Self Interest

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I am told all the time that the world operates on self-interest as if that were a statement of fact rather than a statement of faith. I’ve had people engage in long tautological arguments which start with an assumption of this presumed behavior and conclude with see: enlightened self-interest. But where is the proof? Certainly market studies show that people make constant choices and that is what drives the market. But is that in fact self-interest; is it in anyway enlightened?

Other studies show that the most (quite possibly, all) people are very poor at assessing risk in modern times — modern being anything after we stopped being hunter/gatherers. When given choices they frequently underestimate true risks and over estimate low risk activities. This is why people who are afraid of flying are quite happy to drive their car down a crowded interstate. The facts, that should lead them to make the opposite choice, have no bearing.

Self-interest itself is a watered down and washed-out version of the original economic idea proposed by Jeremy Bentham. Bentham talked about people seeking to maximize their utility but what he really meant was that they seek to maximize their pleasure and minimize their pain. Because economists are seldom philosophers, this got simplified into something that could be measured — that is economic reward. Bentham was probably a lot more accurate in his original formulation but, in any case, in modern times utility became money.

But, of course, the two are not the same. For example, some studies show that there is a point when money no longer drives choice. Individuals will reach a point in their income earning where other things — leisure, hobbies, family, drugs — have more weight than more money. They will actively choose to limit their economic activities in order to maximize these other things. And when it comes to some of them — self-interest is hardly the driving factor.

One could point at people who choose to use drugs or alcohol to increase their pleasure. These acts are so far removed from what most people consider self-interest (health impacts, social disruption, loss of family relationships) that we need to use a different paradigm — addiction — to even talk about it. But addition is a tricky beast too. There is real physical addiction where dopamine levels are affected. There is even permanent addiction where the brain mechanisms that produce these reward chemicals are completely rewired. But most addiction is actually psychological and so a matter of choice. A similar but simpler thing is at play with extreme sports.

So where does that leave us? A topic for another day because…

That’s ten minutes.

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