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Generosity and Self-Interest

Generosity and Self-Interest

David Kelley Ph.D

5 Mins
December 1, 2004

People do generous things. They give directions to strangers, contribute to charities, volunteer in hospitals, send food and supplies to earthquake victims. Actions like these are usually described as altruistic, in contrast to the pursuit of self-interest. In a free society, most of our interactions with people involve trade: we provide values to others only on terms that benefit ourselves. Generosity, however, means providing someone with a value that is not part of a definite trade, without the expectation of a definite return.

But this dichotomy between self-interest and generosity is a false one. Trading and giving are different, to be sure, but the conventional view overstates and misrepresents the difference. The chief cause of this confusion is a narrow definition of self-interest as the satisfaction of short-term desires, particularly for material gain. A rational person knows that what serves his interest in a given situation depends on his long-term goals; that it is in his interest to take responsibility for achieving his goals through productive effort; and that he is more likely to gain the values of living in society—everything from economic exchange to intimate personal relationships—by dealing with others fairly and honestly than by cheating.

What role could generosity play in the pursuit of enlightened self-interest?

One role pertains to emergencies where people are in trouble and we can help at little cost to ourselves. This serves our long-term interests in part because of the potential value that the other person represents. He might become a friend, or a partner in an economic exchange. But there's a more fundamental reason for aiding others in emergencies.

Humans live together partly because there is safety in numbers. Throughout much of their existence as a species, human beings lived in small tribes whose solidarity was the only protection each individual had against the risks of starvation, predators, and attack by other tribes; reciprocity within the tribe was relatively open-ended, one-for-all and all-for-one. By and large, the progress of civilization has replaced this form of reciprocity with contractual relationships. We do not pool the harvest and share it among us; we buy our food in the market. Even emergencies are largely handled through contract and the division of labor: we hire firefighters, police, Coast Guard sailors, and other specialists. But there are residual cases in which we can help each other avoid harm and risk, or gain benefits, in ways that are not easily reduced to contract, such as calling the police when we see a crime, helping a neighbor put out a fire, or contributing to relief organizations like the Red Cross.

Each of us benefits from living in a society where people extend such help. If I am a victim, it is certainly to my benefit to receive it; my life may depend on it. But such help will be available only if people extend it when they can. A social custom is sustained in large part by the expectation that it will be observed. One man giving his seat on a bus to a pregnant woman sets an example for everyone else on the bus. Conversely, it takes but a few teenagers with blaring boom boxes to convey a sense of civic disorder.

The custom of mutual aid among strangers is analogous to insurance. An insurance contract gives one protection against the risk of catastrophic loss in exchange for a series of predictable, affordable payments. In the same way, the custom of mutual aid gives us the prospect of help in emergencies in exchange for offering low-cost help to others. Notice that this explanation of helping strangers involves an implicit trade. But the trade in this case is not with the particular person we help; it is with all other members of our society.

Someone who would accept help in an emergency but would not provide it to others is acting as a free-rider, hoping to benefit from the custom without the effort of helping to sustain it. The virtues of independence and responsibility require that we make our own actions the causes of the benefits we enjoy, rather than depending on others to provide those benefits for us. The rationality of extending aid is of course dependent on one's circumstances; it is not in one's interest to help if it means incurring great risk or depriving oneself and one's family of necessities, as a purely altruistic standard would require.

A second motive for generosity involves a kind of investment. In our personal lives we invest in people in the hope that the gift of money, time, or care will help them tap an unrealized potential, as when a teacher goes beyond the call of duty to help a troubled student. In the same way, wealthy donors to nonprofit organizations often speak of their gifts as investments in education, research, art, and other causes the organizations serve. Of course these are not investments in the literal sense, as when we loan money or buy stocks in exchange for a contractual return. But the metaphor of investment is nevertheless a good one, in two respects.

First, generosity of this kind often springs from a sense that one's own life is improved by living in a world with better, happier, more fully realized people in it. This is a creative impulse broadly similar to that involved in productive work. A truly productive person is motivated not only by the monetary return for his work but also by the satisfaction of creating value in the world. The money one earns is a social recognition of that value but cannot replace one's own judgment and commitment as its source. In the same way, there is a satisfaction in creating value in one's social environment, a satisfaction that remains even when the value cannot be returned in the form of a definite trade.

Secondly, generosity of this kind is an investment in the infrastructure of society. Successful people often say they want to "give something back" to society. The debt they feel they owe is, once again, a metaphorical one. If they acquired their wealth by voluntary exchange, without force or fraud, they owe nothing to other individuals nor to "society" as a collective entity; and governments have no warrant collecting such "debts" by force to fund transfer programs. Nevertheless, we all benefit from the knowledge, culture, institutions, technology, and wealth produced by previous generations. Contributing to help sustain and expand this infrastructure reflects the desire not to be a free-rider, to take full responsibility for the benefits one enjoys—as in the case of giving aid in emergencies.

Such generosity is not altruistic. Altruism would mean giving purely in response to need. But donors who give from enlightened self-interest invest in response to the promise and potential for creating value. They support organizations they think can use the money productively. And they choose which causes to support and at what levels by consulting their own specific interests and hierarchy of personal values—the same way they choose between more work and more leisure, how much to save for retirement, how much insurance to buy, whether to read a book or weed the garden.

Doubtless there are other ways in which generosity serves our interests. But these two—supporting the custom of mutual aid and investing in social infrastructure—are the easiest to understand philosophically. In my experience as head of a nonprofit organization, they are also the most common.

Note: This article first appeared in the  December 2004/January 2005 issue of the Fraser Forum.


Rand, Ayn (1964). "The Objectivist Ethics." In Ayn Rand , The Virtue of Selfishness. New York: New American Library, 1964.

Kelley, David (2003). Unrugged Individualism: the Selfish Basis of Benevolence, rev. ed. Poughkeepsie, NY: The Atlas Society

David Kelley


David Kelley

David Kelley is the founder of The Atlas Society. A professional philosopher, teacher, and best-selling author, he has been a leading proponent of Objectivism for more than 25 years.