Managing Leadership^®

If some supporters, as we noted yesterday, are concerned about the purity of the capitalism we actually practice, a good many critics are concerned about the purity of the capitalists who practice it. Many are simply appalled at the concept of hosts of people mixing it up while both animated and regulated solely by self-interest. No good is likely to come of that. Surely, the idea that it might seems counter-intuitive enough to justify some skepticism.

But Adam Smith certainly was able to see that self-interest was both the inevitable mechanism for motivating individual behavior and, when practiced interactively in free markets, would ultimately act as the most telling and reliable regulator of that behavior. The evidence in the succeeding two centuries has largely – even spectacularly – borne that out.

Another problem with criticisms of capitalism is the assumption that self-interest equates to, or is distorted by the operation of free markets into, plain greed. While self-interest does indeed typically consist of improving one’s financial position, that is also typically shaped in constructive ways by other elements of personal character and prediliction. And often enough, self-interest takes the form of individual or institutional charity, or even altruism, that is viewed as most effectively expressed and disseminated via the markets. We are as much shapers, as products, of our experience with capitalism.

But there is no denying that the drivers of these markets that Adam Smith identified, and that experience has confirmed, are not, and cannot be altruism. That is worth noting: selfless behavior cannot be expected to naturally motivate or order the commercial interactions of human beings.

But that doesn’t mean that self-interest really equates to selfishness. Gannon Beck pointed out, in a comment to Gaming Capitalism, that while free markets operate on the basis of self-interest, they also teach us that if we want to satisfy our own, then we have to satisfy that of others. That, Gannon notes, is what drives proactive, innovative, growing markets and economies. He calls it “unselfish” capitalism, which may get its inspiration from self interest, but which functions because the markets drive us to productively serve mutual interest.

This is bottom-up self-organizing at its best. But it still scares progressives. They, like superlative individual leaders, may talk about their faith in everyone else, but they don’t really trust us to operate out of the glare of their attention and the discipline of their guidance. Not in society, and not at work. How do we, as liberal capitalists, feel about that, in either locale?

We’ll look at that again soon. But tomorrow, we’ll take a brief look at how progressives feel about it. Please stop in!

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This post is a part of a series. You can learn about and link to the other articles here: Conceptualizing capitalism

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Today’s tip: The question of differing values, and how they shape our view of ourselves, others, and how we think society and the workplace should be organized, is really more complex than just the matter of capitalists and progressives. Important and influential values can exist outside that continuum, or even seem not to exist at all. Please see this essay by Michael Wade about the diversity of individual values and motivations roiling around in the workplace, and their implications for management.

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