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Self-Interest, Part 1
FEE ^ | Donald J. Boudreaux

Posted on 03/12/2003 6:31:52 PM PST by dcwusmc

Asked on camera by John Stossel “Who has done more good for humanity, Michael Milken or Mother Teresa?” philosopher David Kelley unhesitatingly answered, “Michael Milken.” Kelley is surely correct. But I’ve spoken to many people who are horrified by this answer. Mother Teresa’s name is synonymous with good deeds and humanitarian concern. In contrast, Michael Milken was a businessman, a financier. To comfort others, Mother Teresa sacrificed herself. Michael Milken did what he did only to make money for himself.

Self-interested motives are so frowned on—and other-regarding motives so admired —that the typical pundit, politician, and pedestrian believes that motives are all that matter. Mother Teresa is admired because of her motives, not because of her results. Michael Milken and other business people are famous—or, in many circles, infamous— largely because of the personal fortunes they’ve accumulated rather than because of the huge benefits their goods and services bestow on millions of people around the world.

One response to those who judge a person exclusively by his motives was made famous by Adam Smith. It says: Look, almost everyone is naturally self-interested. Whether or not this fact is regrettable, it is unalterably true. So let’s deal with reality. As it happens, a free market encourages self-interested people to act in ways that benefit others. So we need not spend much time lamenting people’s self-interest.

Being a great admirer of Adam Smith, I find this line of argument compelling. But having now taught for 20 years, I’ve learned that it leaves a sour taste in the mouths of many students. “But wouldn’t it be great if we all were like Mother Teresa?” students earnestly ask.

No, it would not be great. It would be catastrophically bad.

Self-interest is not merely an unchanging fact of reality that, as regrettable as it might be in the abstract, turns out to be okay in a free-market society. Instead, self-interest is necessary to make a large economy work. If each of us cared as much for strangers as we care for ourselves and our loved ones, our lives would certainly be poor and short, and possibly also solitary, nasty, and brutish. At least two reasons justify my claim that self-interest is a benefit to humankind—that our world would be worse, not better, if selfinterest were not part of our mental makeup.

This month I’ll address the first reason. I’ll address the second reason next month. While it’s difficult to imagine the supposed ideal of universal love—a world in which no one distinguishes the welfare of strangers from that of himself and his loved ones— try to conjure in your mind this imaginary scenario.

One thing to notice is that, with everyone caring deeply about everyone else, our world would be a tyranny of busybodies. I often scold myself for caving into my weak- nesses—for sleeping too late, for spending too little time with my young son, for eating too many potato chips, for buying that new necktie that I don’t really need, and so on. I then try to govern myself by leveling selfimposed penalties for these failures. In other words, because I care deeply about myself, I “interfere” in my own life in order to improve my life’s prospects.

Caring for Strangers

If I cared equally as much about some stranger in Santa Fe or Santiago, would I resist interfering in his life to govern his choices in ways that, to me, seem best? “Sir, you shouldn’t watch so much TV; your time would be better spent reading Tolstoy” or “Mr. Jones, you should put that extra $100 into your savings rather than spend it on tickets for a football game.” Remember, we’re imagining that I care as much about this stranger as I care about myself; he means the world to me. I truly yearn for him to have a happy and good life; I desire this outcome every bit as much as I desire to have such a life for myself and every bit as much as I desire that my son enjoy such a life. It would pain me terribly to see this beloved stranger make choices that seem to me to be unwise for him.

The problem is, while I might care as much about this stranger as I care about myself, I do not know this stranger as well as I know myself. I don’t know his abilities, his history, his likes, his dislikes, his fears, his pleasures, his circumstances. After all, he’s a stranger. Because he knows his situation better than anyone else, he is best positioned to make decisions for himself. My trying to do so, even if I care passionately about his wellbeing, would substitute the judgment and discretion of an ignorant party (me) for that of an informed party (him).

