People misunderstand classical economics, because it is subtle. The prisoner's dilemma is an interesting game because it is extreme: people are able to lower t

People misunderstand classical economics, because it is subtle. The prisoner's dilemma is an interesting game because it is extreme: people are able to lower the total welfare while raising their own. But classical economics asserts that these situations arise only when there are externalities or market frictions, and only in proportion to how large these are (there are also issues of wealth distribution, but this could be thought of as a friction to perfect taxation). If there were no market frictions, and people could be taxed according to their innate ability to earn money, then it wouldn't matter whether people aimed to maximize their own utility, or the sum of everyone's utility: they would engage in exactly the same actions. Altruism vs selfishness only becomes an issue when there are externalities or frictions. E.g. do I choose to pollute a stream, even though I know I won't be punished. Or do I choose to work less than I would otherwise, because some of my income is taxed (if people didn't work less for this reason, we could have a tax system with much more redistribution). So neoclassical theory isn't nearly so tied to the idea of selfishness as people think. One thing it does do, is make very clear that people are selfish. I could buy a coffee every day, or make a donation that would (on average) save one life in Africa. And yet I chose to buy the coffee anyway. As a believer in classical economics, I have to conclude that I am that selfish.