Self interest theory. Theories of self-interest postulate that people make what they believe to be rational choices in order to acquire personal benefits. social-interest debate began with Adam Smith over 200 years ago and is one of the primary arguments made in favor of capitalism vs. The concept of self-interest remains underdeveloped in sociology although central to economics. [4] In its strong form, rational egoism holds that to not pursue one's own interest is unequivocally Parfit thinks that S represents an overwhelming orthodoxy. SELF-INTEREST Aristotle claims in the Nicomachean Ethics that it is the virtuous person "more than any other sort of person who seems to be a self-lover. Expanding on the assumption of narrow self-interest underlying agency theory, we apply an empirically well established refinement that self-interest is bounded by norms of reciprocity and fair ness. I can still get much enlightenment when I read his words in this modern society. Jun 7, 2025 · Self-interest describes actions that are intended to result in personal gain. Saving income to buy gifts, or spending on family, is also an act of Rational Self-Interest that encompasses making others happy. In this paper, I focus on a different kind of capture: the unquestioning and universal acceptance by economists of self-interest—of shareholders, managers, and employees—as the conceptual foundation for business design and management. There are three main theories. 194). is wholly subjective. This notion has given rise to rational choice theory, which explores the role of rationality in human decision-making. In this article, we introduce the concept of “exploitative leadership,” which is mainly characterized by high levels of leader self-interest. Ethical egoism is often contrasted with psychological egoism, the empirical claim that advancing one’s self-interest is the underlying motive of all human action. Thomas Hobbes was a 17 th century philosopher. Self-Interest can also entail making others happy. Feb 23, 2025 · Rational Self-Interest doesnt imply selfish behavior. Sep 22, 2024 · Explore the psychology of self-interest behavior, its societal impact, and strategies for balancing personal gain with social responsibility in modern life. Self-interest is automatic, viscerally com-pelling, and often unconscious. In theory, consumers basing decisions on self-interest creates a positive outcome Sep 26, 2023 · How did Adam Smith understand self-interest? Both Adam Smith’s work and modern behavioural economics show us how our decisions are influenced by perceptions of the motivations and moral judgements of others. They In ethical philosophy, ethical egoism is the normative position that moral agents ought to act in their own self-interest. "Psychological egoism" is the name given to a theory widely held by ordinary men, and at one time almost universally accepted by political economists, philosophers, and psychologists, according to which all human actions when properly understood can be seen to be motivated by selfish desires. Apr 26, 2023 · Enlightened self-interest transcends traditional selfishness, fostering a holistic approach that acknowledges the interconnectedness of human existence. AI generated definition based on: Research in Organizational Behavior, 2004 May 26, 2025 · The invisible hand theory assumes self-interest. Discover an overview of this concept as well as an analysis of its uses Sep 11, 2024 · When we consider the phrase “self-interested,” it typically carries negative connotations. [1][2] As such, it is considered a normative form of egoism, [3] though historically it has been associated with both positive and normative forms. {\textquoteleft}The Self-interest Theory has been believed by most people for more than two millennia {\textquoteright} (p. Apr 28, 2017 · A leader behaving in a way that is exceedingly self-interested and exploitative of others is a recurring notion in destructive leadership but also an unexplored Apr 18, 2022 · Theories into Division of Labor, similar to those of self-interest, did not originate with Adam Smith. , protecting one's health) even if the justification has Adam Smith described self-interest and competition in a market economy as the "invisible hand" that guides the economy. The theory of collective interest that we examine is public goods theory. It encourages individuals to consider broader consequences and harnesses the power of collective well-being for positive change. Jan 21, 2025 · Adam Smith’s concept of self-interest suggests that individuals’ pursuit of their own goals can lead to societal benefits. It comes with both pros and cons. Consider our desires for water, food, or sex. Recent methodological and social trends render sociological indifference to the concept untenable. Source for information on Self-Interest Jan 13, 2009 · Reasonable Self-Interest* - Volume 14 Issue 1By “self-interest” I mean to include, roughly, one's welfare, what is good for one, what is beneficial to one insofar as one is concerned with one's own well-being. He left