9. Make people’s self interest work for the country
Whether he is a communist leader in Europe, or a self professed public servant, there are not many leaders that are truly altruistic. Many have been exposed to be looking after their self interest. It is human nature to look after yourself and your interest first. However, it does not mean this will not redound to public good.
Adam Smith, the father of Economics, in his treatise The Wealth of Nations, widely considered as one of the greatest achievements in intellectual history, expounded that:
“The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principle, that it is alone, and without any assistance, capable of carrying on the society to wealth and prosperity.” He is saying that individuals who compete for private gain will, as if led by an invisible hand, promote the public good.
You don’t have to look far. You go to Singapore, or any modern city. You find good service in hotels, food in the supermarkets, seats in the bus, and pretty much every convenience you are looking for. Nobody tells the people to offer this product or service. It is only that they, sensing an opportunity for private gain in offering so, does it.
Competition is also a key factor because it motivated each person to become more productive. And the greater the productivity, the greater the gain for the individual and prosperity for the community.
As Adam Smith puts it, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner but from their regard to their own interest.”
Market economy works best because policies and regulations most closely aligns personal interest with public good. When the winner is able to win big, there is every incentive to work harder. When the winner wins small, and is taxed heavily, and the consolation prize is also substantial, then people lose the incentive to compete.
May 20th, 2010 at 4:25 am
Even philanthrophy is more oftentimes than not based on selfish reasons – it makes the philanthropist feels good, and achieves his end to get respect from the community as well as leave a name for himself.
May 23rd, 2010 at 4:12 am
I agree, EVERYTHING serves personal interest, it’s just by coincidence that it helps others as well, but this form of help is by providing a service to the public, and to “Fill in a Gap in the Market”, which provide people with increased choices in how they spend their money, and also provides a service to the government in the form of income tax.
May 31st, 2010 at 9:52 am
Adam Smith long expounded on the Self Interest behavior and I quote, ” it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner but with regard to their self-interest”. Smith believes that there is invisible hand that makes the market work- based on incentives. – the Wealth of Nations
June 6th, 2010 at 3:15 am
“When the winner wins small, and is taxed heavily, and the consolation prize is also substantial, then people lose the incentive to compete.”
Yes we lose the will to compete —Those who do not pay taxes, those who just vote for the corrupt politicians – those who were pampered by the politicians – they call MASA – were given so much incentives – high posts in PAG-IBIG funds and government positions.
I still do not understand why E-vat promoter Recto was still elected…Is it for another E-Vat hike?