Sunday, November 27, 2005

Selfishness is Not Synonymous with Self Interest

Mark Tinker, and economist, writes an article entitled: “Expert View; It's better to go nuclear than ask people to be nice”, adding a subheading: “The real world is pushing the politicians to adopt the US way”.

The article is published in the on-line “The Independent” (UK) on 27 November, and you access it at:

Mark Tinker writes:

“Sorry to say it, but the "if only everybody would be nice" route never works. People are selfish. Fact. Adam Smith recognised this back in the 18th century, and the underlying philosophy of his work is that incentives matter and that society is best served if selfish interests are channelled for the common good. The role of government here is to prevent the abuse of this - the formation of cartels and monopolies - but also to allow innovation to deliver the solution. In effect, carrots are better than sticks.”

In this short space he makes a number of common errors about Adam Smith. I cannot comment on his conclusion that the " ‘if only everybody would be nice’ route never works”, as it is one of those hopelessly generalised statements that passes for ‘worldly wisdom’ in tiresome chatter from people claiming to be graduates of the ‘school of hard knocks’, as heard in dinner parties, bars and those hopeless radio station phone-ins.

Smith most certainly did not believe that “People are selfish”, nor is it a “. Fact”. And nor is it correct to allege that “Adam Smith recognised this back in the 18th century” (what a travesty that is of Smith’s “Theory of Moral Sentiments”!

I think Mark Tinker should apologise for besmirching Smith’s reputation and not for concerns about upsetting people with his version of the truth about life in the ‘real world’. It was Bernard Mandeville who considered selfishness to be the prime motive of humans in his “Fable of the Bees”, which Smith criticised in “Moral Sentiments” (‘Of Licentious Systems’, VII.ii.4.114, pages 306-314).

That selfishness abounded was not the same as asserting that it is the sole or dominant motive. Smith’s point was that humans have mixed motives, not a dominant want. This was the gist of his criticism of Francis Hutcheson's idea of 'pure' benevolence.

Self interest is not the same as selfishness any more that eating is the same as gluttony. To claim that “the underlying philosophy of his work is that incentives matter” in one statement, but to start his conclusion with a modest proposition (“incentives matter” – it would be odd if they didn’t) and add that to a controversial assumption “that society is best served if selfish interests are channelled for the common good” is another statement. Tinker buries the implausible – we are all selfish to the core – in with the untrue - that ‘selfishness’ and ‘self interest’ are synonyms, and does this is the name of Adam Smith!

Self-interests are not ‘channelled for the common good’ by any outside agency (including ‘miracles’, ‘gods’ or the State). The self interests of individuals are mediated by social contact, some aspects of which may also be through markets. The same process operates. To live harmoniously amidst strangers – and dependent upon them in degrees of proximity as friends, acquaintances and far vaster number of strangers we are not rampant egoists. The mechanism of the impersonal spectator mediates upon us in our behaviours so that we temper our behaviours to what the impartial spectator can go along with.

Justice curbs behaviour that offends others if our conscience does not, and society imposes merited punishment upon us if we stray over boundaries of acceptable behaviour through formal legal punishment in the extreme cases and informal social isolation or exclusion in less important cases.

To remain functioning despite total dependence on others for everything we need to survive at standards above beggardom, we participate in markets. Any tendency to selfishness is curbed by the need to persuade the owners of things we want to exchange them for things we have – negotiation. To achieve agreement with others we must mediate our self-interests to the extent that we address the self-interests of the other parties. This is an everyday occurrence.

Governments do not “prevent the abuse of this”, i.e., in Tinker’s words “[channelling] selfish interests for the common good”. For one thing, governments are often the cause of distortions of the private mediation of each party’s self interest in their private dealings, especially when they promote state-owned monopolies or give licences (it used to be Royal Charters) to private monopolies. What did most of Mrs Thatcher’s 'privatisations' become, as the Treasury exercised its powers to maximise its revenues, but the substitution of state monopolies by private monopolies?

Adam Smith was aware in excess of the potential for depredations upon Natural Liberty by legislators acting in the ‘public interest’ to disguise their acting in the sectional interests of specific producers.

The state does not protect us all from the potential selfish depredation of everybody else – what an alibi that is for disenfranchising us all from the ever present moral sentiments of the overwhelming majority of us and from the mediation of markets that bring disparate strangers into harmonious relationships.

Tinker creates a parody of Smith’s views on self interest. In doing so he sullies the case for nuclear power, but that is another debate and one in which I agree with Mark Tinker.


Blogger DarcyRezac said...

Interesting. Did Smith originate the phrase "selfish for the common good," or Matt Ridley, you know? I agree this is different from, "self-interest for the common good," which has a sleezy ring to it.

When I met with the Dali Lama a couple of years ago, he used the term, "Good selfish, not foolish selfish." De Tocqueville is famous for his,"self-interest, rightly understood." Charles Handy, "proper selfishness."

At the Vancouver Board of Trade we call it "connecting for good." All are about social capital being created through positive networking or "connectorship."

Thanks for this,

Darcy Rezac,
Chief Engagement Officer
The Vancouver Board of Trade
and, Author, Work the Pond!

5:26 am  

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