23 Things they don't tell you about Capitalism

Free-market economists often argue that self-interest is the only reliable human motivation and basis for economic behavior. This view prioritizes competition and other market forces to lead people and companies to pursue excellence and obey moral standards, while minimizing the influence of public officials, who are not subject to market pressures.

While admitting the significance of self-interest, Chang points out that most people are also motivated by other values, such as honesty and love. Chang recalls a 1990s conference in which economists discussed rapid growth in East Asia. During this conference, a high-level manager from Japan’s Kobe Steel explained that the only way such a large company could function was for managers to trust that the employees were acting in the best interests of the company, not to cheat or deceive them. Chang points out that by trusting their employees and allowing them to take the initiative, several Japanese firms gained advantages over their Western competitors. Similarly, Chang argues, any economic system that fails to account for people’s altruistic tendencies will remain suboptimal.