(Interviewed by Louis James, Editor, International Speculator)

L: Doug, we touched on ethics in our last conversation on your education as a speculator, and we decided we should have a conversation on the subject. Now, most religious people base their personal ethics on the moral mandates of their religions, and I know socialists who base their ethics on the utilitarian principle (or at least say they do). Both types seem shocked when someone like you or I – atheists, anarchists, and capitalists to boot! – refuse to do something that may seem profitable, on ethical grounds. So let’s talk about ethics; what are they, what are yours, and how do you apply them?

Doug: Well, as always, let’s start with a definition. Although I fear we may end up with a lot fewer subscribers, because this is a subject like religion, politics, and the U.S. military, where people have all kinds of hot buttons. But they don’t pay us the big bucks to talk about the weather and the state of the roads… [Laughs]

L: Sure. Webster’s says:

1: The discipline dealing with what is good and bad and with moral duty and obligation.

2 a: A set of moral principles: a theory or system of moral values.

2 b: The principles of conduct governing an individual or a group.

2 c: A guiding philosophy.

2 d: A consciousness of moral importance.

3: (Plural) A set of moral issues or aspects.

Doug: These are all workable definitions, depending on the context we’re discussing. Now, there are clearly some people who have no ethics at all, which is to say no principles. They act on the spur of the moment, just doing whatever seems like a good idea at the time. Then there are other people who have flawed principles that will consistently set them in the wrong direction. My own set of principles can be summed up in two statements:

1: Do all that you say you’re going to do.

2: Don’t aggress against other people or their property.

There are endless corollaries you can derive from this, but this is what it all boils down to.

L: The first one sets out the basis for contracts and fair conduct, the second one the basis for peaceful physical interaction. But the first is actually derived from the second, because breaking the first (committing fraud) is really just a deferred form of the second (initiation of force).

Doug: True enough, although I think it’s helpful to make a distinction between force and fraud. I also think it’s important to distinguish between ethics, an individual’s own guiding principles, and morality, which is a set of community standards. Morals, being politically derived artifacts, really only have a coincidental, or even accidental, connection to ethics. Morality is something that’s dictated by a group or even imposed on a group by some kind of higher power. Ethics deals with the essence of right and wrong. Morality is just a construct of rules. It winds up being a bunch of precepts. Some have a basis in ethics. Others are just dramatizations of people’s fears, quirks, and aberrations.

The difference between ethics and morals is analogous to that between using a gyroscope or a radar to navigate. A gyroscope is an internal device that keeps you level and steady without reference to what’s outside. Radar would use external cues, bounced off other people to tell you which way to go. Morality tells you what to do; ethics acts as a guide to help you determine, yourself, what you should do.

Similarly, ethics is a branch of philosophy, not religion. Ancient Greeks studied, wrote about, and placed a great deal of importance on ethics, the guiding principles of good action, completely apart from whatever their frisky gods were up to. For them, religion had basically nothing to do with ethics, except for providing edifying stories from time to time.

L: Okay, but what’s the basis for your principles – or the one fundamental libertarian commandment of non-aggression that they resemble? Why is this any better than, for example, the Ten Commandments in the bible?

Doug: Which Ten Commandments? The part of Exodus 20 most people refer to when they say the “Ten Commandments” actually has more than 10 commands, and there’s another version in Exodus 34, plus one in Deuteronomy 5. So the things are hardly written in stone, as it were. Some of the bible’s commandments are basic common sense, of course, especially if you use the “Thou shall not murder” translation instead of the “Thou shall not kill” version Catholics favor.

But the first three or four, depending on how you count them, are totally useless admonitions regarding a supernatural being, the existence of which is not supported by any evidence whatsoever. As ethical guidance goes, the list is rather confusing, with the parts governing the way people treat each other looking almost like afterthoughts, thrown in after all the instructions on how to worship.

The Ten Commandments impress me as an arbitrary agglomeration of moral precepts and commands. They lead to thinking you’ll be all right if you do as you’re told, instead of figuring things out for yourself. They get people into the mindset of following orders, even if the orders are goofy or irrelevant or arbitrary. The Ten Commandments got Western civilization off to a bad start.

L: In the New Testament, Jesus boiled it down to two principles, as you do: first, to love god, and second, to love your neighbor as yourself.

