organon

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

339 posts in this topic

I get the impression that your concept of productivity here is different than the Objectivist definition and conception.

On what basis would you argue that my grasp of productivity is not rational?

The only difficulty I see with Dr. Peikoff's formulation, given that it is intended as a general definition, is that it does not include work that focuses upon the development and/or actualization of consciousness, e.g., as with rational psychological therapy. In the case of rational therapy, if we assume that all of the change that is wrought in the mind of the patient is accomplished through dialogue, there are no material values involved.

(In the case of rational education, material values, in the form of, e.g., textbooks that are (properly) informed by a grasp of development psychology, are present.)

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

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

So when I'm home reading a book I'm not being productive?

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I must say I can only say "I don't get your disconnect."
Paul - the problem arises because 'creating value' is being invalidly limited to one form. Note that the action which produces a material value - specifically material wealth (the 10k) - for one's SELF, where one previously did not have said material value, is discounted as the creation of wealth. That is the error here. (And it is correct to identify that error as the same which occurred in the discussion of 'virtue' in the other thread).

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So when I'm home reading a book I'm not being productive?
That would depend, wouldn't it? If that is one step in a larger process of creating a material value, that could indeed qualify as productiveness.

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

A lot hinges on "material". If, for example, computer programming doesn't classify as "material" in the way he meant it, his definition is flatly wrong.

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

A lot hinges on "material". If, for example, computer programming doesn't classify as "material" in the way he meant it, his definition is flatly wrong.

What would cause computer programming to be excluded from Dr. P's definition of productiveness?

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What would cause computer programming to be excluded from Dr. P's definition of productiveness?

It isn't clear to me how programming, or more broadly intellectual property, falls into the category of "material values", given that material generally means some tangible thing with mass. I don't see the point of having the adjective "material" on "values". There is probably a good reason but I'm not currently seeing it. The issue would not arise if the statement were simply: "Productiveness" is the process of creating values, whether goods or services.

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The same way any man making an honest profit does, by the use of his mind, fundamentally.

Yet, was there productive work involved on my part, that would allow me to take pride in this wealth?

The answer would apply also, I imagine, to gambling winnings.

Is there any immorality involved in achieving that wealth? Was it achieved through theft or fraud? No.

But was any productive virtue exercised in its achievement?

Were I to pursue such an enterprise, and succeed in achieving wealth from that pursuit, I think I would view the money very differently than money received in exchange for creative, intellectual work.

John

John, I think you need to concretize this more to understand where the productive or creative effort is. You pose a reasonable question, essentially: "If I buy property from one person and turn around and sell it to another immediately, for a whole lot more money, where have I done any actual work? Where is the productivity on my part?"

Have you done such an exchange? For those who are good at it, it certainly can sound effortless. I have friends who flip properties, as well as those who long-term invest. I also invest, but, lately, in stocks, etc.

When you see such transactions in detail, they don't look so trivial. Yes, you buy the property from the distressed or eager owner. Why don't they hold on and sell it for more? Or why don't they do more creative marketing or market further afield (internet, etc.)? Why not go for Sale-by-Owner and pocket more cash? How about upgrading, or putting lipstick on the pig? Why don't they do all those things that you may or may not do? Maybe they don't know how, or don't have the presentation or research skills or liquidity to do so. Even if you do no more than find a buyer, that's non-trivial. If you happen to know someone who wants such a place and would be willing to meet your much higher price, then you've found a buyer that they haven't and you know something about that buyer and the price they're willing to pay that the seller doesn't. If you are going to do a pre-foreclosure auction, or some other creative technique to get that house sold at your desired price, that is also - when you actually do it - non-trivial.

I've tried, a few times in my life, to do some kind of sales. I suck at it. I can sell my own skills and talents; I've done that effectively as a business and technical consultant and as a performer. I've written successful marketing materials and resumes for other people that have gotten them jobs where they couldn't before. Starting out as a technical specialist, I aggressively charted a course and marketed myself on up the scale well beyond my early colleagues. But selling product, in the classical way, on the floor or on the phone, that sort of thing, I don't have the talent that others I greatly admire do. I took a pre-foreclosure course. The successful, highly-motivated folks who made their millions first by using these techniques, later by selling the workshops, saw nothing of making up fancy brochures for each property, shipping them out for auctions, planting flyers and mailers and door-hangers everywhere, buttonholing people at events, brazenly going into banks and pitching on a troubled property, etc., etc. They LOVE this stuff. You can tell. I'm sure there are many on this forum that are good at this. I took a good honest look at my own interests and talents along these lines, I took a mental inventory and there's no stock on the shelves: I'm not that person. I can do other things, but I don't want to be doing this stuff.

