Being Ethical Is Long-term Greedy

In one of your tweets, you listed out some of the things you should study, like programming, sales, reading, writing, and arithmetic. One of the items that ended up on the cutting room floor was that you should also study ethics. I was originally going to put that out there as a concession to people who believe that making money is evil, and that the only way to make it is evil.

But then I realized ethics is not necessarily something you study; it's something you think about and is something you do. Every one of us has a personal moral code, and where you got that moral code from is different for everybody. It's not like I can point you to a textbook. Sure, I could point to some Roman and Greek texts, but that's not gonna suddenly make you ethical.

There's the golden rule, right? Do unto others as you would have them do unto you. Or there's Nassim Taleb's silver rule, which is don't do unto others which you don't want them doing unto you. Once you've been in business long enough, you will realize how much of business is about trust. And it's about trust because you want compound interest; you want to be able to work for a long period of time with trustworthy people without having to reevaluate every discussion with that and rethink each time, and without having to constantly look over your shoulder.

Over time, you gravitate towards working with certain kinds of people, and similarly, those people will gravitate towards working with other ethical, quote-unquote, people. So, being ethical turns out to be a selfish imperative. You want to be ethical because it attracts the other long-term players in the network, and then they want to do business with you.

If you build a good enough reputation for being ethical, eventually, people will pay you just to do deals through you because you're the one who will validate and insure the deals by your presence. You wouldn't be involved with low-quality stuff, so being ethical actually pays off in the long run. But it's the very long run. In the short run, being unethical pays off, which is why so many people go for it.

It's a greedy algorithm, but you can be ethical simply because you're long-term greedy. I can even outline a framework for different parts of so-called ethics just based on the idea of long-term selfishness. For example, you want to be honest because it leaves you with a clear mind. You don't have two threads running in your head: one is the lies that you told to keep track of, and the other one is what you're saying.

You just have to think about one thing at a time, so you have more energy to think about that thing. You're a clear thinker. Also, by being honest, you're rejecting the people who only want to hear the pretty lies, so you force those people out of your network. Sometimes it's painful, like friends and family, but long-term, you create room for the people who like you exactly the way that you are. So that is a selfish reason to be honest.

For example, in negotiations, if you're the kind of person who always tries to get the best deal for yourself, you will win a lot of very early deals, and it'll feel very good. But on the other hand, there are a few people who will recognize that you're always scrabbling and not acting fairly, and they will tend to avoid you over time. Those people end up being the deal makers in the network because people go to them for a fair shake or to figure out what's fair.

If you are cutting people fair deals, you don't get paid in the short term, but in the long term, everybody wants to deal with you. You end up being a market hub; you have more information, you have trust, you have reputation, and people end up doing deals through you. A lot of wisdom is just realized in the long-term consequences of your actions, and so the longer term you're willing to look, the wiser that you're going to seem to everybody around you.