By Arnold Kling
Donald J. Boudreaux writes,
What about the assumption of self-interest? It, too, is equally inoffensive. All that economists need to be true on this front is that each person generally cares more about himself, his loved ones, and his friends than he cares about strangers.
Economic theory does not require that each individual care exclusively about himself; it doesn’t require that each individual have no concern for strangers. And it is certainly not an assumption that each person desires only maximum monetary wealth or material goodies.
For Discussion. Sometimes, economics is described as assuming that people optimize. Boudreaux seems to be arguing for a weaker version of self-interest. What practical difference is there between the two assumptions?