sum (everyone is, generally, getting poorer).

I think the "zero vs. positive sum" debate can actually be a red herring from the real issue - the dual morality implied in any wealth redistribution scheme. Debating whether wealth is a zero-sum or positive-sum game reduces the discussion to a polite rivalry like that between horse-bettors. In fact, the issue at hand is much more visceral and the consequences of persuading the popular consciousness on this issue are difficult to overstate.

In the first place, it is a myth that the Prince (government) taxes the wealthy to help the poor. The Prince taxes everyone to help himself. To the extent that the Prince taxes the "wealthy" more than the "poor" this is only to say that the Prince cannot tax the unproductive since there is nothing to be taxed and, therefore, his burden must fall on the productive. The term "wealthy", then, should really be "productive"... the Prince taxes the productive and subsidizes the unproductive class which, thus bribed, stands ready to riot along with the Prince should the productive class begin to protest by refusing to produce. Look at the recent riots in Egypt, this dynamic was painted out in black and white. Pro-government "protestors" out in the streets armed by Mubarak himself with whips and bats, riding horses and camels, while the business class was being interviewed on State television complaining about the riots and admonishing everyone to "just go home".

The political elites - all of whom are very wealthy - far from being "taxed" are themselves the tax-collectors - in Roman times they were called "tax farmers". The modern corporate structure can be understood as essentially a branch of the Internal Revenue Service. Its job is to enforce the tax codes to the most stringent possible interpretation and collect the taxes on a monthly, bi-weekly, weekly or even daily basis. The corporation will not tolerate the possibility of even the slightest legal liability to the IRS on behalf of its employees. Employers never under-collect but regularly over-collect taxes on behalf of the IRS and it is the same in every country. The Prince is, necessarily, the wealthiest person by far in his realm... anyone else approaching his wealth would automatically be perceived as a threat and be killed, driven out or plundered.

Also, let's dispel the notion that equality is the purpose of redistribution. Firstly, equality far transcends material wealth - a congenitally blind person will never be "equal" with his peers no matter how many free meals he receives. Secondly, let's say all wealth is zero-sum. Nobody gets wealthier or poorer over time, people born wealthy remain wealthy and people born poor remain poor. We (naturally) suspect that such a system could only arise through some sort of systematic injustice and it is precisely this suspicion that is supposed to be the motivation for redistribution to create "equality." In other words, the outcome of a social order is an indictment of the systematic injustices within that social order. But redistribution is precisely a systematic injustice! The whole argument is an attempt on the part of the Prince to argue that his systematic injustice (taxation, redistribution of wealth from others to himself) is justified by the "need" to fix a supposedly greater injustice, the "unqueal distribution of wealth."

Finally, the proponents of wealth redistribution through the agency of the Prince ignore the wealth-centralizing effects of the very system they espouse. Look at the trillions of dollars which are sucked up by the Military-Industrial Complex and spent on sweetheart contracts to companies owned by members of the Good Ol' Boys club. Look at how the big-box retailers target social security and welfare recipients and how the big-name pharmaceutical companies target medicare recipients. It's like a big money pipe right from the IRS to these ultra-wealthy owners of the major corporations. Look at the multi-trillion dollar bailouts of the big banks... Lloyd Blankfein is not a creature of the market, he is a creature of the State.

To see egalitarianism more thoroughly dismantled by the master of anti-egalitarianism (Rothbard), read this.

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Clayton replied on Wed, Feb 23 2011 1:30 PM

<snip> double-post

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Clayton:
<snip> double-post

You know you can delete posts, right?

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Clayton replied on Wed, Feb 23 2011 1:40 PM

I don't see an option for it.

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But there are those that still see the pursuit of wealth as a zero-sum game. As I understand it, they believe this because, in an interdependent society, everyone needs to obtain money to obtain wealth, and the pursuit of money is a zero-sum game. And so, they must go through the zero-sum game of money in order to get to the non-zero-sum game of wealth.

Pursuit of money is not a zero sum game at all. A gets money from B by giving B something B wants. B is happy to be give A the money, because he got in exchange something he wants more. So it's win win right there.

Now someone may argue that there is only so much money in the world, and if A gets it, everyone else has less. But taking money out of context like that, ignoring that money is always aquired by exchange for something valuable, is a twisted way of looking at things.

It also makes money the goal of the whole game being played, which it isn't. The goal is to get what you like. And you can't eat money or play music with it.

Basically seeing money as what it's all about, like Scrooge McDuck taking a shower in it, is the underlying atitude of Mercantilism. The very mention of which should make one recoil in horror.

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Good points, Clayton

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hardway replied on Wed, Feb 23 2011 1:54 PM

The pursuit of wealth is not a zero sum pursuit, because wealth is not strictly defined as money. You can't live in money, you can't eat money, you can't drink money, you can't have sex with money, you can't drive money, etc... If all you have is a huge pile of money, all you have is potential wealth. 

