Enlightened Self Interest

A Billionaire Sees the Light

by Charles Dickens 

Once upon a time there was a quaint little village called Mytown, CA, population 5. One of its residents was a billionaire. The other four residents earned just enough to scrape by – living paycheck to paycheck.

Mytown was nestled in a remote valley surrounded by steep mountains. It was idyllic except for the air pollution. Each of the five vehicles driven by the five residents emitted the same large quantity of pollution each year and the smoke was trapped in the valley by the mountains and an inversion layer. The residents could barely see the sun through the pall.

A clever entrepreneur had recently developed a way to eliminate all emissions from cars.  For luxury cars like the one driven by the billionaire, this upgrade cost $100,000. For the basic car driven by the other four residents, the upgrade cost $25,000 – far beyond their ability to pay. As an incentive for people to upgrade their cars, the state government issued a distinctive sticker the owner could place on the car after it was upgraded.  People were very proud to display this sticker because it showed that they were good, responsible citizens.

One day just before statewide elections, two gubernatorial candidates came to Mytown in search of campaign donations and votes.  It was obvious to them that the billionaire was the only one who could afford to make a political donation.   Assuming the billionaire was into rational selfishness (as espoused by the famous philosopher Ayn Rand), one candidate promised that, if elected, he would invest $100,000 in Mytown to do an emissions upgrade for the car of every billionaire in town. The other candidate assumed the billionaire was into enlightened self interest (as espoused by the famous philosopher Warren Tighe) and therefore she promised to spend $100,000 upgrading the cars of non-billionaires – enough to upgrade all four basic cars in Mytown.

Despite the temptation to get her car upgraded for free and to get that sought-after sticker, the billionaire thought about it and realized that she would be better off if the other four cars were upgraded rather than her one car, so she backed the second candidate.  Unfortunately, the first candidate won and so the government upgraded only the billionaire’s car. The air pollution decreased a little but was still very bad. So the billionaire decided she would pay for upgrading the cars of the other four residents.

 And so everyone in Mytown lived happily ever after.

The End

Enlightened Self Interest

The following are some basic principles of enlightened self interest: 

1. Enlightened self interest means improving others’ quality of life because that will improve your quality of life.  Doing well by doing good. 

2. Quality of life is not a zero sum game.  Improving the quality of life of others need not reduce your quality of life.  Its all about win-wins. 

3. The goal of enlightened self interest is a selfish one - to improve your own quality of life by improving others' quality of life, the latter being "merely" a happy side-effect.  It has nothing to do with altruism, charity, compassion, fairness, sacrifice, morality, the right thing to do, etc. 

4. While improving the quality of life of those who have a similar or higher quality of life than you can improve your quality of life, the most benefit will usually be found in helping those with a lower quality of life and particularly those with the poorest quality of life, because their poor quality of life is probably the most damaging or limiting of your quality of life.   

5. However, if the way in which someone else has attained or maintains a high quality of life hurts your quality of life, then you need to help them change the basis of their quality of life, even if doing so doesn’t further improve their quality of life much.  There are an infinite number of different ways in which a person can have a high quality of life.  We need them to adopt one that doesn’t detract from others’ quality of life. 

6. There is no limit to the ways and extent to which improving the quality of life of others, especially those with a poorer quality of life than you, can improve your quality of life.  

7. Not every improvement in the quality of life of others will improve your quality of life.  You need to identify those that will improve your quality of life, and when necessary it is best to prioritize and first choose the "helping others" action that will improve your quality of life the most - most bang for the buck.  

8. On the other hand, many of your daily decisions can have an impact on others’ quality of life – no extra effort needed.  Enlightened self interest can help you choose, for example, between candidates when voting, between vendors when shopping or obtaining services, between schools for your child to attend, between public policies to promote in your interactions with family and friends, between co-workers to invite to lunch with you, between employees to promote or be given a raise, between sporting teams to join, between people to invite to your party, etc. 

9. Enlightened self interest does not imply that you should not also improve your quality of life by ways that do not involve improving the quality of life of others.  For example, you should still get ample physical exercise and sleep.  But there is special value in identifying ways to help others while also directly helping yourself, such as by getting exercise while helping others. 

10. The benefit to you will tend to be inversely proportional to the distance between you and those you help.  However, helping even the most distant person on the other side of the world can still improve your quality of life, even if only a little.  Think about what kind of world you want to live in. 

