The Secret History of Self-Interest
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George Stigler exhorts us to admire “the granite of self-interest” upon which the palace of economics is built. Throughout most of Wealth of Nations, he writes, Adam Smith took a hard line, explaining the endurance of colonialism, primogeniture, and slavery by invoking the self-interest of the principal actors involved. Slavery panders to the pride of slaveholders, and therefore serves their self-interest. (This is Stigler's paraphrase of Smith.) Unfortunately, Stigler continues, Smith failed to turn “the jaundiced eye of a master economist” upon political life. In thinking about politics, he was not hard but soft. He ascribed excessive influence to emotion and prejudice, and, shockingly, spied “failures of self-interest in guiding people's behaviour.” If Smith had only been as tough-minded as Stigler and his colleagues, he would have recognized that every “alleged failure” of self-interest was “non-existent or of negligible magnitude.” Today this attitude toward self-interest is widespread among economists and the social scientists most influenced by them. But it was rare or unheard-of in the eighteenth century. Throughout Smith's great economic treatise, significantly, interest was contrasted with pride. Although Britain would benefit from relinquishing its dominion over the American colonies, it was unlikely to do so: “Such sacrifices, though they might frequently be agreeable to the interest, are always mortifying to the pride of every nation.” Because it is an unnatural means of enriching one child while beggaring his siblings, primogeniture is against “the real interest of a numerous family” even though it supports “the pride of family distinction.” Landowners retain their slaves because they are driven by a natural inclination to bully and preside-even when such gratuitous domineering entails economic deprivation. Smith repeatedly states that self-interest, however robust, is merely one motive among others. He also assumes that people are sometimes rational, sometimes not. The majority of every class is usually governed by common prudence; yet Europe's landed nobility destroyed itself by a most imprudent vanity. In other words, Smith concedes, indeed he stresses, the massive historical importance of self-destructive and noncalculating behavior. Under certain conditions, we must appeal to motives other than interest to understand not this or that scattered event, but the drift of social and political change. His ideas about motivation, in other words, are distinct from, and perhaps more interesting than, those of his purported successors. In explaining human action, he routinely invokes the distinction (common at the time) between “interests, born of calculation, and passions, based on impulse.” This opposition is fundamental—and not merely for those seeking to master the vocabulary of Wealth of Nations. The concept of self-interest was one of the most striking coinages of modem European thought. In phrases such as “special interests” and “interest groups;” it continues to play an important role in the self-description of contemporary societies. To study its origins and development is to learn something essential about the prism through which we have come to interpret our lives. Unfortunately, for a variety of reasons, the evolution of the concept of self-interest has remained shrouded in obscurity. To dispel the clouds, to disclose some remarkable aspects of the idea's history, we must focus sharply on the all-important contrast between calculating interest and noncalculating passion. This essay has three objectives. First and foremost, I want to document the incredible finesse with which Smith and his contemporaries analyzed the human psyche. A brief historical survey is meant to suggest the pitiful impoverishment that befell us, sometime in the nineteenth century, when Marxism and liberal economics conspired to assert the supremacy of interest and thus to extinguish an older and subtler tradition of moral psychology. Second, I hope to explain how the increasingly positive attitude toward self-interest, typical of a broad range of seventeenth- and eighteenth-century theorists, was motivated not only by discontent with the aristocratic ideal of glory, but also by disenchantment with the Christian dogma of original sin. And third, I want to suggest that the postulate of universal self-interest, although logically incompatible with insight into the rich variety of human motives, first rose to cultural prominence because of its unmistakably egalitarian and democratic implications. Consider, first of all, some intriguing psychological assumptions Smith borrowed from David Hume.
Source Publication
Beyond Self-Interest
Source Editors/Authors
Jane J. Mansbridge
Publication Date
1990
Recommended Citation
Holmes, Stephen, "The Secret History of Self-Interest" (1990). Faculty Chapters. 815.
https://gretchen.law.nyu.edu/fac-chapt/815
