Commercial Society

A Primer on Ethics and Economics

One of the greatest and most joyful challenges of adult life is to develop skills that make the people around us better off with us than without us. Integrity is a key part of that challenge. We are social animals, aiming not simply to trade but to make a place for ourselves in a community.

In this book, the authors discuss the connections between the ethical, economic, and entrepreneurial dimensions of a life well-lived

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Sections of the Book

Part 2: Progress

How would you know whether you are making progress? You could start by deciding what to count as progress. One obvious question to ask yourself is what you really want out of life. Once you have an answer, then you can proceed. You can measure your progress by asking whether you are getting closer to achieving your goals. One problem with this way of proceeding is that when we are really making progress, we are not simply making progress toward achieving goals that we had when we were in high school. Rather, in any real human life, our goals themselves are a moving target. As we get older, we develop more mature ideas about which goals are worth wanting. That means we need to keep an open mind about whether the time has come to revise our goals. It is your life. You have the right and the responsibility to reconsider the value of your goals. That is what a satisfying life is like.

Part 3: Understanding Trade

Trade enables us all to make ourselves useful to each other. When we exchange goods and services, we enhance mutual well-being. In short, the more people trade, the more their communities flourish. How, though, do we settle on the terms of exchange, which means, ultimately, how do we settle on the prices at which our services are exchanged? Are price changes predictable? Can they be made more predictable? What is a cooperative surplus? How is it generated? How is it distributed? How are these things affected by market structure, regulation, and current events?

Part 4: Trust, Agency, and Bystanders

Communities are networks of cooperation. Successful communities grow, and the networks that compose them become more complex. Businesses expand. Companies begin to hire large teams of employees. Those employees become the company’s eyes and ears. They need to understand what the company is trying to do and who it aims to do business with. Employees are the owner’s agents, and that is just the beginning of the growth in complexity. We have not even mentioned shareholders, trustees, contractors, or any number of people directly or indirectly involved with the business. In short, as a company becomes more complex, the people who run it can no longer do everything themselves. They have to delegate.

Part 5: Management of a Commercial Society

Commercial societies, and the economies upon which they are built are complicated arrangements involving, in many cases, hundreds of millions of people, each with their own goals and aspirations. They do their best to achieve their own ends in a broader context defined by everyone else’s doing exactly the same thing. Things work for the most part, but there is always friction when people have goals that might conflict with those of others. How can we keep things working well enough to allow people sufficient freedom to pursue their goals, which offering sufficient protections to everyone at the same time? The answer that we have come to over a long period of serious thought, not to mention a lot of trial and error, is that functional institutions and sound policy can make the critical difference in this important task.