An abstract from the book "23 Things They Don't Tell You About Capitalism" by Ha-Joon Chang

 Self-interest is a most powerful trait in most human beings. However, it’s not our only drive. It is very often not even our primary motivation. Indeed, if the world were full of the self-seeking individuals found in economics textbooks, it would grind to a halt because we would be spending most of our time cheating, trying to catch the cheaters, and punishing the caught. The world works as it does only because people are not totally self-seeking agents that free-market economics believes them to be. We need to design an economic system that, while acknowledging that people are often selfish, exploits other human motives to the full and gets the best out of people. The likelihood is that if we assume the worst about people, we will get the worst out of them.

Free market economics starts from the assumption that all economic agents are selfish. The beauty of the market system is that it channels what seems to be the worst aspect of human nature- self-seeking, or greed- into something productive and socially beneficial. We know too many corrupt politicians and lazy bureaucrats to believe that all public servants are solely serving the public. Most of us, myself included, have goofed off from work ourselves and some of us have been frustrated by colleagues and assistants who put in excuses not to put in serious work. However, we have a lot of evidence to state that self-interest is not the only human motivation that matters in our economic life. Some of these include honesty, self-respect, altruism, love sympathy, faith, and sense of duty, solidarity, loyalty, public-spiritedness, patriotism, and so on. These are sometimes more important than self-seeking as the driver of our behaviors. The motivations behind such non-selfish behaviors by workers are varied – fondness of their jobs, pride in their workmanship, self-respect, solidarity with their colleagues, trust in their top managers or loyalty to the company. Bottom line is that companies, and thus our economy, would grind to a halt if people acted in a totally selfish way, as they assumed to do in free-market economics.

Of course, all this is not to deny that self-seeking is one of the most important human motivations. However, if everyone were really out to only advance his own interest, the world would have already ground to a halt, as there would be so much cheating in trading and slacking in production. More importantly, if we design our economics system based on such an assumption, the result is likely to be lower rather than higher, efficiency. If we did that, people would feel that they are not trusted as moral agents and refuse to act in moral ways, making it necessary for us to spend a huge amount of resources monitoring, judging and punishing people. If we assume the worst about people, we will get the worst out of them.