Tag: The Wealth of Nations

“It is not from the benevolence of the butcher, the brewer, or the baker that we can expect our dinner, but from their regard to their own interest,” wrote Adam Smith in The Wealth of Nations ( 1776 ). Smith conveyed an assumption that individuals interacting in the marketplace are driven by the pursuit of rational self-interest. It does not mean that individuals are not concerned about others or cannot act generously, but their central motive a concern about the costs and benefits for themselves. Self-interest assumption is used in economics to analyze human interactions not only in private markets, but then also in other areas, including politics. In 1957, economist Anthony Downs introduced the theory of rational choice to explain individuals’ participation in politics. Another economist, James M. Buchanan, was the architect of public-choice theory since&... Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.