Until you spend that money, you are living like an animal, and you are not going to live for very long.  You are going to partake in transactions, if for nothing else, just to survive.  So you can't have all the money, even hypothetically, for more than a very short time.

Unless you take money by violence, you must exchange something for it.  To take in a lot of money, you have to put money out, generally a sizable chunk, in the hopes of getting more back.  That is not zero sum.  You got more back than you put out, but all the money made in the deal didn't go into your pocket.  Even after a long series of such succesfull deals, your pile is bigger, but so are a lot of other people's.

I think that the presentation of accumulation as a "zero sum game" has been presented as a kind of boogey man by socialists to justify redistribution strategies.

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Clayton:
I don't see an option for it.

Crap.  I didn't realize it's on a timer.  It looks like you have only about 5 minutes or so to delete a post...and maybe 24 or 48 hours to edit one.  Good to know.

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Eric M replied on Wed, Feb 23 2011 3:58 PM

John James:
In otherwords, they don't view man differently because they view the world differently...it's the other way around.

Yes, that makes sense now. Is it possible that the Left's worldview dictates their view of man and the Right's view of man dictates their worldview?

John James:
I don't find that to be the case.  Would you really try to argue that man is a perfect creature, always acting rightly, justly, morally, and kindly...in the best interest of the entire universe?  Because unless you are prepared to argue that contention, then you have to accept the notion that man is not perfect...and therefore ipso facto is flawed.

Granted, man is not perfect in the way that you defined it, but all men have reason, and through reason have the ability to do what's right  (even to the extent that they could do it all the time). To hear Sowell in the interview, it is as though he believes that since men are inherently flawed, they cannot strive for perfection, that they cannot work to do what's right. I would rather live in a world where people incorrectly tried to attain the ideal than one where everyone believed that no ideal could be attained and simply went with the flow, right or wrong.

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Eric M replied on Wed, Feb 23 2011 4:14 PM

Clayton:

Your summary is fascinating, thanks for sharing. I could see a modern anti-Machiavelli in this kind of work.

I don't think it is sufficient, however, to shrug off the zero-sum problem as a red herring. The Prince, as you put it, can only stay in power with the backing of a number of followers, and those followers have to support the Prince by whatever defense they choose. My argument is that their line of defense is an ideological one based in the zero-sum problem. They support the Prince because they think he is the only one that can solve the problem. They aren't cognizent of their blunder, and in fact they seek to do good (they are 'do-gooders', as they can be called), but it is this problem that animates their actions.

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Eric M replied on Wed, Feb 23 2011 5:04 PM

Smiling Dave:
ignoring that money is always aquired by exchange for something valuable, is a twisted way of looking at things.

People are pretty twisted these days after all!

To be clear, I'm not justifying any logic that says the pursuit of wealth is zero-sum. But I am trying to figure out why people think that. The logic might be twisted, but it has a hold on many otherwise bright people, so it begs some sort of reconciliation.

Consider those who might look at it in this twisted way. Aren't there those who might legitimately see money as a goal in itself? The latest hip hop record will undoubtedly prove that at least someone out there claims that money is the ultimate goal. Gangsters and high finance traders also come to mind as people who seek money for money's sake.

I would also argue that almost everyone pursues money as an immediate goal to achieve before the ultimate goal of real wealth. They may know that ultimately they want food, shelter, a working car, and a trip to the Bahamas, for instance, but their current focus is on money. They know that before they get any of that stuff, they must first get money, which means that they spend their time figuring out ways to get money. They don't spend their time figuring out how to real wealth--they know that real wealth comes as a matter of course when they have money--so their intent is focused on money.

Twisted? Perhaps. But, then again, I would say that is exactly what money does to an economy--it twists it up by abstracting real wealth into an artificial form.

By the way, thanks for the dramatization with Scrooge McDuck--very compelling!

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Clayton replied on Wed, Feb 23 2011 5:10 PM

I don't think it is sufficient, however, to shrug off the zero-sum problem as a red herring. The Prince, as you put it, can only stay in power with the backing of a number of followers, and those followers have to support the Prince by whatever defense they choose. My argument is that their line of defense is an ideological one based in the zero-sum problem.They support the Prince because they think he is the only one that can solve the problem. They aren't cognizent of their blunder, and in fact they seek to do good (they are 'do-gooders', as they can be called), but it is this problem that animates their actions.

I'm less sympathetic to the statist. While most apologists for the State are, as you say, "do-gooders" they are also inconsequential. That is, they are not part of an opinion-molding class either because they do not hold an opinion-molding position (such as academic, journalist, TV anchor) or because they are not otherwise influential (politician, business magnate, etc.) What such people think about the State is unimportant except on a "collective" scale. These are "the masses" (in which I include myself, in case my language seems to suggest I imagine I am in the opinion-molding class).

