Psychologists, philosophers and researchers have time and again tried to answer if Humans are only driven by self-interest. And there is no simple explanation to it. Humans are inherently and instinctively believed to be selfish. However, human behavior can arguably be also motivated by altruism - acting to help someone else at some cost to oneself - given an individual has a higher emotional intelligence.
But there is a catch here. Recollect the last time that you helped someone thinking that you did it selflessly. May be it did come from a place of compassion or for the well-being of other, but more often than not it wasn’t the only motivation. Acts of kindness make us feel good about ourselves, help create a positive perception in peer group, avoid regret for an inaction, etc. But we, as humans, are wired to be driven more by our ego than empathy.
When Altruism enters the Capitalistic World
The cautionary tales of infamous Elizabeth Holmes, Adam Neumann and now Sam Bankman-Fried characterize protagonists turned anti-heros, who apart from being charismatic were also believed to be motivated by an altruistic ambition. On a deeper look, all these entrepreneurial journeys will seem to have an uncanny similarity.
Elizabeth, founder of Theranos, dropped out of college to supposedly bring revolution in diagnosing disease. Theranos promised that Edison test could detect conditions such as cancer and diabetes quickly without the hassle of needles. Eventually on investigation, it was revealed that Theranos relied on third-party machines to run many of its tests, and the results from its own device were erratic and inconsistent.
Though unconvicted on the charge to defraud patients, it does raise a plausible question whether the motivation to serve humanity led Elizabeth to justify turning a blind eye on the inaccurate results? Dan Ariely, a behavioral economist, has theorized that when people behave dishonestly, and think it is ok to cheat (a little), usually do so in such a way that they are able to rationalize their actions, while still profiting from their cheating.
Generally, we don’t like to act immorally, because we don’t want to think of ourselves as immoral people—but we also want the benefits that cheating can bring us. We get around this conflict by engaging in dishonest behavior that we are able to rationalize to ourselves. This allows us to preserve our self-image and think of ourselves as moral, upstanding people, while still profiting from dishonesty.
When other people stand to benefit from our cheating, we find it far easier to rationalize our bad behavior in purely altruistic ways and subsequently we further relax our moral inhibitions. After all, if we are doing something for the pure benefit of others, aren’t we indeed a little bit like Robin Hood?
Dan Ariely in The Honest Truth About Dishonesty: How We Lie to Everyone - Especially Ourselves
Even in case of Adam Neumann’s WeWork, the guiding mission of company itself was to elevate the world’s consciousness. And for Sam Bankman-Fried, founder and former CEO of FTX - he had bought into the idea of effective altruism even before starting up his entrepreneurial journey. In fact, it became his north star - to get filthy rich, for charity’s sake.
Capitalism-led Altruism
Adam Smith, the father of capitalism, had theorized the ‘Law of self-interest’ where he assumed humans to be self-serving by nature. As per Adam, in the ideal capitalistic society, as long as every individual were to seek the fulfillment of her/his own self interest, the material needs of the whole society would be met.
In case of any privately-owned enterprise, there are multiple ways the owner of the business creates value for the society. The business provides society with the product or service that has an intrinsic value, and generates employment for the people, who in turn support their families. The surplus or the wealth created by the owner is at their disposal, which may be utilised for any philanthropic purposes.
Entrepreneurs like Ratan Tata, Bill Gates, Warren Buffet and Azim Premji are the living examples of capitalism-led altruism, having created sustainable businesses backed by utmost integrity and accountability. Ensuring that the interest of various stakeholders are met and being able to operate the business (or even functional departments) efficiently is in itself an act of altruism!