One of the teachings of economics is that humans are, generally, self-interested. Critics of economics have seized upon this terminology to argue that economics (and free markets in general) are promoting selfishness. It’s the whole “greed is good” mentality. Nothing could be further from the truth as there is a distinct separation between selfishness and self-interest.
Selfishness is marked by a lack of consideration for others; the self is supreme.
Self-interest is looking for the best ways to promote’s one welfare, how to make one happy. This includes caring for others.
I have a family whom I love. I have friends whom I love. To the extent I can, I try to be generous with them: buy presents, spend time, that sort of thing. This is self-interested behavior perfectly consistent with economic theory. Taking care of my family and friends makes me happy, plus provides a safety blanket. It also fills social needs and desires.
This is just one example of self-interest, but there are many more: charity, friendship, neighborly love (perhaps, one might say, the Christian Virtues).
So many of the moral criticisms of economics and markets stem from confusion over these two terms. Perhaps I shall write more on this topic in the future.
5 thoughts on “Self-Interest vs Selfishness”
I’m afraid that “the self is supreme” is also what self-interest is about.
The distinction you are after can be said in fewer words than you used John.
Selfish is a shortsighted version of self-interest. It may be in your long term best interest to be giving. It is a lifetime struggle to know how much giving and how much taking is optimum for you.
“The distinction you are after can be said in fewer words than you used John.”
If you are responding to our host, his name is Jon.
“It may be in your long term best interest to be giving.”
In other words “Giving may serve my self interest.
Acting in one’s own self interest in a free market society means serving others in order to improve your own well being through exchanges in which both parties are better off. It isn’t necessary for someone else to get less if I get more. See Adam Smith on that subject.
I might open a sandwich shop and become very wealthy because I provide a lot of value to my customers who prefer the sandwiches I make for them to the money they give me in exchange. Both I and my customers are better off because of my efforts.
“ It is a lifetime struggle to know how much giving and how much taking is optimum for you.”
Giving and taking aren’t necessarily involved. Voluntary exchanged in which both parties gain is the key to improved human well being.
Only in voluntary exchange can 1 + 1 = more than 2. This equation is why free market capitalism improves the lives of ordinary people more than any other system known to humans.
You have something that you value at 1. I have something that I value at 1. We will only voluntarily enter into an exchange of these things if I value your thing more than one and you value my thing at more than one.
So after the exchange we each have more than one and in total have more than two. Multiply that by millions of exchanges and you have huge increases in wealth for society.
The exchange part of the above is capitalism. When it is completely voluntary and free of government meddling or other barriers to exchange then you have free markets. The greatest increases in wealth occur in societies that have Free Market Capitalism.
I’m sure that if Jon/John was offended by the misspelling he would have corrected the commenter.
“Christian Virtues” Nah. Rational (or “enlightened”) self-interest gives one all the good bits of popular morality without having to make any fallacious appeals to authority, or relying on claims for which the evidence is insufficient to establish their truth. In other words, an appeal to rationality is better than an appeal to religious diktat, even if some of the diktat’s happen to be good.
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