Not All Self-Interest Is Equal

Some American concepts are far more complex than the casual observer would expect. The American confidence in the free market is such a concept. It entwines elements of capitalism, freedom, democracy and self-interest in a complex fabric that has woven the most formidable economic power ever achieved to date. And we Americans tend to believe that we are guaranteed to remain in the forefront of economic powers because it is our rightful place in the world. But our economy, our market system and our societal framework did not achieve its success simply because of these structural elements. It has at times been more and less capitalistic than others, it hasn’t always been free in the same way that is it free today, and it isn’t always a democratic operation. So it shouldn’t be surprising that the principle of self-interest hasn’t always been a constant in the marketplace, the economy or our society.

Recognizing and grappling with this complexity is part of the challenge that America must confront to be successful in the competitive global arena. In that regard it is incumbent upon us to know and understand the difference between: Self-Interest and Enlightened Self-Interest.

Self-interest is the term that you will usually hear. It is one of the forces that drives the efficiency and competitiveness of the marketplace. People, groups, companies, states, countries, and multi-national are all considered to work better and receive greater results when they operate under the principle of self-interest. Much of the free enterprise system stems from this mode of operation. A free market doesn’t guarantee that you will succeed; in fact, it is generally indifferent to your success or failure. The free market only assures you that in a level playing-field market that the better, more cost efficient and need fulfilling products and services will win out over their lesser competitors. But self-interest also can drive actions and behaviors that are anathema to the benefits expected of the free market operating in a democratic society.

Self-interest can represent a selective provision place in the law that thwarts a fair and open competition. Self-interest can lead to corruption and abuse that erodes and rots the power of a free market. And in one of its most devious incarnations self-interest can lead individuals, groups, and entities to seek local and/or near term benefits that are actually destructive to those that sought the benefits as well as those that were disadvantaged originally.

The problem with thinking that self-interest is an American principle that has produced the benefits that our economy and society have achieved is that it has produced some of the worst conditions in America also. There is nothing inherently wrong or misguided about self-interest, rather you have to understand that it does not guarantee a positive outcome for you, for others or for anyone.

America is best served when the principle of self-interest is an “enlightened self-interest”. This requires that decisions and policies are examined in terms of the self-interests that are involved. And you have to understand what the self-interests are, and whether they are reasonable, rationale and prudent interests to be served. For example, the America economy benefits enormously when the middle-class (and the lower-class) incomes grow. The reason is that a robust consumer economy increases the flow of money in the nation’s economy, it increases the private sector’s opportunities to grow, and provides for more profits.  The wealth of the country expands the most when it expands for all members of the society. Otherwise, the simplest way to a sound economy would be to place all the wealth in one individual/corporation, which we in America know is just stupid.

What issue confronting America today, illustrates the difference between self-interest and enlightened self-interest? You might as well ask: What issue doesn’t? If you don’t see it yet, one of the biggest is the national budget and its little sister the debt ceiling. And there doesn’t appear to be any comprehension on the part of Congress that understanding the issue is an important part of addressing the country’s problems.