While I'm sure there are varying levels of disillusionment - ranging from outright cynicism to romantic delusion - in the opinion-molding class, I think that the majority of people in this class engage in Orwellian double-think and they can never be completely unconcious of this fact. They have to at once seek their own advancement by furthering the agenda of the Prince (which is organized plunder of the masses) while at the same time holding in the forefront of their mind the "social justice", "equality" or other noble goal which is supposed to justify all this self-seeking behavior. Such individuals do not believe false things - such as that voluntary exchange represents a "wealth transfer" or that war destruction can "stimulate" an economy - merely as a result of poor reasoning skills or bad information. These beliefs are motivated beliefs or superstitions, not rational beliefs. They have to believe these fairy-tales because it is the only way they can sleep at night.

So, no, they do not believe that the Prince is the only one who can solve inequality through wealth redistribution in the sense that I believe 2 + 2 = 4. That is, it is not a conviction which is consistent with rational deliberation and careful, dispassionate thought but, rather, it is an unshakable superstition which cannot withstand scrutiny because such scrutiny would reveal that it is a baseless belief motivated by naked self-interest. This is why the talking heads on cable TV all look like alcoholics with the bags under their eyes and the line-worn faces, serious as the grave - they're eaten up by the anxiety at the back of their mind that, in a very real sense, they are getting away with murder while holding neighborhood barbeques, attending their kids' school plays and appearing on TV to bloviate on the dog-and-pony-show of "democracy".

As for it being a red-herring I maintain that it is indeed a red herring because the opinion-molding class would much rather espouse crappy economics than defend immoral behavior. As bad as it is to be ignorant or stupid, it is not nearly as bad as being outright evil. The real issue is that the Prince seizes property to which he obviously has no legitimate claim whatsoever (taxation) and uses it to enrich himself and his ecosystem of political enablers while justifying this behavior with transparent claims of using their ill-got gain for the general welfare. The miraculous thing is not, as Hoppe has noted, that anyone would try to operate a government since the advantages of a territorial monopoly on law and force and forcible collection of revenues are obvious but, rather, that anyone tolerates the existence of a government. This remains a mystery but it is my hunch that this is possible because the State manipulates evolutionary vestiges in the human psyche that were adaptive in the ancestral environment but are maladaptive in the modern environment (as evidenced by the fact of the existence of the State). That it is possible to operate a government is no more evidence that government is good than the fact that it is possible for a man to rape a woman is evidence that rape is good.

Now, to come back to the issue of zero-sum economics... yes, clearly, the idea that free exchanges are zero-sum wealth transfers has been exhaustively debunked from every conceivable angle by economists ranging all cross the ideological spectrum... even Marxists must nominally admit that voluntary exchanges are mutually beneficial, they simply redefine the conditions of voluntariness. Zero-sum economics is like 2+2=5 or not believing in the existence of the number zero, it's obsolete superstition. Which raises the question... how does it happen that people in the supposedly "enlightened" modern world can so blatantly cling to obsolete superstitions unless these are motivated beliefs? While continuing the battle of repeatedly debunking these neophyte mistakes in economics is clearly valuable (ala Hazlitt's Economics in One Lesson or Sowell's Basic Economics), this is not sufficient. It was Rothbard who pointed out in the article I linked above that the first mistake of modern "conservatives" was to cede the moral high ground and grant that social justice or equality is a "noble goal." It is not a noble goal and when used as a transparent ideological cover for the Prince's plunder of the masses it is twice ignoble.

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Eric M replied on Wed, Feb 23 2011 5:18 PM

Hardaway:

Thanks for your input.

hardaway:
You can't live in money, you can't eat money, you can't drink money, you can't have sex with money, you can't drive money, etc...

To this, I would refer you to my previous post:

Eric M:
Consider those who might look at it in this twisted way. Aren't there those who might legitimately see money as a goal in itself? The latest hip hop record will undoubtedly prove that at least someone out there claims that money is the ultimate goal. Gangsters and high finance traders also come to mind as people who seek money for money's sake.

I would also argue that almost everyone pursues money as an immediate goal to achieve before the ultimate goal of real wealth. They may know that ultimately they want food, shelter, a working car, and a trip to the Bahamas, for instance, but their current focus is on money. They know that before they get any of that stuff, they must first get money, which means that they spend their time figuring out ways to get money. They don't spend their time figuring out how to real wealth--they know that real wealth comes as a matter of course when they have money--so their intent is focused on money.

hardaway:
Even after a long series of such succesfull deals, your pile is bigger, but so are a lot of other people's.