I'm just mentioning the above to point out that there are ways of making money that are easy to others that are hard for me and vice versa. To someone who is good at this property 'arbitrage' (as Phil put it), it's nothing. They have qualified the best properties and motivated sellers, handled the pitch and the legal transactions, know the market and features to pitch to raise perceived value, lined up the best potential buyers, have access to the requisite professionals, and know how to close both sides of those transactions and move on. All of this takes knowledge and ability and drive. Talking about it as if it were buying and selling a candy bar, with both sides of that transaction just waiting to hand you the property and the money, doesn't take into account all of the things that one does to know the business and know when and how to make it happen.

Yes, sometimes, it just falls into your lap and it can even happen as you imply, you know a buyer, you know a seller, you pitch the high price and get it. Far more often, either the sale price is much closer to the market and the profit is far less, or the seller knows the market much better, or isn't so motivated to buy exactly that place, and it won't happen as you say. Sometimes, you get lucky. Luck like that tends to happen to prepared, knowledgeable, and industrious people, in my experience.

Such arbitrage can be highly risky, too. I have almost pounced on a couple of great deals in property, one of which, for example, turned out, through further research, to have been built over an old oil field that was still bubbling up toxic H2S and other lovely things. They put a tarp and dirt over the site and built condos. They didn't disclose the history in talking about the great opportunity. Others didn't do the research and ended up selling for less than they paid. The more you know, the fewer mistakes you make and the easier it looks. Don't be fooled.

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It isn't clear to me how...intellectual property, falls into the category of "material values"...
To be claimed as property, does not the value in question have to be given SOME material form?

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John, I think you need to concretize this more to understand where the productive or creative effort is. You pose a reasonable question, essentially: "If I buy property from one person and turn around and sell it to another immediately, for a whole lot more money, where have I done any actual work? Where is the productivity on my part?"

Have you done such an exchange? For those who are good at it, it certainly can sound effortless. ...

...When you see such transactions in detail, they don't look so trivial. ...

...I'm just mentioning the above to point out that there are ways of making money that are easy to others that are hard for me and vice versa. ...

...Yes, sometimes, it just falls into your lap and it can even happen as you imply, you know a buyer, you know a seller, you pitch the high price and get it. Far more often, either the sale price is much closer to the market and the profit is far less, or the seller knows the market much better, or isn't so motivated to buy exactly that place, and it won't happen as you say. Sometimes, you get lucky. Luck like that tends to happen to prepared, knowledgeable, and industrious people, in my experience.

The more you know, the fewer mistakes you make and the easier it looks. Don't be fooled.

While all of the above is quite true, I would point out the ease or difficulty one experiences in creating material values is irrelevant to whether an action is virtuous or not. Even if everyone performs the process and even if the process requires almost no effort whatsoever, that will not somehow render the action non-productive. It will not make it any less a virtue.

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I don't see the point of having the adjective "material" on "values".
Are there values which are not material? If so, what are some of them?

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I don't see the point of having the adjective "material" on "values".
Are there values which are not material? If so, what are some of them?

Intellectual property can be represented in a limitless number of particular material forms, but what is copyrighted are the actual words. The same with computer code, which can reside in magnetically aligned regions on a hard disk, tape, or any other storage format, but the form does not change the copyright. That's why IP is fundamentally different than a particular owned object - recognition of its validity depends on going up a layer of abstraction. You can in fact purchase a copy of say Atlas Shrugged but that gives you ownership of that particular physical copy. It does not give you any ownership in the text itself, even though it is represented in a material form in your particular copy. Arguably, what is copyrighted is not a material item, but an abstract sequence of words/bits that can be physically (materially) manifested in endless ways.

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Intellectual property can be represented in a limitless number of particular material forms, but what is copyrighted are the actual words.
But in order to copyright them - in order to consider them as property - they must be put into SOME material form. That is the point.

Until that has been done they are NOT property.

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Intellectual property can be represented in a limitless number of particular material forms, but what is copyrighted are the actual words.
But in order to copyright them - in order to consider them as property - they must be put into SOME material form. That is the point.

Until that has been done they are NOT property.

No, that is not the point, at least not the entire point. You did not address the real issue I described in my post. Of course the material to be copyrighted has to be presented in some physical form initially, but the copyrights to Harry Potter do not reside "in" J.K. Rowling's handwritten manuscripts but in a more abstract form that can be manifested in countless different ways. In this context, the particular material manifestation is an omitted measurement of the property.

Also, there is the point brought up by organon, which is very close to my point here: how would you characterize the productive work of a successful psychiatrist in material terms when the object of their work is another person's consciousness, which is certainly not material?

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No, that is not the point, at least not the entire point. You did not address the real issue I described in my post. Of course the material to be copyrighted has to be presented in some physical form initially...
And if it is NOT put into some material form?

