Benificence
The concept of beneficence refers to the drive in human beings to help each other in addition to working for their own gain. In some, this paradigm is highly developed, while in others it is less prominent. Adam Smith, however, holds that even the appearance of beneficence is in fact self-serving, and that the phenomenon is indeed entirely absent from the human heart, particularly in the economy. In commenting on Smith's paradigm, Kenneth Lux on the other hand claims that Smith made a fundamental mistake in his reasoning, and that self-servitude is indeed not at the heart of the social and economic good. Indeed, he mentions pertinent examples of cases in which the self-serving paradigm indeed leads to decidedly undesirable consequences. My tendency is to agree with Kenneth Lux: the economy and its prosperity depends not so much upon what I can do for myself as upon the way in which I do so.
Beneficence can be defined as the quality of being kind, charitable or beneficial, and engaging in acts that can be experienced as such. Adam Smith holds that, in an exchange-based economy, beneficence is present only as it connects to the self-serving nature of all human action. Firstly, Smith distinguishes between human beings and animals by noting that the adult animal serves his own needs without being dependent upon any of its fellows. The human being, however, is dependent upon a vast network of other human beings for all of his or her needs. In order to obtain food or indeed any commodity, for example, a person needs to visit a store that carries what is needed.
The problem, according to Smith, is that these needs can only be met by other persons who are as self-serving as the first individual attempting to fulfill his needs. Hence, the needy person must appeal to the self-serving paradigm in the other to meet his or her needs. As such, money is exchanged for goods, and the needs for money and the purchase item are respectively met. In this way, according to Smith, whomever supplies a need in society does so not out of a sense of beneficence, but primarily because of self-interest.
Even the beggar, according to Smith, is not entirely dependent upon beneficence to more than a certain degree. The author demonstrates that the beggar might accumulate some money, clothing or food during a day of begging, but that these are then used in promoting the self-interest of others by offering them in exchange for further food and/or clothing to fulfill the beggar's needs (p. 43).
The individual, in Smith's view, works only towards his own interest in accumulating capital, rather than with the good of the public in mind. However, the public good occurs by association; by individuals serving their own interest. The sense of selfishness and the result of public good integrate as cause and effect of each other. In this way, Smith claims that economic selfishness is actually for a greater good than those deliberately attempting to bring about good by blatant beneficence.
Specifically, Smith holds that this paradigm manifests itself in the division of work. An individual is driven to seek employment or business opportunities by his or her own financial need. As such, the person would look for the greatest need, where the greatest gain is potentially possible. In addition to fulfilling his or her own need for financial gain, the person also fulfills a need in society and hence contributes to the general social and economic good (p. 44). Furthermore, Smith criticizes those consciously doing charitable work is little more than hypocrites only seeking to further their image as charitable businesspersons rather than in fact being very focused on the good they appear to promote. Indeed, Smith claims that it would take very little to dissuade such people from continuing their work in favor of charity rather than in favor of themselves (p. 44).
While the above may have been true in Smith's time, I must disagree that it is necessarily the case today. Indeed, businesses today pride themselves upon their charitable, humanitarian and environmental efforts. Indeed, the very concept of "social" and "corporate responsibility" is built around this. Businesses today are recognizing the importance not only of functioning at an optimal profit margin, but also of doing so in a way that recognizes themselves as part of a larger and integrated whole in terms of human beings and the environment.
Kenneth Lux adds a further dimension to these ideas. Rather than directly disagreeing with Smith, as was my first instinct to do, Lux analyzes the specific elements in what Smith says and identifies a specific oversight. Firstly, Lux notes that Smith does not give due consideration to the paradigm of cheating. Cheating is self-serving, but does not serve the public good and is certainly not beneficial for the economy. Indeed, if Smith's assertions about self-servitude were to be believed, not cheating would be irrational (p. 47). While Smith's view is that competition is the element that prevents cheating, Lux however demonstrates that cheating can destroy the competitive element and concomitantly serve the interest of the cheater.
To further demonstrate how self-interest does not promote public or economic good, Lux mentions the example of the environment. It is the prevalent self-interest existing from the Industrial Revolution to date that has led to the environmental crisis the world faces today. It can therefore not be that self-interest or egoism promotes beneficence in the sense that Smith saw it. Clearly pure self-interest tends to be destructive rather than constructive.
According to Lux, the fundamental paradigm of promoting social and economic good is not self-interest, but rather a sense of morality in the human heart. In addition to honesty, Lux mentions fairness, integrity, reasonableness and justice (p. 50) as examples of principles that guide business ethics and practice. In this, Lux makes an important distinction between pure charity as a paradigm to promote the public good, and the business paradigms of honesty, integrity and fairness, which have the same effect. Smith makes a fundamental mistake in attempting to separate business from the paradigm of beneficence. Lux then adds these principles to expand Smith's definition: beneficence is not only charitable actions, but also actions of integrity and honesty within the business paradigm itself. At its most fundamental level, Lux's argument is then against Smith's idea that purely egoistic and selfish actions could lead to the public good.
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