To this, I would say you are incorrect. Money cannot grow like real wealth in deals as you suggest. Given a constrained amount of currency (which I realize is unlikely with the Fed), two people involved in deals with each other cannot grow their monetary piles. One can only gain if the other loses.

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Eric M:
Is it possible that the Left's worldview dictates their view of man and the Right's view of man dictates their worldview?

I suppose you might be able to look at it that way, but in the end, I don't think you can start with the worldview and use it to comment on the nature of man...for it is humans that act...it is literally what we do that makes up the world we live in.  So no matter how much someone may want to say "the world makes man what he is", it is really man who makes man's world what it is.

Think about it.  If someone has a certain worldview, (i.e. "this is the way the world is")...what they are talking about is "this is the way the human world is."  They're talking about the human world that we live in...the societies, the culture, the interactions, the inventions, the emotions, the relationships.  It is man himself that makes up this world.  So it is impossible to say that somehow the world that man makes is what makes man what he is...

But it is quite easy to say, the nature of man is what makes all those aspects of man's world what they are.

You can't draw a conclusion about the nature of man by saying "We have the wrong instutitons.  That's why we have all these problems.  If the institutions were different, then man wouldn't act this way and people wouldn't be suffering."  That's not drawing a conlcusion from a worldview, even if you want to claim it is.  You are beginning with a notion about the nature of man...you are saying "man acts one way, but that's only because of X.  If you remove X, man would be restored to his natural state of being."  What is it that makes you believe that man would act differently if the institutions were different?  It has to be a rooted belief about the nature of man.

Now, of course some will argue "that's just a chicken or egg question...it's like art imitating life imitating art."  But that's nonsense.  Sure, one's environment can have an influence on one to a certain extent.  Even to a large degree.  But to propose that somehow the flaws that exist in every man...the things leftists point to and complain about...the things that are the very source of almost all the world's ills...are somehow the result of simply living with the wrong institutions or the wrong setup?  Can anyone seriously argue that every single human being has the same basic flaws and instincts because of nothing other than their environment?

Just look at how they argue.  A leftist will look at the financial crisis and say "oh that was just a bunch of greedy business men being greedy in their capitalist businesses.  If we just had the right people in charge of those companies / in the government then none of this would have happened.  It's greedy people and their capitalist institutions that are the problem.  If people just weren't so greedy, everything would be fine."  It's the same nonsense spouted by those Venus Project ignoramuses.  Money is evil, and it makes people do bad things.  If only we eliminated scarcity and the institution of money, there would be no more crime.  Seriously?  You really want to claim a medium of exchange is what causes one man to want another man's wife?  You really think scarcity of resources is what causes one man to be jealous of another man's athletic prowess and want to hurt him for it?  It's complete bullshit.  Man is how man is.

The world is not perfect because the humans who make up the world are not perfect.  We are naturally greedy, self-righteous, survival-focused, procreation-driven, power-hungry, self-interested creatures.  That doesn't make us evil.  It's just a part of what we are.  Christians, Jews, and Muslims all believe we are this way because of something called Original Sin.  But whatever reason you want to believe, the fact remains, man is not perfect and will never be perfect.  And therefore, the world is not, and never will be perfect.

As Milton Friedman said: "Nirvana is not for this world."  Again, it is imperfect man who makes up man's world that makes it imperfect...not the other way around. 

Those with the unconstrained vision believe man is naturally a virtuous creature, and that it is only because of these institutions we now have (be them religious, commercial, political, educational, or whatever) that we have the suffering we do.  If it weren't for these institutions, man could live in peace and prosperity.  That's why they constantly argue in favor of more power and more control.  They feel like "if only the right people were in charge and we set it up so that they had enough power, everything would be okay.  And once everyone saw how great the world could be, we wouldn't even need a government or laws or private property...man could live in harmony.  That's basically Marx's communist utopia.  The strong centralized state was just a stepping stone.  They operate under this assumption that angels exist, and that in fact, all men are angels.  "Man is born free, but is everywhere in chains", Rousseau said.  If only we just got back to our natural roots.

Those with the constrained vision, however, believe that man is naturally greedy and self-interested, driven by his instincts and biological and psychological urges and that there is nothing you can do about that.  Man is predictably self-important.  He is not perfect, he is not a saint.  He predictably responds to incentives.  Therefore, it is not about getting rid of or having the right institutions to get man to be able to operate in his supposed "natural" state of virtue...but rather it is about operating under the assumption that man is only human, and is constrained by his humanity...his emotions, his urges, his desires.  Friedman illustrates this quite well when he explains why it isn't necessary to "throw the bums out."

 

Eric M:
Granted, man is not perfect in the way that you defined it, but all men have reason, and through reason have the ability to do what's right  (even to the extent that they could do it all the time). To hear Sowell in the interview, it is as though he believes that since men are inherently flawed, they cannot strive for perfection, that they cannot work to do what's right. I would rather live in a world where people incorrectly tried to attain the ideal than one where everyone believed that no ideal could be attained and simply went with the flow, right or wrong.

