The Power of Self-Interest

Written by Marty Seldman, Ph.D.

This article may be useful to a wider audience but it is mainly intended for those of you who are idealistic, generous, and trusting.

You can already guess, based on the title and first sentence, that my main focus here will be on the more cynical/realistic aspects of human nature.

Before we go there I want to also acknowledge the reality of the uplifting, aspirational elements of our being.

LOVE – Many of us would say it’s the most powerful force in our lives and the source of joy and meaning. In 1874 Henry Drummond wrote a short book on love, titled, “The Greatest Thing in the World” and it sold 12 million copies.

SACRIFICE – Love of other people, their country or a cause often leads people to sacrifice their self-interest and even sometimes their lives (as we can see in Ukraine).

GENEROSITY – I was fortunate to grow up in Brooklyn, NY in the 1940’s and 50’s with all four grandparents living on the same street. Maybe it was because they were so grateful to have survived and escaped brutal conditions in Eastern Europe and Russia, but they were routinely generous to family, neighbors, and even strangers. Research on altruism has revealed that proportionally the poorest people are often the most generous.

MORAL “COMPASS”

Every day, most of us adhere to our moral code and keep our commitments, ignoring competing impulses that would conflict with our values.

So why explore the power of self-interest?

1. If you routinely underestimate how self-interest impacts behavior you will be at a serious disadvantage in transactions, negotiations, and even relationships.
2. Miscalculating self-interest can often lead you to be “blindsided” (“I didn’t see it coming”) by the actions of others, including people you trusted.
3. “People Tell You How to Sell Them” – when it comes to influencing someone or selling your ideas, being able to discern “what’s in it for them” is essential.

In my coaching practice or seminars I introduce this topic by asking a question:

“If you had a choice would you rather work with someone you trust whose interests’ conflict with yours or someone you don’t trust whose interests converge with yours?”

This is not a trick question. I don’t think there is a “right” answer, but it is very rare for people to pick “someone I don’t trust”. Many times people answer “TRUST” before I finish asking the question.  My goal is actually just to get someone to pause and consider the impact of diverging personal interests.

The rationale is the following:

1. The pull of self-interest can be so powerful that in some circumstances it can break bonds of love and trust.
2. Many times what we consider a trusting relationship has never had that trust tested by a conflict of interests or competing interests.

A very rich source of data on the intersection of love, trust and self-interest is research on lottery winners and beneficiaries of estates.

Lottery Winners

Studies on the lives of large sum lottery winners reveal that within a few years of their amazing “luck” over 50% experience divorce, family conflicts, estrangement, bankruptcy, and sometimes episodes of violence.

Why? Let’s start with an initial decision if you are married and live in a state with community property laws. Do you keep your winnings in a personal account, outside of the marital trust, or comingle funds (now community property)? If you decide to keep it separate I wouldn’t look forward to that conversation with your spouse.

Needs, want and dreams – Everyone in your family and all of your friends and acquaintances have real needs and/or hidden desires.

These all become activated when you receive that “pot of gold.” Imagine the number of requests (repeated), and even demands that will be coming your way; and the reactions if and when you say no.

So the evidence points to frequent unresolved conflicts and estrangement. This happens between people who up until this event professed love and loyalty to each other. In fact, if you had asked one of these folks before the lottery, “Is there anything that could come between you and your sister” many would say NO; they admit they never would have predicted what happened.

Dividing Up Estates

If you asked estate attorneys about their experiences reading wills and estate plans to beneficiaries (pre-covid when everyone was in the room), they will describe kicking, screaming, threats, and even biting. Recent studies show over 45% of families report serious conflicts, leading to disengagement, over the proceeds of an estate. As compared to lottery winnings sometimes these disputes are over much smaller amounts of money or just a few possessions. Again, if you asked these families, prior to the estate proceedings, could anything ever disrupt or destroy your relationship with a specific sibling or relative or even parent, many would have said “No, Never.”

Learnings

1. Since these experiences involve how love, and trust can be impacted by self-interest, they point towards NOT underestimating its potential impact.
2. Self-Interest can guide our mind to rationalize our behavior or even to have selective memories. Social scientists call this “biased social accounting” where we may remember (and even embellish) everything positive and deserving we have done while it’s “what have you done for me lately” about other people’s contributions.
3. Third party interests – Your loving relative, close friend or trusted colleague may have a romantic or financial partner who isn’t particularly concerned about you. They can and often will play a significant role in stoking their partners’ self-interest and its justification.

Suggestions

1. Have a healthy respect for self-interest.
2. In key situations, pay attention to the potential influence of third parties (partners, advisors) of your friends, relatives and colleagues.
3. Stay alert: Anticipate when your interests may compete with others. At work it could be around allocating resources, getting credit, assigning blame, or who gets to lead the team.
4. Be proactive and preventative: document, make clear agreements and put them in writing. If necessary, hire lawyers to reduce the chances of ambiguity and misunderstandings.
5. Develop your skills: Sharpening your ability to achieve “win-win” solutions that align interests becomes even more valuable, In many instances it’s worth it to aim for each party feeling an agreement is “fair” even if it means sacrificing some of what you think you deserve.
6. Trusted Advisors: Architects, real estate agents, financial advisors, therapists, lawyers, and even executive coaches will represent themselves as “trusted advisors.” They claim to always put your interests first. Of course many of them do. However, if we examine their fee structures and combine it with our knowledge of self-interest, it makes sense to monitor those relationships.
7. “Politics Makes Strange Bedfellows”: When interests align there may be windows of opportunities to collaborate with people you would not trust in other circumstances.
8. Positive signs: To end this section on a more upbeat note, equally notice the people in your network who are able to rise above the pull of self-interest. For example, they put their self-interests aside to do what is right, fair, and what they agreed to or they take a personal risk with nothing in it for them, to warn you about a threat.