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The Sweet Sociability of Self-Interest

by | Jun 27, 2017

The Sweet Sociability of Self-Interest

by | Jun 27, 2017

undreds of liberty-loving students, professionals, and entrepreneurs recently gathered in Atlanta for the first-ever FEEcon, an event celebrating the ideas of freedom and free enterprise. Judging from attendee feedback, it was a smashing success.

But it raises an interesting question. A skeptic might ask, “Isn’t a gathering of individualists a contradiction in terms?” Such a critic might have been even more flabbergasted had he attended. The conference was successful, not only because of meticulous planning (perhaps another shocking word in this context), but because of the communal spirit of the attendees.

Here were freedom-minded individualists following instructions and schedules, adhering to rules, moving in groups, and behaving conscientiously toward each other.

Here were apologists for capitalism generously sharing ideas and their precious time with one another, generally without the promise of pay.

Many of those who shared most generously were admirers of Adam Smith, who famously wrote of the importance of self-interest, and of Ayn Rand, who explicitly denounced altruism and even wrote a book titled “The Virtue of Selfishness.”

What explains this seeming paradox? How can adherents of a philosophy so preoccupied with the prefix “self” (self-interest, selfishness, self-ownership, self-reliance, etc) be so considerate and solicitous toward others? Wouldn’t you expect them to be narcissistic and misanthropic, miserly and hermit-like?

Smithian Self-Interest

The truth is, the self-interest-centered individualism of the centuries-old classical liberal tradition has never been antisocial. Indeed, from the beginning, one of its main objectives has been to explain and promote human communities.

Adam Smith, one of liberalism’s founding fathers, analyzed the effects of “self-love” for the purpose of explaining how a market society works. He famously wrote in the Wealth of Nations (emphasis added):

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.”

Smith explained how, through the market, the private “selfishness” of the individual inadvertently advances the public good:

“Every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

Many consider this aspect of the market society to be excessively calculating, even cynical, leaving no room for authentic fraternity. Some go so far as to demand the abolition of capitalism in favor of socialism in order to fully restore benevolence and the intentional promotion of the public interest in the hearts of humankind.

Others grudgingly concede the necessity of self-interest in economic matters, but want to keep it quarantined in the marketplace, and even there to have its excesses mitigated by “public-minded” governmental and moral regulation. They seek to exclude toxic self-interest from the non-commercial aspects of society: from matters of friendship, family, civil society, etc. In these realms, altruism must reign, lest self-interest breed destructive antagonism.

As some skeptics of the free market have eagerly pointed out, even Adam Smith regarded selfless benevolence as an essential part of the human condition. In his Theory of Moral Sentiments, he wrote:

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

20th Century Selfishness

Yet, Ayn Rand and her protege Nathaniel Branden (who co-authored The Virtue of Selfishness) would have none of such half-measures. Rand’s Objectivism was not merely a political and economic doctrine, but a thoroughgoing life philosophy. And according to it, altruism was an absolute vice, and selfishness an unmixed virtue.

And Harry Browne, in his popular book How I Found Freedom In an Unfree World, also advanced a profoundly self-oriented life philosophy. His idea of personal freedom entailed a complete psychological emancipation of the individual from the demands of others, and a careful avoidance of what he called “the unselfishness trap.”

These 20th-century strands of individualism were even more radically self-oriented and anti-altruistic than their 18th-century predecessors. Many consider them to be a bridge too far: perhaps several bridges. To them, Smithian self-interest was already unpleasantly calculating, but Randian selfishness goes to noxious and antisocial extremes. Many blame such schools of individualist thought for the Reagan-era rise of capitalist greed that, to this day, threatens to sink the world economy in a whirlpool of rampant fraud and predatory business practices.

Are these concerns well-founded? Does selfish individualism need to be tempered by the imposition of at least some selfless collectivism, lest the Gordon Gekkos of the world drive the world to destruction while spouting “greed is good”? Does the wild ego need to be tamed, if not by governmental checks, at least by moral hectoring to guilt-trip individuals into considering the well-being of the tribe?

Rand, Branden, and Browne certainly didn’t think so.

