Quote by Vernon L. Smith

“Gregg: I notice you did not use the word greed in that answer. When many people hear “self-interest,” they think “greed”. So are you suggesting that a Smithian approach actually has nothing to do with greed at all when it comes to self-interest properly understood? Smith: It’s not a matter of greed. It’s a matter of, as Smith says, the individual being fitter than anyone else to take care of himself or herself in terms of knowing what he or she wants and in making judgments about that. And so, knowing that other people are also self-interested, I know what action I take would be hurtful to them. And then I take that into account. In other words, being self-interested is an input to our socializing process. There are many experimental economists and behavioral economists who want to explain that with a utility function so that if I am other-regarding, it’s because I am taking into account your reward as well as mine. Adam Smith says no. Adam Smith is right. It is not in the utility function. That’s the difference between an emphasis on outcomes and process.”

Quote by Vernon L. Smith