Kant vs The Hedge Funds









This is the quote by Anthony Scaramucci, a hedge fund manager who supports Trump, at a recent Romney retreat, cheering on the anti-Trump crowd to join him in defeating Hillary Clinton. (Hillary=White Walkers, get it?)

The problem with the hedge fund guys is that, in their mythology, they are all brave, valiant, noble warriors fighting against some dark forces. I understand the urge and underlying mental dynamics: It is difficult for a man to do his job while recognizing that the very nature of that job is predatory. A man is not made this way. At the end of the day he wants to feel good about himself.

Thus we often witness the construction of elaborate mental schemes by those with power and leverage, aimed at the public, but also, in a way, at themselves, because getting validation of their goodness through public channels – such as charity – mitigates their furtive feeling of worthlessness. Still, a public praise is a weak consolation to such a smart group of people, simply because they know more than that adoring crowd of know-nothings. That’s why, receiving public accolades at a charity gala is always met with self-deprecating modesty: that self-deprecation is hardly faked. Deep down they know that it is undeserved; they know how they made their money. Such inadequacy is manifested by their public admiration of the truly noble, mostly fictional characters: Jon Snow, Obi Wan Kenobi, Batman. They wish they were like that. For example, I’m willing to bet that Trump, who avoided service in Vietnam, wishes that he would have avoided that service in a manner of Muhammad Ali – by being a conscientious objector and spending time in jail for his noble beliefs – rather than being a soft-ass run-of-the-mill son of a rich man.

Often, the argument in the defense of such guys goes along the lines that they are smart and risk taking. Intelligence, awareness and risk-taking are important qualities in a person, as I, too, hold those in high-esteem. But the argument usually stops right there as if smarts and risk-taking are good qualities in themselves. For some reason, we as a society, don’t demand that those qualities were channeled to the public good or just simply good. For us, smarts in the service of self-enrichment is admirable enough.

This is a problem. Even worse so, as philosopher Immanuel Kant says in his ‘Fundamental Principles of the Metaphysics of Morals’, “without the principles of a good will those qualities may become extremely bad, and the coolness of a villain not only makes him far more dangerous, but also directly makes him more abominable in our eyes than he would have been without it.”

We only wish that our villains would be stupid and inept, but more often than not, they are not.

Kant, who spent decades pondering on the issue, makes a point separating goodness stemming from inclination from goodness stemming from duty. That is an important, illuminating distinction that renders the entire ‘hedge fund good guys’ argument impotent. Charity, a favorite public display of goodness, is an inclination, not a duty, and therefore, according to Kant’s logic is disqualified from an absolute good. He gives an example of a philanthropist clouded by sorrow of his own, that (the sorrow) extinguishes all sympathy for the lot of others. While he still has the power to benefit others in distress, he is not touched by their troubles because he is absorbed with his own.

This is an inclination, not a duty. But notion of duty is absent from our public conversation. We often argue that if an agent charges you a fare fee because otherwise the market forces would put him out of business, then such a dynamic should be celebrated as beneficial to both. Kant disagrees. Or rather, he’s unsatisfied with such motivations. If the market forces were not there to inhibit the unscrupulous agent, he then would be free to charge you whatever fee he wanted. For Kant the absolute good, or good will, is for an agent to do the right thing even when the restricting or triggering forces are absent. This is the kind of level of thinking that is out of reach to our valiant hedgies, and sadly, to the public as well. We still can allow a standard economic argument to end with a simple: “but it makes money” cudgel and go on our way.