This papers explores the virtues and vices of an economic and political system grounded on the principle of individual self-interest. Do Adam Smith and America’s founders agree more than they disagree on the benefits of a society organized around individual self-interest? It pays particular attention to the ways in which America’s founders built political institutions designed to check the negative implications of individual self-interest.
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Virtues and Vices of an Economic and Political System Grounded on the Principle of Individual Self-interest
Self-interest can be explained as actions that a person performs in an effort to fulfill personal benefit. Self-interest is usually very rampant in people’s everyday activities. In most cases, people seek to engage in actions that have a high chance of eliciting personal benefit. These personal benefits serve as significant motivators for increased productivity and investment. Many organizations also pursue self-interest in order to achieve organizational goals and objectives. In the political realm, political parties and politicians are usually in pursuit of personal interest. This perspective helps in shaping an organization’s ability to explore its potential. Political parties are also in a position to delve into politics driven by personal interest. From a wide perspective, self-interest can be understood from an economic, political, and, psychological perspective. As such, a person engages in behaviors and actions that provoke desirable individual benefits.
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The concept of self-interest is has been widely studied in relation to economics and how it influences markets. Adam Smith, who is widely regarded as the father of modern economics, viewed self-interest as central to the success of a free-market economy (Werhane, 2019). Adam Smith considered that the pursuit of personal interests in an economy would lead to unintended positive consequences for the larger population. For example, in the pursuit of meeting their personal needs, producers increase productivity in order to meet the needs of buyers. Buyers, on the other hand, in their pursuit of acquiring the best products, tend to buy from the best suppliers. As a result, producers are forced to focus on quality products in order to fulfill their interests in making profits. As a consequence, the competition ensures that quality products are available in the market at affordable rates, which eventually benefits the consumers. The aspect of self-interest in economics and politics has both positive and negative consequences.
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Adam Smith and most of the American founders agree more than they disagree that self-interest is of great interest to society. Adam Smith sought to explain some of these benefits from an economic point of view. Self-interest is a significant motivator of increased economic activity. In a free-market economy, self-interest and competition are integral parts of success. In a market economy, a seller exists not primarily to meet the needs of customers, but to meet their own financial interests. Adam Smith pointed out that butchers do not sell meet because of their benevolence, but because they have high regard for their own personal interests (Werhane, 2019). In this example, the butchers are interested in selling meet in order to meet other needs of their families as well as other personal needs. The unintended consequence is that those interested in buying meat are able to find it in the market. In their pursuit of personal interests, many sellers exist in a free market economy, and, as such, there is increased competition. This competition is important in a free market economy. According to Adam Smith, many people produce many integral products and services in society in order to meet self-interests. However, the society at large gets to benefit through these self-interests. Adam Smith termed these beneficial complementary but opposing forces of competition and self-interest as the invisible hand (Offer,2012).
Self-interest is also rampant in the political scene. The independence of the American society from colonization could be argued to have been achieved from people’s self-interest to live freely under self-rule. The heroes of the war who helped the country to fight for independence were also guided by personal interest to live free and to also be heroes for the country. As such, it is clear that personal interest motivated them to dedicate their strength and influence to fight for the best interests of the country at large. Without the desire to be fulfilled at a personal level, it would be difficult for people to see the need to fight the colonial masters. It is also argued that the American founding fathers had the self-interest of controlling the country’s vast economic resources. To achieve this fete, it was, therefore, necessary to fight for the independence of the country in order to rule itself. In the current political scene, self-interest ensures that many politicians are able to avoid losing public confidence in order to rise through various levels in the political ladder (Strauss & Cropsey, 2012). As public officials are often under scrutiny, their desire to maintain their political positions, as well as to occupy higher offices, serves as a guiding principle for them to follow prescribed laws, and to serve citizens in the best way possible. This view is beneficial to society as it keeps politicians in check.
Despite the many benefits of the pursuit of self-interest to the society in terms of economics and politics, it also has some significant demerits to the individual and society. The concept of competition has been unable to offer adequate regulation to negative acts that may arise from self-interest among individuals. In their bid to satisfy the need for quick financial gains, some people have resorted to dealing with counterfeit products. These products can be defined as those that are made fraudulently to resemble the original products. This practice is negative and leads to serious losses to the dealers in the original products, as well as greatly disadvantages buyers. Another example is one of increased fraud in the financial sector. In the end, many consumers are greatly affected due to people’s selfish interest to create quick wealth. Some business organizations also use propaganda to tarnish the reputations of their competitors. This approach leads to unfair disadvantaging of a credible business. In the political scene, self-interest has sometimes led to the cultivation of personality cults among some politicians in order to gain fame and power.
Some politicians also use illegal means to acquire wealth which can put them at an advantage while vying for office. In some cases, politicians and political parties lie to the electorate in the bid to gain power through their votes. In some cases, some politicians run their campaigns by advocating for items that violate the constitution if they realize that those electorates support the said positions. The American founding fathers set precedence in the political sphere. President George Washington voluntarily retired after two terms, which still to date help to discourage any candidate from ruling for too long for personal interests (Strauss & Cropsey, 2012). The founding fathers also wrote the constitution which established many institutions that serve the public interest.
The Bible encourages people to create wealth through industry and honesty. Many lessons are provided in various verses in the Bible on how people should conduct themselves in order to do the best for themselves and the society at large. The Bible insists on businesses founded on the need to serve the interests of consumers in a manner that directly and clearly responds to their needs. In Leviticus 19:35-36, businesspersons are urged to use correct measures and weights in their sales. As such, it is a clear instruction for business to use correct standards and avoid fraudulent schemes in business. This idea is reinforced in Deuteronomy 25:13-16, which emphasizes on the uniformity of measures used in trade dealings. Philippians 2:3-8urges everyone to be mindful of others and not do anything solely through selfish personal ambitions. In regards to politics, the Bible encourages adherence to laws. In Matthew 22:17-21, the Bible insists on the need for everyone to pay taxes. Romans 13:1-7 urges all to be subject to authority. In this case, it is clear that political leaders should focus on obeying laws even as they try to seek and exercise power. Everything should be done in accordance with the law, and for the interest of society at large.
In conclusion, self-interest has a number of advantages and disadvantages. Many people engage in actions that are intended to fulfill personal ambitions. As such, it is clear that people often engage in causes that have a personal benefit in them. This fact is evidenced in business, as many people engage in business in order to make a financial gain. However, this approach has the unintended consequence of also benefitting society by encouraging a vibrant free-market economy. Personal interest is also present in politics, but it is highly checked by constitutional institutions that ensure that people mainly serve the interests of the public. Biblical teachings largely encourage people to serve in the interest of everyone, and not just for the purposes of personal ambition.
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