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In daily life, of course, there is no avoiding some version of the principal-agent problem: in every instance, who is really acting in whose best interest? Capitalism-as-usual has crafted a vast and complex network of competitive agents fighting for that almighty dollar. In such a system, participants are routinely faced with economic choices wherein it may not be clear whose best interest is being represented. 

Consider a first-time homebuyer…

She walks into the local branch of her bank, not entirely sure if it is part of a big national chain or not (does it matter?). She and her partner have both recently been promoted to “real” jobs with $60k+ salaries within the past year and now they really want to pull the trigger and buy their first real home. She sits with a mortgage banker. The banker compiles her info and enters it into the bank’s proprietary internal system. Congratulations! She is approved for the loan she wants up to $800k with only 10% down on the house they have been eyeballing and it’s likely she’ll be able to close. 

This “happy” fantasy plays out often, mostly in White America, with different homes at different price points in different towns, and (aside from healthcare costs) it seems to be the primary reason why people lose their homes. Did you catch what happened? Maybe it’s happening to you!

Uncertainty about the future? Who cares! If the banker knows that no history of high income is not sufficient to justify underwriting the loan, aren’t they acting in bad faith by approving it? Or is the computer system “acting” in bad faith by determining that the client qualifies for more than they can realistically afford? Or is it the bank’s board of directors for approving the usage of the system? Or perhaps the managers for incentivizing the underwriting? Or is the client herself acting in bad faith against her future self and her partner by prioritizing her immediate satisfaction over a more rational plan reflecting greater future uncertainty? 

If someone is making money, they are acting in their own interest; whether or not your interests are best served…well…that’s not really relevant. Bad faith is fundamental to the zero-sum-ism of capitalism-as-usual. 

A person who wants something that is not true to be true, while using various strategies to deceive him/herself into believing what they want to be true is actually true when it is not true, is acting in “bad faith.” They cannot be trusted to recognize and act rationally according to information that they encounter in their environment if it contradicts their internal view. They cannot be trusted to act in any non-self-centric way as they have clearly demonstrated that their self-generated perspective (delusion) will dominate and drown out even logical proof or direct observation of the natural world. And yet, they will likely continue to represent themselves as “reasonable” individuals with a “reasonable” propensity to acknowledge and respect reality. 

***Be wary of those who do not understand how capitalism-as-usual is harmful. They are ignorant of or willfully complicit in their proclivity to spread harm. Your own economic health is severely compromised if connected to theirs!***

Imagine someone with a business idea who wants to believe that their idea can turn a profit and that it will not have any negative consequences or effects, though they “haven’t really looked into that” negative consequences part yet. 

Is this an ethical pursuit?

Is this a typical pursuit?

Is this a feasible pursuit?

Is it morally acceptable to run a business that can only achieve profitability through the exploitation of a minimum-wage workforce?

Present society apparently affirms these questions. 

Capitalism (past and present) has proven to be the dominating behavior for centuries. Do not be fooled into believing that pure capitalism does not pervade everywhere—it does and is. Moreover, generations of the very deepest of pockets have a vested interest in maintaining capitalism-as-usual’s status quo, the standard operating procedure, the way things always have and always will be done (even though we know that this is not true as the mighty capitalists will adopt any new thing that will maximize profits, changing the appearance of what has always been done while doubling-down on capitalism-as-usual). 

Nevertheless, history does not affirm that capitalism-as-usual is ethical, moral or helpful. The only truth that history affirms is that capitalism-as-usual is commonplace. 

Now imagine the entrepreneur. If an entrepreneur’s business is organized to maintain capitalism-as-usual, however unconsciously that may be, it is causing excessive economic harm by default. The centralizing of profit maximization affirms that capitalism-as-usual demands “bad faith” as default behavior. Since capitalism-as-usual creates the conditions for harm, no matter how ethical an entrepreneur strives to be, the whole system, the water in which our global economy swims, is tainted by the exploitation necessary to reach maximum profits. Up and down the entirety of the supply chain, capitalism-as-usual has reached its exploitative tentacles to give us the lowest prices for the greatest profits. Thus, to participate, at all, in capitalism-as-usual means that the entrepreneur must sell his/her product knowingly aware of the harm that that product will create through its development (the inequitable nature of employment in the capitalism-as-usual organization), manufacture (environmental costs, exploiting developing nations), delivery/distribution (fossil-fuel dependent transportation), and retail sale (the exploitative nature of wage-labor). 

Knowingly participating in capitalism-as-usual forces the do-gooding entrepreneur to act in “bad faith” towards humanity through the existence of that entrepreneur’s business within the already-established, profit-maximizing, exploitative-by-default system of capitalism-as-usual. Do not be deceived. They may claim to offer something you want or need, but at what other costs than money? Despite what they say to you, are they even being honest with themselves?

Anyone ought to be free and able to try to open a business in a free market economy, but that does not mean that every kind of business is, in and of itself, a healthy contribution to the very economy that makes it possible. Some ideas are parasites. Some things benefit from the direct demise of a host. 

Not all profitable businesses are economically ethical. Not all ethical business ideas can be realized profitably. This can be a tough pill for some entrepreneurs to swallow, but unlike denial, this truth does not cause lasting harm. As a risk management procedure addressing the potential corrosion of “bad faith” on business operations, we think it prudent to choose to work with those for whom progress is important and learning is a lifelong process, otherwise, stubbornness tends to fester and bloom cancerous agents.