Self-interest 2.0

 

It’s not possible to imagine a free, natural society where people do not pursue their self-interest. Adam Smith rightly stated that market works best when people act based on their self-interest. And Milton Friedman stated (and practically demonstrated in Chile) that Smith’s free market will eventually lead to political and social freedom.
But what self-interest actually means? For centuries this was an obvious question: Economic gain or profit and that, as Friedman believed, would be the building block of a free society. But it posed serious issues: Inequality, greed, sustainability and environmental concerns. No, self-interest is one of the most complicated terms to define. We are social animals. We are bound to cultural, moral values. We are complex creatures. Our self-interest is not simply related to our pockets. We indeed seek our self-interest but our self-interest is far more complicated than just an economic gain.
Current “free market” is not sustainable. Some actors win and get rich some don’t. And those who have won will rig the rules. Free market leads to concentration of wealth and it consequently leads to concentration of power which means one thing: injustice. This is a simple math you can’t argue otherwise. A sustainable free society is where people pursue their economic, social and moral self-interest. Extreme inequality in society serves no one’s self-interest. Pro-capitalism economists who argue everyone is better off in a capitalist society where some are extremely rich but fewer people live in poverty, are wrong. We human compare ourselves with each other. That is the engine which drives us to work harder in a group. Extreme inequality is a dangerous disease in any society which should be cured. But no, not artificially by a government (that itself is another disease). The solution is redefining self-interest. Having a bit less money in my pocket but living in a healthier, safer society serves my self-interest instead of having more money but living in an unsafe, unhealthy society. I have discussed an alternative mechanism instead of collecting tax here. Clearly, it’s not wise to cure one disease (inequality) by making the other one (government) bigger.
But this is the main question: how should we redefine self-interest? Should we develop new social norms? definitely not. Social norms are very much like official regulations. They should be obeyed. That’s against the free market. Redefining the term is not about the culture it’s all about education. Individuals should be educated about different actors involved in the complex equation of self-interest and it’s up to them to decide what best serves their self-interest.

 

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