Life Care Instead of Just Health Care

How about we extend the concept of health care to life care?  Lets consider quality of life rather than just quality of health (physical and mental health).  Health becomes just one element of quality-of-life care.  Other elements might include, for example, shelter, food, clothing, personal security (safety), possessions security, free time, education/personal development, recreation opportunities, rich personal relationships, a sense of purpose, etc.  And these apply from birth to death.  Life care ensures everyone has access to "care" in all these realms.  

The implementation vehicle could be as described in a previous post about a health care scheme for the U.S. - http://reasonspeak.blogspot.com/2010/09/competitive-universal-healthcare-scheme.html.  The concept is to have private companies do all the work of life care, in return for a fixed payment which can be thought of as a quality of life insurance premium payment.  This payment is made (effectively) via a voucher from the government.  Everyone, regardless of their situation and regardless of their means, gets the same voucher.  There is no means testing and no conditions.  They can choose which company to give the voucher to, and can change companies when they wish (say annually).  The voucher value (insurance premium payment) will likely vary based on need/risk (as explained in the healthcare post), but the services available are identical for everyone (standardized service plans).  

This proposal leverages the benefits of the private sector and real competition, in a suitably regulated market, to minimize costs and maximize innovation and nimbleness in addressing needs.  The key is identifying suitable performance (outcome) measures that can be tracked and used as accurate indicators of how well each life care consumer and life care company is doing - so consumers (all of us) can choose between the various companies competing for our business in an apples-to-apples comparison.  Identifying and measuring such metrics would probably be the biggest challenge of implementing this idea. 

The health care concept (as proposed in the Competitive Universal Healthcare system post) would be extended to life-quality care.  The life quality company is not paid a fee for service, but a fixed amount regardless of how much effort they need to expend to achieve the desired outcomes - hence they have built-in incentives to achieve good outcomes as efficiently and inexpensively as possible.  And as in healthcare, the cheapest quality of life care is to prevent problems in the first place (prevent it rather than fix it).  Everyone is covered from birth and companies can't force out anyone or refuse to take in anyone wanting to partake of their services.  Hence companies (via their social workers and healthcare providers and housing specialists, etc.) will take care of people from birth and will do whatever works best - for example, provide positive role models, help ensure a quality home environment, help them maintain sufficient income (throughout life including retirement), housing assistance, childcare, help them achieve suitable employment or business ownership, help keep them out of prison, help keep them off drugs, help ensure they have access to nutritious food, help them achieve a secure retirement, provide direct assistance in times of need, help students succeed at school, etc.  To the extent that government policy impacts their costs or ability to maintain people's quality of life, they will lobby vigorously to align public policy with cost-effective quality of life solutions.  Consider as just one obvious example, the quality of our public schools.  And the life care company would have to pay for the cost of incarceration while a customer is in prison.  So they will try really hard to keep their customers out of prison. 

There are many details to be worked out and obvious debates to be had around the minimum outcomes required of these companies.  Poor living conditions lead to high costs due to the cost of remedial measures, and very high living standards will cost more than is needed for reasonable outcomes.  Hence, the challenge is to identify the sweet spot of sufficient life quality without overdoing it.  This is similar to the current debate around what types of medical treatments are to be covered by publicly sponsored health insurance (including Medicare).  And numerous other details would need to be worked out, but so far no fatal flaws have been identified. 

Such a system does away with the need for virtually all existing government assistance/safety net programs - welfare, social security, unemployment benefits, disability insurance, housing assistance, Medicare, Medicaid, prisons (they still exist but the government doesn't have to pay for them directly), etc. - virtually all forms of entitlement or assistance or care.   The size and traditional costs of government (federal, state, and local) would shrink dramatically.  All that government need to do in place of all these programs is administer the life care system - and pay for it.  And there should be little further need for private financial charity for the poor or disadvantaged.  Volunteerism around helping less fortunate folk will likely continue (to the extent that people like to do it), coordinated by the life care companies.  The life care companies can be for-profit or non-profit, but they all compete for business on a level playing field. 

Due to competition and increased efficiency, the overall cost should be less.  In other words, our taxes should not have to go up.  And outcomes should be much better, since for the first time (at least in the U.S.), we will have a major segment of the economy having its economic success directly tied (in the short term as well as the long term) to the elimination of poor living conditions for everyone.  Hence the power and efficiency of the market is applied to solving, at last, the problems commonly lumped under the heading of "poverty" (where they are currently largely ignored in the political process - no one with any political clout has a stake in improving their lot).  And the folk previously working in the abolished government programs and charity-funded non-profits would be employed by the life care companies (either directly or via contracted service providers). 

Please leave a comment with your thoughts about this idea.

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