The concept of self-interest is believed to have emerged in relation to financing. Its primary meaning is close to that of the word ‘commodities’. With time, however, its meaning has changed almost completely and in the modern world in means egoism, selfishness, and individualism. Though economists are constantly trying to prove that “individuals pursuing self-interest advance the interests of society,” some people may still keep to an idea that the presence of this feature in the person’s character does not make him/her any better.
Nevertheless, self-interest can still be regarded as a force that provides foundation to the society, irrespective of its being destructive in nature. According to Adam Smith, people promote the good of society every time they pursue their self-interests; all the individuals are largely motivated by the economic self-interests in the society because it allows them to exercise their sovereignty and even when doing something beneficial for the society, they still pursue only their own interests.
To begin with, Adam Smith was convinced that the main role of self-interest in the society consists in increasing the good done by people. He argued that self interest together with freedom and competition can lead to “natural harmony of interests between workers, landlords and capitalists”. Smith stated that self-interest under some circumstances is even beneficial for the society.
Thus, for instance, in his Wealth of Nations, Smith explains that “investors decide to put their money in a particular industry in order to maximize the return on their investment. In so doing, they unknowingly contribute to maximizing the “annual revenue of society”. This is what Smith called an “invisible hand” by which the rich are led “to make nearly the same distribution of the necessities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants”. Thus, self-interest serves to guide people making them do public good, regardless of whether this act is conscious or unconscious.
Economic self-interest serves as a powerful motivation for most of people. As a rule, exercising of individual sovereignty is strongly motivated by self-interest. The matter is that “prior to interaction with others, individuals articulate a sense of their own objectives and a commitment to secure those objectives as best they can”. At this, their interests remain peculiar to themselves only. Whether to follow these interests or not depends on the person’s tastes. Tastes motivate individuals and guide them in their actions; a person motivated by tastes will never agree to change his/her preferences because he/she regards them as the most rational ones.
Thus, people who “like law reform will act for the public good; those with other tastes, not finding their interest in such disinterest, will act otherwise”. Any of these actions will be regarded as rational and this is what the individual sovereignty motivated by self-interest consists in.
Lastly, all the people are motivated by economic self-interests because all their good deeds result in the good for their own selves. On the one hand, being guided by one’s own self-interest is normal, especially in the modern society where “no government can do anything except through people and people look to themselves first”. This is why self-interest of people can be totally justified and this is why such a behavior is common to all men and cannot be found in case with animals, for instance, which have
“no other means of persuasion but to gain the favor of those whose service [they] require[…]”
On the other hand, the fact that people have self-interest in every their good deed means that no pure good can be done to the society. Even disinterred deeds bring benefit to a person, namely satisfaction with this deed. This satisfaction motivates people to do the good to the society, which means that they are guided by their self-interest in the first place.
Therefore, Adam Smith believed that self-interest promotes good in the society, which cannot be disagreed with. Self-interest motivates people in their deeds, regardless of whether they are good or bad. In case with good deeds, however, self-interest in inevitable because every good deed brings the doer pleasure and satisfaction which is then used as motivation for the subsequent good deeds. Thus, people motivated by self-interest promote the good in the society sometimes even unconsciously.