The key to prosperous societies is the institution of a system in which members often, even unknowingly, advance the welfare of other members. Often, this happens through mutually beneficial exchanges in the marketplace, but the concept can be extended to areas of life where most of us don’t normally think of self-interest as the driving force of action.
Take academia, for example. In the United States, there are legions of public and private universities that work with the mission of advancing knowledge and advancing human progress. They are often considered beneficial institutions. Professors are appointed by these institutions to engage in path-breaking research and train students in the methods of their respective fields. What motivates them to do so? Suffice it to say that university professors generally don’t come cheap. Salaries of public university professors are a matter of public record and anyone can check. For the 2019-2020 academic year, the American Association of University Professors reported that the average salary for a full professor at a doctoral institution was more than $160,000 (the figure is about $145,000 for public institutions alone).
So, university professors get paid for their efforts. So what? Does this mean that they never have good intentions? Of course not. However, university professors pursue prestige, professional advancement, and yes, financial gain, in addition to the desire to advance knowledge and mold young minds. The point is that the institutional arrangements provided by the university setting allow essentially self-interested actors, professors, to engage in self-serving behavior that simultaneously advances the public interest at large.
To drive this point further, let’s look at a historical example: Isaac Newton’s invention of “calculus”. Although it may be the bane of many math students’ existence, calculus has been used in countless scientific breakthroughs and inventions that have advanced mankind. What motivated Newton to make such advances in pure theory? Calculus did not immediately help anyone but Newton. No one in England ate well the day after the apple fell on Newton’s head. Furthermore, another theorist, Leibniz, discovered the same principles of calculus around the same time as Newton. Newton suspected Leibniz of plagiarizing his ideas, but history casts doubt on this charge.
Newton fought bitterly to maintain that he was the sole inventor of calculus. Why? If he were only committed to advancing scientific thought for its own sake, we wouldn’t expect him to care so much about who got credit (Leibniz, incidentally, was more generous in apportioning credit). Clearly, Newton was also driven by self-interest. The rewards he gained from his innovations in theory included the Lucasian Chair of Mathematics at Cambridge and his appointment as Master of the Royal Mint. The rewards we pursue for ourselves should not just be in monetary terms.
Years and years after the discovery of calculus, NASA scientists (and teams hired by private billionaires) are using the theories to send rockets into space. Calculus has been used in countless projects and inventions that advance the common good. Its inventor didn’t necessarily want any of those specific projects to happen. The creation of calculus was the product of intellectual curiosity and self-interested behavior under institutions that allowed its creator to reap substantial rewards for its creation.
Does this mean there is no room for intentional “good work”? No, we intentionally try to always do good for others and that’s great. Mothers and fathers intentionally put their children’s best interests at heart, not for financial gain, but for love. Of course, it is also possible to imagine this behavior as selfish. (As George Mason University economist Walter Williams used to demonstrate in his undergraduate classes, love between two people occurs when the satisfaction and happiness of one is a function of the well-being and satisfaction of the other.)
We live in large societies where most of the people around us are strangers, and we don’t assume that they all care about us. The societies that have made the greatest gains in human welfare are those institutions that allow self-interested individuals to pursue their own ends through specialization while simultaneously increasing the welfare of others around them, or in the case of Newton and Leibniz, through time.
Giorgio Castiglia is program manager of the Competition Project at the Mercatus Center and a PhD student in economics at George Mason University.