Economic opportunism

Economic opportunism is a term related to the subversion of morality to profit. There exists no agreed general, scientific definition or theory of economic opportunism; the literature usually considers only specific cases and contexts.

Description

There is no agreement about ''why'' this is so. Oliver E. Williamson comments:

Market trade supplies no universal morality of its own, except the law of contract and basic practical requirements to settle transactions, while at the same time legal rules, however precise in their formulation, cannot control ''every last detail'' of transactions and the interpretation (or implications) thereof. Since economic opportunism must be assessed against some relevant norm or principle, controversy about what that norm or principle should be, makes a general definition difficult.

*Economists frequently cannot even agree on the basic principles of the functioning of economic life, and consequently what constitutes a deviation from those principles is in dispute.
*Market trade is compatible with a great variety of moral norms, religions and political systems, and indeed supporters of the free market claim that this is exactly its advantage: people can ''choose their own values'', buying and selling as they wish within a basic legal framework accepted by all.
*Economic action therefore involves a great variety of motives, some more honorable than others.
*It is not feasible to outlaw many forms of economic opportunism, because any such law could not be effectively enforced, or, such laws would conflict with the civil rights or trading rights of citizens. People often complain about "over-regulation" or "too many rules" – too much "policing" may mean that they no longer take economic initiatives (or become confused about what rule to follow).
*It is often disputed in economics whether the opportunist, as a type of "entrepreneur", creates more opportunities for everybody by what he does, or whether the opportunist is a "pest" with a harmful effect on economic life. Evaluating this objectively can be extraordinarily difficult, because people may not even agree about what the true costs and benefits are.

Adam Smith famously wrote in ''The Wealth of Nations'' that:

If that Smithian view is accepted, then it is difficult to establish that "taking selfish advantage of an economic situation" can in any way be considered "opportunist", because it does not transgress any moral principle or principle of trade. Indeed, the pursuit of self-interest is in this view ''beneficial'' for all, it is exactly what makes the market tick. Furthermore, it is in the interest of market actors to conduct their affairs properly, because if their trading reputation is destroyed, they will be out of business. If it is believed that markets gravitate spontaneously to an equilibrium state, so that price-levels ensure that everybody gets what they want, how can there be any "opportunism"?

At best one could draw a subtle distinction between "selfishness" and "self-interest". For example, "self-interest" could be defined as a healthy concern with one's own wellbeing, necessary to survive and prosper, while "selfishness" could be defined as an exclusive or excessive concern with one's own advantage while disregarding the interests of others. Any trading relationship usually involves both cooperation between the trading partners, so that each gets what they want from others, and competition by each party to get the best deal for themselves. So the trading relationship is normally both self-directed and other-directed at the same time. The issue then is, just how far the concerns of other party or parties to the trade are really taken into account, or to what extent the expectations of others are fully met or honoured.

"Selfishness" would then denote a ''specific type'' of self-interest which violates a ''shared'' principle of trade (or some other principle) in a way that is illegitimate, unfair, unjust in some sense (such as unfair trade, negligence or unfair competition