organon

A question regarding a particular venue of wealth acquisition, in an ethical context.

339 posts in this topic

Why is the purchase and sale of such a property, with the only work on my part the identification of the opportunity and the actions necessary to take advantage of it, not a real, productive value?

Because, I think, I have added nothing to the world: neither the creation of a material value, nor a skilled service (e.g., a haircut, or dry cleaning) that has legitimately added to the life of the man or men with whom I traded.

You don't have to add anything to the 'world' at large when you create a value and morally profit from it. The value is to the person who wants to sell to you, when he wants to sell, at the price you pay him. You are satisfying his need. And if you don't have the skill to judge what is worth buying at what price so you can profit from it in the service you provide you will lose your shirt.

When speculators buy farm commodities for the futures market under arbitrage they are economically stabilizing the market, but the immediate value of the service is to the farmer who wants a known anticipated selling price. The knowledge of the futures market, etc. are important skills for the speculator; the direct value is to the person selling. He will probably receive less than he otherwise could have, but he wants to buy the speculator's assumption of the risk, just as you do when you buy insurance. The same principle hold for anyone who wants a timely sale of his property at the price he thinks it is worth under those conditions.

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Why is the purchase and sale of such a property, with the only work on my part the identification of the opportunity and the actions necessary to take advantage of it, not a real, productive value?

Because, I think, I have added nothing to the world: neither the creation of a material value, nor a skilled service (e.g., a haircut, or dry cleaning) that has legitimately added to the life of the man or men with whom I traded.

You don't have to add anything to the 'world' at large when you create a value and morally profit from it. The value is to the person who wants to sell to you, when he wants to sell, at the price you pay him. You are satisfying his need. And if you don't have the skill to judge what is worth buying at what price so you can profit from it in the service you provide you will lose your shirt.

When speculators buy farm commodities for the futures market under arbitrage they are economically stabilizing the market, but the immediate value of the service is to the farmer who wants a known anticipated selling price. The knowledge of the futures market, etc. are important skills for the speculator; the direct value is to the person selling. He will probably receive less than he otherwise could have, but he wants to buy the speculator's assumption of the risk, just as you do when you buy insurance. The same principle hold for anyone who wants a timely sale of his property at the price he thinks it is worth under those conditions.

Does successful speculation require rationality, e.g., a thorough knowledge of the marketplace, of the opportunity, and the consequent justified grasp that the probability of making a profit is significant? Yes.

Is there any productivity exercised, given that no values, whether goods or services, that have legitimately added to the life of the man or men with whom one has traded, were created? Not that I can tell.

Does the seller choose to make the trade, and sell his house at the agreed upon price? Yes.

Does the buyer choose to make the trade, and buy the house at the agreed upon price? Yes.

Do I make a profit? Yes. To make this profit, in this case (given that substantial likelihood of profit was thoroughly established, through examination of such facts those as mentioned above) or, without question, consistently over time, is rationality required? Yes. Have I exercised productivity, i.e., the creation of legitimate values, whether goods or services? Not that I can tell.

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Do I make a profit? Yes. To make this profit, in this case (given that substantial likelihood of profit was thoroughly established, through examination of such facts those as mentioned above) or, without question, consistently over time, is rationality required? Yes. Have I exercised productivity, i.e., the creation of legitimate values, whether goods or services? Not that I can tell.

You have produced a solution to a desire. Someone is willing to pay you for it.

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Do I make a profit? Yes. To make this profit, in this case (given that substantial likelihood of profit was thoroughly established, through examination of such facts those as mentioned above) or, without question, consistently over time, is rationality required? Yes. Have I exercised productivity, i.e., the creation of legitimate values, whether goods or services? Not that I can tell.

You have produced a solution to a desire. Someone is willing to pay you for it.

Hi Arnold,

The seller, due to extreme motivation, sold his house, let us assume, at 50% of FMV (fair market value) following negotiations. Did he desire to sell it at that price at the close of negotiations, for whatever reason? Yes.

The buyer bought the house, let us assume, at 60% of FMV following negotiations. Did he desire to buy it at that close at the close of negotiations, for whatever reason? Yes.

Did I make a profit made by virtue of the difference between the prices of purchase and sale? Yes.

Was any productive work involved in exchange for that profit? Rationality, given the probability of profit was justifiably established to any meaningful degree, through knowledge of factors including a thorough grasp of the marketplace, yes. But productive work? No, I don't think so.

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The seller, due to extreme motivation, sold his house, let us assume, at 50% of FMV (fair market value) following negotiations. Did he desire to sell it at that price at the close of negotiations, for whatever reason? Yes.

The buyer bought the house, let us assume, at 60% of FMV following negotiations. Did he desire to buy it at that close at the close of negotiations, for whatever reason? Yes.

