Capitalism is Egoism for All

We know from Atlas Shrugged, and many other Ayn Rand writings, that capitalists are egoists. They trade to make a profit, and this is morally admirable. They are wealth creators.

We should be very grateful to millionaires and billionaires who earn their money through voluntary trade. (Let me make clear that in no way do I sanction dishonesty or breaking the law. Businesspeople who disagree with one or more laws should nevertheless obey them and work within the law to try to get them changed). Honest capitalists provide us with a never-ending stream of goods and services that make our lives better and, at the deepest level, make our survival possible.

But it is important not to forget that customers and employees are egoists too. Trade is a two-way street. The capitalists want to get the highest price possible for what they provide, but customers want to get the lowest price possible for what they buy. (Of course, customers may look for other values aside from price when buying, e.g., company values and reputation). Their goal is not to ensure the producer’s profit or even care about it. They do not sacrifice themselves to the seller. Buyers routinely compare sellers to each other. They look for the best deal they can get and are quite willing to abandon one seller for another in a second if an alternative value is greater. The same principle applies to employees. Applicants want the best job they can get. If a given employer does not offer what they want, they can and do look elsewhere. If a company does not treat existing employees justly, or if the employees witnesses fraudulent activities, they can look for better jobs with no concern for its effect on their current employer’s bottom line.

It is revealing that capitalists are condemned for being egoistic, but customers and employees are not, even though they profit in their own way: they act to get what they personally want within the context of what is possible (as do capitalists). If altruism were the gold standard in ethics, then it should follow that customers and employees would sacrifice their wants to make sure the capitalists make money. But they do not, and no one demands that they do. In contrast, capitalists are vilified for making profits.

Why the double standard? It is that capitalists have more productive ability and have achieved more than others, and this, according to the left, is unfair. The leftist fantasy is that everyone comes out the same because they wish it to be so. Because some people are, in fact, more able than others, egalitarianism is, at root, a revolt against reality. They want capitalists to produce but not be commensurately rewarded. Full socialism is too radical to be accepted today, so, as a compromise, capitalists are allowed to function, but the government takes as much of their money as they can get away with. The latest proposal, over and above big tax increases, is to seize some of their assets.  Egalitarianism is to trump rights. For the left, altruism is a one-way street. Only customers (recipients, lower-level employees) get to be egoistic and keep what they earn. Law-abiding capitalists are to function as selfless servants of the less able. The left, in short, advocates social injustice. They hate the good for being the good. If America chooses to exploit the people it should admire, then it is doomed to end up as another failed nation in the dustbin of history.



Edwin A. Locke is Dean’s Professor of Leadership and Motivation Emeritus at the R.H. Smith School of Business, University of Maryland.
He is a Fellow of the Association for Psychological Science (APS), the American Psychological Association, the Society for Industrial & Organizational Behavior, and the Academy of Management. He is the recipient of the Distinguished Scientific Contribution Award (Society for I/O Psychology), the Lifetime Achievement Award from the Academy of Management (OB Division), the J. M. Cattell Award (APS) and the Distinguished Scientific Contribution Award from the Academy of Management.
He, with Gary Latham, has spent over 50 years developing Goal Setting Theory, ranked No. 1 in importance among 73 management theories. He has published over 320 chapters, articles, reviews and notes, and has authored or edited 13 books including (w. Kenner)

The Selfish Path to Romance

, (w. Latham)

New Directions in Goal Setting and Task Performance

, and

The Prime Movers: Traits of the Great Wealth Creators

. He is internationally known for his research on motivation, job satisfaction, leadership, and other topics.
His website is:

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