(Dis)honest Ways To Make It Rich

(DIS)HONEST WAYS TO MAKE IT RICH.

Money. In a world where most things come with a price tag attached, we are all obliged to try and acquire the stuff. This can be achieved through fair means or foul. But what is an honest way of becoming wealthy?

To my mind there is only one way to become wealthy through entirely honest means, and that is to provide a product or service that an informed customer may choose to spend his or her money on. The company that provides this product or service relies only on the actual quality of it to keep them ahead of competitors.

Furthermore, the honest boss of a company recognises that he or she is but one member of a team, and it was that collective which worked together to bring product X to the market. We might make a comparison to the conductor of an orchestra. A great conductor can make the difference between a performance that is merely OK and one that is sublime. It would be wrong, however, to attribute the excellence of the performance entirely to the person who happens to lead the orchestra. Obviously, were it not for the violinists, the trumpet players, the pianists, the percussionists and all the other members of the orchestra, bringing what is likely years of hard practice at perfecting the craft of playing their chosen instrument, there would be no music at all, sublime or otherwise.

The same can be said for the CEO of a company. A great CEO can make the difference between an outstanding year for the company and a merely average (or abysmal) one. But a CEO of a Fortune 500 company could no more bring its product to market by themselves than a conductor could wave his baton like a wand and create music, absent of all the other members of the team we call an orchestra. The honest boss recognises that he or she is but one person among many, and that it is actually the organisation the team comprises that earns those £billions multinational corporations bring in. The honest boss would not accept a financial reward that is so high other members of the team must necessarily do with so little even if they work full time their daily life is one of constant money anxiety. Of course, it would also be wrong to pay everybody the same, since people clearly have different levels of responsibilities and skills in any organisation. But there is surely a mutually beneficial compromise between the extremes of total equality and high inequality.

(Image from wikimedia commons)

NOT SO HONEST

Do all companies competing in the market adhere strictly to these conditions for honest money-making? Clearly not, as it is not too difficult to find examples of businesses that break at least one of the rules I just mentioned. To recap, the totally honest business:

1. Sells a product or service to an informed customer. In other words, whatever advertisement is used to try and sell the product gives an honest description of its advantages and disadvantages in comparison to rival products. Any potential customer truly knows exactly what it is they are about to pay for.

2. Relies only on the actual quality of that product/service in order to stay ahead of the competition. In other words, there is no lobbying the State to pass laws that disadvantage their competitors, grant monopoly rights that are then exploited through price hikes that would not be possible in true free market competition, and other distortions of the market.

3. Acknowledge that it is the company, not any one person, who earns the profit. This income should be distributed in a mutually beneficial way that avoids the injustices of total equality (which fails to compensate for differences in responsibility and talent) and extreme inequality (which places unnecessary anxiety on the disfavoured and can lead to structural violence, as the disenfranchised riot against what is an obviously rigged system). In a good business, every person from the bottom to the top is motivated by the hope of success; the bad business relies on the fear of failure to keep its employees working.

UNINFORMED CUSTOMERS

So, are customers always completely informed about the product they are about to buy? Not according to the documentary 'Will Work For Free':

"If I wandered into a phone shop, unsure of what to buy, and make the mistake of telling the salesperson that I am not too familiar with the differences, I leave myself open to product sale bias. In this scenario, the store has no problem selling the best products, so instead, I am presented with an inferior product which the store is struggling to offload. The salesperson's job here, becomes distorted and I the customer will most likely be subjected to either a sales pitch as opposed to honest insight".

Or how about this quote from the Daily Mail:

"The Herts and Essex Fertility Centre charges £1,247 for three drugs routinely prescribed to women on IVF. But the same prescriptions in the same quantities cost £876.72 from Boots or £929.22 from Asda. Couples who buy drugs from the clinics may have no idea they are paying over the odds or that they can get them elsewhere...Experts accused the clinics of exploitation, calling the way they charge for IVF drugs 'a complete racket'".

Neither of these quotes convey an impression of potential customers making decisions armed with a complete set of all facts. I dare say most people have had the experience of dealing with some salesperson or business who appears to be, shall we say, economical with the truth in order to ensure a sale.

