Self-Interest, Altruism, and the Common Good

Adam Smith, among others, would have disagreed with this extreme view. (His other most notable work, The Theory of Moral Sentiments, addressed at great length the need to take into account the welfare of others). Exchange may fail to promote social well-being for a number of reasons. People may be badly informed. The situation may entail positive and negative externalities not taken into account in individual self-interested decisions. And, as also pointed out by all major philosophical and religious teachings, purely self-interested decisions are often at odds with basic ethical concerns.

http://www.btinternet.com/~pae_news/review/issue28.htm

Interesting perspective on self-interest and not. Final excerpt:

More and more, economists are realizing that a well-functioning economy cannot rely only on self-interest; it also depends on a culture that includes taking into account the common good. Without such values as honesty, for example, even the simplest transaction would require elaborate safeguards or policing.

If everyone in business cheated whenever they thought they could get away with it, business would grind to a halt. If everyone in the government took bribes, meaningful governance would disappear. In addition, people have to learn to work together to overcome problems of externalities. In regard to children or the ill, who cannot take care of themselves through market exchange, some “benevolence� is obviously in order as well. Self-interest may indeed, in some cases, serve the common good, but it cannot be the only motor for an economy that serves the well-being goals of the society. Indeed, self-interest alone cannot even be efficient. Imagine if you were afraid to put down your money before having in your hands the merchandise you wished to purchase—and the merchant was afraid that as soon as you had what you wanted you would run out of the store without paying. Such a situation would require police in every store—but what if the police also operated with no ethic of honesty?

Surely. I was just giving a very rough take on the concept.

I’d quote from P. J. O. (Eat the Rich, etc.) except he sacrifices accuracy in economics for humor any time there is a hint of a conflict.

From Oct 21 NY Review of Books review of Robert Paxton’s Anatomy of Fascism (by Adrian Lyttelton):

“Fascist ‘anti-capitalism’ was not just pseudo-revolutionary rhetoric, or a nostalgic vision of a pre-industrial craft and rural economy. Fascism expressed a consistent preference for ‘national production’ over international finance, and for an organized and politically mobilized economy over the free market. ‘Productivism and an appeal to innovation and managerial engineering,’ Charles S. Maier has written, ‘constituted the modern message that Fascists and Nazis conveyed to the Italian and German economic elites.’ In the developed fascist economy, industrialists lost much of their freedom to make decisions, although one can certainly agree with Paxton that they were not too unhappy about this, since they kept their profits and were assured of a docile labor force whose wages stayed low. Only the small businessmen who had been conspicuous among fascism’s ealy supporters were radically disappointed. The hierarchical organization of cartels and producers’ associations under state supervision tended to favor the larger firms.”

1. It does indeed seem condescending to claim that all poor Christians voting for Bush are doing so because they are duped into screwing themselves economically. However, notice that the frustration is with a certain kind of single issue voting. Frank does not seem to be arguing that these poor people are stupid mysogynists and homophobes (an argument that is sometimes heard), rather he seems to be arguing that their sincerely held views on abortion and gay rights cause them to ignore other issues which really affect them. But it really is an important and live question what Christians have gained from being increasingly allied with the Republican party for the past few decades. Pat Robertson has gone from a movement activist concerned mainly with “moral” isues like abortion to a partisan Republican who approves of Schwartzenegger. What has he and those who follow him (many of whom are poor and have not done well with Bush) got to show for their strong support for Republicans?

On the other side, one might ask Frank: why do you think that abortion is so unimportant that I should switch from one corporate party to another, in the pursuit of uncertain economic gains? The ethics of voting are enormously complex, and Frank is giving some of the difficult issues short shrift. He could just as well ask (as I do) why the Democratic party is so monolithic and extreme on the issue of abortion, even though it seems hurt them politically to be so.

2. It does seems strange to hold up self-interest as a final arbiter of smart or ethical voting (if that’s what Frank and others are doing). For one thing, it would make political discourse virtually impossible. No one ever claims “please support policy X, for the sole reason that is benefits me and only me!” That kind of argument is almost incomprehensible, unless it is coupled with some kind of claim about what I deserve, or how benefits to me also contribute to the common good. But this kind of coupling is in fact how most people argue, and probably should argue (because each of us is probably best equipped to talk about the challenges and needs which confront us in our concrete situations, rather than everyone in the abstract). Farm groups tend to put forward arguments why ‘pro-farm’ policies help everyone, or at least give farmers their due. Unions, business leaders, women’s groups, and leaders of ethnic and racial groups do the same. I see nothing wrong with this kind of discourse and this kind of politics. It might be accurately described as ’self-interested’, but it does not argue from self-interest.

But it should at least raise an eyebrow when we find, for example, the most extreme pro-management views among the lowest paid employees in meat processing plants, or the most supply-side, regressive taxation views among those who are barely making it. This is not because it is wrong to support policies which don’t directly benefit you, but because it seems to signal (though it does not conclusively prove) that people could be adopting an ideology which justifies the dominance of others. We can argue whether the pro-management or supply-side views are really best for the country from the perspective of sound policy analysis, but it seems unlikely that the poor and uneducated in general have arrived at these views through genuine lived experience or sound, informed analysis. Does this kind of thing happen? It seems to; the best concrete example I can think of now is not from the U.S. unfortunately. In Latin America, the strongest supporters of the pro-business right wing dictatorships were the small business owners who were barely making it. Those who benefitted (big business, the rich) most from these dictatorships were less monolithic in their support for the regimes.

3. It’s not elitist or condescending to note that sometimes people support policies which undercut their explict aims. For example: most Americans believe that taxation is unfair, and that this unfairness favors the rich. And yet some of the least popular forms of taxation are the most progressive (e.g. the estate tax). We could have a discussion (not on this thread!) about whether the tax system unfairly benefits the rich. But there should be little disagreement about whether people are sometimes confused about which policies best promote their aims.

Interestingly though, with many of these “cultural” or “social” issues, the policy is identical to the effect (a ban on abortion, gay marriage) and thus it is almost impossible to get confused between what you want and how to get there.

You asked for some examples of frivolous expenditures. What I consider frivolous is any project the government should not be involved in. For me I believe that the government has a very minimal role in our society. They should provide a framework by which the private sector can build on.

Many of the projects that I would consider frivolous do have some legitimate purposes but I think that they could be better instituted. They would include but are not limited to: Welfare, Healthcare, Social Security, National Endowment for the Arts, farming subsidies (including tobacco), etc. There is a strong and healthy debate over the principles involved here. Is it the government’s responsibility to provide these things free of charge (not counting taxes)? Are our citizens guaranteed these privileges as rights? I say no, and those programs to me are frivolous. I believe there are better ways to encourage positive results for many of these social concerns but it is not the government’s responsibility for many of them, or at least to the involvement that they are. Once we decide what the government’s full range of responsibility is we can distribute the budget accordingly. This should allow us to reduce government programs and their costs and likewise reduce the required taxes to accommodate such a large budget.

May I suggest the following article as worth reading: Marion G. Romney, “The Perfect Law of Liberty,� Ensign, Nov. 1981, p43. It might provide some fodder for your next blog. I look forward to reading it.

Yep, the gov’t can create monopolies like the ABA and AMA but wasn’t his argument for allowing that to prevent fraud and provide for public confidence in the service being provided. His argument falls apart in practice, but it at least gives the appearance of competence and professional conduct.