Doug: The second one, interpreted liberally, looks good at first. But it’s not. Love isn’t something you should hand out for free; it’s something that should be earned and deserved. If it’s not, love is not virtuous, it’s worthless and counterproductive. I believe in giving the other guy the benefit of the doubt and maintaining an attitude of good will towards others whenever possible. And I absolutely believe in cultivating a benevolent approach towards other people, creatures, and even inanimate objects. But to love one’s neighbor as one’s self is idiotic and degrading; it leads to self-abasement and destroys self-respect.

But the first one is nonsense to me. Which god? Allah? Zeus? Perhaps Yahweh, the one who calls himself “Jealous” in those commandments, periodically authorizes wholesale genocide, and says he will punish children for the sins of their fathers?

It appears most people in the U.S. worship Jesus. Why not Baal or Quetzalcoatl? If you must debase yourself before some construct, it makes more sense to me to have a household god, as did the Romans, that represents and personifies the virtues that are important to you as an individual. My personal preference in gods are those that show nobility, as do many of the Greek gods, but especially the Norse gods. But I don’t see what gods have to do with ethics. At least any more than Batman, Wonder Woman, or other super heroes do.

L: Okay, okay, but let’s not get distracted. Religion is not today’s subject. What’s the basis of your two ethical principles? Why are they better than others?

Doug: They demonstrably work. They allow you to live with other people, in any society, and in any time, whether those people are enlightened philosophers or bloodthirsty pirates. Understanding those two laws is all one needs to interact peacefully and productively with others. Even more important, they’re what you need to live with yourself – and you are the final judge of what you do; the opinions and morality of others are just opinions.

You could say the two laws are right because they obviously benefit others, but they actually benefit you the most – and it would be stupid to adopt principles that benefit you less. You could say, as an economist might, that they maximize efficiency and hence well-being among members of a society. They’re quite practical, and it doesn’t take a legal scholar to understand them. In fact, a six-year-old can understand them, rather intuitively.

L: Sounds like the utilitarian principle of the greatest good for the greatest number.

Doug: They happen to be pragmatic and utilitarian, although I must say I don’t like pragmatists or utilitarians, because their principles are situational, fluid, and unsound. Someone who holds to those things could wind up committing all manner of depredations. But it’s because my ethical principles are sound that they tend to produce the greatest good for the greatest numbers, not the other way around.

The problem I have with utilitarianism is that anyone can argue that anything, even the great atrocities committed by the Soviets, were right as rain, because they were intended for the greatest good. Pragmatism is anti-ethical because it holds something is right if it works; the Nazis fancied themselves to be pragmatists.

L: Anything sacrificed on the bloody altar of the greater good, even an innocent child, is made sacred and holy by that excuse. Utilitarianism devolves into expediency, the perfect excuse for any atrocity. The 20th century sure showed how badly utilitarianism can be abused.

Doug: For sure. And all these cockamamie philosophies usually evidence themselves as some variety or another of economic collectivism and political statism. My view is that free-market capitalism is the only ethical economic system. It maximizes everyone’s advantage and does so without coercion. That’s no accident; that’s the proof of the soundness of the principles.

And it’s no coincidence that the two ethical principles I outlined are also the only laws you need. You certainly don’t need some council or Congress or Parliament cranking out new ones by the score every week. Or, as you pointed out, one being derived from the other, they could be boiled down to one single law: Do as thou wilt… but be prepared to accept the consequences.

L: We discussed that in our conversation on judging justices. And that makes sense; on the most fundamental level, the law is a substitute for personal ethics when those fail or appear to be lacking. So they should have the same basis. There is little in our world that is more perverse than unethical laws that require people to do what’s wrong or punish people for doing what’s right.

Doug: Sure, but it happens all the time. These laws are cranked out by governments like there’s no tomorrow – they are basically visible dramatizations of the psychological aberrations of lawmakers and the people they pander to. In brief, I have no automatic respect for either law nor morality – which I know sounds horrible. But that’s only because they subvert people’s judgment. They actually work to make a personal code of ethics unnecessary, by telling people all they have to do is obey the law and current morality. This tends to transform people into unthinking automatons who don’t feel responsible for their own actions.

L: “I was just following orders!” Frightening indeed. But I want to stay on track here. Let’s talk about how you apply your two ethical principles, and if such a simple system can really cover all situations.

Doug: Okay…

Editor’s Note: Due to the length of this interview, which moved on to personal ethical choices and actions, and then to the ethics of investment, we will continue with it in next week’s installment.