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... the copyrights to Harry Potter do not reside "in" J.K. Rowling's handwritten manuscripts...
The copyright resides in the words JKR has made manifest. The particular form of manifestation is, as indicated, immaterial. But the necessity of SOME form of manifestation is absolute.
In this context, the particular material manifestation is an omitted measurement of the property.
Then it is fortunate NO "particular material manifestation" has been insisted upon. Only that there be some type of material manifestation. Without it, there can be no claim to property because there is no referent in reality to identify that which cannot then be duplicated.

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Thank you for your post, alann. :-)

... All of this takes knowledge and ability and drive. ...

Yes, without question; rationality, and the actions needed to take advantage of the opportunity, are without question engaged in, in order to carry out the transaction successfully.

Yet, is there any value creation on my part?

Same for trading currencies. Or winning at the card table.

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While all of the above is quite true, I would point out the ease or difficulty one experiences in creating material values is irrelevant to whether an action is virtuous or not. Even if everyone performs the process and even if the process requires almost no effort whatsoever, that will not somehow render the action non-productive. It will not make it any less a virtue.
This is a good point. It is virtuous to take action to achieve objective values. It does not matter whether the effort was greater or lesser than not taking that action, in fact taking an action that produces a disvalue could have taken greater effort. Your point is well-taken that pointing to a productive enterprise and saying: "That's too easy. What has he done to add value to the thing he's selling for a huge profit? How is that virtuous?" buys into the idea that effort is the primary in assessing ones productivity, rather than the material gain achieved. If the buyer was willing to buy and rationally values the property more than the money, then such a voluntary transaction allows each party to achieve a value.

But I was pointing out that there are more aspects to the transaction suggested as an example than what I thought to be a somewhat "floating" view of "flipping" or "arbitrage", or whatever you want to call it. My essential point is not that it's hard work -- for those who are good at it, it may actually be pretty easy. I was merely pointing out that concretization shows the elements missing in the description of such an enterprise: Things such as assessing the market, locating the undervalued property, locating a buyer, closing the deal, all of that.

My understanding/paraphrase of the original question was 'how virtuous can this be, if I'm just buying this thing and turning around and selling it for a ton of money? I added nothing productive." I don't agree with that assessment. If truly nothing productive was added, then people of any intelligence and knowledge would quickly eliminate the middle man. And I don't agree with the analogy to gambling. It assumes facts not in evidence about the attitude of the seller, middleman, and buyer. It's possible that they're taking a flyer, but that is not the norm for such a transaction. The middleman, if he wishes to stay in business and/or solvent, will know the market and be able to identify and jump on a good deal. He is not seeking risk as a thrill, as a rule, but trying to mitigate it by finding a good deal. And, as far as 'gambling,' even there, poker requires all kinds of skills, psychological insight, patience, etc., and enough people are willing to pay to watch poker that there are at least 3 syndicated series of poker championships circulating the cable programming, and name players have cadres of fans).

I am merely pointing out that, when one posits a question, invalid assumptions, if granted, can confuse the issue. Because I am one of those who isn't all that talented at such arbitrage, as a rule, I am aware of the falsity of assuming that there is no such talent and ability required, and that it requires no effort or skill and that there is no value added by the middle man, as if the seller would have achieved even the price he did and the buyer would have found that house or equivalent and paid less. It's possible, but that would have required more time and effort and, possibly, money, on the part of both. That time and effort is what was saved by the middle man. Sometimes the middle man is superfluous; if so, keep him out of the transaction. Otherwise, faulting him for making money in the transaction is an injustice.

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quote name='alann' date='Aug 20 2007, 07:04 PM' post='59038']

I am merely pointing out that, when one posits a question, invalid assumptions, if granted, can confuse the issue. Because I am one of those who isn't all that talented at such arbitrage, as a rule, I am aware of the falsity of assuming that there is no such talent and ability required, and that it requires no effort or skill and that there is no value added by the middle man, as if the seller would have achieved even the price he did and the buyer would have found that house or equivalent and paid less. It's possible, but that would have required more time and effort and, possibly, money, on the part of both. That time and effort is what was saved by the middle man. Sometimes the middle man is superfluous; if so, keep him out of the transaction. Otherwise, faulting him for making money in the transaction is an injustice.

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I find no fault in him that I can identify; and yet, as with poker, or trading currencies (all of which can involve, without question, virtue, in the form of, e.g., rationality) -- I don't see how productive virtue is exercised. Take trading currencies successfully, over the course of thousands of trades, over a course of years. Does this require significant virtue? Yes, I think so. But is productiveness involved?

