In my last post, I used the price increase of Whitney Houston’s music on iTunes to ask whether it was wrong to profit from someone’s death. One particular response caught my attention. A reader commented that making money off the dead was not inherently immoral, but that raising the price of her music was because “they would've made a lot of money on her death already, but they just wanted more.”
This is an intriguing response because it suggests that some profit is okay, but that there can be such a thing as too much. It is worth mentioning that Adam Smith seems to agree. In The Wealth of Nations, he writes that the attempt to significantly increase profits is “pernicious” (at I.ix.24). Comparing the rise of profit to an increase in wages, he indicates that while paying workers more only increases prices a little bit, increasing manufacturers’ profits cause a “geometrical” rise in prices. These higher prices hurt workers, so, Smith thinks, there is a point where higher profits have bad effects that shouldn't be ignored.
What is interesting about Smith’s claim is that it isn’t about profit itself, but it is about the consequences of profit. It makes sense to suggest that economic inequalities that interfere with people’s rights or moral/political equality are impermissible (John Rawls makes this argument, for example), but what would we have to argue to suggest that some profit is inherently acceptable but more is in-itself not?
In the end, I think we would have to say one of two things: (1) that only a percentage of profit is inherently moral – the “just price theorists” argued something like this in Medieval times, but they assumed that all profit was sinful because they felt money acquisition in-itself was sinful. Or, (2) people are only entitled to earn a certain amount in their lifetime and anything above that cannot be justified. Marx argues an extreme version of this (the amount people can earn is zero), but I don’t know of anyone who claims that people can only make, for example, five times what they need to live. If someone tried, how could they justify what number it would be without being arbitrary? We might claim that people are only entitled to the money that they can use, but if this is the case, where do savings fit in, or inheritance? There are arguments for a “maximum wage,” but these are about income, and not about profit itself. Again, we appear to be stuck.
I suppose if someone did an intensive study and showed that there was a certain wealth threshold at which people started being less happy or less healthy, then one might make some sort of a virtue-based argument for a limit, but this would imply that there is no individuality. Some people do better with wealth than others. Bill Gates does fine, for example, Whitney Houston, not so much. It does seem unfair however, to limit one person’s wealth because someone else would be unhappy at the same level and no law could take every case into account So, the question of profit boils down to the question of personal freedom – not a surprise since many people think liberty and capitalism are necessarily intertwined.
In short, I can’t think of a good way to justify the claim that only some profit is justified without making the good of society trump individual rights. It is fine to make this kind of "collectivist" argument -- I would do so about questions of justice, for example -- but if we do focus solely on profit, we are at the same point we were with the previous post: to question the profit motive is to question the entire capitalist system. If we find excess profit immoral than we have to find much, if not all, of our entire economic approach to be immoral as well. This, I suppose, is part of what the more extreme members of the Occupy Movement are getting at, but if the more moderate members have an argument that articulates how much profit is too much while retaining the current commercial model, I’d love to hear it. I’m stymied.