Did I make a profit made by virtue of the difference between the prices of purchase and sale? Yes.

Was any productive work involved in exchange for that profit? Rationality, given the probability of profit was justifiably established to any meaningful degree, through knowledge of factors including a thorough grasp of the marketplace, yes. But productive work? No, I don't think so.

The "fair market value" is the price agreed upon by a willing buyer and a willing seller. It is not some kind of intrinsic value.

If a man buys a house for $200K and later sells it for $100K, what is the fair market value? Answer: the $200K when he bought it and the $100K when he sold it. If the speculator who bought the house resells it for $120K, that is the fair market value. The speculator added $20K of value to the property.

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"Production is the application of reason to the problem of survivial." [Ayn Rand, What is Capitalism, Capitalism the Unknown Ideal, p 17.]

"Wealth is the product of man's capacity to think." [Ayn Rand, The Meaning of Money, For the New Intellectual, p89.]

"The virtue of Productiveness is the recognition of the fact that productive work is the process by which man's mind sustains his life, the process that sets man free of the necessity to adjust himself to his background, as all animals do, and gives him the power to adjust his background to himself. Productive work is the road of man's unlimited achievement and calls upon the highest attributes of his character: his creative ability, his ambitiousness, his self-assertiveness, his refusal to bear uncontested disasters, his dedication to the goal of reshaping the earth in the image of his values. "Productive work" does not mean the unfocused performance of the motions of some job. It means the consciously chosen pursuit of a productive career, in any line of rational endeavor, great or modest, on any level of ability. It is not the degree of a man's ability nor the scale of his work that is ethically relevant here, but the fullest and most pruposeful use of his mind." [Ayn Rand, The Objectivist Ethics, The Virtue of Selfishness, p26.]

"The maintenance of life and the pursuit of happiness are not two separate issues. To hold one's own life as one's ulitmate value, and one's own happiness as one's highest purpose are two aspects of the same ahcievement. Existentially, the activity of pursuing rational goals is the activity of maintaining one's life; psychologically, its result, reward and concomitant is an emotional state of happiness. It is by experiencing happiness that one lives one's life, in any hour, year or the whole of it. And when one experiences the kind of pure happiness that is an end in itself - the kind that makes one think: "This is worth living for" - what one is greeting and affirming in emotional terms is the metaphysical fact that life is an end in itself." [Ayn Rand, The Objectivist Ethics, The Virtue of Selfishness, p29.]

When a speculator buys a piece of property from a willing seller, he is buying a value. The seller of the property is willing to accept the value he receives, does not see the larger value in the property or does not care to gain from a possible larger value. The speculator is speculating that there is someone that will see the larger value in the value that he has just purchased and is willing to take the risk on his assumption. The specualtor is a go between for a person that does not recognize the value and someone that does recognize the value in the property. He is the finder of values that are not recognized by the person selling the property (and others), for the person that does recognize the value.

An example of a different kind might help. A person dies and leaves in their will property to a nephew. The property is filled with trees in what seems like the middle of no place to the nephew. The nephew does not care to take care of the property and decides he will sell it to anyone willing to accept his price. A specualtor comes along and recognizes the value in the piece of property that the nephew does not. The value could come in many different forms, but let us use the tress. The trees happen to be ever-green/christmas tress, that are ready or almost ready for harvest. The speculator buys the property and then begins his search for the person that will value the property at a higher value than the nephew. A value that was not there nor seen buy the nephew has just been created by the speculator and the new buyer.

Now if you want to keep thinking that a speculator's work is unethical and unproductive go right ahead. But, the speculator is very productive in producing values that were not recognized, along with other things, and most importantly, the production of his survival by producing a profit which means wealth so that he can keep living.

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Was any productive work involved in exchange for that profit? Rationality, given the probability of profit was justifiably established to any meaningful degree, through knowledge of factors including a thorough grasp of the marketplace, yes. But productive work? No, I don't think so.

Why are you limiting productiveness to productive work involving concrete things?

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The "fair market value" is the price agreed upon by a willing buyer and a willing seller. It is not some kind of intrinsic value.

Yes .... ?

The speculator, assuming no added value in relation to the property, e.g. via rehabbing, did profit $20k, and the price at purchase and at sale was established in each case via negotiation between the involved parties, and agreed upon by both parties in each case, for whatever motive.

Was any productiveness -- any value creation -- exercised in relation to the $20k? Not that I can see.

Was rationality needed? Yes, to, e.g., thoroughly establish a significant likelihood of profit. But I don't see how any values were created in this process.

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Now if you want to keep thinking that a speculator's work is unethical and unproductive go right ahead. But, the speculator is very productive in producing values that were not recognized, along with other things, and most importantly, the production of his survival by producing a profit which means wealth so that he can keep living.