One happy consequence of self-interest is that it aligns concern with knowledge. Each of us knows most about himself, and each of us is concerned mostly about himself. That person to whom each of us directs the bulk of his life’s energy and interest is that person whom each of us knows most about. In short, it’s good that I care mostly about myself because I’m the person who knows most about myself. Likewise, it’s good that I don’t care as much about you as you care about you because I don’t know as much about you as you know about you. And you surely don’t want me to disturb you with my well-meaning but ill-informed attempts to govern your life. That would be harassment, not helpfulness.

Self-interest doesn’t strip people of their concern for others, but it does confine that concern to appropriate realms. I care not only about myself; I care also, very deeply, about my family. This concern is appropriate because I know a great deal about my son, my wife, my parents, and my siblings. I care also about my friends, although not with the same intensity that I care about my family. I know my friends pretty well—much better than I know strangers, but not as well as I know my family.

Self-interest not only prompts each of us to care for himself and his loved ones, but also—and importantly—it helps to keep each of us from attempting to meddle in the affairs of those whom we know too little.

Ideas on Liberty • February 2003


TOPICS: Heated Discussion
KEYWORDS:
Thoughts on Freedom by Donald J. Boudreaux Self-Interest, Part 1 Donald Boudreaux (dboudrea@gmu.edu) is chairman of the economics department of George Mason University and former president of FEE. FEBRUARY 2003 53
1 posted on 03/12/2003 6:31:52 PM PST by dcwusmc
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To: dcwusmc
Well reasoned article. - Thanks.

Did you post it directly to the backroom?
2 posted on 03/12/2003 6:39:54 PM PST by tpaine
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To: dcwusmc
A corporation gave me a job, not some do-gooder philanthropist or some ranting raving rock star.
3 posted on 03/12/2003 7:07:44 PM PST by Commander8
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To: tpaine; Admin Moderator
Actually, I think I did... but I didn't mean to... I wonder if we can get it moved...
4 posted on 03/13/2003 10:04:09 AM PST by dcwusmc ("The most dangerous man, to any government, is the man who is able to think things out for himself.")
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To: dcwusmc
Dave, Don't worry about moving it. There is a strong group who checks the backroom everyday to see what has been tucked away by the moderators.

"Self-interest doesn’t strip people of their concern for others, but it does confine that concern to appropriate realms. "

Wouldn't it be great if our politicians could understand that sentence?

5 posted on 03/14/2003 5:45:42 AM PST by B4Ranch (Politicians, like diapers should be changed often. Stop re-electing these 'good' people!)
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To: dcwusmc
I believe the Capitalist system is the most just economic system. That said, it seems that the author defines most helpful as making the most money. Money is not everything. And to reduce human beings to mere cogs in an economic machine distorts their humanity. People have souls. Mother Theresa met people's needs both spiritual and physical. I agree that good hearted folk should not attempt to save the world. They also treat people as abstractions. One should be loving (kind,good) to those one meets in life. Milken, I recall went to jail. All his money could not purchase his freedom. Nor can it purchase his soul. You made a caricature out of kind persons ( I agree that altruism has its dark side, but so does self interest). Witness the CEO's who gave themselves raises while laying off thousands of workers. As a culture with so many people following the money wherever it takes them, we have become a rootless society. What good is making a lot of money like old man Potter in It's a Wonderful Life if our communities end up becoming a Pottersville. While I would like to make more money, I also want to raise my kids in a decent place. We are not economic islands untouched by other people's behavior and the market does not care for virtue. But it is necessary.
6 posted on 03/14/2003 7:11:07 AM PST by TradicalRC (Fides quaerens intellectum.)
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To: dcwusmc
"If I cared equally as much about some stranger in Santa Fe or Santiago, would I resist interfering in his life to govern his choices in ways that, to me, seem best? 'Sir, you shouldn’t watch so much TV; your time would be better spent reading Tolstoy' or 'Mr. Jones, you should put that extra $100 into your savings rather than spend it on tickets for a football game.' Remember, we’re imagining that I care as much about this stranger as I care about myself; he means the world to me. I truly yearn for him to have a happy and good life; I desire this outcome every bit as much as I desire to have such a life for myself and every bit as much as I desire that my son enjoy such a life. It would pain me terribly to see this beloved stranger make choices that seem to me to be unwise for him."

