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How do I define "economic self-interest"?

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Quick Answer

Economic self-interest refers to the financial theory that says people should make economic decisions based upon the best outcome for themselves. Self-interest is defined as a way of promoting activities and beliefs that serve to benefit the person making the decision over any other parties involved. Many criticize economic self-interest because it has the potential to harm the interests of others and ultimately negatively affect their situation.

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Full Answer

Adam Smith, who is considered the father of modern economics, said that acting in one's own economic self-interest would lead to a better national economic situation, as everyone would be looking out for themselves. Smith famously said, "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 self-interest."This belief rests on the idea that if individuals continuously make decisions that benefit their own situations, then all people will have access to a better quality of life, since they won't have to depend on others to make decisions for them. This theory is largely criticized for its lack of understanding of systems of power that marginalize a portion of a country's citizens, thus making it impossible for poor individuals to pull themselves out of poverty.

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