Values and Virtues

Part III of Money as a Reflection of Political Values, Virtues, and Human Order

Previous Parts

• Introduction
• Part I - Politics, Values, and Money
• Part II - A Defense of "Neutral" Money

Prior to moving forward with a critique of “neutral money”, it would be worthwhile to set the stage as to why what we value as individuals and society should be in line with the common good, and why upholding certain virtues and values benefit individuals as well as the common good.

Self-interest, Individualism, and the Common Good

To start, the right-wing libertarian perspective, as outlined in Part II of this essay series, maintains that by individuals pursuing their own self-interest, a spillover effect occurs that benefits the whole. In that sense, the common good is a byproduct of individuals pursuing their own ends, and there is no need for a direct intent by individuals or parties in a society to contribute to the common good or even have the common good in mind. What is key in this argument is that the common good is still of importance – allowing individuals to pursue their self-interest will benefit everyone, i.e. the common good. This is important to highlight because it illustrates that harming or obstructing the common good is a vice in libertarian thought. Even if one believes that greed is good, greed results in a benefit for all as a byproduct. Now imagine a community in which greed is celebrated and in which individuals are motivated to and rewarded for pursuing their own self-interest with disregard of the common good. In this community the values that are pushed out are exclusively focused on individual self-interest and material gain. What might such a community lead to? Would it lead to the common good as a byproduct? Or would it thwart the common good and the good life?

Let us first approach how relationships might evolve in a society that purely upholds self-interest as the ultimate goal. Say a butcher sets up shop for maximal profit and self-interest as the ultimate goal with disregard to her role in the community she’s in. All the relations and transactions that the butcher conducts with its customers are focused on maximizing the butcher’s interests. At the same time, the customers want to maximize their interest as well and are aware that the butcher is also looking to maximize her interest. Every time the customer sets foot at the butcher’s shop, the customer gets feelings of skepticism and interrogates the butcher to make sure he is receiving good quality meat as marketed and that the price is fair in accordance with the meat’s quality. While there is an argument to be made that for the butcher to maximize her interest she would need to be honest and provide the best products, by self-interest being the utmost value upheld and with reality of imperfect free market dynamics, the butcher can be clever and deceptive in her marketing and selling approach. In such an environment that is purely focused on self-interest, distrust between individuals and parties in a community would be prevalent. Every transaction would be based on distrust of the other and approached as a form of war like negotiation with the goal of beating the other. While such negotiation and war like approach to transactions and relations might be beneficial in certain international or big business circumstances, on a local level where different parties rely on each other for essential services, such an environment distorts the innate social and relational life of humans and incubates distrust between individuals who rely on each. Individuals and households in such a community would be burdened by the pressure of having to approach every relation and transaction with another party in their community with extreme caution and suspicion knowing that everyone is out to benefit themselves with disregard of the other. This environment negatively affects the lives of individuals and households in the community, as well as productivity and sustainable growth within the community. This mistrust and war-like approach on the local level would lead to instability due to different parties opposing each other and not trusting that the services offered by specific parties are being provided with good intent and with the others’ needs in mind. This depiction is of course an extreme case, but the point portrayed is that pushing pure self-interest as a virtue may incubate such an environment overtime.

From an Aristotelian perspective, the community is the sum of its parts. The parts are the individuals, the households, businesses, and political institutions. All those parts make up the polity. If we look at a specific institution within a polity, take the military for example, the individuals who make up the army work together and uphold the virtues and values that are reflected by the military organization as a whole. In practice, when the military is conducting an operation, the soldiers act in coordination to achieve their mission. If the soldiers just looked out for their individual lives and interests while conducting an operation, the mission might fail. It is the combination of the soldiers looking out for their own lives as well as working as a collaborative team that leads to success and keeps them alive. At a company, the same reasoning applies. While there are individuals working at a company for their own interest, it is the collaboration of the individuals with their team and with other departments at the company that allows for success. Different members in the team and different departments within the company not being on the same page leads to failure and trouble at the organization, as well as tension between the teams and employees at the company. Another example to illustrate how pure self-interest undermines success could be made by using sports. If players in a basketball team start focusing only on their own fame and success, this might lead them to stop passing the ball with a strategy to win as a team, and each player would start hoarding the ball so they can accumulate the most shots scored to beat records, be the most valuable player, and gain fame. This corrupts the nature of the basketball team and the nature of what it means to be a basketball player in a team. With that context, a strongly held conviction of pure self-interest and extreme individualism can undermine the functioning of organizations and groups. The common good in such a case is not achieved as a byproduct but is rather undermined due to the focus of self-interest as the ultimate good by individuals in the community.

To be clear, this is not to say that individuals should be commanded by central figures to uphold strictly held values and to conduct their daily lives with the common good in mind at all costs, or that they should sacrifice their induvial interests in the name of the public good. But it is to highlight that a pure focus and belief in self-interest undermines the social and collaborative nature of humans and the order of things since a conviction of self-interest becomes a force guiding people and it comes in the way of community building and human flourishing.       

Material Goods as Means and Ends  

Does virtue influence our approach to how we perceive and use things? Does it also influence the function and purpose of specific goods and services?

