Assuming that we are uniformly rational and concerned only with advancing our material interests provided good enough predictions about our behavior—or so we thought—and convinced us that we are best off designing systems as though we are selfish creatures. Moreover, people who don’t cooperate can ruin things for everyone, so to save ourselves from freeloaders we built systems by assuming the worst of everyone. (…)

The widespread conviction about the power of self-interest is based on two long-standing, partly erroneous, and opposing assumptions about getting people to cooperate. One of them inspired the philosopher Thomas Hobbes’s Leviathan in 1651: Humans are fundamentally and universally selfish, and governments must control them so that they don’t destroy one another in the shortsighted pursuit of self-interest. The second is Adam Smith’s alternative solution: the invisible hand. Smith’s 1776 book, The Wealth of Nations, argued that because humans are self-interested and their decision making is driven by the rational weighing of costs and benefits, their actions in a free market tend to serve the common good. Though their prescriptions are very different, both the Leviathan and the invisible hand have the same starting point: a belief in humankind’s selfishness.

{ Yochai Benkler/Harvard Business Review | Continue reading }

photo { Rory Watson }

ideas | July 15th, 2011