I do not agree that man could do "what is right" 100% of the time.  If he could, he would have the ability to be perfect.  And I do not believe that's possible.  Even the Pope goes to confession at least once a week.  But even that is beside the point.  Even supposing man could act in a moral, virtuous manner his entire life, I would think even you would have to agree such a task would be quite difficult.  Why?  Because it would be against his nature.  Man is not naturally virtuous, despite how much he may be able to act in such a way.  In fact, some say that that is actually what makes an act virtuous...that it is a conscious effort against our natural instinct of self-importance.  I've heard it suggested that that is what separates us from the animals...that it is the ability to consciously choose to act outside of our natural greedy, prideful tendencies.  That is what makes us civil.  And yes, that does come from the ability to reason.  But the ability to act outside of the natural tendencies, even for a lifetime (which I still don't believe is possible, but supposing it were), doesn't change those tendencies.

Think about it.  If man were naturally virutous, would he really have such a tough time being that way more often?

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Eric M replied on Wed, Feb 23 2011 5:58 PM

Clayton:

You suggest that those in the opinion-molding class are not pure evil, but from your description of them, I cannot see a difference. They try to exploit the masses, obtain positions of power to do it, and lie to the masses in order to make it sound like it's in their favor. What can be more evil?

Whether or not the opinion-molders are evil, one does not readily find a solution in your argument. How does one break free from this situation you describe if not through outright revolution?

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Eric M:

Smiling Dave:
ignoring that money is always aquired by exchange for something valuable, is a twisted way of looking at things.

Consider those who might look at it in this twisted way. Aren't there those who might legitimately see money as a goal in itself? The latest hip hop record will undoubtedly prove that at least someone out there claims that money is the ultimate goal. Gangsters and high finance traders also come to mind as people who seek money for money's sake.

Yes, there may be people who think money is a goal in itself. And any study of economics will have to take them into account. After all, AE is built on the idea that the value of a thing is subjective, changing with each individual and with time as well.

However, when we are trying to understand the way an economy works, what makes people richer and what makes them poorer, are there winners and losers or just winners, and other theoretical questions, we have to make sure we have a clear picture of what is going on.

Consider a physicist sitting in a nuclear power plant, and noticing the pretty red light that suddenly started flashing. He really likes flashing red lights, and figures things at the plant must be really great if from out of nowhere he is geting a free light show. But if that light is a sign that the plant is about to blow up, he has to wake up and realize what is really going on.

So too, when studying the free market, if one just looks at the ebb and tide of paper money passing from hand to hand, one is looking at only part of the picture. Any analysis that considers only what happens with the paper money and concludes every transaction involves a winner and a loser is being as foolish as the scientist who looks only at the prety red light. He ignores the big picture, that much more important things are going on, and how the money fits in to the complete picture. [More on this later].

I would also argue that almost everyone pursues money as an immediate goal to achieve before the ultimate goal of real wealth. They may know that ultimately they want food, shelter, a working car, and a trip to the Bahamas, for instance, but their current focus is on money. They know that before they get any of that stuff, they must first get money, which means that they spend their time figuring out ways to get money. They don't spend their time figuring out how to real wealth--they know that real wealth comes as a matter of course when they have money--so their intent is focused on money.

Yes, that is very true. But they are wrong if they think that when they get money from someone they have won and the other guy lost. [Assuming a voluntary interaction]. They have indeed won, by getting the money they wanted, but the other guy has also won, because he got something he wanted in exchange for that money. So it is a win win situation, not a zero sum game. And as I said before, to look only at what happened to the money is an incorrect analysis. A correct analysis has to look at what each person wanted when they made the exchange. It is certainly an artificial kind of tunnel vision to look only at who got the dollars and declare him the only winner, when the other person at that time wanted to get rid of his dollars. He got what he wanted, so he must be considered a winner, too.

Twisted? Perhaps. But, then again, I would say that is exactly what money does to an economy--it twists it up by abstracting real wealth into an artificial form.

Studying AE will show that what you say may be true of fiat money to some extent. But money is an incredibly useful and important thing that rather than twisting an economy makes it hum and grow. Otherwise we would be stuck with the many inconveniences of a barter economy.

By the way, thanks for the dramatization with Scrooge McDuck--very compelling!

wink, yw.

 

My humble blog

It's easy to refute an argument if you first misrepresent it. William Keizer

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Eric M replied on Wed, Feb 23 2011 6:59 PM

John James:
it is really man who makes man's world what it is.

I agree, but do you think that everyone thinks this way?
John James:
So it is impossible to say that somehow the world that man makes is what makes man what he is.