two famous books. This is a moral practice that recognizes the worth of others, as well as the worth of self. [3][4][5] The term Philosophical Explanation One of Adam Smith’s most influential and perhaps groundbreaking theories was his theory of self-interest. Both this theory and further developments in rational choice theory refute any negative misconceptions associated with self-interest. Plato’s Republic defines this theory as economically significant. Individuals are calculating costs and benefits to determine which choices can maximize self-interest or are aligned with their beliefs. Self-interest theory argues that people are inherently selfish based on four arguments: it is true by definition, evolution has programmed people to pursue self-interest, hidden benefits motivate seemingly altruistic acts, and fear of punishment deters wrong acts. Oct 30, 2024 · The invisible hand is a metaphor that describes the unseen forces of self-interest that impact the free market. It claims that, when people choose to help others, they do so ultimately because of the personal benefits that they expect to obtain, directly or indirectly, from doing so. This article argues, against all previous deliberative theory, that self-interest ought to play a role in deliberative democracy. His mainly research - only from UKEssays. c. The Mandevillian interpretation works further harm since Mandeville, unlike Smith, reduced all motivations to self-interest, and all Jul 26, 2010 · However, by employing game theory he shows that states can widen the perception of their self-interest through economic cooperation and involvement in international institutions. Recent methodological and social trends render sociological indifference to the concept untenable Although self-love may corrupt moral perception, the impartial spectator serves as an antidote. This audio assignment explains these concepts and their importance to our understanding of the economic system. The self-interest vs. This theory influenced both Smith’s moral framework and his view of political structure that he presented throughout his writings Apr 6, 2025 · Self-interest is often seen as the bedrock upon which classical economic theory is built. Mar 2, 2023 · Enlightened self-interest means a “self-interest rightly understood” where a person, a group, or an organization is “doing well by doing good. Dive into key concepts like the Invisible Hand and Game Theory, and understand the critical debates surrounding human rationality. Conversely, if these theorists assume narrow self-interest, they increase testability Sep 5, 2012 · The concept of self-interest remains underdeveloped in sociology although central to economics. Self-interest and Selfishness Part of the misunderstanding of Smith’s work may stem from the tendency of modern readers to conflate self-interest with selfishness. At its core, the ethics of self-interest is closely tied to ethical egoism, a moral philosophy that posits individuals should prioritize their own self-interest above all else. He thought that given four basic facts about human life, without means to enforce social rule the life of man would be "solitary, poor, nasty, brutish, and short. In this article, we will examine the practical applications and consequences of ethical egoism in Dec 1, 2024 · From pursuit of self-interest to pursuit of happiness: Complementary or contradictory readings of “wealth of nations” and “theory of moral sentiments”? Jan 13, 2009 · The first two sections of the essay apply this theory in a simple form, one that treats self-interest and altruism symmetrically. objective-list theory d. other types of economies. When I ask people what’s the first thing that comes to mind about Adam Smith, self-interest is the most common answer. Oct 14, 2024 · Social Contract Theory Ethical egoism seems to pull on the intuition that human beings are self-interested . com . Virtually every Western moral philosophical and psychologi-cal theory gives a prominent role to such self-interest (Sears & Funk, 1991), yet when David Sears started putting this question to empirical test he Mar 23, 2021 · Basically, rational choice theory reduces all human activities to one motivation — every human being has exactly the same motivation: to maximise self-interest. It sometimes refers to what is in a person’s interests, to well-being understood as what makes their life go well. This is associated with the ______ theory, The study of the law as a reflection of morals is the _______ theory. Self-interest can also refer to a motive or disposition of character: persons are said to act from self-interest when they aim at their own good or to be self-interested when they are disposed to pursue their own good Apr 28, 2017 · A leader behaving in a way that is exceedingly self-interested and exploitative of others is a recurring notion in destructive leadership but also an unexplored Nov 21, 2023 · Learn about rational self-interest in economics and the theory behind it. This is a descriptive rather than normative view, since it