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Let us for the sake of clarity define making of a profit as being the trade of that which is given being of lower value than that which is demanded and received.

In general, and not withstanding secondary ethical considerations (such as the consequences of a trade in goods or service not occurring), what would be ethical problems related to trading for profit, and how are they dealt with in philosophy?

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    It depends on who you ask. Could you perhaps make this question objectively answerable by specifying a specific strand of philosophy you would like answers to focus on? "Looking forward to hearing people's thoughts" is unfortunately not something that fits on this site, because it is not suitable for open-ended discussions. See the help center and the tour for more information. – user2953 Aug 2 '16 at 9:13
  • @Keelan Thank you kindly for the feedback. I was quite aware that the background and such would not contribute to the question and hence I put such through as a comment. I shall delete the original comment and re-post it accordingly. As for the exact branch of philosophy... I do not feel competent to specify any particular strand. Do you feel that a particular strand might be more relevant? – Avestron Aug 2 '16 at 9:47
  • Background: I consider myself to be a failed (non-start) "entrepreneur". I am beginning to think that one reason for this being so is because I may lack a kind of instinct almost predatory to feel comfortable with profit. Troubling over this has inspired this question and I very much look forward to hearing peoples' answers on the matter – Avestron Aug 2 '16 at 9:47
  • I edited your post to show what I mean. This way, you're asking an objectively answerable question rather than asking the random internet guys what they think. However, if this changes the meaning of the post too much for you, feel free to rollback. – user2953 Aug 2 '16 at 10:09
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    One thing to note: is that in any trade, both parties feel they have profited, or the trade wouldn't occur. You sell your house? The cash is worth more to you than the property, and the property is worth more than the cash to the buyer. No one is getting "ripped off", unless someone misrepresented himself during the transaction (counterfeit money, say, or not disclosing roof problems). The point of making a deal is it's win-win. – Dan Bron Aug 2 '16 at 10:50
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Let's say you and I engage in a voluntary trade where you give me A and I give you B in return.

Moral "problem"

A moral problem only arises out of the false assumption that the traded items have some objectively assignable values, like $10 or $20. Then if A has less value assigned to it than B then I lose and you win, and vice versa.

Problem solved: values are subjective and "opposites attract"

The problem vanishes when it is recognized that in a voluntary trade each party values what they receive higher than what they give up. In the above trade, I ranked A higher than B, while simultaneously you ranked B higher than A. We ranked them exactly opposite of each other, which is why we traded in the first place. Every voluntary trade arises out of such opposite rankings by the two sides of the trade.

The "marginal revolution"

Why do different people rank things differently? Part of it is personal preference and taste, but a very important aspect is how many units of something they already possess. The more of something I have, the less subjective value I place on an additional "marginal" unit of that thing. Because people have different amounts of things (goods, money, time, skills, friends, etc.) their rankings differ from each other, which causes them to trade those things amongst each other.

When "Have horse, want cows" met "Have cows, want horse"

Example: I have 20 cows and no horses, you have 5 horses and no cows. We agree to trade one of my horses for two of your cows. Why? Because I subjectively value getting my first two cows higher than keeping my "marginal" fifth horse, while you subjectively value getting your first horse higher than keeping your "marginal" 19th and 20th cows. So we trade and are both subjectively better off than before.

Entrepreneurs and profits

The same reasoning can be applied to entrepreneurs trading things they have (ingenuity, money raising ability, connections, demand forecasting skills, people skills, etc.) to get things that they want (money, prestige, etc.) On the other side of the trade you have customers who trade the things they have (money) for things they want (gadgets/services provided by entrepreneurs). In the trade, the two sides rank things opposite each other, e.g. the entrepreneur ranks $100 higher than the gadget he is selling, while the buyer ranks the gadget higher than the $100 he is spending. A win-win trade is born.

But profits are not forever

If the entrepreneur is making lots of profit, say 50% on each gadget, other entrepreneurs come in to offer competing products, and more competition means more supply which results in falling prices and narrowing profits. So the entrepreneur's initial high profits are a limited time reward for offering something that is so in demand that customers are willing to pay good money for it. The higher the profits, the faster other entrepreneurs jump in and reduce the margins. This is how the market rewards innovation but once innovated drives down prices so that consumers keep getting new things that keep getting cheaper.

I had fun writing this and hope some folks like reading it. Cheers!

  • "I have 20 cows and no horses, you have 5 horses and no cows. We agree to trade one of my horses for two of your cows." You have no horses. – Rubellite Fae Apr 26 '18 at 15:26
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Because trading is voluntary, it's always done for profit of both sides. At least at the moment of the trade each of the parties agrees to conduct it. Both sides benefit from the trade. Otherwise one of the sides (or both) wouldn't agree to participate in such a trade because each of them has alternatives to conduct a similar trade with someone else or avoid it at all. It's hard to see any ethical problem with voluntary exchange where each participant profits form it by definition.

Consequently, any forceful intervention in a voluntary exchange causes at least one of the parties less profit or even a loss, or prevents the trade. Therefore, the more relevant question would be about the morality of the such interventions (prohibitions, partial prohibitions by taxation, etc.).

  • This is more a comment than an answer, isn't it? – user2953 Aug 9 '16 at 13:12
  • "Trading is voluntary." Only in the sense that I choose to eat instead of starving. I propose that trading for first-tier Maslowian needs isn't actually voluntary in a sane society. Thus, it is unethical to profit from hunger or ailment. – Rubellite Fae Apr 26 '18 at 15:30

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