I do not consider speculation unethical -- there is rationality involved in the identification of an opportunity: in the grasp of the marketplace; in the discovery of the opportunity, and in the actions needed to take advantage of it. And we are assuming, of course, there is no theft or fraud involved.

But, as in the case of a successful futures speculator, or one who has discovered a method for gambling that, over the course of many trials, significantly improves the win rate, rationality is exercised, yes, and the money is won by means of no immorality that I can see, but I do not see how productiveness is exercised.

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The "fair market value" is the price agreed upon by a willing buyer and a willing seller. It is not some kind of intrinsic value.

Yes .... ?

The speculator, assuming no added value in relation to the property, e.g. via rehabbing, did profit $20k, and the price at purchase and at sale was established in each case via negotiation between the involved parties, and agreed upon by both parties in each case, for whatever motive.

Was any productiveness -- any value creation -- exercised in relation to the $20k? Not that I can see.

Was rationality needed? Yes, to, e.g., thoroughly establish a significant likelihood of profit. But I don't see how any values were created in this process.

The value of sustaining his life was produced through his productiveness. A value is that which one acts to gain and or keep. Is not your life a value, that the production of a profit allows you to sustain?

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Once again, the value is to the seller, not something physical added to the property.

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Was any productive work involved in exchange for that profit? Rationality, given the probability of profit was justifiably established to any meaningful degree, through knowledge of factors including a thorough grasp of the marketplace, yes. But productive work? No, I don't think so.

Why are you limiting productiveness to productive work involving concrete things?

"Productiveness" is the process of creating material values, whether goods or services. (Objectivism: The Philosophy of Ayn Rand, Penguin Group, 1991?, p. 292.

I would modify this definition in the context of one profession in particular, namely, (rational) psychology, in the context of therapy, where a benefit, and service, an immense service, if well done, does indeed exist -- but the effect in entirely upon the patient's consciousness.

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Once again, the value is to the seller, not something physical added to the property.

In this context, ewv, I think that there is a value to both the buyer and the seller, in the context of their own values -- otherwise they would not have agreed to the transaction, in each case.

Was there any productive work involved on my part, though? Rationality, yes; but productive work? No, I don't think so. What values did I create in this process? None that I can see.

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"Productiveness" is the process of creating material values, whether goods or services. (Objectivism: The Philosophy of Ayn Rand, Penguin Group, 1991?, p. 292.

I would modify this definition in the context of one profession in particular, namely, (rational) psychology, in the context of therapy, where a benefit, and service, an immense service, if well done, does indeed exist -- but the effect in entirely upon the patient's consciousness.

It also applies to education, but if you have to add isolated additions to a general definition there is something wrong with the understanding of the concept and its integration.

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The value of sustaining his life was produced through his productiveness. A value is that which one acts to gain and or keep. Is not your life a value, that the production of a profit allows you to sustain?

Yes, my life is a value.

Yes, I generated a profit by means of my actions in relation to this transaction.

Yes, the 'work' involved here -- though not involving the creation of values on my part -- may have allowed me to pay the bills, and even allowed me to fund other projects that are of an unquestionably productive nature.

But in relation to this wealth -- was any productiveness, defined as the creation of values by means of a man's own mind through which he sustains his life, either directly or through trade, exercised? No, I don't see how.

Is this unethical? No, I don't see how that could be demonstrated.

But would I regard the wealth thus gained in any similar way to that in which I would regard wealth received in exchange for a creative, intellectual creation? No, I don't think so. Same for gambling winnings, even though the intellectual challenge of beating the house on a regular basis might be interesting to some.

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"Productiveness" is the process of creating material values, whether goods or services. (Objectivism: The Philosophy of Ayn Rand, Penguin Group, 1991?, p. 292.

I would modify this definition in the context of one profession in particular, namely, (rational) psychology, in the context of therapy, where a benefit, and service, an immense service, if well done, does indeed exist -- but the effect in entirely upon the patient's consciousness.

It also applies to education, but if you have to add isolated additions to a general definition there is something wrong with the understanding of the concept and its integration.

I would argue, ewv, that the problem is rather with a definition that describes productiveness only in the context of material values -- and does not include in that definition the effects of productive work that focuses solely upon the actualization of consciousness. Yes, education is another good example. :-) Although rational education without question does, I think, require an understanding of developmental psychology, and involve an application of that understanding to the curriculum.

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John, do you agree with Ayn Rand's definition of production which is "the application of reason to the problem of survival"? If you do, than anything you do that allows you to surive (ethically of course), takes productiveness.

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John, do you agree with Ayn Rand's definition of production which is "the application of reason to the problem of survival"? If you do, than anything you do that allows you to surive (ethically of course), takes productiveness.

