Economic self-interest

These developments raise two general questions. First, the central question of this book is the appeal to economic self-interest an effective way to get companies to take worker health and safety seriously Second, what are the implications of conceptualising the role of an OHS agency as providing a service for its clients I shall defer consideration of the latter question until Chapter 12. The focus in what follows is on the appeal to economic self-interest. 

To summarise this section of the argument, self-interest is not the only or even the most important human motivation beliefs and values play a cmcial part in the decision making of both individuals and firms. Economic self-interest is thus a very uncertain basis on which to design public policy. It works in some circumstances, but it is foolish to assume that it will always do so. Policy must be attuned to the fact that in many circumstances beliefs and values are the critical motivators of action. 

The coal mining industry offers a useful illustration of the limitations of the view that safety pays —of the view that economic self-interest provides an effective incentive to companies to improve occupational health and safety. There are two strands to the safety pays argument. The most familiar is the notion that workers compensation costs provide significant safety incentives. In the first part of this chapter I shall explore in some detail the limitations of this notion in the context of coal mining and argue that safety in this industry depends as much or more on government intervention. 

Stroebe, W. and Frey, B. Self-interest and collective action the economics and psychology of public goods. British fournal of Sociat Psychology 21 (1982), 121-37. 

To establish a framework for supply chain intermediary analysis, we focus on the economic incentives of three types of players suppliers, buyers, and intermediaries. All players are self interested, profit seeking, and risk neutral. In the simplest form, each supplier has an opportunity cost s, each buyer has a willingness to pay level v that could be public or private information depending on the model assumptions. The intermediary offers an asked price w to the supplier and a bid price p to the buyer while creating a non-negative bid-ask spread p — w) to support her operation. The intermediary has the authority to determine whether a particular trade is to take place using control p. Adopting some mechanism T P,p, w), the intermediary optimizes her own profit. 

Of course it is possible to assimilate the moral dimension into the dimension of self-interest by arguing that in cases such as the above it is in an individual s interest to avoid moral condemnation. But this is far from the spirit of the neo-classical paradigm. Moreover, to argue that it is in people s interest to act morally in order to satisfy their own consciences and win the approval of others expands the concept of self-interest to the point where it has no meaning. On this expanded definition, no matter what a person does, be it moral or immoral, selfish or altruistic, it can be said to be motivated by self-interest. Most importantly, in the present context, to expand the concept in this way is to obliterate the distinction between the market and regulatory approaches to public policy which is the very question at issue in this book. In short, to be able to talk sensibly about policy in this area requires that we maintain this distinction between moral and economic motivation. 

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