Selfishness, and the absence of selfishness, is a fascinating issue. Simple models typically start with the idea that selfishness is a universal quality. This is termed unbounded selfishness. The evolutionary logic of this is superficially appealing. Sacrificing for others without a payback seems doomed. (Assuming selection pressure is strong). Thus, selfishness and business are assumed to go together.
Unbounded Selfishness
This idea of unbounded selfishness is quite widespread. I am unaware of any serious theoretical treatments that equate rationality with self-interest. Philosophers don’t generally do that. Anyone thinking deeply can see the problem assuming selfishness. Yet, business scholars often start with the assumption that self-interest is a feature of rationality. Benkler argues that selfishness has become assumed in economics. (After Adam Smith, although to be fair one shouldn’t blame him).
Models of self-interested rationality increasingly came to be seen as universally correct and applicable across an ever-expanding range of human practices.
Benkler, 2011, page 78
Selfishness And Business Are Not The Same
Benkler explains why these views are wrong. In his 2011 HBR article he surveys research. This explains how a willingness to cooperate, even at personal expense, can work as an effective strategy. We can do better working together. This happens all the time.
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 sometimes. But sometimes is not always. We all do plenty that isn’t selfish too. (Probably all, that may be a bit strong).
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. Caring about others really messes up utility functions. Basically, it adds feedback loops. I care about you. You care about me. So the modeler can’t get a utility for me independent of you and vice versa. The model descends into complexity. So modelers assume I don’t care about you and vice versa. The model is thus much simpler ignoring social concerns.
Finally, we have all got used to believing in unbounded selfishness. This makes changing our expectations hard.
When we see acts of generosity or cooperation, for example, we tend to intrepret them through the lens of self-interest.
Benkler, 2011, page 85
Bounded Selfishness And Business
The lesson 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. Then they aren’t always saintly either. Their complex motivations are what make people worth studying.
For more on selfishness and rationality see here, here, and here.
Read: Yochai Benkler (2011) The Unselfish Gene, Harvard Business Review, July-August, pages 77-85