only makes claims Jul 6, 2018 · Adam Smith is a fascinated moral philosopher and an expert of economic. The document discusses two theories: self-interest theory and utilitarianism. A 'self-interested' person, in this view, is one concerned with profit maximization (or, its converse, loss minimization). Sep 1, 2012 · The concept of self-interest remains underdeveloped in sociology although central to economics. Discover the foundations of Rational Actor Theory, a cornerstone in economics, political science, and psychology. meaning theory, Wolf's theory of self-interest a. Ethical egoism also differs from rational egoism, which holds that it is rational to act in one's self-interest. Self-interest can also refer to a motive or disposition of character: persons are said to act from self-interest when they aim at their own good or to be self-interested when they are disposed to pursue their own good Apr 4, 2016 · Expanding on the assumption of narrow self-interest underlying agency theory, we apply an empirically well-established refinement that self-interest is bounded by norms of reciprocity and fairness. hedonism b. Preference or desire accounts identify self-interest with the satisfaction of one’s desires. d. Smith’s conception of self-interest in The Wealth of Nations is a broad one and not inconsistent with the moral psychology of The Theory of Moral Sentiments. -Politicians and bureaucrats pursue their own Consistent with Smith's earlier work on moral psychology, the Theory of Moral Sen- timents,4 self-interest is, however, not to be identified with selfishness or greed. Thus, if both parties are motivated by self-interest, agents are likely to pursue self-interested objectives that deviate and even conflict with the goals of the principal. In the present article the author examines the role the assumption of self-interest plays in its own confirmation. It is proposed that a norm exists in Western cultures that specifies self-interest both is and ought to be a powerful determinant of Ethical egoism, in philosophy, an ethical theory according to which moral decision making should be guided entirely by self-interest. In this comprehensive exploration, we delve into the intricate relationship between self-interest and economics, shedding light on how individuals and societies are driven by their own self-interest. Nov 17, 2023 · 2. If positive political theorists assume broad self-interest as the standard of human behaviour, they can accommodate people’s ideological motivation to act for the common good. According to Consequentialism, or C, the ultimate moral aim is that things go as well as possible. Adam Smith turned economic theory on its head in 1776 when he declared that the pursuit of self-interest mediated by the market itself--not by government--led, Abstract According to the Self‐interest Theory, or S, our own well‐being is the supremely rational aim. For example, a self-regarding duty may be simply to treat oneself in a certain way (e. This essay explores ethical egoism and the main arguments for and against it. In addition, countless medieval records describe this division as contributory to the community as a whole. Hedonism, the school of ethics which argues that pleasure is the only intrinsic good. Interest theory refers to the idea that observers are motivated to care about the mistreatment of others to the extent that it triggers their self-concerns, influenced by factors such as similarity or identification with the victim. A number of philosophical, psychological, and economic theories examine the role of self-interest in motivating human action. “Self-regard” has broader uses. Study with Quizlet and memorize flashcards containing terms like "nice guys finish last", "the achievement of his own happiness is mans highest moral purpose", the nestle story raises a question about whether ___ is the driving force behind all human conduct and more. It is not until we consider moral philosophy—which seeks to categorize things into standards of right/good and wrong/bad—that self-interest becomes decidedly The self-interest motive is singularly powerful according to many of the most influential theories of human behavior and the layperson alike. At its essence, self-interest involves prioritizing one's own needs, desires, and well-being. Aug 5, 2024 · What Is Rational Choice Theory (RCT)? In economics, rational choice theory (RCT) is a school of thought stating people’s decisions are based on rational analysis to achieve favorable outcomes. preference theory c. Mar 19, 2024 · Self-interest is a fundamental aspect of human behavior and a cornerstone of economic theory. It is the invisible hand that Adam Smith described, guiding individuals to contribute to the economy's overall health through their pursuit of personal gain. This assumption of self-interest dooms agency theory to inevitable inherent conflicts. Nov 4, 2002 · 1. Study with Quizlet and memorize flashcards containing terms like When an individual or business promotes its own interests, the good of society is indirectly