Selfishness and Business

Selfishness, and the absence of selfishness, is a fascinating issue. Simple models typically start with the idea that selfishness is a universal quality, what is sometimes called unbounded selfishness. The evolutionary logic of this is superficially appealing, sacrificing for others without a payback seems to be doomed if selection pressure is strong.

This idea of unbounded selfishness is quite widespread. Indeed while I’m unaware of any serious theoretical treatments that equate rationality with self interest people often start with the assumption that self interest is a feature of rationality. Benkler (2011, page 78) argues that post Adam Smith, “Models of self-interested rationality increasingly came to be seen as universally correct and applicable across an ever-expanding range of human practices.”

Benkler explains why these views are wrong. In his 2011 HBR article he surveys research which explains how a willingness to cooperate, even at personal expense, can work as an effective strategy. He even goes as far as to claim there exists a “myth of selfishness” (Benkler, 2011, page 84). He says that this myth persists because it is partially true — we all take selfish actions some times. Believing in the myth is also simple. This helps those who design economic models — the models are quite complex enough without introducing a willingness to sacrifice for others. Finally, we have all got used to believing in unbounded selfishness. This makes changing our expectations hard. Benkler says: “When we see acts of generosity or cooperation, for example, we tend to intrepret them through the lens of self-interest” (2011, page 85).

The lessson from Benkler is that assuming people are totally selfish is a poor start to constructing models of the business environment. People aren’t always selfish but then they aren’t always saintly either. Their complex motivations is what makes people worth studying.

Read: Yochai Benkler (2011) The Unselfish Gene, Harvard Business Review, July-August, pages 77-85