How Beneficial Is Self Interest?

Without a healthy dose of self interest, most of us would be hard pressed to gain the respect of others or maintain a strong sense of identity. Even so, self interest is one of those areas in life where balance does matter. How to know, when self interest goes too far?

Adam Smith is often recalled, as someone who promoted self interest as important for its civilizing effects on society and contribution to economic dynamism. Indeed, Smith's advocacy in this regard could help explain why self interest is often attributed to modern day capitalism. Nevertheless, self interest is too basic an element in human behavior, to assume it is somehow responsible for either capitalism or other ideological patterns.

Pierre Lemieux,  in"Self-Interest and Capitalism are Not Synonymous", stresses this reality as well. Nevertheless, some have used their support of capitalism as an excuse to impose their own self interest on others to an excessive degree. Again, recall that markets have the greatest capacity to generate civility, when individual self interest is tempered by the self interest of others via ongoing processes of negotiation. Regular readers may recall I've noted losses of civility in non tradable sector services, where personal negotiation is generally lacking for the presentation and experience of time based product. Here's Lemieux:

The superiority of free markets is that they efficiently reconcile the personal interests of the different individuals in society. Efficiency means that free markets lead each individual to serve his fellow humans while pursuing his own self-interest and this in a way that promotes general prosperity. In a socialist or crony-capitalist context, economic interactions become a zero-sum game.

Economic interactions can also become a zero-sum game when taxpayers foot the bill for extensive amounts of time based product, yet millions remain unable to benefit in any meaningful capacity from what these applied knowledge subsidies provide. Alas, these subsidies are more likely to reduce supply side capacity, instead of strengthening it. Lemieux concludes:

Evaluating public policy in a classical liberal or libertarian perspective amounts to asking not whether it furthers my interests or yours instead, but to which extent it allows free markets and their supporting institutions to work; to which extent it allows people to trade according to their own reciprocal interests; or, in certain cases, to which extent such policy emulates the workings of free markets:

Excessive self interest on the part of both public and private enterprise, has contributed to social and political circumstance where life feels more harsh than usual. Let's make more room for free markets which extend to time based services, so that each individual has a greater chance of equal participation with others in the workplaces of the 21st century.