promoted. It suggests that individuals should prioritize their own interests and desires above all else, as this is the most effective way to achieve personal satisfaction and overall well-being. Jun 18, 2009 · Kant is the foremost example of a philosopher who makes room for self-regarding duties while firmly excluding self-interest from moral motivation. The idea that pursuing self-interest can simultaneously serve the public interest underpins classical economic theories favoring free markets. Among the conditions that legitimate the entry of self-interest into deliberation the authors include both the “regulative ideal” of the absence of coercion (recognizing its impossibility in practice) and the constraint of self-interest by fairness. Rational egoism (also called rational selfishness) is the principle that an action is rational if and only if it maximizes one's self-interest. Philosophical concepts concerned with self-interest include: Enlightened self-interest, a philosophy which states that acting to further the interests of others also serves one's own self-interest. holds that self-interest doesn't exist. Helping others to achieve their interests is a premium manner to advance A leader behaving in a way that is exceedingly self-interested and exploitative of others is a recurring notion in destructive leadership but also an unexplored aspect that warrants further scrutiny. Aug 12, 2012 · Campaigns to promote pro-environmental behaviour usually emphasize self-interested reasons for engaging with a self-transcendent cause such as protecting the environment. Oct 21, 2022 · ABSTRACT Ideology and self-interest are often in tension. In a total of six studies (total N = 1,722), we Feb 2, 2020 · The ethical theory known as ethical egoism states that we are always morally required to do what’s in our own self-interest: the view is sometimes called an “ethics of selfishness. The “invisible hand” metaphor illustrates how self-regulated markets can promote the common good. May 24, 2025 · The concept of self-interest has been a cornerstone of various philosophical theories, influencing decision-making in personal and public contexts. Aug 25, 2016 · The balance struck by moral rules between the claims of self-interest and the claims of others is what makes it possible for those rules to be recognized and accepted as appropriate. … he awards himself what is finest and best of all" (1168b28–30). Cyrenaics Oct 1, 2018 · Self-interest, it turns out, is a key component in the creation of a stable, just, and orderly society in which individuals are secure and able to pursue their own goals. [1][2] It has often been simply expressed by the belief that an individual, group, or even a commercial entity will "do well by doing good". The automatic nature of self-interest The contrasting view of self-interest typically pits it against morality, holding that one is moral only to the extent that one sacrifices one’s self-interest for the sake of others or, more moderately, to the extent one acts primarily with regard to the interests of others. ,egotism) Individual ethical egoism is a belief that can't be consistent unless it applies to just one person. Distinguishing between self-interest and selfishness is crucial in understanding economic behaviors. A Core Principle Section 1: Defining Self-Interest: A Core Principle Self-interest, often at the core of human behavior, is a multifaceted concept that transcends mere selfishness. With men driven by narrow con-siderations of self (i. This article was updated in August of 2018 to include new information and examples. Psychological Egoism All forms of egoism require explication of “self-interest” (or “welfare” or “well-being”). Enlightened self-interest is a philosophy in ethics which states that persons who act to further the interests of others (or the interests of the group or groups to which they belong) ultimately serve their own self-interest. One might think, for example, that basic facts about evolution show we’re motivated by self-interest. , Those who follow the self-interest theory believe that acting in a selfless manner does which of the following Study with Quizlet and memorize flashcards containing terms like Wolf endorses which of the following theories of self-interest? a. The concept of self-interest is used in two distinct ways. I am also indebted to many for comments and discussions over the years that have helped me understand these issues. It differs from psychological egoism, which claims that people can only act in their self-interest. This concept suggests that when individuals act in Sep 11, 2023 · Abstract This article draws on textual evidence from The Theory of Moral Sentiments and The Wealth of Nations to address mistaken interpretations of Adam Smith's fundamental concept of self-interes The concept of self-interest is used in two distinct ways. Moore1;2 and George Loewenstein1 This paper argues that self-interest and concern for others influence behavior through different cognitive systems. Smith’s theory of self interest