As Ayn Rand wrote:

“Individualism holds that a civilized society, or any form of association, cooperation or peaceful coexistence among men, can be achieved only on the basis of the recognition of individual rights…”

Nathaniel Branden pointed out that:

“Contrary to the belief that an individualistic orientation inclines one to antisocial behavior, research shows that a well-developed sense of personal value and autonomy correlates significantly with kindness, generosity, social cooperation, and a spirit of mutual aid…”

And Harry Browne clarified that:

“An efficiently selfish person is sensitive to the needs and desires of others. But he doesn’t consider those desires to be demands upon him. Rather, he sees them as opportunities — potential exchanges that might be beneficial to him. He identifies desires in others so that he can decide if exchanges with them will help him get what he wants.”

Self-Interest and Honest Business

As individualists have long emphasized, self-interest draws individuals toward mutually advantageous exchanges: toward “doing business” with one another.

Moreover, contrary to the caricature of the greedy businessman who would sell his own mother down the river for an extra buck, self-interest also draws individuals toward doing honest business with each other.

And this is not mainly because they are self-interested in staying out of jail. As Edward Peter Stringham demonstrated in his book Private Governance: Creating Order in Economic and Social Life, what keeps businesspeople honest is not regulation (which actually fosters moral hazard), nor even primarily the government enforcement of contracts or laws against fraud. What primarily disincentivizes commercial criminality is what Adam Smith called “the discipline of continuous dealings.” As Stringham wrote:

“According to Smith, with repeated interactions people have an incentive to follow through with their contracts or else others will not want to deal with them.”

And such reputational concerns are a matter of self-interest: of the realization that, for the sake of one’s own interests, “honesty is the best policy,” as is justice in general.

Self-Interest and Human Society

Indeed, human society itself originated out of self-interest, and not, as some claim, out of a human capacity for pure, selfless benevolence. As Ludwig von Mises wrote in Human Action:

“Within the frame of social cooperation there can emerge between members of society feelings of sympathy and friendship and a sense of belonging together. These feelings are the source of man’s most delightful and most sublime experiences. They are the most precious adornment of life; they lift the animal species man to the heights of a really human existence. However, they are not, as some have asserted, the agents that have brought about social relationships. They are fruits of social cooperation, they thrive only within its frame; they did not precede the establishment of social relations and are not the seed from which they spring.”

In other words, society is a prerequisite for, not a result of, selfless benevolence. The ultimate source of society, according to Mises, is the human individual’s pursuit of his own improved sustenance, security, and flourishing through the division of labor:

“The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth.”

This is necessarily the case since:

“But for these facts men would have forever remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature. Each man would have been forced to view all other men as his enemies; his craving for the satisfaction of his own appetites would have brought him into an implacable conflict with all his neighbors. No sympathy could possibly develop under such a state of affairs.”

Only the abundance offered by the division of labor could have ever led pre-humanity to extricate itself from the dog-eat-dog law of the jungle, the Hobbesian war of all against all, the state of “nature, red in tooth and claw.” And only to the degree that such an escape was made was the luxuries of friendliness and a spirit of community extending beyond the pre-human pack even conceivable. Again, Mises:

“What makes friendly relations between human beings possible is the higher productivity of the division of labor. It removes the natural conflict of interests. For where there is division of labor, there is no longer question of the distribution of a supply not capable of enlargement. Thanks to the higher productivity of labor performed under the division of tasks, the supply of goods multiplies. A preeminent common interest, the preservation and further intensification of social cooperation, becomes paramount and obliterates all essential collisions.”

Humans become “socialized,” not by sacrificing their own interests for the sake of a deified abstraction called society, but by pursuing their own self-interest through harnessing the division of labor, which is almost always more productive than isolated labor owing to the Law of Comparative Advantage. As Mises put it:

“If and as far as labor under the division of labor is more productive than isolated labor, and if and as far as man is able to realize this fact, human action itself tends toward cooperation and association; man becomes a social being not in sacrificing his own concerns for the sake of a mythical Moloch, society, but in aiming at an improvement in his own welfare.”

Man is, as Aristotle said, the social animal, not because he is kind-hearted and community-minded. Homo sapiens is social, kind-hearted, and community-minded precisely because he is sapient: wise enough to understand that his own interests are better served through cooperation and peace than through isolation and predation.

