One of the prevailing ideas that philosophers were trying out in the 17th and 18th century was that the line between personal interest and social good was not always clear-cut. Indeed, there were cases in which pursuit of personal interest was also of benefit to society as a whole. Here’s an example from Montesquieu in The Spirit of Laws (1748), from the 1777 translation into English (Chapter VII, “Of The Principle Of Monarchy,” arguing that in a monarchy, individual pursuit of honor can be socially beneficial. He writes (and note in particular the line I have rendered in boldface type):
A monarchical government supposeth, as we have already observed, pre-eminences and ranks, as likewise a noble descent. Now, since it is the nature of honour to aspire to preferments and titles, it is properly placed in this government. Ambition is pernicious in a republic; but in a monarchy it has some good effects; it gives life to the government, and is attended with this advantage, that it is no way dangerous, because it may be continually checked.
It is with this kind of government as with the system of the universe, in which there is a power that constantly repels all bodies from the center, and a power of gravitation, that attracts them to it. Honour sets all the parts of the body politic in motion, and, by its very action, connects them; thus each individual advances the public good, while he only thinks of promoting his own interest.
True it is, that, philosophically speaking, it is a false honour which moves all the parts of the government; but even this false honour is as useful to the public as true honour could possibly be to private people. Is it not a very great point, to oblige men to perform the most difficult actions, such as require an extraordinary exertion of fortitude and resolution, without any other recompence than that of glory and applause?
Of course, the belief that pursuit of personal interest might also benefit others and society as a whole has been familiar to economists at least since Adam Smith’s Wealth of Nations in 1776. Baby economists nestling in the crib of their introductory economics class are entertained before naptime with Smithian quotations like (boldface mine):
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 own necessities but of their advantages.
Or in Smith’s famous passage about the “invisible hand”:
He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, 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. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
One intriguing part of the Smith “invisible hand” quotation is the phrase “as in many other cases,” which suggests that, in Smith’s view, the phenomenon of an alignment between pursuit of personal interest and a benefit to the broader social interest is reasonably widespread. The modern-day descendents of my wife’s Quaker ancestors, who arrived in what would later bcome the United States some centuries ago, would say that “they came to do good and ended up doing very well.”
Of course, the questions of when and how self-interest aligns with the public interest remain very much with us today. I would also argue that the questions of when the modern pursuit of honor, in the form of broad recognition or “preferments and titles” aligns with the broader public interest also remain with us. It would of course be overly simplistic and incorrect to say that public and private interests are always aligned. But an argument that people should disregard their private interest, while perhaps successful in certain limited communities, has never commanded broad and lasting appeal. Thus, the question for society is what set of social, political, and economic constraints might best encourage a reasonably strong alignment between private interests and social good.
For those interested in the evolution of these thoughts from the 16th up through the 18th century, my own favorite (in my limited reading on this subject) is the 1977 book by Albert O. Hirschman, The Passions and the Interests. (And yes, this is the same person whose name appears in the Herfindahl-Hirschman index used to measure the concentration of a market.)
