What's Self-interest

Self-interest, in the market system, is the motivating force of all the
various econmic units as they express their free choices. Sel-interest
means that each economic unit tries to do what is best for itself:
Entrepreneurs try to maximize profit or minimize loss, property owners
try to get the highest price for the sale or rent of their resources,
workers try to maximize their utility (satisfaction) by finding jobs
that offer the best combination of wages, hours, fringe benefits, and
working conditions, consumers try to obtain the products they want at
the lowest possible price and apportion their expenditures to maximize
their utility.

The pursuit of self-interest is not the same as selfishness.
Self-interest involves maximizing some benefit, and it does not
preclude helping others: A stockholder may invest to receive maximum
corporate dividends and then donate a portion of them to the United Way
or give them to grandchildren, a worker may take a second job to help
pay college tuition for her or his children, an entrepreneur may make a
fortune and donate much of it to a charitable foundation.

Posted at 11:36AM Oct 29, 2006 by byuan in Economics  |  Comments[0]