I would offer Miss Rand's definition as given in Galt's speech, which I think indicates the meaning of productiveness more thoroughly:

"Productiveness" is your acceptance of morality, your recognition of the fact that you choose to live–that productive work is the process by which man's consciousness controls his existence, a constant process of acquiring knowledge and shaping matter to fit one's purpose, of translating an idea into physical form, of remaking the earth in the image of one's values... (Galt's Speech) [italics added]

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Was any productive work involved in exchange for that profit? Rationality, given the probability of profit was justifiably established to any meaningful degree, through knowledge of factors including a thorough grasp of the marketplace, yes. But productive work? No, I don't think so.

Why are you limiting productiveness to productive work involving concrete things?

"Productiveness" is the process of creating material values, whether goods or services. (Objectivism: The Philosophy of Ayn Rand, Penguin Group, 1991?, p. 292.

I would modify this definition in the context of one profession in particular, namely, (rational) psychology, in the context of therapy, where a benefit, and service, an immense service, if well done, does indeed exist -- but the effect in entirely upon the patient's consciousness.

Dr. Peikoff's statement is not the definition of productiveness. It is a description of one aspect of it.

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Once again, the value is to the seller, not something physical added to the property.

In this context, ewv, I think that there is a value to both the buyer and the seller, in the context of their own values -- otherwise they would not have agreed to the transaction, in each case.

Was there any productive work involved on my part, though? Rationality, yes; but productive work? No, I don't think so. What values did I create in this process? None that I can see.

Do you not see the profit that you've created?

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John, do you agree with Ayn Rand's definition of production which is "the application of reason to the problem of survival"? If you do, than anything you do that allows you to surive (ethically of course), takes productiveness.

I would offer Miss Rand's definition as given in Galt's speech, which I think indicates the meaning of productiveness more thoroughly:

"Productiveness" is your acceptance of morality, your recognition of the fact that you choose to live–that productive work is the process by which man's consciousness controls his existence, a constant process of acquiring knowledge and shaping matter to fit one's purpose, of translating an idea into physical form, of remaking the earth in the image of one's values... (Galt's Speech) [italics added]

So, because I do not make anything of a physical form such as steel, furniture or anything else of a concrete form, I am not productive? Because I am an exercise trainer I am not using productiveness to sustain my life? I must disagree and restate that production is "the application of reason to the problem of survival."

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So, because I do not make anything of a physical form such as steel, furniture or anything else of a concrete form, I am not productive? Because I am an exercise trainer I am not using productiveness to sustain my life?

Without question, Ray, no.

A service profession can be an entirely valid form of productiveness, given that you are offering a genuine value to your clients in exchange for that which you receive from them in trade. Whether, e.g., a dry cleaner; or barber; or nutritional consultant; an exercise trainer; or rational psychologist.

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Dr. Peikoff's statement is not the definition of productiveness. It is a description of one aspect of it.

Is this the case? If so, the fact that this description applies only to the context of material values, and that there is another, more inclusive, definition of productiveness, is not indicated.

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Once again, the value is to the seller, not something physical added to the property.

In this context, ewv, I think that there is a value to both the buyer and the seller, in the context of their own values -- otherwise they would not have agreed to the transaction, in each case.

Was there any productive work involved on my part, though? Rationality, yes; but productive work? No, I don't think so. What values did I create in this process? None that I can see.

Do you not see the profit that you've created?

I have an extra $10k in my bank account, yes. I don't see, though, that created anything in the process. As with, for example, a gambling system, developed through the application of thorough, rational analysis, that regularly wins at the blackjack table. Rationality? Yes. Productivity? No, I don't think so.

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Once again, the value is to the seller, not something physical added to the property.

In this context, ewv, I think that there is a value to both the buyer and the seller, in the context of their own values -- otherwise they would not have agreed to the transaction, in each case.

Was there any productive work involved on my part, though? Rationality, yes; but productive work? No, I don't think so. What values did I create in this process? None that I can see.

Do you not see the profit that you've created?

I have an extra $10k in my bank account, yes. I don't see, though, that created anything in the process. As with, for example, a gambling system, developed through the application of thorough, rational analysis, that regularly wins at the blackjack table. Rationality? Yes. Productivity? No, I don't think so.

You agree with every element of productivity in all of your above examples whey you say "yes" after all of your own questions. Yet you say "no" when it comes to the concept itself. I must say I can only say "I don't get your disconnect." I get the impression that your concept of productivity here is different than the Objectivist definition and conception. This is probably why you aren't seening "yes". This is much like your disagreement with the concept of "virtue" in the parental obligation thread. I'd recommend you putting in writing exactly what your concept of productiveness is, and then distinguish it from the Objectivist concept.

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