Corporations are judged based on goodwill, not profit. Individuals are evaluated based upon their contributions to community rather than economic productivity. Most would suggest government must step in to redistribute wealth from those at the top of the socioeconomic food chain to those at the bottom.

Honestly, the idea that the desires of the group are more important than the individual drives me just a little crazy. The economist Adam Smith once said, “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.” He meant that we don’t expect these men to provide us with beer and chips out of the goodness of their hearts — rather, they do it for profit.

It is important to understand that working to better your own life and your family’s life benefits society as well. In fact, working for your own benefit ultimately will raise the standard of living for everyone.

Let’s look at an example — simplified due to my word limit. Let’s say Patrick is an engineer for Car Company X. Patrick wants a raise and needs to impress his boss. He works day and night designing a sleek, new, eco-friendly car that revolutionizes the auto market. As a result, Car Company X profits and rewards Patrick’s hard work with the raise he has been seeking.

The benefits, however, do not stop with our friend Patrick. The entire world that now uses Patrick’s eco-friendly machine benefits as well. And wait, it doesn’t stop there. Patrick’s eco-car creates competition among other car companies to create products that match or exceed the quality and value of Patrick’s.

Other companies design slicker, sleeker, more eco-friendly cars, and huzzah — the entire standard of living of society has been raised, all because Patrick was pushing for a simple bump in pay grade.

Let’s look at the same example, except in this case, there is a government hand to redistribute Patrick’s newfound wealth. Patrick still wants the raise, and he still can obtain it by designing that new car. But now he knows if his income increases, it will be taken from him and redistributed to others. Poof! Patrick’s incentive to design this new car has vanished. Why would Patrick work day and night only to have his reward taken from him?

The collectivization of his reward creates a disincentive for Patrick to work those extra hours and put in that extra effort. In fact, it is a disincentive for him to act to better himself.

And as in our previous example, the damages do not stop with Patrick. Society never benefited from his new eco-friendly design or the designs of competitors. The standard of living has not advanced whatsoever. It is lose-lose all the way around. Setting aside the issues of incentives, risk and return, it is important to realize that although the baker has no one’s interests but his own in mind, the entire community benefits from the product of his labor — they have delicious breads to make their lives better.

Although the butcher has no interest in much other than his own personal profit, it is the community that benefits from the meats he provides to everyone. When the baker and the butcher produce, everyone benefits. It is win-win all the way around.

Much of the opposition to this simple concept of people acting in their own interests stems from the belief that when people trade, there must be a winner and loser. But there is not. People who trade freely and voluntarily do so only when they both stand to benefit. If either party in a trade feels the result would be a personal loss or personal harm, would they not back out? Trade will occur only when both parties perceive a personal gain.

But, Alex, what about people who do things for charity?

What about the school of social work? What about the people who work at homeless shelters and hospitals and the like? Surely helping others is more important than serving our own personal needs.

To this, my answer is: “Thank you for your work.” I mean that sincerely. But please realize you are working in your own self-interest, too. I assume you also enjoy it and that’s why you do it. Trust me, if you should get out in the real world and find you do not enjoy it, you will find something else to do.

The work you do is appreciated, but we appreciate “the butcher, the brewer, the baker” and Patrick just as much.

Alex Brooks is a guest columnist at The State News and an economics senior. Reach him at brook194@msu.edu.