Many leftists, especially the materialist ones, believe that the world (i.e., nature) is all that there is, and that men and their civilization are only a small part of it.
John James:
What is it that makes you believe that man would act differently if the institutions were different?

Whether or not we are molded by the world completely, you have to agree that man is influenced by the world in some ways, right? For instance, I waste thirty minutes at stop lights every day because of the influence the world has on me. Acknowledging this makes me want to change the system to a more efficient one. And isn’t that what we’re all trying to do here? Libertarians in general have to believe that if the institutions were different (e.g.., minimized or withdrawn altogether), then man would act differently (e.g., more morally). Otherwise, they wouldn’t be so adamant in their beliefs. Otherwise, they would be nihilists.
John James:
Man is how man is.

What gives a person who believes this the motivation to do anything right or just? If we are to simply accept the notion that all men are greedy, lustful, and sinful, doesn’t that eliminate all moral responsibility?
John James:
it would be against his nature.  Man is not naturally virtuous

I think this underscores what might be a conflict of definitions here. It is not clear to me that we are using the same definitions for the words ‘nature’ and ‘virtuous’. To begin, I agree that man has natural instincts toward selfishness, greediness, etc., but I don’t know that those are by definition wicked. Natural instincts are natural instincts and he is not wicked for anything he has been given inherently. I would argue that man naturally has reason, intellect, and free choice. Through these instruments, man can and has been able to direct the natural instincts to virtuous and productive ends. He is not wicked just by having base instincts, but he is wicked if he doesn’t use his other natural abilities to guard against unjust behavior. Man is not virtuous or wicked by nature; rather, he can be either depending on his choices. And yes, the right choices are difficult because they must be made sometimes against his natural instincts, but they can also be made in accordance with his natural reason and will, and that is the determining factor for all actions.

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hardway replied on Wed, Feb 23 2011 8:52 PM

Eric M:

Only two people, who between them poses all the money in the world, dealing only between themseleves, for money? I guess if you limit conditions to such an extent as to be completely absurd, and impossible, then your "zero sum" game can work out? 

In the real world, a world of scarcity, I stand by my analysis.

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Clayton replied on Thu, Feb 24 2011 12:21 AM

Clayton:

You suggest that those in the opinion-molding class are not pure evil, but from your description of them, I cannot see a difference. They try to exploit the masses, obtain positions of power to do it, and lie to the masses in order to make it sound like it's in their favor. What can be more evil?

Whether or not the opinion-molders are evil, one does not readily find a solution in your argument. How does one break free from this situation you describe if not through outright revolution?

Well, what they espouse - the State - is pure evil. It is organized plunder or what I call the Day Mafia. I think there are varying degrees to which this is understood and I suppose that the lower a person is on the totem pole of power the less clearly they must understand the true nature of their master in order to serve it in their capacity.

As for solutions, outright revolution is clearly not a solution as history is filled with examples of revolutions every single one of which has failed to increase human liberty. I'm not convinced that there is a solution to the problem... perhaps we are doomed by the very fact that human nature permits governance to live under tyranny. Perhaps, in the long run, a person is either lucky enough to be born into privilege (with the only drawback being the psychological difficulty of justifying one's existence) or sentenced to be born into servitude and there isn't a damn thing that all the libertarian philosophy in the world can do about it. However, I'm a bit more optimistic than this because of the rapid adaptability of the human prefrontal cortex (higher thought) and the evidence that this remarkable capacity for higher thought is what lifted Homo sapiens or one of our ancestors out of an animal existence (red in tooth and claw) into the early tribal cultures where some form of law other than raw instinct regulated behavior. Perhaps we can transcend the tribal morality of statism and evolve into a higher morality where everyone - princes, public bureaucrats, judges, priests, soldiers and policemen included - is held to precisely the same standard of behavior no matter his family name, bank account balance or official capacity. I am skeptical that this process can be completed in years or even decades, if it can be completed at all. Rather, it is going to require generations to breed out whatever psychological hooks permit the manipulation of the masses by demagoguery in addition to a good deal of lost time being made up in the discipline of moral philosophy which has nearly lain dormant since the 18th century.

Clayton -

http://voluntaryistreader.wordpress.com
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Eric M replied on Thu, Feb 24 2011 12:22 AM

Smiling Dave:

I agree completely with your assessment of the zero-sum mentality and that it is best in all ways to view the pursuit of wealth as a non-zero-sum condition.

But, to clarify my point in bringing all this up, there are those in society today that view the pursuit of wealth as a zero-sum game (perhaps the majority). That belief affects their behavior in economic situations and it also influences others' behavior on them. And these consequences are real and troublesome. In effect, these people behave as if the pursuit of wealth is a zero-sum game, and so, for all intents and purposes, it is a zero-sum game to them. We agree that it is founded on false premises. Now, to get them to understand this is another ball game completely.

