economics and greed

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    In your opinion, does any facet of doing economics presume self-interest or greed. I know I’ve read Mises state in several different places that economics is not concerned whatsoever with the desired ends of individuals…so long as they are acting, they must rank/value ends and economize on scarce resources to accomplish them. Does this mean that if every individual were entirely altruistic, this would not change the scope, assumptions, etc. of economics one iota. It seems to make sense to me, but just wanted to hear what you have to say on this matter. Thank you very much.


    Yes, motives do not matter at all for the working of human action in general and the market economy in particular. Of course, if people have more altruistic motives, then their particular actions will differ from those they take if they have more selfish motives. Consequently, we would see more and larger charitable organizations in the economy of the former case and more and larger pleasure palaces in the economy of the latter case. Historically, we see this in the difference between the economy of the early republic period in America, described by Alexis de Tocqueville, and today’s economy.

    What matters for the working of the market economy is monetary incentives. We must be free to offer monetary incentives to each other for an advanced market economy to develop. Money is a requisite of economic calculation and economic calculation is necessary for entrepreneurs to build an advanced capital structure.

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