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TEN CHARACTERISTICS OF ECONOMIC GOODS, OR WEALTH

1. They are scarce; that is, there is less of them than is wanted. 2. They have to be economized.

3. Well-being is thought to increase as they increase and to decrease as they decrease.

4. Men labor to produce them, that is, to make them less scarce.

5. Men try to secure them by purchase.

6. They have value, or power in exchange.

7. They become the subject of property rights.

8. Wise men exercise frugality and foresight with respect to them. 9. There is a conflict of interests among men with regard to them, because there is not enough of them to go around and satisfy everybody. 10. They give rise to questions of justice and equity.

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CHAPTER III

SELF-INTEREST

The fact that we are going to study the problem of national prosperity and progress certainly implies that we have an interest in it. It probably implies also that we care somewhat more for the prosperity or progress of our own nation than for that of other nations. That would mean that we are somewhat self-centered. Even the humanitarian who professes to care for mankind above all nations seems still to prefer mankind to other species. There are people who have so deep an interest in animals as to make them unwilling to sacrifice any animal for the benefit of mankind. They are slightly less selfcentered than the humanitarians, but even they cannot take quite the same interest in the lower as in the higher animals. In short, no one can avoid being slightly self-centered, caring more for some animals than for others, for certain races or nationalties of men than for others, or even for certain persons than for others. Generally it will be found that those species, nationalities, or persons for whom we care most are in some sense nearer to ourselves than those for whom we care least.

This fact of self-centered interest must be taken as one of the original, or primary, facts in our problem of nation building. It is therefore very important that we examine it and see exactly what it means.

What is self-interest? Our discussion will center naturally around two main questions: first, what does it mean to be selfinterested; and, second, is it a good or a bad thing for each individual to be self-interested, or at least slightly self-centered, as we shall call it. In discussing the first of these questions

it is not necessary to go very far into that form of hair-splitting analysis which considers whether benevolence is not merely another form of selfishness. It is sometimes argued by a certain kind of sophist that the benevolent person is benevolent because he gets pleasure from being benevolent. Since it gives him pleasure, it is only a form of self-gratification; and since it is only a form of self-gratification, it is only another form of selfishness. It may be true, from a certain point of view, that a man may get more pleasure from the taste of food upon the palates of his children than upon his own. A sophist might say that he was as truly selfish as a man who got no pleasure whatever from the taste of food upon any palate but his own. However, no sensible person would remain long in doubt as to which would make the better father. There is no doubt that the man who takes some delight in the welfare of his neighbors and fellow citizens is a better neighbor and citizen than a man who takes no pleasure whatever in such things.

In trying to understand what self-interest really is, there are two extreme views to be avoided. One is that self-interest means such extreme selfishness as to show no regard whatever for the interests of others; the other is that benevolence means a real preference for other people as compared with self. Now self-interest simply means some preference for self as compared with certain other people; and benevolence, instead of meaning a preference for other people, is quite compatible with some degree of preference for self. There is probably no human being who has not some interest in other people besides himself; neither is there anyone who does not care more for himself than he does for other individuals outside a rather narrow family or neighborhood circle.

The difference between a selfish and a benevolent person. As a matter of fact, the difference between a selfish and a benevolent person is one of degree. An extremely selfish

1 See the author's "Essays in Social Justice," p. 60. Harvard University Press, 1915.

person is one who has an extreme preference for self as compared with others, and whose interest in other people does not extend beyond a rather narrow circle of relatives, friends, and neighbors. An extremely benevolent person is one who has only a mild preference for self as compared with others, whose interest in others extends to a rather wide circle of relatives, friends, neighbors, fellow citizens, and many other human beings, and who even includes some of the kindly animals in the circle of his care and protection. To prefer the satisfaction which the expenditure of a dollar on charity gives me to the satisfaction which it would give me in the gratification of my own palate does not mean that I have a deeper interrest in the receiver of my charity than I have in myself. If I spent the dollar upon myself, it might supply only a trifling need or gratify a mere whim or caprice, because I have spent so many other dollars on myself as to have supplied all my principal needs. But when it is spent in charity, it may supply a vital need of someone else. If I were in exactly as great need as he of the objects which my last dollar would purchase, and I then gave him my dollar, that would show that I appreciated his interest as highly as my own, or even more highly than my own. If there are a number of people in whom I am so deeply interested as to be willing to sacrifice myself even to a slight extent, I should pass for a fairly generous man. But while I am writing this I am fully conscious of the fact that there are people in various parts of the world who are suffering from hunger, cold, and sickness. Yet I sit comfortably in my room instead of going out to find them and share my last dollar with them. They are so far away in space, or they are so far removed from myself in race, language, religion, or color that I cannot cudgel myself into caring as much for their comfort as I do for my own. If they were near neighbors, near relatives, I would take a deep interest in them. Will the reader ask himself if he is not in about the same condition?

The way in which I appreciate an income for myself more than I appreciate an income for someone else may be illustrated by means of the diagrams below:

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In Diagram A, let us measure the income of a certain man, whom we shall call A, along the line OX, and his appreciation of, or interest in, each dollar of his income, along the line OY. Thus, if his income is equal to the line OE, his interest in each dollar is measured, let us say, by the line DE. But as his income increases, each dollar becomes a matter of less consequence to him. He could spare it with less real sacrifice, because, having so many other dollars, he can still supply himself with all the necessaries of life and some unnecessary things besides. In other words, if we assume that his income increases from a quantity measured by the line OE to a quantity measured by the line OE', then his interest in each dollar will decline from an intensity measured by the line DE to an intensity measured by D'E'. Another increase, say to the line OE", would bring another fall in his appreciation, or interest, say to the line D"E". From these assumptions we may derive the curve YDDD" to indicate his appreciation of, or interest in, each dollar of his income.

Another way of stating the case is as follows: Assuming that his income is measured by the line OE", to give up one dollar of his income would cause him a sacrifice measured by the line D'E". He would merely have to give up some unimportant luxury for which he does not care very much. If he were to keep on giving until there remained an amount measured

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