Chapter ǴǶ: Kirzner on the Morality of Capitalist Profit ȃȀȂhow the trader came by the information and what fiduciary obligations he
might have to the various parties involved.
What policy implications follow from imagined cases like those of
the person who races ahead to the oasis, Samuelson’s commodity specula-
tor, the art dealer, and the insider trader? It would be extremely difficult
to draw up specific rules that would suitably cover all such conceivable
cases. Much behavior must be left to the informal pressures of moral judg-
ments and reputation effects. We scarcely want—do we?—to establish a
government authority charged with appraising everyone’s moral entitle-
ment to each bit of his income and with rectifying allocations of income
deemed unjustified. Institutions and policies simply cannot be devised to
guarantee ethically appealing detailed outcomes in each individual case.
As Rutledge Vining (ȀȈȇȃ) emphasizes, legislators do not have a handle
on ultimate outcomes; they can only tinker with rules and institutions.
A discoverer does not in general have an obligation to share the fruits
of his discovery just because a rival would soon have made the same dis-
covery on his own anyway. In Kirzner’s example (ȀȈȇȈ, pp.ȀȅȆ–ȀȅȈ), one
person on a beach stealthily but legitimately snatches a spectacular seashell
from beneath the nose of someone entranced by the sunset. He has not
“blocked discovery” by the sunset-watcher; he has simply been more alert.
In other cases, however, one transactor may have a moral duty to
divulge information to another, although failure to do so does not nec-
essarily entitle the other person to claim that he was robbed or cheated
(ȀȈȇȈ, p.ȀȆǿ). “Ļere appear to be a number of moral gradations, in regard
to the reprehensibility of gaining benefit by failure to disclose available
information” (ȀȈȇȈ, pp.ȀȆǿ–ȀȆȀ). Doubts about the decency of benefiting
from the removable ignorance of others seem to recede the more imper-
sonal the relation is between the parties (ȀȈȇȈ, p.ȀȆȀ). Although we may
well sympathize with persons whose ignorance is exploited, we should
consider that they would probably be even less well informed and less
well-off than under some system in which entrepreneurial profit were not
allowed to provide the driving motivation (ȀȈȇȈ, p.ȀȆȀ).
őŚŠŕŠŘőřőŚŠ ŒšŞŠŔőŞ ŏśŚşŕŐőŞőŐ
Let us step back from our dubious or borderline cases and focus on wealth
that the holder indisputably has created or has received by indisputably
voluntary transactions untainted by ignorance. Even then, can we be sure
that the holder is morally entitled to his wealth? Kirzner (ȀȈȇȈ, pp.ȀǿȀ–Ȁǿȁ)