Thanks gain for your case-in-cartoon--compelling and very entertaining!

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Eric M replied on Thu, Feb 24 2011 12:24 AM

Hardaway:

I tend to be a little absurd sometimes. Thanks for attempting to knock some sense into me.

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Eric M replied on Thu, Feb 24 2011 12:34 AM

Clayton:

I'm glad to hear that you reserve some optimism. I have to think that a conversation like this, on a website like this, and the very fact that there is such a thing as the Internet, means that there is hope. At the very least, we freedom lovers need to keep positive and energetic because we have absolutely no chance if we give up. Thanks again for your input.

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Eric M:
it is really man who makes man's world what it is.
I agree, but do you think that everyone thinks this way?

Whether they think that way or not, they are still making a judgment about the nature of man first...whether they admit it or not.  That was kind of the point I was making.  Even if your argument is that man could be perfect if only he lived in a perfect world, you're still making the judgment that man naturally has the ability to be perfect. (Not to mention you're operating under the assumption that the world could be made perfect...and who exactly would do that?  Obviously man would.) 

So again, it's a judgment based on the nature of man.  Not the other way around.  Think about the gun argument.  Anti-gun people claim that if there were no guns, there would be less violence and less crime.  Even though they are blaming guns, they are still making a statement about the nature of man...saying that if only we didn't have X, man would be in his natural state, and everything would be dandy.  The Earth didn't make guns, therefore they are unnatural.  Man is only unhappy because of this introduction of an unnatural thing that is not useful for anything other than violence. 

Anyone who believes that less guns would automatically equal less violence is stating a belief that it is not man who is violent, but that it is simply guns that are violent.  Basically at the heart of it, they're not fans of the "guns don't kill people, people kill people" meme.  The really do believe that it is guns that kill people...and that if there were no guns, there would be (at least) less killing.  That is a statement of belief about the true nature of man.

 

Eric M:
Many leftists, especially the materialist ones, believe that the world (i.e., nature) is all that there is, and that men and their civilization are only a small part of it.

Sure.  And they ignorantly believe that man in his "natural state" is happy, peaceful, and carefree.  That's what all the hippie commune nonsense was about.  Every few generations you have some kind of movement in which people think they are enlightened, they think they've got it all figured out...and they profess that if we just got back to our roots...lived in nature and got rid of all this commercialization, technology, and capitalism...that if we just lived together and shared everything...nothing belongs to anyone and everything belongs to everyone...then we wouldn't have all these problems.  It is these capitalist, exploitative institutions that make men greedy and wish to take advantage of one another.  If we got rid of those, man could be free.  He wouldn't be stuck in the chains of a world where you have to exploit others and make a profit.  People wouldn't have to be wage slaves.

It is the institutions that make men suffer.  If we didn't live in a world of haves and have-nots...if everything belonged to everyone and no one had to be a wage slave, then man wouldn't be greedy and selfish.  It's just that in this world we live in, these evil institutions force you to either take or be taken advantage of...to either be an exploiting owner, or a wage slave.  If we just got rid of these institutions like "private property" then things would be much better.

The problem is the people who believe this nonsense not only don't have the faintest understanding of the basics of economics, but they wouldn't even have to if they would just look at history...and all the failed attempts at such nonsense throughout the centuries.  They think they have something new...that's all they ever talk about: "Those old-world conservatives are stuck in the old world.  They don't know anything other than this antiquated way of doing things...this institutionalized capitialistic way of running the world through exploiting people, blah blah blah.  What we're talking about is something new.  A new way.  We want to move on from that old world and make a new, better world.  We want to 'progress'...that's why we're the 'progressives'...and they're the 'conservatives'.  They just want to conserve the old world, we want to progress to a new world."


Eric M:
Whether or not we are molded by the world completely, you have to agree that man is influenced by the world in some ways, right? For instance, I waste thirty minutes at stop lights every day because of the influence the world has on me. Acknowledging this makes me want to change the system to a more efficient one. And isn’t that what we’re all trying to do here? Libertarians in general have to believe that if the institutions were different (e.g.., minimized or withdrawn altogether), then man would act differently (e.g., more morally). Otherwise, they wouldn’t be so adamant in their beliefs. Otherwise, they would be nihilists.

Again I'm not sure you're fully reading my response.  I explicitly stated man is influenced by his environment.  But that has nothing to do with the fact that regardless of his environment, he is self-interested, procreation-driven, and greedy, with power-grubbing tendencies.

