The Trader Principle

The trader principle is the basic Objectivist principle of interaction between people. It's a product of many different ideas, including the harmony of interests, the virtues of independence, justice, benevolence, and pride. It says that the proper way to deal with other people is through the principle of trade.

As discussed in the harmony of interests thread, trade allows both participant of an interaction to gain from it. Instead of having a lose-lose or win-lose situation, it allows both sides to win. This is one of the key criteria behind the harmony of interests, and a good enough reason to establish the trader principle in practice. By maintaining the harmony of interests, we continue to gain massive amounts of value from other people. If instead we act under a principle of parasitism, where we try to gain at the expense of others, we'll quickly lose our opportunities to interact with them. Our desires would come into conflict with their interests. The bigger the conflict, the more adversarial the relationship.

In the section on politics, we'll discuss a specific kind of parasitism, which involves using violent force or fraud to benefit at the expense of other people. This not only destroys the harmony of interest, but makes your life a threat to theirs, and justifies their use of violent retaliation. In fact, as I'll argue, it doesn't just make it permissible to use force against you. It creates a moral requirement on their part. If life is their standard, then they'll need to remove you as a threat to it.

But force is not the only form of parasitism. It's possible to use persuasion to achieve it. One method to do this is through guilt. They can try to persuade you that if you don't give them money to them, you'll be morally wrong and not a nice person. By trying to persuade you that the right thing to do is to sacrifice to them, they achieve the same purpose. But again, a disharmony of interests is created. The more you give, the more it hurts you. And since it's fundamentally based on persuasion, you can always change your mind about it. That gives a very good reason to not try to live the life of a parasite. You may get a free ride for a short while, but your hold on them is weak. You're gaining value from them at a cost, which means they have a strong incentive to dump you.

Contrast that with the trader principle. You gain your values from other people, but you make it worth their while. Since they benefit from the transaction, you have a good reason to believe they'll want to continue with that relationship. And almost as important, you're relying on their best qualities, not their worst. A parasite has to trick and deceive someone into giving them values. They have to worry that the person will eventually come to their senses, or that they have enough people to mooch off of in case one stops. A trader seeks the best in men. The more intelligent and clear-sighted they are, the better the opportunity for a mutually beneficial trade.

There are other advantages to being a trader. Independence is a big one. If you learn to provide value to others, you can trade with anyone. You don't have to rely on their good will or friendships. You have a better shot relying on their self-interest. And that certainly makes persuasion a lot easier. Contrast this to the parasite, for instance a son who relies on his parents for their money. He's not able to make his own investments, or plan for the future. He relies on their judgment to maintain their financial situation. As long as he uses need to keep them paying, he has to keep himself near the poverty line, or at least in a situation where he can't easily take care of himself. And he's completely reliant on the good graces of those two. His life belongs to them, whether they know it or not. But he knows it, and has to act accordingly. He's chaining himself to them and their good fortune, and so instead of asking what's in his own interest, he must always ask what will keep them happy first.

Another advantage to the trader principle is that it creates future opportunities for trade. There was a show a few years ago called Star Trek, Deep Space Nine. There's a race of businessmen who constantly cheat their customers and business associates. They wanted and worshipped the win-lose situation. The obvious question is, why would anyone ever deal with them a second time? Fortunately, fiction doesn't have to be consistent. But if they had understood the trader principle, every exchange would be a benefit to both parties. People would find that they benefit from the business relationships, and the more they benefit, the more they'd want to continue with them. Word of mouth would be positive, with customers telling other customers that they should try them out. The trader principle rejects the idea of an isolated business transaction as if it had no effect on future possibilities. Instead, it grasps the long term benefits of positive interactions.

The trade principle is not just for business, though. It's a general way of dealing with other people. That means personal relationships as well. By offering value for value, you keep everyone interested in continuing the relationship. Imagine a romantic relationship. In one scenario, you try to get the most you can for the least cost. You ignore your partner, don't bother thinking about them, and otherwise offer little or nothing in return for what you get. How long will they stick with the relationship? How much effort will they put in to making you happy? Contrast this to the thoughtful person who puts real energy in making the partner happy. Maybe there are spontaneous gifts, planned trips, listening, shared adventures, etc. By trading value for value, you're not just securing the relationship, but you're improving it. The values you gain are higher.

There's this contrast between the person who tries to get something for nothing (or little), and the person who earns it. The person earning it can take pride in his accomplishments, and know that he deserves what he gets. His efforts are directed towards enhancing his life, instead of minimizing his efforts. The trader principle is just one aspect of this. The trader seeks to gain values from other people, but doing it by offering his own values. He doesn't have to trick or deceive others. He wants them to see clearly the value he offers. He's concerned with enhancing the values he gains, and securing them in the future. The values he gains from other people are a source of pride in himself, because he knows he's earned them and traded fairly with them.

The trader does not seek the unearned, and doesn't grant it to others. He lives his own life, and deals with other people as independent human beings with their own goals and interests. He recognizes that his interests are in harmony with theirs, and seeks win-win situations where everyone benefits. He sees further then the immediate transaction and understand how being a benefit to others is a good way to benefit himself.

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