And according to Mises, the pursuit of self-interest through the division of labor not only explains the origin of society, but its continued evolution:

“The factor that brought about primitive society and daily works toward its progressive intensification is human action that is animated by the insight into the higher productivity of labor achieved under the division of labor.”

Economic partners will not want to continue dividing their labor with you if you murder their brothers, abduct and enslave their children, or raid their storehouses. Thus the self-interested pursuit of the division of labor fosters the discipline of continuous dealings, which in turn drives the development of such basic societal norms as the general renunciation of murder, kidnapping, and theft (also known as the rights to life, liberty, and property). It also drives the development of less-fundamental norms like manners, which further grease the gears of cooperation and decrease social friction.

Self-Interest and Education

This explains the rise of friendly norms in broad strokes, but how does it actually occur on the individual level?

The individual’s basic character—the way she habitually deals with fellow humans, including her basic moral principles, her manners, and her other social virtues—is formed in childhood through education.

By “education,” I do not mean “schooling.” Education is social learning: learning from others, whether through listening, observation, or interaction. Education occurs with or without school. (In fact, virtually all schooling has been an outright hindrance to education.)

Many assume that the way to educate and “socialize” a child is by conditioning her to suppress her self-interest: to foster in her due regard for others through paternalistic controls, exercises, rewards, and admonishments. The idea is that, without being inculcated into a certain degree of selfless benevolence and concern for the collective, a child’s natural, unchecked self-interestedness will make her narcissistic, cold, cruel, and in some cases even sociopathic.

However, as developmental psychologist Dr. Peter Gray demonstrates in his must-read book Free to Learn: Why Unleashing the Instinct to Play Will Make Our Children Happier, More Self-Reliant, and Better Students for Life, character education does not primarily occur through involuntary, top-down, engineered “instructions” in virtue, but through the unplanned lessons that emerge out of social interactions in general, and especially with other children of various ages through voluntary social play. As Gray writes:

“Social play (that is, all play that involves more than one player) is, by its very nature, a continuous exercise in cooperation, attention to one another’s needs, and consensual decision-making. Play is not something one has to do; players are always free to quit. In social play, each player knows that anyone who feels unhappy will quit, and if too many quit, the game ends. To keep the game going, players must satisfy not only their own desires but also those of the other players. The intense drive that children have to play with other children, therefore, is a powerful force for them to learn how to attend to others’ wishes and negotiate differences. Research in our culture has shown repeatedly that even preschool children engage in enormous amounts of negotiation and compromise in the context of play…”*

In free play, playmates have the right to quit, just as in the free market, potential economic partners “reserve the right to refuse service to anyone.” So the self-interested pursuit of play, like the self-interested pursuit of the division of labor, fosters the discipline of continuous dealings, which in turn cultivates the childhood development of morality and manners. Playmates will not want to continue playing with you if you hurt their bodies with blows or hurt their feelings with cruel words.

It is through the experience of actually socializing, and not through adult finger-wagging, that children truly learn what kind of behavior is prosocial (that which wins, preserves, and builds relationships with playmates) and what kind of behavior is antisocial (that which drives playmates away). Children are naturally play-loving, so they have every interest in adopting pro-social/pro-play behavior. When this behavior becomes habitual it becomes what we call the child’s burgeoning “character” and “personal code of conduct.”

The self-interested pursuit of free social play is how children learn morality and manners, in order to win friends and influence playmates. Tragically, for over a century, the compulsory schooling movement has been waging an ever-growing war on free social play. This war has fully enlisted parents as well, as manifested in the present-day ubiquity of helicopter parenting. The decline of play has contributed to a wide range of emotional and psychological problems, especially among young people today.

Self-Interest and Generosity of Spirit

In the 1930s, Dale Carnegie wrote a book that has, ever since, informed adults about the basic social principles they could have learned as a small child through enough free social play, and that could have been reinforced by later work experience (which has since been all-but abolished for minors).

Anyone who has read Carnegie’s How to Win Friends and Influence People knows that the book basically counsels the reader to be abundantly friendly, kind, considerate, and solicitous toward others. Such advice might be found in any book of morals. But what has made Carnegie’s book such a perennial bestseller and such a life-changing read for generations of people is that, through case study after case study, he convincingly shows how such conduct is exceedingly good for business and leads to a flourishing, happy life. The convincing presentation motivates readers to actually try out Carnegie’s advice, and they invariably discover that it works like a charm.

