I have long been a proponent of self-interest. I see it as a beautiful thing. If you just rolled your eyes at that sentence, let me explain. First, I want to point out that there is a difference between being selfish and seeking your self-interest. Often they are used interchangeably, but they are not. Self-interest is a concern for one’s own well-being without being detrimental to anyone else. Selfish on the other hand is being completely concerned with oneself, without regard for others. The oxygen mask on an airplane is a perfect example of this distinction. In the case of an emergency on an airplane, the international air safety standards, regarding the use of the oxygen mask recommends that “the passenger should always fit his or her own mask before helping children, the disabled, or persons requiring assistance.” I think most adults would instinctively rush to make sure that a child or the elderly are taken care of first. In this case it would be detrimental to everyone if the adult tried to be selfless and not seek his/her own self-interest. If he/she does not take steps for self-preservation first, then they can be of no use to those who really need them. In this case self-interest is essential for the benefit of all.
I can also make the case that there are no selfless deeds. Parents and missionaries are classic examples. They both get immense satisfaction and a sense of accomplishment from being of service. This is a need they seek to fulfill in themselves. The gratification that missionaries and parents receive from their service is included in their definition of self-interest. Their need to be of service is satisfied by being in those roles. So truly they are benefiting just as much as those they serve, albeit in a different manner.
Our economic models are based on the concept of scarcity which necessitates competition. This compels people and businesses to maximize their self-interest. Equilibrium is achieved when buyers and sellers optimize their self-interest. Sellers naturally want to get the highest price they can for their product, while buyers want to get the cheapest price. The price that is finally established is one that benefits both the buyer and seller. If a buyer or seller were to opt out of serving their own self-interest, then one would be exploited by the other. If, as a consumer we don’t make certain that we get the best value for our dollar, then we would be at the mercy of businesses and vice versa.
Successful businesses are those that are able to demonstrate the value they bring to the customer. By ensuring that the consumer has the highest quality of good or service, businesses solidify their own interest. They are not doing this out of the goodness of their heart. Not to be cynical, but when businesses help others, they are also helping themselves. When they do charity work and “give” back to society, they are reaping the rewards themselves. The goodwill and positive emotions that are then associated with their brand go a long way to ensuring there is always a demand for their product.
So the lesson for today is, don’t feel bad when you put yourself first. You are doing a service to everyone around you when you do. You’re a better parent, worker, spouse and friend when you take care of yourself. Your circle of influence is better off with a happier you. So if each person seeks their self-interest, then we can be sure society as a whole will be better off.
Now, specifically from a financial perspective, it is important to ensure that when you make a purchasing decision that you absolutely put your self-interest first. To do so, you have to be conscious of your purchasing decisions, if you are on auto pilot it is dubious whether your purchase is in your best interest. So take a moment and be present when making a purchase, don’t let those somatic markers do the work for you. If you are not used to making conscious purchasing decisions I suggest you start practicing. Start today and start small. When you stop for coffee, for example, think about it for a second. Take a deep breath and ask yourself if you really need that coffee. Do you really need it now? Are you buying out of habit? You may be surprised by what you find out. This type of training is ongoing. Like a muscle, it gets bigger and stronger over time. The more conscious choices you make, the more it benefits you and everyone around you.
This topic usually spurs a lot of conversation. I would love to hear your view, so leave a comment below.