February 21, 2005
EGALITIE AIN'T ABOUT SELFLESSNESS (via Robert Schwartz):
The Theory That Self-Interest Is the Sole Motivator Is Self-Fulfilling (ROBERT H. FRANK, February 17, 2005, NY Times)
A NEW YORKER cartoon depicts a well-heeled, elderly gentleman taking his grandson for a walk in the woods. "It's good to know about trees," he tells the boy, before adding, "Just remember, nobody ever made big money knowing about trees."If the man's advice was not inspired directly by the economist's rational-actor model, it could have been. This model assumes that people are selfish in the narrow sense. It may be nice to know about trees, it acknowledges, but it goes on to caution that the world out there is bitterly competitive, and that those who do not pursue their own interests ruthlessly are likely to be swept aside by others who do.
To be sure, self-interest is an important human motive, and the self-interest model has well-established explanatory power. When energy prices rise, for example, people are more likely to buy hybrid vehicles and add extra insulation in their attics.
But some economists go so far as to say that self-interest explains virtually all behavior. As Gordon Tullock of the University of Arizona has written, for example, "the average human being is about 95 percent selfish in the narrow sense of the term." Is he right? Or do we often heed social and cultural norms that urge us to set aside self-interest in the name of some greater good?
If the search is for examples that contradict the predictions of standard economic models, a good rule of thumb is to start in France.
Which is sillier, looking to France for an example of anything positive in economics or specifically for altruism? Posted by Orrin Judd at February 21, 2005 10:57 AM
Funny, I thought Bush's Social Security changes were motivated by self-interest and nothing else.
if not, what else is in there?
Posted by: Harry Eagar at February 21, 2005 5:15 PMOwning your own future and giving everyone a vested interest in society.
Posted by: oj at February 21, 2005 5:21 PMAnd that's not in your own self-interest?
The mistake is here is that the author is using the term "self-interest" to mean "economic self-interest". If you value walks in the woods more than lots of cash, it's in your self-interest to take a lower paying job that lets you take such walks, even if it doesn't maximize your income.
Mickey Kaus' book The End of Equality is basically a diatribe about liberals who strive for "equality" being obsessed with monetary equality, as if that's all the matters in life. It's a deeply ironic point but a good one.
Posted by: Annoying Old Guy at February 21, 2005 6:13 PMNo. It's in your own self-interest to get money for nothing and screw the future. You'll be dead anyway.
Posted by: oj at February 21, 2005 6:21 PMWait a minute . . . Orrin, did you get this piece out of The Onion?
Posted by: george at February 21, 2005 7:09 PMGeorge: Follow the link it is out of the NYTimes.
Posted by: Robert Schwartz at February 21, 2005 11:05 PMThe French are the archetype of the balance between work and pleasure, whether that is a correct archetype or a sustainable model is of course open to question. The short work week, the wonderful two hour lunches with the wine flowing and the six weeks of paid vacation appear to be going the way of the Maginot Line however.
It all boils down to choices. Do you want to control your time or do you want to spend every weekend chained to your desk and have your family put your face on a milk carton? How much money is being able to go to your kid's Little League game or piano recital worth? How much is it worth to you to hang out with friends barbecuing brats on the grill watching football on a Sunday afternoon, instead of sitting in the office and wrestling with Thai Bhat futures? How much is being able to sit at home, dressed in your MIT Athletic Dept sweats, with your pink bunny slippers, and your dog at your feet while you're working instead of having to put on the Brooks Brothers business suit and show your smiling face at the office?
Harry, the Social Security changes are about one thing and that is increasing the rate of return available to payers while not appreciably increasing their risk category. If you can invest in Duke Power rather than short-term T-bills, you can get about a 3 points better return at least. And I hope I do not have to explain what a 3 point better annual return over 20 years will do for you. It is also about freedom, who should choose where to invest what is in fact 'your money', the Federal government or you. Now, some people would, if given the chance, use it to buy oil stock from Snidely Whiplash, or let some clown in a boiler room invest it, but we could designate that it could only be used for certain classes of investment.
Bart: The Froggies are the ones who went on vacation and let grannie die alone during the heat wave. They may know how to take it easy, but altruism is not the name of their game.
What I really found interesting is that the author could write the article and not mention the real source of altruistic belief and action, whcich is religion.
Posted by: Robert Schwartz at February 22, 2005 12:16 PMThe concept of the French as altruistic boggles the mind. But they are hedonistic.
Posted by: Bart at February 22, 2005 2:03 PM