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I think you're conflating self interest and best interest. In the case of banks, you have execs acting in their personal self interest and not in the long-term

I think you're conflating self interest and best interest. In the case of banks, you have execs acting in their personal self interest and not in the long-term interest of the bank. Their long and short-term interests were not in alignment. This could be addressed by compensating execs with shares that are locked up for a period. To blame failure on irrationality is to not understand the motivations of the actors involved. Perhaps the risk of going out of business was mitigated by knowing they're "too big to fail". Perhaps it's not the banks that are irrational but the incentives given to them.

wpietri 9y ago
You have introduced another dimension here, and I don't think it's helpful in resolving language about single individuals.
- smokeyj 9y ago
  We're using different definitions of self-interest. https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Ethical_egoism https://en.wikipedia.org/wiki/Ethical_egoism (your use) https://en.wikipedia.org/wiki/Psychological_egoism https://en.wikipedia.org/wiki/Psychological_egoism (my use) In the normative sense, any action that is "bad" is irrational. In the descriptive sense, there is no such thing as wrong self interest, therefore it can't be irrational. In that sense "rational self-interest" is tautological. Which is why in my original question I asked for "an example of someone not acting in their (voluntary) self interest". We can also reason in principle that markets don't require that people have their long-term best interest in mind. The market for cigarettes and fast-food is operating just fine. Sure customers might suffer for it, but the market aspect worked just fine.
  - wpietri 9y ago
    Ethical egoism is not my position; I'm not making a moral claim. I agree, though, that psychological egoism is yours. And as Wikipedia explains, psychological egoism is considered tautological and lacking in explanatory power. Given that you apparently understand that people mean different things here, your intervention in this conversation is especially irritating. Rather than just recognizing that jrs235 is using a different definition of self interest, the one that Smith was using, you post an faux-naive question, wasting at least his and my time, and likely that of others.
    - smokeyj 9y ago
      >> If people against their conscious choice do things they know are bad for them > Ethical egoism is not my position; I'm not making a moral claim Hmm.. > Rather than just recognizing that jrs235 is using a different definition of self interest, the one that Smith was using No, Smith was not using your (unprovided) definition. That's the whole point. Jrs235 slam dunk of a comment is a straw man. Read bmmayer1's comment. > you post an faux-naive question, wasting at least his and my time Yet nothing of value was lost.

wpietri 9y ago

You have introduced another dimension here, and I don't think it's helpful in resolving language about single individuals.

smokeyj 9y ago
We're using different definitions of self-interest. https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Ethical_egoism https://en.wikipedia.org/wiki/Ethical_egoism (your use) https://en.wikipedia.org/wiki/Psychological_egoism https://en.wikipedia.org/wiki/Psychological_egoism (my use) In the normative sense, any action that is "bad" is irrational. In the descriptive sense, there is no such thing as wrong self interest, therefore it can't be irrational. In that sense "rational self-interest" is tautological. Which is why in my original question I asked for "an example of someone not acting in their (voluntary) self interest". We can also reason in principle that markets don't require that people have their long-term best interest in mind. The market for cigarettes and fast-food is operating just fine. Sure customers might suffer for it, but the market aspect worked just fine.
- wpietri 9y ago
  Ethical egoism is not my position; I'm not making a moral claim. I agree, though, that psychological egoism is yours. And as Wikipedia explains, psychological egoism is considered tautological and lacking in explanatory power. Given that you apparently understand that people mean different things here, your intervention in this conversation is especially irritating. Rather than just recognizing that jrs235 is using a different definition of self interest, the one that Smith was using, you post an faux-naive question, wasting at least his and my time, and likely that of others.
  - smokeyj 9y ago
    >> If people against their conscious choice do things they know are bad for them > Ethical egoism is not my position; I'm not making a moral claim Hmm.. > Rather than just recognizing that jrs235 is using a different definition of self interest, the one that Smith was using No, Smith was not using your (unprovided) definition. That's the whole point. Jrs235 slam dunk of a comment is a straw man. Read bmmayer1's comment. > you post an faux-naive question, wasting at least his and my time Yet nothing of value was lost.