To illustrate virtue in finance, Ferraro & Sison leverage the work of Aristotle and MacIntyre (Ferraro & Sison, 2017). One of the main themes throughout the paper is Aristotle’s analysis on economic activity as “natural chrematistics” vs “non-natural chrematistics” and the shared sentiment by MacIntyre termed as “internal goods” vs “external goods”.

From the point of view of Aristotle, there are “natural” economic activities (natural chrematistics) that are necessary to sustain our lives and that fulfill a greater goal rooted in non-material gain. In other words, material goods are sought after to serve an end beyond material gain. This type of economic activity is deemed as virtuous and will result in the good life for individuals and the community. On the other hand, seeking material goods for the sake of accumulating material goods as an end in itself is a form of non-natural economic activity (non-natural chrematistics) and corrupts human excellence, thus impeding the good life. As for Macintyre, Ferraro & Sison highlight his work regarding “internal goods” and “external goods”. MacIntyre claims that institutions and individuals focused on “external goods” leads to corruption and undermines the virtues and common good. By focusing on the “external goods” the practice of institutions or individuals gets distorted and deters their primary functions and reason for being established in the first place. Similar to Aristotle, pursuing “external goods” as an end in and of itself is a vice that results in harm for individuals as well as the common good since it corrupts the foundation of those establishments and individual pursuits.

An example of how “non-natural” material accumulation impedes the good life from an individualistic perspective is that an unsatiated spirit arises by having material goods as the ultimate end. Given that material goods only result in short-term happiness, the long-term form of happiness that humans aim to is outweighed by short-term desires which eventually leads to a lack of sustained fulfillment. An environment in which material goods are perceived as an end in and of themselves may provoke animal spirits for continuous, irrational pursuit of material goods and speculation, corrupting virtues and values such as temperance, prudence, and honesty that lead to a good life according to Aristotle (see Politics by Aristotle). From a communal perspective, since individuals and households make up the community, lust for material goods as an end in themselves harms the community since the values of the constituents who make up the polity gets corrupted and members and organizations in the community stop functioning in a way that will achieve human flourishing.

Ferraro & Sison highlight that the functions and purpose of finance in an economy are to promote household savings, allocate funds to productive use cases, manage risk, and facilitate payments (Ferraro & Sison, 2017). All these functions by financial institutions and professionals contribute to human flourishing and add value. With the functions of finance outlined, Ferraro & Sison then leverage Aristotle’s and MacIntyre’s thinking to argue that when financial institutions and professionals focus on the “external goods”, the function of finance is then undermined at the detriment of the participants’ and communities’ happiness and good life. The point here is that approaching finance as a means to accumulate money as an end in itself corrupts the functions of finance in a society. For example, if investment banks start pushing any type of deal for the sake of accumulating fees and commission without considering the context and value of the projects and deals, the role of finance of allocating funds to productive use cases would be undermined, and funds will be misplaced resulting in a loss of funds by savers as well as a lack of new investment into productive assets that may contribute to development, ingenuity, and innovation. This undermines the human flourishing that finance is supposed to accomplish.

In sum, the main theme here is that goods, services, and products are “external goods” that allow for non-material gain and fulfillment on an individual and community level. If they become the end in themselves detached from any other productive or beneficial use, the function is corrupted, and human flourishing gets impaired.

Teleology and Money

While goods and services have ends beyond themselves, it is important to highlight that the end or purpose of these goods are not necessarily fixed with a focus on their end goal or purpose. As Dick highlights, while the telos of money plays a role in our perception of what money is, the telos alone should not be the focus on what money ought to be (Dick, 2021). A normative approach to what money ought to be outweighs a pure teleological approach. What is meant by a pure teleological approach here is that a specific good or item only serves a specific end and must only be used in such a way. For example, from a pure teleological approach, a pen can only be used for writing and nothing else. However, what if the pen can also be used for other purposes such as “using the hollow barrel of the pen for an emergency tracheotomy” (Dick, 2021). With that view, flexibility as to how tools should be used allows for a better overall function that goes beyond their pure intended purpose. This approach to goods can better serve our needs. In other words, systems and institutions should not be established with the focus of the item at hand or letting the item or tool flourish for its own sake, but should rather make the items or tools work for humans. It is a combination of telos as well as other fundamental considerations that should be taken into account in approaching how things ought to be or ought to be used. Having a normative approach to how the items or tools ought to be used or what they can serve is a priority if we are to “design” just and virtuous systems and institutions.

In what follows in this essay series, many of the arguments presented regarding money will be rooted in this section and on the points raised regarding the common good vs pure self-interest, “natural” vs “non-natural” chrematistics, and teleology.  

Part IV will be a critique of “neutral” money – Part IV - A Critique of "Neutral" Money

References

• Ferrero & Sison, Aristotle and MacIntyre on Virtues in Finance
• Aristotle. (1905). Aristotle’s Politics. Oxford :Clarendon Press,
• Dick, D. G. (2021). What money is and ought to be. Journal of Social Ontology, 6(2), 293-313