JKS:> Profit maximization (or seekingh, actually I said nothing about maximization) is a product of specific social and institutional arrangements. That's my point, actually, with respect to markets. <
so that markets encourage universal profit-maximization (or under conditions of incomplete information, etc, to universal profit-seeking)? I don't think so, since I can imagine a market system that would co-exist with universal multi-goal seeking by cost-minimizing not-for-profits.
If you are right, however, we should jettison markets, so as to avoid encouraging single-minded greed, which goes against and undermines society's ability to achieve socialist ideals. Markets encourage narrow individualism and thus undermine public spirit and democracy, not to mention human and environmental health.
I had written:>>This kind of single-minded devotion to a single number characterizes most markets under capitalism.<<
JKS:> Not in the real world. It extreme moments of cynicism, yes. But it tends to blow up, as we have just seen. <
Most businesses face various informational and societal constraints that prevent full-tilt profit-seeking. For example, it's best to maintain the loyalty of upper-level employees, who among other things provide the needed information, so profit-seeking becomes very complicated than simply maximizing a single number. But given this kind of technical & societal constraint, the goal is still profits. After all, maintaining morale is justified by profit-seeking.
The "extreme moments of cynicism" (which I assume refers to the current era) isn't a matter of some business elite suddenly deciding to be profit maximizers. Rather, it's a result of the success of their long-term efforts (lobbying, lawsuits, union-busting, etc.) in the past to weaken legal and community constraints on their profit-seeking. Of course, these efforts were part of a long-term profit-seeking strategy. The constraints were what kept them away from acting on their extreme cynicism for a period. The abolition of the constraints allowed them to be in touch with and to act on the motives of their inner cynics.
This kind of period "tends to blow up," yes, because individualistic greed often goes against the collective goals of capitalists (e.g., maintaining public confidence in business). But just because something is "dysfunctional" (to business, the most powerful sector in society) doesn't mean that it doesn't or won't happen.
>>Smith would not have been surprised. He thought you needed the moral sentiments to make a market society go. He was quite right.<<
what Smith and most liberals miss is that the profit motive that he celebrated undermines the moral sentiments he thought were necessary to maintain the system's stability. It's a contradictory system...
JD
