Adam Smith Self Interest Analysis

Self-interest, a common term that is widely used today, is described as the act of pursuing one’s personal benefit or desires. Many, however, have different interpretation and perception of this term. Some may argue that it is an individual act that can benefit the society, while others say that it is only pursued for one’s own advantage regardless of others. So, what then is self-interest?

Adam Smith, the “father of modern economics” and a moral philosopher, focuses much on personal ethics and human morality in an economic system. Smith introduces self-interest as the great motivator in an economic activity which cultivates a competitive free market economy. When individuals are in the process of providing their own self-interest, it can

This enables the society to be interdependent through production and consumption. Everyone’s labour, whether immediate or in the long run, can play a role in making a better place by serving the needs of others. Smith, in his writing, concludes that, “among men, … the most dissimilar geniuses are of use to one another; the different produces of their respective talents, by the general disposition to truck, barter, and exchange, being brought, as it were, into a common stock, where every man may purchase whatever part of the produce of other men's talents he has occasion for.” (Book1, Chap2, para 5). Unlike selfishness, which causes oneself to strive to be ahead of others or being too obsessed in accumulating wealth for his own purposes, men should instead work together creatively, utilizing their personal gifts and talents in building the community encourage collaborations through specialisation.

Furthermore, Adam Smith made a clear distinction between self-interest and selfishness by connecting human ethic to economic decisions as he adopts universal moral truths to describe economic behaviour. Although decisions or choices made by individuals are fundamentally based on self-interest, it is also important to note that they too include the idea of mutual sympathy and the fellow-feeling to

As beings who are naturally social, one’s actions are profoundly driven by sympathy, i.e. a moral understanding or “emotion which we feel for the misery of others” (I.I.1.1). When one sympathizes with another, he places himself in the others’ circumstances and identify with their feelings. Hence, Smith also argues that “Sympathy, however, cannot, in any sense, be regarded as a selfish principle” (VII.III.7).

Since everyone exhibits at least some form of generosity, it is evident that self-interest cannot be adequately considered as selfishness or greed. People in their self-interest can exhibit a caring attitude towards others, for example, supporting family and friends financially or donating to charity. This then fulfils the individual’s personal desire and motive to better one’s condition. As such, when being interested in other people is our best interest, it promotes benevolent activities towards others without