Don't most people realize that everyone has a different idea of what brings them happiness? It is for that reason that healthy families, who "truly yearn" for one another "to have a happy and good life" do not harass one another as the author implies people would. While I agree with the gyst of the article, I think his example is so weak as to detract from it.

7 posted on 03/14/2003 3:29:16 PM PST by Voice in your head (Nuke Baghdad)
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To: Voice in your head
Don't most people realize that everyone has a different idea of what brings them happiness? It is for that reason that healthy families, who "truly yearn" for one another "to have a happy and good life" do not harrass one another as the author implies people would.

I do really hate to disillusion you, but your statement is incorrect. Except perhaps as within a family. Strangers are all too willing to harrass, intimidate and even imprison or kill to ensure that their views are followed to the letter. It's all done in the name of do-goodism and it's the rankest of evils.

8 posted on 03/14/2003 5:58:57 PM PST by dcwusmc ("The most dangerous man, to any government, is the man who is able to think things out for himself.")
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To: dcwusmc
I'll buy that. But, do-goodery is a phenomena that rears its ugly head in the arena of anonymous power grabbing. People vote for do-goodery, because it is impersonal and more attractive. People are more aggressive in anonymous arenas. This is seen in mobs, in chat rooms, in forums such as this, and at the ballot box. When it comes time to confront someone in a personal confrontation regarding an issue that is for their own good or otherwise, do-gooders are not so aggressive. However, if a person can vote for a law that imposes their will on others for their own good, the do-gooder will almost always vote yes. The anonymity is the catalyst.
9 posted on 03/14/2003 6:12:16 PM PST by Voice in your head (Nuke Baghdad)
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To: dcwusmc
This is a wonderful article with terrific possibilities for discussion. It will die of neglect in the smoky backroom and that sux.
10 posted on 03/14/2003 9:21:38 PM PST by gcruse (When choosing between two evils, pick the one you haven't tried yet.)
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To: gcruse
That was my fault. I accidentally posted it here....
11 posted on 03/14/2003 9:25:24 PM PST by dcwusmc ("The most dangerous man, to any government, is the man who is able to think things out for himself.")
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To: dcwusmc
Not blaming you, mate. Just lamenting the nature of things.
12 posted on 03/14/2003 9:27:51 PM PST by gcruse (When choosing between two evils, pick the one you haven't tried yet.)
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To: gcruse
Understood, thought there are some who do check this place out. Maybe I'll hafta repost it later...
13 posted on 03/14/2003 9:38:09 PM PST by dcwusmc ("The most dangerous man, to any government, is the man who is able to think things out for himself.")
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To: dcwusmc
Part 1 eh ? So far I like what I have read . I'm going to mash the link and see for myself .
14 posted on 03/14/2003 10:00:48 PM PST by Ben Bolt
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To: dcwusmc
Interesting read, I do not disagree. I must ask you one thing though, as a christian, what is it that Jesus proclaimed as the meaning of His message? Our purpose here on earth? Was that message " To love God with all that we are, and to serve others"

To that issue, I cannot square the first paragraph. In Gods eyes, I have to believe the author is sadly wrong on the first paragraph.

15 posted on 03/15/2003 5:08:22 AM PST by exnavy
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To: exnavy
...and to serve others"

Glad you feel that way. I want breakfast in bed and I want it NOW!!

