Self-Interest, Competition & Property: Are They Good or Evil?

A young English lad - educated entirely in England, that too - came up to me the other day and said he doesn't approve of Capitalism "because Capitalism means self-interest, competition and private property - and these are dividing humanity." He was particularly harsh on Private Property - saying that once upon a time we could pluck berries in the wild and eat them, but now everything has become private property, and we must buy them.

Actually, berries survive because someone looks after them on his private farm. It's far easier to buy berries than to hunt for them in the wild. The human population on this planet would be far smaller if we returned to hunting and gathering. 

Note that the lad has been "educated" for 16 continuous years in England!

And he dreams of a world where we are all generous and altruistic, where competition does not exist, and property does not either.

I was then half-way through my "Adam Smith Lunch" - a steak, some bread, and a beer - and so promptly reminded him of that great Scotsman's infinite wisdom:

It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our lunch, 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 own necessities but of their advantages.

Smith added that he had "never seen much good come from those who purport to trade for the public benefit" - like Air India or SAIL.

Self-interest is a powerful drive - and surely it would have led to mutual annihilation without The Market. Without markets, we would snatch, grab, loot, kill and plunder to obtain what we need. With the market, we peacefully trade and exchange. We never camouflage ourselves in the market, as predators do in the jungle; rather, we loudly advertise! The market is not the jungle.

An added fact is that there is much we do that is neither selfish nor altruistic. I liked Kenneth Minogue's words quoted on this blogpost of a friend:

The defect of this whole way of thinking is that it fails to take seriously the fact that a great deal of what humans get up to is neither self-interested nor altruistic. It is disinterested, activities that people enter into just because they happen to want to be thus engaged—with no thought of personal advantage or the world's benefit. Many pursuits, from playing a musical instrument to making academic inquiry (the "disinterested pursuit of truth," as it is sometimes described), fit into this vital category. It is a place where many of Western civilization's great achievements originated. 

Moving on to the English lad's second grouse: Competition. Now, we all hate competition when we go to the market to sell what we produce - but we love competition when we go to the market to buy. It pitches each self-interested businessman against others who are equally self-interested. And this works in our interest as consumers. This "catallactic competition" is also NOT the law of the jungle - and it is certainly not true that only the fittest survive. All survive in market competition. The best whisky sells alongside a bottle of the worst plonk, and so on. Note that if there was no competition - because of the Tyranny of protectionism - no one would work, as in the case of the sales manager of Bajaj Auto in the bad old days.

And as for Private Property - it is the unwritten law in all our bazaars, where goods arrayed before every street vendor are presumed to belong to him: "possession is nine-tenths of the law." If someone declared everything in the bazaar to be "collective property" chaos and looting would immediately ensue - and all in the name of the "Brotherhood of Man." This was John Lennon's dream too, when he sang, "Imagine no possessions... " The American poet, Robert Frost, got it right when he wrote, "Good fences make good neighbours." And it was, of course, Ludwig von Mises who defended the Institution of Private Property most forcefully:

If history could prove and teach us anything, it would be that private ownership of the means of production is a necessary requisite of civilization and material well-being. . . . Only nations committed to the principle of private property have risen above penury and produced science, art and literature." 

Self-interest, competition and private property are NOT dividing humanity. On the contrary, they are providing us with the means of co-operation; the "rules of the game." In the market, there is social co-operation because we take burdens off others' backs by producing for them. This is why we specialise in the "division of labour." What we produce is Property - our property - and these we exchange with others, for theirs.

Finally, it must be noted that The Market is based on Individualism: each entrepreneur taking his own risks, answerable to none but himself for his gains and losses (or to shareholders, in the case of joint stock companies). The motto of such a society is "each man for himself; each man by himself." The motto of such a society is certainly NOT "all for one and one for all."

Indeed, the market economy has nothing to do with the Brotherhood of Man. The chief advantage of the crowded urban bazaar is that it allows us to gainfully trade with COMPLETE STRANGERS.

This last point is most evident in Goa - where each shack-owner is looking out for, and serving, the needs of endless foreign tourists whom he has never met before. Interestingly, while the "educated" English lad was unconvinced, our unlettered waiter, who was listening-in, saw that I was right. He later told me that he liked my emphasis on Individualism and Private Property - he said he wanted to be his own boss one day. He agreed there was no Brotherhood of Man; there was no "society"; and that all the people out there were almost entirely strangers. 

That complete strangers can gainfully interact and make exchanges is the greatest benefit of the market order and its commercial culture - which have come to us from the past, as a part of our heritage, as we have evolved intellectually. 

Celebrate The Market!