Self-Interest

Economics talks about a concept called efficiency. Although I’m not going into details, it just means that a person’s output is efficient when he/she acts in his/her self-interest. So, it simply means that the efficient outputs need to make an economy efficient and everyone should act in one’s own self-interest to achieve that efficiency. There’s nothing wrong with this concept because there have been many great minds supporting this idea in all walks of life.

I have not read any Ayn Rand books. There is one concept that’s often pointed out by many in talks and discussions where she staunchly supports capitalism claiming that capitalism is the perfect environment that enables a person to work for himself and innovate. And yes, many results are there to see all over the world. Here again, a person is acting according to his/her own interest or rather self-interest, which enables no interference from others and enabling him/her innovate.

Now, come to social context. If everyone acts on his or her own individual interests, shouldn’t the society become better? But does it happen? No. So, back to the main point. Why does everyone serving his/her own self-interest not resulting in a better world? That’s something to ponder about.

In Finance, there is an idea in practice called futures trading. A very scientific argument in favour of this is that speculation from all quarters that trade will result in the right price discovery of anything that’s traded. But, futures trading has resulted in many failures than successes for a few. The reason? In trading, you get profits when the prices are inflated without any reason. Then when they sell off to book profits, the poor farmer at the other end of the spectrum, for whom which futures trading is really 'supposed' to do good, gets hurt badly. The prices were never discovered rightly because, the human "greed" was never taken into account when they speculated.

Now, drawing parallels to the serving self-interest part. I’m not claiming futures trading or innovation is bad. But, we miss an important part in the claim of this "serving self-interest". So, let me add something to it. “Everyone acting in his/her own self-interest results in better system, when it doesn’t harm anyone else”. “When it doesn’t harm anyone else” is utterly ignored from every context. And, the examples are plenty from the global financial meltdown to the Maoists insurgence in central India to the current protests in the middle east; everywhere the ones who could act in their self-interest acted so. But, they didn’t realize that they were hurting many and that they were suppressing, hurting and ignoring dreams and aspirations of many.

Come to personal lives. Aren’t we all selfish in whatever we do? With our friends, relatives, loved ones etc. We are all selfish. But have you ever thought that, you could have made life better for them as well as you, if you were not hurting anyone? May be, we would even have had fewer divorces, fewer child abuses, fewer family issues, less criminals and better individuals.

I’m connecting being selfish and serving self-interest here because, selfish is always given a bad connotation. But, my argument is this. Why can’t we be selfish in a good sense, where we do good for us, but don’t hurt others? Wouldn’t it make a better us and a better environment for ourselves to live in?