Economics 101

Tough Questions about Greed, Selfishness, and Self-Interest

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How do you legislate good behavior? Is it possible to legislate in such a way that people are incentivized to serve others instead of themselves?

These are just a couple of the tough questions I’ve been asked in response to my previous writings on the difference between selfishness and self-interest in our lives, especially in business. This past Friday I had the opportunity to speak about C.S. Lewis, selfishness, and self-interest to a group of Capitol Hill staffers as part of the Faith & Law lecture series.

The main points of my talk were that:

  • There is a tension between legitimate self-interest and selfishness.
  • Business need not be always primarily driven by greed. It is possible for businesses to be motivated by a desire to serve their customers.

These points prompted many thoughtful questions from the audience. You may have some of the same ones. I’ve listed some of the more challenging questions below, along with the answers I gave.

How do you legislate in such a way that incentivizes good behavior so that people serve others and not themselves?

There is reason to consider where certain great abuses in business that come as a result of greed should be legislated against. Additionally, in order to run businesses, we certainly need the rule of law, preservation of private property, and certain regulations that have to be there in order for business to run smoothly.

Whether or not this works in a particular society depends on the motives of the people involved. If people are not honest or respectful or trustworthy – not everyone is, we certainly know that – then the whole business sector breaks down. If you have to legislate every contract, or bring it before judges, then the whole system stops functioning. That’s why in a lot of countries there is a black market and lots of corruption.

What about “crony capitalism?” Isn’t that business acting in its self-interest?

Different companies lobby for the wrong kind of advantage in business propositions, and that messes up the whole idea of the free market because they structure everything in their own interest. It’s unfair and unjust to other people to have the government regulating for a particular corporation or business against other businesses.

This is legal, unfortunately, but it seems to be unjust or unfair in most cases.

How can we think about the double-standard society holds where multimillionaire businessmen are disdained while celebrities are not?

It is a fascinating double-standard, and I’ve noticed it a number of different times.

It’s based on a caricature of capitalism. Caricatures have a basis in reality, but they’re an overstatement of things.

There is certainly enough greed to go around. There is enough selfishness to go around. There are a lot of biblical warnings about riches.

On the other hand, being wealthy is not necessarily wrong, as we see in the “righteous rich” from the Old and New Testaments. Riches do have corrupting power, but it’s not an absolute necessity that it corrupts.

Money is a good thing. Profit is a good thing. Should we maximize profit at all costs? No. But there are many people who pursue what you might call “capitalism with a conscience.” Listen to what Bono said last year about aid to Africa. He said the solution is not aid, but capitalism with a conscience. There has been acknowledgement of that even from the World Bank.

These are just a few of the questions people raise about greed, selfishness, and self-interest. You may have others – feel free to share them in the comments below.

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