16 posted on 03/15/2003 5:46:44 AM PST by lonestar (Don't mess with Texans)
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To: lonestar
Unfortunately for you, breakfast will be served only in the kitchen. God helps those who help themselves. And the commute from Michigan is a bit much.
17 posted on 03/15/2003 6:12:36 AM PST by exnavy
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To: TradicalRC
I believe the Capitalist system is the most just economic system. That said, it seems that the author defines most helpful as making the most money. Money is not everything. And to reduce human beings to mere cogs in an economic machine distorts their humanity. People have souls. Mother Theresa met people's needs both spiritual and physical. I agree that good hearted folk should not attempt to save the world.

Nicely put TRC.
As it happens, a free market encourages self-interested people to act in ways that benefit others. So we need not spend much time lamenting people’s self-interest.

...I find this line of argument compelling. But having now taught for 20 years, I’ve learned that it leaves a sour taste in the mouths of many students. "But wouldn’t it be great if we all were like Mother Teresa?" students earnestly ask.

No, it would not be great. It would be catastrophically bad.
A very broad, naive question has been presented by the students.  Conversely, a very narrow response comes from the prof.  If this is actually how he answers those who seek to learn, could it not be argued that *he* has served his self-interest satisfactorily, to the detriment of his students?   

If the answer to the question above is yes, then don't count me as nonplused since such a thing occurred in a college classroom!

18 posted on 03/15/2003 7:07:25 AM PST by GirlShortstop
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To: exnavy
I suspect a strong case could be made that the Christian who follows God's directive IS acting in his or her own self interest. Consider that God says the alternative to accepting His Son's sacrifice is eternal damnation. I find that an easy choice to make, personally. So in doing the OTHER things, after that, I would be simply acting in my own (ETERNAL) self-interest. I am not, BTW, making this as a formal argument, merely in passing... HOWEVER, this can only hold true IF the Christian does it the way God SAID, which was to PERSONALLY do it. Nowhere in the relevant passages of the New Testament does God say to get laws passed in order to see His work done. Thus, I find those who advocate government to do THEIR work to be in direct contravention of Scripture.

Mother Theresa was doing God's work and following His orders because her ETERNAL self-interest required it. She did good work. BUT in the overall scheme of things, Mike Milliken was able to do MORE good by accident simply by following his temporal self-interest and creating opportunities for others who were able to achieve and cash in on filling HIS needs. I do not think the two areas come into conflict until or unless someone wants to interpose Government into the mix and have IT do the good the INDIVIDUAL is supposed to do. Which NEVER works and ALWAYS causes government to grow out of control.
19 posted on 03/15/2003 8:14:40 AM PST by dcwusmc ("The most dangerous man, to any government, is the man who is able to think things out for himself.")
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To: exnavy
"I have to believe the author is sadly wrong on the first paragraph." -exnavy-

Look at the point beyond the end of the first paragraph:

"Mother Teresa's name is synonymous with good deeds and humanitarian concern. In contrast, Michael Milken was a businessman, a financier. To comfort others, Mother Teresa sacrificed herself. Michael Milken did what he did only to make money for himself." [end 1st]
--- "Self-interested motives are so frowned on—and other-regarding motives so admired —that the typical pundit, politician, and pedestrian believes that motives are all that matter."
-- "Mother Teresa is admired because of her motives, not because of her results."
--- "Michael Milken and other business people are famous -- because of the huge benefits their goods and services bestow on millions of people around the world."

Thus, we should change our views on ~motives~ in regard to law & society... 'Good' motives [in particular those enforced by government decrees], can do more harm in the actuality of their enforcements than any possible results derived.

20 posted on 03/29/2003 10:12:35 AM PST by tpaine
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Posted on 08/29/2003 12:58 PM PDT by tappers
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1 posted on 08/29/2003 12:58 PM PDT by tappers
21 posted on 08/29/2003 1:13:52 PM PDT by tpaine ( I'm trying to be Mr Nice Guy, but politics keep getting in me way. ArnieRino for Governator!)
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