BEND THOSE RULES

Moving on to the second condition for honest money making, I think it is fair to say that there are all kinds of distortions of the free market principle of trading true value for value under conditions of competition that favour only those who genuinely provide the best product/service. In fact, this quote from Ayn Rand's Atlas Shrugged sounds suspiciously like the actual (as opposed to some ideological 'free') market:

“When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favours–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed".

YOU ARE WORTH THAT? REALLY?

When you watch an athlete push their body to the limits of human capability and beat a record for the fastest sprint, the longest jump, the most perfectly executed dive and so on, you can only feel a sense of admiration for those who have put in such hard work to achieve this pinnacle, and a sense of humility that some are able to dedicate themselves to an effort more supreme than most of us could ever endure.

(Image from wikimedia commons)

But, given that the human body is capable of doing only so much, at some point an ever-decreasing time limit for completing a sprint or other record-breaking achievement starts to seem kind of...dubious. And then, it happens. The once-celebrated athlete is exposed as a cheat. He took performance-enhancing drugs, or some other means of gaining an edge that is against the rules of professional sport.

It is, by the way, a bit unfair to dismiss those who are caught relying on such dubious tactics as just cheats. It is almost certain that these athletes trained every bit as hard as those who never touched performance-enhancing drugs. It is not like they just slobbed around in front of the TV all their lives, then one day injected themselves with something and wandered down to the Olympic park to beat Usain Bolt. No, their result came about by a mixture of honest and dishonest methods.

Just as we understand that an individual can only break a sports record by a certain amount before it becomes obvious that they must have relied on some kind of cheating, so too should we recognise that an individual can only make so much money for themselves before their wages and bonuses are the result, not simply of their own merit, but a combination of honest work and cheating, of either rigging the system to favour themselves and disadvantage their fellow workers, or being in a position to benefit from a system that is already rigged. Is the CEO of a multinational company worth five times as much as the average employee? Doubtlessly, yes, because he or she shoulders enormous responsibility. Ten times more? Twenty? I think most people would still accept this is fair. But when those at the executive level start making hundreds or thousands of times more than the average employee, we really should be as dubious of this reward as we would be of an athlete who somehow manages to shave ten, fifty, or one hundred seconds off the previous world record in the sprint. Anyone who is a billionaire definitely did not earn that money through entirely honest means under conditions of true competition in which all have an equal chance to excel. No, they were in a position to take advantage of a rigged system.

CONCLUSION

Like everything created created by humans, markets are not perfect but flawed creations. If we come up with a description of markets which recognises the possibility that some may violate one or more of the conditions for acquiring deserved wealth, we can see what that flaw is. So here goes: The free market is an arena of competition in which individuals and groups try to gain a greater monetary reward than other individuals and groups, via whatever method they can get away with'. Clearly, such conditions are prone to cheats whose method for gaining wealth relies not entirely on making their own money, but (at least in part, to a greater or lesser extent, ) in taking wealth from others. Modern understandings of markets view them not as efficient machines, but rather as chaotic ecosystems. Just as the natural ecosystem inevitably allows parasites to evolve, so too do market systems give rise to parasites. And, just as in the natural world, those parasites are under competitive pressure to hide themselves from their victims, or better yet to fool their victims into believing they are something to be protected, rather than fought.

Bare in mind what I said about the 'cheating' athlete, though. Just as the athlete was not simply a cheat but somebody who relied on a combination of meritocratic and dubious methods for achieving success, so too are the most successful cheats in business rarely simply parasites. Just as natural parasites have a competitive selective advantage in becoming interwoven among some vital function of their hosts body, such that removing the parasite without causing harm to the host presents a great challenge, so too are market parasites under selective pressure to interweave their dubious wealth-extraction schemes among genuinely useful services. The best parasites are never just cheats.

But, whatever. It is true to say that if those who take wealth, rather than make it, are allowed to flourish too much, then society is doomed just like Rand said. We know what needs to be done to ensure that never happens, though: Don't let them get away with it.

REFERENCES

"Will Work For Free" You tube documentary

"And They Charge Hundreds of Pounds More For Drugs You Can Buy at Asda" by the Daily Mail

'Atlas Shrugged' by Ayn Rand