described the unforeseen benefits of each individual acting out of their own self-interest. The third section examines whether the theory can be revised to accommodate an apparent asymmetry in our common-sense thinking about self-interested and altruistic attitudes. Understanding Rational Choice Theory RCT is a framework used in Apr 28, 2017 · A leader behaving in a way that is exceedingly self-interested and exploitative of others is a recurring notion in destructive leadership but also an unexplored Aug 6, 2025 · Discover how the invisible hand in economics guides free markets, using self-interest to achieve societal benefits. Beyond the realms of philosophical inquiry, the belief that self-interest explains human behavior has had a profound influence on the development of classical and modern political and economic thinking. The term has enjoyed historical predominance in the West since the sixteenth century. The A study of literary and philosophical accounts of self-interest during the early modern period seeking to analyze the emergence of the "interest-paradigm" in modern social theory. Understanding one’s ethical and professional obligations to others, in contrast, often involves a more thoughtful process. . Aug 14, 2020 · This chapter identifies the Ethic of Self-Interest as a well-recognized ethical perspective that has become the underlying philosophical frame of reference for decision-making in many modern Glossary assumption of rationality: also called the theory of rational behavior, it is the assumption that people will make choices in their own self-interest 1. When applied to actions, S claims that “ What each of us has most reason to do is whatever would be best for himself, and It is irrational for anyone to do what he believes will be worse for himself” . While it is seen in … Dec 10, 2014 · Expanding on the assumption of narrow self-interest underlying agency theory, we apply an empirically well-established refinement that self-interest is bounded by norms of reciprocity and fairness. -Government officials are assumed to align their interests with public interests. Several theories attempt to answer this question, and Parfit begins his discussion with the best-known case: the Self-interest Theory, or S. The ability to persuade others by engaging their self-interest is a way to benefit one’s own self-interest without the use of coercion or force (Rand, 1966). However, psychological In the first quote, Smith explains why self-interest is necessary, and in the second he shows how the pursuit of self-interest, via the invisible hand, benefits soeiety. " May 27, 2025 · Ethical egoism is a philosophical theory that posits self-interest as the foundation of moral decision-making. , On Wolf's Journal of Applied Corporate Finance SELF-INTEREST, ALTRUISM, INCENTIVES, AND AGENCY THEORY This research has been supported by the Division of Research, Harvard Business School. g. Experiments and other evidence show that self-interest, a concern for Study with Quizlet and memorize flashcards containing terms like Which of the following is NOT a viewpoint of the self-interest theory of government? -Limitations on taxes and spending are considered as safeguards against the selfish behavior of government officials. The Ayn Rand Lexicon: This mini-encyclopedia of Objectivism is compiled from Ayn Rand’s statements on some 400 topics in philosophy, economics, psychology, and history. Social theorists have long been fascinated by self-interest as a motivation for economic and other forms of social action (Coleman, 1986). , sel‹shness) and distrustful of everyone else, the result is “bellum omnium contra omnes,” a war of everyone against every-one The Self-interest Debate in Economics: Financial Gain Within economics, discussions of self-interest are often concerned with personal pecuniary payoffs. ” Sen adds that, “in terms of historical lineage, the self-interest interpretation of rationality goes back a long Given the multiple uses of terms, discussion of altruism and self-interest in evolutionary theory can often seem directly relevant to the psychological egoism-altruism debate. What makes a desire self-regarding is controversial, but He agreed with conventional theory in identifying self-interest as a prime motivator of man, but for him this had malevolent rather than bene‹cent results. This focus on self-interest as the key building block for organization theory is relatively new. e. Agency theory assumes both the principal and the agent are motivated by self-interest. Often, and most plausibly, these desires are restricted to self-regarding desires. However, in the realm of philosophy, self-interest is more neutral—simply denoting that we all have our own welfare in mind when we act. [1] Ethical egoism holds, therefore, that actions whose his real achievements in economic theory. P is not a single theory, but rather a class of theories, and Parfit thinks that one of those versions of P which he describes as critical-CP-is the best theory. contains a subjective and an objective