Arnold Kling  

What is selfishness?

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Don Boudreaux writes,


when someone selfishly jogs to improve his or her health, we applaud. When that same someone selfishly seeks financial profit by offering goods or services for sale to consumers, many of us are wary. (And even most of the other of us who aren’t wary don’t positively praise this variety of self-interested behavior. We merely tolerate it as necessary.)

Selfish behavior that is exclusively self-regarding is praised; selfish behavior that requires the selfish actor to consider and satisfy and please strangers is suspect.

Curious.


I think that we have a deep-seated inclination to view market transactions as zero-sum rather than positive-sum games. So when we buy, we think that the seller "wins" and we "lose," even though we voluntarily made the purchase.

My explanation for this consists of amateur evolutionary psychology. In the hunter-gatherer period, there was no market pricing. The stronger prehistoric human took advantage of his weaker counterpart in any exchange. Our prehistoric self sees corporate sellers as an analogue of a giant brute with a big club.

Thus, we have the Erin Brockovich narrative. The corporation is cold and evil. The anti-corporate crusader is virtuous.

To see the larger context of an economic system and its positive-sum consequences requires a major leap, a shift of consciousness if you will. The objective of economics courses should not be simply to get students to shift supply and demand curves correctly. It should enable them to make that consciousness shift. In that sense, not even all professional economists have Learned Economics (see the chapter on Type C vs. type M arguments).

Zimran Ahmed writes,


it seems that we are biologically wired to imaging goods as fixed sum entities that just appear (as if they grow on trees, or graze in large herds perhaps) where one person having them means another person goes without.

For Discussion. If our prehistoric self views a corporation from which we are buying a product as a brute with a club, what should our analogy be instead?


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CATEGORIES: Economic Philosophy



COMMENTS (9 to date)
Dan Weintraub writes:

Funny that you should bring up the concept of "winners" and "losers" in market transactions. I have always thought eBay was brilliant to label its buyers "winners" (and have been amused by the smile on my wife's face every time she "wins" the right to buy an item). Strange that on eBay, or in any auction probably, people are always satisfied that they got a fair price, probably because the bidding is so transparent, where as the price set in retail or other modern transactions is more mysterious.

William Woodruff writes:

I must disagree with your premise. Not all exchanges with the the brutish corporation are seen as zero sum games by consumers.

I believe a majority of exchanges between consumers and the brutish corporations are mutual exchanges, and the consumer does not leave feeling cheated.

Many consumers enter into the exchange because they themselves are incapable of creating the good/service themselves and are a willing participant in the exchange. Dissatification originates when the product/service delivered does not meet ones expectation (real or imagined).

Taken to the extreme, patients in managed care are only discontent with poor service, not great service. Could anyone imagine such an exchange:

" I hate the brutish corporation which created the necessary utensils for my heart surgeon who performed my successful triple bypass'

William

Ken writes:

"I must disagree with your premise. Not all exchanges with the the brutish corporation are seen as zero sum games by consumers."

Of course not. If consumers didn't think they were going to come out ahead, they wouldn't be consumers.

The problem begins when bystanders make (hopelessly confused) moral judgements about what is going on between the consumer and the corporation. It bites us all in the nether regions when those bystanders manage to get laws passed on the basis of those judgements.

Maybe this evolutionary theory helps explain why those bystanders keep getting it wrong. What to do about it? I wish I knew.

Lawrance George Lux writes:

Arnold,
The answer is a Brute with a Club and a Gun. Corporations possess the financial resources to produce inferior product, evade Government regulation, produce evasive advertising about product, and hire Accountants to avoid paying Taxes and artifically inflate Profits hidden from the Public.

The Consumer, on the other hand, possesses little financial capital for research of product, little available evidence to substantiate product claims in advertising, and very little Price competition.

Consumers are left to trust the good-hearted nature of Corporate leadership, who would rather fulfill the needs of Consumers, rather than make the greatest Profits possible. lgl

Bill writes:

"The Consumer, on the other hand, possesses little financial capital for research of product, little available evidence to substantiate product claims in advertising, and very little Price competition."

lgl,

Where do you live? None of this statement is true for the U.S.; at least, not since the coming of the internet.

Brock writes:

Bill -

I think LGL is correct, and that the Don Bourdeux's observation makes perfect sense. It's all about trust.

When we see a jogger we know exactly why he's doing it and what he's getting for it and what his acticity costs us (answers: he wants to, health, nothing).

When someone tries to sell us something there could be alternative motives. Some sales people are just really excited about how great their product is and want to share it with everyone. Some sales people just want the commission and will sell you any piece of crap they think you'll be a sucker for. We know this, so until we know the sales person, we're cautious.

As for the Internet, sure, that helps a well-prepared shopper find the best stuff, but (1) it's not infallible, and (2) old habits die hard.

Gil writes:

I don't think it's because of the size or power of the participants. Most people don't assume that a strong man is taking advantage of a weaker woman if they are dating or getting married, for example.

I think it's about base greed and jealousy. I suggest that many people react negatively to those accumulating wealth because wealth is something that they can theoretically have for themselves (or their causes) if only that wealthy person/group didn't hoard it. You can't steal someone's health or emotional pleasures, but you can take his money.

These people prefer to believe that the wealth is undeserved so that they can be at ease with their dislike of economic success. They tell themselves that wealth can only be taken from others, rather than created, despite the abundance of evidence to the contrary.

Bernard Yomtov writes:

My explanation for this consists of amateur evolutionary psychology. In the hunter-gatherer period, there was no market pricing. The stronger prehistoric human took advantage of his weaker counterpart in any exchange. Our prehistoric self sees corporate sellers as an analogue of a giant brute with a big club.

I don't know any more about evolutionary psychology than you do, maybe less, but this seems wrong. Why assume that there were no market exchanges just because there was no currency? If it took more than one hunter to bring down game, for example, then there would have to be some arrangement for sharing the spoils. And why wouldn't gatherers barter if they found different foods?

The fact is that GOV'T budgets ARE zero sum -- more for education does mean less on defense, or vice versa.

In ex-commie Slovakia, "Economist" meant bookeeper, with a tiny bit of accountant. The need for economists to constantly reinforce the positive-sum nature of ALL trade is a true and important deficiency of many economic discussions.

There is also the distaste of many folk at being treated as a consumption-object-target by sales folk.

And there's no need to go further back than 1000 years, when virtually anybody who was "rich" in Europe was rich based on force of arms and doing much more in the way of taking than in producing. And most non-fighting rich merchants were amorally willing to help whoever they thought would win most cheaply, sucking up to those kings in return for royal patronage.

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