Consider Edward Lewis, the hero in Pretty Woman. He was a corporate raider (I think is the term) who bought "companies in financial difficulty", broke them into pieces that were worth more than the whole, sold them off, and became a millionaire.

Was such activity necessarily unethical? No.

Was he happy? No, to a considerable degree. "We don't build anything, Phil; we don't make anything."

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But I was pointing out that there are more aspects to the transaction suggested as an example than what I thought to be a somewhat "floating" view of "flipping" or "arbitrage", or whatever you want to call it.
I understand. And I think we are in agreement with each others points here. :ph34r:

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I am merely pointing out that, when one posits a question, invalid assumptions, if granted, can confuse the issue. Because I am one of those who isn't all that talented at such arbitrage, as a rule, I am aware of the falsity of assuming that there is no such talent and ability required, and that it requires no effort or skill and that there is no value added by the middle man, as if the seller would have achieved even the price he did and the buyer would have found that house or equivalent and paid less. It's possible, but that would have required more time and effort and, possibly, money, on the part of both. That time and effort is what was saved by the middle man. Sometimes the middle man is superfluous; if so, keep him out of the transaction. Otherwise, faulting him for making money in the transaction is an injustice.

I find no fault in him that I can identify; and yet, as with poker, or trading currencies (all of which can involve, without question, virtue, in the form of, e.g., rationality) -- I don't see how productive virtue is exercised. Take trading currencies successfully, over the course of thousands of trades, over a course of years. Does this require significant virtue? Yes, I think so. But is productiveness involved?

OK, I think I see the question here. The wider issue is whether something in which a skill such as selling is applied to make money is productive, since that person is not creating something new. One might say that the author of a book on selling who comes up with new ideas, and/or integrates ideas into a new method of selling that enables others to sell more or for more profit, would be productive, but a salesman who reads the book or takes his course and then sells up a storm is not 'productive', because he's creating nothing new. Hmm.

I think there are degrees of creativity and, hence, productivity. The middle man in your example is not creating something new as Marie Curie, or Einstein, or Linus Pauling, or Thomas Edison, or Bill Gates did. He's applied his skills, located product, seller, and buyer, and conducted a transaction that allowed the three of them to get something they wanted. Nothing new resulted, although 3 people achieved values. Was he 'productive'? I think a definition is critical here. If Productivity is 'creating something of value', then the question is what did this middle man create? One could argue that there are transactions which would never have happened but for the creative intervention of a negotiator, salesman, or other middle man. Is the solution to the problems of two people that results in both receiving something of value to them not creative? Maybe the answer is 'it depends'. Was the solution creative or just pro forma. How creative is selling a candy bar? Well, Frank Woolworth, the inventor of the "5 and Dime" discount store revolutionized shopping, creating the first store in which the customers could handle and select merchandise themselves from bins. His concept of a "Discount" store did not exist before his came into being. I would suggest that he was highly productive. Do we say that a successful manager at one of his stores, applying his template and making substantial profits is not productive?

Does one have to be an innovator to be productive? Is it just than one has to create 'things' to be productive? Are you saying that the man who manufactures toys is productive, but a seller is not?

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Does one have to be an innovator to be productive? Is it just than one has to create 'things' to be productive? Are you saying that the man who manufactures toys is productive, but a seller is not?

Hi alann,

At least some of these issues were addressed here:

Is not a car salesman productive, and he does not add anything to the car? Is not a insurance salesman productive, and he has not added anything to the companies policies?

Ray is exactly right. Buying and selling a house, whether over 30 years or 30 days, is essentially similar to a sales job. If Apu runs the local Kwik-E-Mart, he is productive by providing a service: he locates in a convenient location a variety of goods. Flipping a house is much the same.

Hello Ed,

Without question, Apu is providing a service of value -- a locally available market, in which individuals can purchase groceries. He is without question offering, although perhaps at a premium (that they are gladly willing to pay), a value.

Now, re a salesman. What value does he provide?

Properly, I think, information regarding the value of a product: a thorough summary of its advantages, and why it is preferable to other options on the market.

Is this a valuable service, that a rational man is willing to pay for? Without question.

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Is it just than one has to create 'things' to be productive? Are you saying that the man who manufactures toys is productive, but a seller is not?
I believe that is indeed the claim being made here. Note this statement:
"We don't build anything, Phil; we don't make anything."
And further note, this statement is contrasted against the fact that the speaker makes enormous PROFIT.

As I pointed out to Paul back in post #54, it is this view of 'creation' which is in error. What qualifies as 'creating value' is being invalidly limited to one form of value creation ('building things'). As with the example referenced in #54, note that the action which creates a material value (more money) is being rejected as NOT creating a material value. That is a contradiction.

Obviously, the making of material wealth (in this case, profit) IS the creation of material value.

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