component. Jan 30, 2021 · This book discusses the complete developmental history of the human aspect in economics, details the issue of self-interest, from pre-Adam Smith to contemporary neuroeconomics, representing a unique contribution to economics, and helps to elucidate the position of self-interest in economic theory Jun 7, 2022 · According to philosophers like Adam Smith, humans are rational beings who make choices in their own self-interest. is wholly objective. ” These largely cited quotes are attributed to Alexis de Tocqueville regarding the first (Heffner 1956; Vearrier 2020) and often to Benjamin Franklin regarding the second. Jun 30, 2021 · Self-interest drives capitalism. Yet, their theories may become tautological and empirically untestable. Individual ethical egoism is the prescriptive doctrine that all persons should serve my self-interest (i. However, each argument faces criticisms like not A combination of self-interest, a regard for the wellbeing of others, and appropriate institutions can yield desirable social outcomes when people interact Game theory is a way of understanding how people interact based on the constraints that limit their actions, their motives, and their beliefs about what others will do. ” This essay introduces ethical egoism. Virtually every Western moral philosophical and psychologi-cal theory gives a prominent role to such self-interest (Sears & Funk, 1991), yet when David Sears started putting this question to empirical test he Feb 24, 2021 · This distinction between natural self-interest and concern for close friends, family and larger social groupings gives rise to an intriguing view of the political life that Smith outlines in the 6th edition of The Theory of Moral Sentiments. The word Rational qualifies the Self-Interest as beneficial rather than greedy. Don A. The starting point of both egoism and social contract theory is that we are self-interested and rational beings. Aristotle's thought is that if one pursues things such as pleasure and wealth, one pursues what is base, injuring oneself. The chapter explains how these theories can be indirectly self‐defeating, in the sense that our trying to achieve these aims may cause them to be worse; how it can be rational to cause A) a societal norm B) an unwritten rule that governs our interactions with each other C) self-policing D) ethical egoism, Which of the following is not associated with the self-interest theory? I cannot recommend personal ethical egoism to others because such a recommendation would be against my own self-interest. Sep 22, 2009 · THE RATIONAL PURSUIT OF SELF-INTEREST According to Amartya Sen, standard economic theory defines rational behavior in two different ways: “One is to see rationality as internal consistency of choice, and the other is to identify rationality with maximization of self-interest. Capitalism’s friends and foes agree on this, even if they agree on nothing else. Through introspection and ethical action, it guides individuals towards navigating human interactions with wisdom Dec 1, 2005 · According to self-interest theory, people become always selfish and due to such an opposite behavior people are obliged to leave the moral values of human being. Psychological egoism is the view that humans are always motivated by self-interest and selfishness, even in what seem to be acts of altruism. Ethical egoism, the ethical position that moral agents ought to do what is in their own self-interest. More precisely, psychological egoism is the doctrine that the only thing anyone is capable of Conclusion Although it is hard to prove that everyone must always act out of self-interest, it is probably true that we have the tendency to act for the sake of promoting our own best interest. One of the enduring questions in public opinion research is the extent to which citizens’ political beliefs and behavior are guided by their own narrowly defined tangible self-interest. Explore how rational decision-making and self-interest drive human behavior, predict market trends, and inform policy-making. Conclusion Although it is hard to prove that everyone must always act out of self-interest, it is probably true that we have the tendency to act for the sake of promoting our own best interest. Sep 14, 2024 · Explore psychological egoism, its impact on human behavior, and the debate surrounding this theory of self-interest in modern psychology and society. b. No empirical interest, according to Kant, can motivate moral concern, because all such interests—including our interests in others—reduce to self-interest. Learn why it's crucial for understanding market dynamics. However, it is crucial to recognize that self-interest operates within a spectrum, ranging from narrow and immediate Glossary assumption of rationality: also called the theory of rational behavior, it is the assumption that people will make choices in their own self-interest Self-interest generally refers to a focus on the needs or desires (interests) of the self. z55d vwz b7gl cea 4bjgeo sbdy plo6fh 0f1v puho6 7sphhry