There is no unit of account for social capital.

As Carnegie’s readers see confirmed by experience, behaving in a friendly and generous way toward others they encounter in their lives is in their own self-interest, because it builds good favor, or what is known today as “social capital,” and such social capital generally yields exceedingly good returns. For people who try it long enough, being friendly and generous eventually becomes a habit, and even a source of immediate pleasure, and thus an end in itself.

The universal effectiveness of Dale Carnegie’s teachings should put to rest the concern that self-interest, unchecked by governmental regulations or moral dogmas, would at worst break down society, and at best create a coldly calculating one. There is no unit of account for social capital. And one can’t be consistently friendly and generous without learning to love it and without it becoming second nature.

The Paradox of Self-Love

Thus, it makes perfect sense that a conference full of self-interested, commerce-oriented individualists and entrepreneurs would go so swimmingly. While others may strive for self-aggrandizement through the exercise of power (perhaps excused by posing as victims) and through vanity-infused virtue signaling, individualists are more likely to seek self-advancement through voluntary exchange, which includes not only formal trades, but the loose reciprocities of courtesy and friendship.

When it is not simply a matter of neurotic and compulsive obedience to expectations (and there is nothing commendable about compulsory virtue), conspicuous altruism is often paradoxically a vehicle for a posturing and self-righteous moral narcissism.

The flipside of this paradox is that what Adam Smith called “self-love” is actually the only solid bedrock for an authentic love of one’s fellow humans, as well as the only firm foundation for a friendly and flourishing society.

*Gray cites the Russian psychologist Lev Vygotsky to further elaborate how morality emerges out of play:

“Play is freely chosen activity, but it is not free-form activity. Play always has structure, derived from rules in the player’s mind. (…)

To play is to behave in accordance with self-chosen rules. (…)

…every form of play involves a good deal of self-control. When not playing, children (and adults, too) may act according to their immediate biological needs, emotions, and whims, but in play they must act in ways that they and their playmates deem appropriate to the game. Play draws and fascinates the player precisely because it is structured by rules the player herself or himself has invented or accepted. The student of play who most strongly emphasized play’s rule-based nature was the above-mentioned Vygotsky. In an essay on the role of play in development, originally published in 1933, Vygotsky commented on the apparent paradox between the idea that play is spontaneous and free and the idea that players must follow rules: 

‘The . . . paradox is that in play [the child] adopts the line of least resistance— she does what she most feels like doing because play is connected with pleasure— and at the same time she learns to follow the line of greatest resistance by subordinating herself to rules and thereby renouncing what she wants, since subjection to rules and renunciation of impulsive action constitute the path to maximum pleasure in play. Play continually creates demands on the child to act against immediate impulse. At every step the child is faced with a conflict between the rules of the game and what she would do if she could suddenly act spontaneously. . . . Thus, the essential attribute of play is a rule that has become a desire. . . . The rule wins because it is the strongest impulse. Such a rule is an internal rule, a rule of self-restraint and self-determination. . . . In this way a child’s greatest achievements are possible in play, achievements that tomorrow will become her basic level of real action and morality.’

Vygotsky’s point, of course, is that the child’s desire to play is so strong that it becomes a motivating force for learning self-control. The child resists impulses and temptations that would run counter to the rules because the child seeks the larger pleasure of remaining in the game. To Vygotsky’s analysis, I would add that the child accepts and desires the rules of play only because he or she is always free to quit if the rules become too burdensome. With that in mind, the paradox can be seen to be superficial. The child’s real-life freedom is not restricted by the rules of the game, because the child can at any moment choose to leave the game. That is another reason why the freedom to quit is such a crucial aspect of the definition of play. Without that freedom, rules of play would be intolerable.”

Reprinted with permission from the Foundation for Economic Education.

Dan Sanchez

Dan Sanchez

Dan Sanchez is a libertarian writer and educator. He is Murray N. Rothbard fellow at the Libertarian Institute and Director of Content and Editor of the Foundation for Economic Education (FEE). He created the Hazlitt Project at FEE, launched the Mises Academy at the Mises Institute, and taught writing for Praxis. He has written hundreds of essays for venues including,,, and The Objective Standard.

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