How to Understand Value For Value Relationships and Profit From Them

In many of my articles, I have mentioned the importance of value for value relationships. In fact, your success in life depends on cultivating these types of relationships and making them an ongoing part of your life.

The Types of Exchanges

First we are going to distinguish the difference between voluntary and involuntary exchange. It is individuals such as you who are involved in exchanges. In any two person exchange, one sells (gives) and the other buys (receives). "Society" cannot take part in an exchange-only individuals can.

A voluntary exchange takes place when two or more individuals agree to deal with one another. Each participates of his own free will. The exchange could involve anything from giving and receiving love to buying and selling Real Estate. All involved believe they will benefit from the exchange.

An involuntary exchange takes place when at least one party to the transaction is in it against his will. Examples of this type of exchange are robbery, rape, assault and murder. Only this type of exchange can be defined as criminal.

Any use of goods coming from an involuntary exchange is a crime, provided the consumer knows they were acquired in this way.

If you believe that involuntary (criminal) exchanges are to your liking you probably need to study and implement methods governments use to acquire their funding-or read with sadistic delight some books on the joys of our progressive tax system and the benefits of the inflationary policies of the Federal Reserve System. I'm sure you're thrilled about the massive bailouts our financial and political leaders have embarked upon.

Universal Fallacy Number 1 Concerning Voluntary Exchanges

The ultimate fallacious belief is clinging to the fallacy that one man's gain is another man's loss. This doesn't apply to voluntary exchanges-only to involuntary exchanges. As mentioned earlier, only crimes such as robbery, rape, assault and murder fall into the category of involuntary exchanges. Of course, in an involuntary exchange one man's gain is another man's loss.

By the way, when the government resorts to such confiscatory measures as taxation and inflation-and interferes with voluntary exchanges by attempting to regulate personal behavior they are committing aggressive acts against their citizens. These are in the category of involuntary exchanges-and therefore are criminal acts against innocent people. As Davy Crockett once mentioned "When the legislature meets nobody's life, liberty and property is safe." And I guarantee that the hapless taxpayer is paying for all these massive bailouts. Did anyone ask any of these taxpayers if they would voluntarily donate to the bailout fund? No! The government is expropriating them to take care of the needs of their favorite sons. Now that's what I would call massive amounts of involuntary (criminal) exchanges.

In a voluntary exchange both individuals believe they are trading something they value less for something they value more. Whether you trading love, friendship or money for goods and services, you believe you will benefit. Nobody would purposely trade something he values more for something he values less. Even those kind-hearted, loving individuals who seem to give without measure are gaining value in their exchanges. The joy and happiness they acquire are worth more to them than any money or time they give up. Just try to prevent them from helping others and you will definitely create much pain and frustration in their lives.

Universal Fallacy Number 2 Concerning Voluntary Exchanges

The next universal fallacy is ignoring the profit motives of others. Unethical people try to use others. They believe they will profit if they take advantage of other people-getting whatever they can from them without giving anything in return. Some people realize that they need to give some value to receive what they desire-but they give as little as possible. And they wonder why people attempt to avoid them like the plague-not willingly associating with them.

Unfortunately you have the spectacle of politicians, altruists and do-gooders acting as if earning a profit is somehow sinful and base. They complain about how some businesses are earning excess profits, not realizing that the companies earning the highest profits on the free market are exactly the ones supplying the consumers' most urgent desires more efficiently than their competitors. Of course, since most politicians thrive at the expense of others-the hapless taxpayers-you can't expect them to understand how ethical and just the earning of profits through voluntarily exchanges are.

Profiting From Value for Value Relationships

Following are some realizations necessary for you to profit from value for value relationships.

1. If you want to succeed in your personal and financial relationships, you must recognize the profit motives of other people. Ignoring someone's profit motive guarantees you have absolutely no chance of satisfying their most urgent needs and desires.

2. In a business relationship you must appeal to the profit motive of your prospect, client or boss. If you disregard their profit motive and attempt to force your values on them, your chances of selling a prospect, gaining or retaining a client or pleasing your boss is slim and you guarantee that your pocketbook remains anemic.

3. Trading value for value in a personal relationship can be quite difficult. Some compatibility between the individuals involved must exist. For instance in a sexual relationship it is definitely profitable for both individuals to give as much pleasure as possible. The returns can be enormous. The more compatible two people are sexually the greater the returns in the form of pleasure and ecstasy. A successful personal relationship is when both individuals are doing everything possible to satisfy their partner's profit motive. If only one partner is concerned about this, the relationship is obviously one-sided.

Conclusion

Relationships built on voluntary exchanges are profitable for all involved. Never believe you can gain long-term profits by ignoring other peoples' profit motives or even worse by indulging in involuntary exchanges. An individual acting with rational self-interest doesn't sacrifice long-term gains for short-term benefits. The irrationally selfish person lives his life as if tomorrow never arrives by ignoring the fact that he has to trade value for value to gain long-term success and happiness. The rationally selfish individual builds his happiness and success and contributes to the happiness and success of others on the foundation of voluntary exchanges.