And I think you are actually making assumptions about the nature of man that are a stretch.  From this post as well as your last one, it sounds like you're essentially arguing that if it were believed that it were impossible for man to be perfect, then man would never work toward improvement.  And I completely disagree.  You seem to be stuck on this notion...it's almost like you have to believe that man could attain perfection because otherwise no one would strive to better himself or the world around him.  And that is not the case at all.  In my own life I do not believe I could ever be perfect.  That doesn't make me want to kill myself or sit on the couch and never do anything.  I don't think people strive to improve themselves or make their life more comfortable because they think they could somehow achieve perfection.  They do it because they want improvement.

The difference between statists and libertarians (or liberals and conservatives) is that liberals operate as if that perfection were somehow attainable.  They operate as if it were somehow possible to eliminate suffering...segregation, racism, violence, inequality.  As Friedman points out, they will almost never admit or claim that that's what they're aiming to do...but if you follow the logic of their arguments and the "solutions" they promote, that's the direction they're moving.  Whereas Sowell points out conservatives don't assume that there is a solution out there...they understand that we live in a world of tradeoffs, and that everything you do has a cost.  But liberals don't consider that.  Their philosophy is dictated by the notion that inequality exists, and it shouldn't...and we should eliminate it; even if it means taking away the very freedoms of life, liberty, and property.

Eric M:
Man is how man is.
What gives a person who believes this the motivation to do anything right or just? If we are to simply accept the notion that all men are greedy, lustful, and sinful, doesn’t that eliminate all moral responsibility?

No, it does not.  Just because you know you aren't a perfect creature and are bound to make mistakes it doesn't mean you wouldn't or shouldn't strive to do the right thing.  As I said, that's certainly not the case for me.  And as Ayn Rand put it, "[The phrase] 'Nobody is perfect in this world' is a rationalization for the desire to continue indulging in one’s imperfections, i.e., the desire to escape morality. 'Nobody can help anything he does' is a rationalization for the escape from moral responsibility."

Just because you have imperfect urges and are an imperfect being it doesn't remove what some might call your "moral obligation."


Eric M:
I think this underscores what might be a conflict of definitions here. It is not clear to me that we are using the same definitions for the words ‘nature’ and ‘virtuous’. To begin, I agree that man has natural instincts toward selfishness, greediness, etc., but I don’t know that those are by definition wicked. Natural instincts are natural instincts and he is not wicked for anything he has been given inherently.

So...what exactly would you call someone who does nothing but indulge their greedy, selfish urges, without care to the individual rights of others?  Would you not consider him wicked?

Here again, I do not believe you are fully reading what I wrote.  No one said simply having those urges makes man wicked.  Again, I explicitly stated that wasn't the case: "We are naturally greedy, self-righteous, survival-focused, procreation-driven, power-hungry, self-interested creatures.  That doesn't make us evil.  It's just a part of what we are."  [Seriously, did you completely skip that part?] 

But just because having those natural tendencies doesn't make man evil, it doesn't mean having complete disregard for the rights of others is not bad.  You even go on to say yourself that it is whether man chooses to do those things or act in the opposite manner that determines what kind of man he is.

That conclusion of yours does not align with your previous statements.  I think in your zeal to argue that man is not inherently evil, you are reaching to a point where you are essentially saying evil does not exist (or at least cannot be defined).  Think about what you just said.  You are not sure if greediness and selfishness are wicked, simply because they are a part of man's nature, and man is not wicked for his natural tendencies...so therefore those natural tendencies cannot be wicked.

That doesn't make any sense.  It's almost like evangelists who say: "A lot of people wonder how we can trust the Bible. But they need to read First Corinthians 5 where Paul writes…"  You're trying to make the arument that man is not evil even though he is naturally greedy and selfish, because you don't necessarily think those things are evil...because you don't think man is evil.  You might as well just cut out the middle man and say "Man is not evil because man is not evil."

And don't misunderstand me, I'm not saying man is evil.  And I'm not even saying being self-interested is evil.  There is nothing wrong with that.  But disregarding the rights of others is wrong.  Being greedy and selfish to a point at which you violate others' rights, is evil.  So yes, man has tendencies that can lead him to be evil.  And as I said, it is our conscious effort against our natural instincts that separates us from the animals...that it is the ability to consciously choose to act outside of our natural greedy, prideful tendencies that is what makes us civil.

I'm not sure why you have such a problem with this.  The only thing I can figure is that it is important for you to believe that man can be perfect because you are under the impression that if he can't, then there would be no incentive to work for improvement.  But I have no idea what leads you to believe that when all the historical and practical evidence points to the contrary.

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Eric M replied on Thu, Feb 24 2011 8:49 AM

John James:

Thanks for your thorough response. Without delving into a point-by-point rebuttal, can you help me out by explaining the difference as you see it between the following concepts: striving for an ideal, striving for a solution, and striving for improvement?

And please, if it's at all possible, can we avoid talking about personal motives behind this discussion? Not only is it irrelevant, I also think your speculation is well off base. Thanks.

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