You did not answer the question, at least not to my satisfaction. What prompted my question was your statement that "Profit-seeking companies have an incentive to dump costs on others (externalize internal costs, pollute) and to capture external benefits." That statement implies that not-for-profit companies have different incentives. You now say that "a not-for-profit organization is less likely than a profit-seeking one to be _aggressive_ in corrupting the environmental protection agencies, evading the law, and especially moving its operations to another country to get away from government regulations. That's because not-for-profits are not set up to be engines of endless accumulation of power (as I said in my previous message)."
But why? Corporation A makes widgets and distributes profits to shareholders. Corporation B makes widgets and distributes profits to charitable organizations. Why does corp. A have different incentives than corp. B regarding externalities? Again, you appear to fall back not on the institution itself, but on the psychological and social development of the decision makers, but if you have proper psychological and social development of the decision makers, why does the institution matter? Interesting that you criticize capitalist societies for encouraging sociopaths to rise to the top of capitalist institutions. That, of course, in the view of Locke and others, is a primary benefit of commercial society -- it channels dangerous human energy into a relatively benign arena, as opposed to war, religious conflict, etc.. As the history of socialist countries demonstrates, sociopaths thrive and rise to the top in all environments. David Shemano -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Jim Devine Sent: Monday, December 19, 2011 3:23 PM To: Progressive Economics Subject: Re: [Pen-l] Worker-owned companies? By mistake, I sent this before I was finished. David Shemano wrote: >> You didn't really answer the question, which is why do you believe >> there are different incentives regarding externalities between a >> profit and a non-profit when both are engaged in production.<< Actually I did, but no matter. There is no difference: minimizing private costs (which is, as my intermediate micro teacher told me in college, what any organization does) can and often does mean increasing external costs. However, a not-for-profit organization[*] is less likely than a profit-seeking one to be _aggressive_ in corrupting the environmental protection agencies, evading the law, and especially moving its operations to another country to get away from government regulations. That's because not-for-profits are not set up to be engines of endless accumulation of power (as I said in my previous message). >> You assume a greedy person is more likely to ignore externalities >> than an altruistic person, and you appear to assume a greedy person >> is more likely to work for a profit than a non-profit (and vice-versa >> for an altruistic person), which are nice assumptions to make and it >> is always nice to assume away the problem, but is that where you want >> to leave it? << I did NOT assume that "a greedy person is more likely to work for a profit than a non-profit (and vice-versa for an altruistic person)." I don't know where that came from. It didn't come from me. Did it come from channeling the conventional wisdom or Ron Paul? In fact, what I said was "We can't automatically assume that the leaders of a not-for-profit would automatically be altruistic." Anyway, what does "greedy" mean? The word is thrown around a lot. I define "greedy" as involving more than standard garden-variety self-interest.[**] It involves shunning existing laws, codes of ethics, traditions, etc. (unless it serves self-interest to obey these), since all that matters is "number one." It's akin to being a psychopath (except, psychologists tell me, that psychopaths are often very charming and good at manipulating others).[***] Greediness is like behavior based on Ayn Rand's philosophy (without the cultiness). Psychopaths are encouraged by a capitalist society and the corporate form of organization, often by rewarding them with large incomes and a lot of power. Like scum, greedy people rise to the top and are rewarded for being greedy. Non-psychopaths may learn to act like psychopaths in public to survive (or to help their families). So, following both selection and conditioning, it's quite possible that a greedy person is likely to work for a profit-seeking organization, especially at the top. However, it does not follow automatically that those who run not-for-profits are not greedy. As I mentioned, I know of several cases where leaders of not-for-profits _are_ greedy. (I put this in a separate paragraph so that it wouldn't be ignored, the way that my statement that "We can't automatically assume that the leaders of a not-for-profit would automatically be altruistic" was.) What does "altruistic" mean? Before, I didn't get into the definition of altruism (though I should have). According to one web definition it is "the principle or practice of unselfish concern for or devotion to the welfare of others (opposed to egoism)" or in "behavior by an animal [or person] that may be to its disadvantage but that benefits others of its kind, as a warning cry that reveals the location of the caller to a predator." (http://dictionary.reference.com/browse/altruism) That definition seems pretty standard, so I'll use it. (Definitions are only conventions, after all.) I don't see many people as being altruistic by that definition (though individual actions may be altruistic). However, to my mind, being morally "good" doesn't involve self-sacrifice to help others.[****] (An altruist may be a total pain in the ass, by the way, thinking that he or she knows what's good for others.) Instead, being morally good involves seeing one's self-interest as involving working with and communicating with others in a democratic and collegial way to help attain common goals. Instead of "altruistic," it involves believing in solidarity (and acting on the basis of its principles) . If a not-for-profit is working to accomplish its mission (which requires a good regulatory framework encourages this), then it would reward those who are "solidaritous" (if I may coin a word) while training people to be that way. The people who rise to the top would be those who are best at serving the mission, not those who are looking out for themselves über alles. Thus, people who work for the Cancer Society -- especially those at the top -- would be most interested in helping those with cancer rather than owning minks, BMWs, Rolexes, etc. Of course, as I said before (and again above), a democratic regulatory framework is required to make sure that not-for-profit organizations don't go astray. This is hard in a society like ours that rewards greed so much. -- Jim Devine / "In an ugly and unhappy world the richest man can purchase nothing but ugliness and unhappiness." -- George Bernard Shaw [*] The more accurate term is "not-for profit" rather than "non-profit," since not-for-profits sometimes make profits. It's just that their goals are different (at least on paper). [**] The Wikipedia's definition of greed as "an excessive desire to possess wealth, goods, or abstract things of value with the intention to keep it for one's self. ... " doesn't seem clear enough to me. What is meant by "excessive"? [***] I found a mnemonic that summarizes what "psychopath" means C - cannot follow law; O - obligations ignored; R - remorselessness; R - recklessness; U - underhandedness; P - planning deficit; T - temper. As a documentary (called "the Corporation"?) argued awhile back, that describes a for-profit corporation pretty well. [****] This refers only to social ethics. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
