Online Library of Liberty

A collection of scholarly works about individual liberty and free markets. A project of Liberty Fund, Inc.

Advanced Search

Philip Wicksteed on how impersonal economic relations help others (1910)

The English economist Philip H. Wicksteed (1844-1927) makes the interesting point that a business person aims to help others achieve their goals whether or not the business person is motivated by selfishness or altruism:

We shall find that the economic relations constitute a machinery by which men devote their energies to the immediate accomplishment of each other’s purposes in order to secure the ultimate accomplishment of their own, irrespective of what those purposes of their own may be, and therefore irrespective of the egoistic or altruistic nature of the motives which dictate them and which stimulate efforts to accomplish them. And the things and doings with which economic investigation is concerned will therefore be found to include everything which enters into the circle of exchange—that is to say, everything with which men can supply each other, or which men can do for each other, in what we may call an impersonal capacity; or, in other words, the things a man can give to or do for another independently of any personal and individualised sympathy with him or with his motives or reasons.

We shall find that the economic relations constitute a machinery by which men devote their energies to the immediate accomplishment of each other’s purposes in order to secure the ultimate accomplishment of their own, irrespective of what those purposes of their own may be, and therefore irrespective of the egoistic or altruistic nature of the motives which dictate them and which stimulate efforts to accomplish them. And the things and doings with which economic investigation is concerned will therefore be found to include everything which enters into the circle of exchange—that is to say, everything with which men can supply each other, or which men can do for each other, in what we may call an impersonal capacity; or, in other words, the things a man can give to or do for another independently of any personal and individualised sympathy with him or with his motives or reasons.

A full realisation of this, while bringing home to our minds the fundamental importance and the wide area of these relations, will at the same time convince us of the impossibility of permanently isolating them in practical life from the non-economic relations into which they perpetually play.

When our conception of the nature of economic facts and relations has become clear, we shall see without difficulty that the market, in the widest sense of the term, is their field of action, and that market prices are their most characteristic expression and outcome. The individual, in administering his resources, regards market prices as phenomena which confront him independently of his own action, and which impose upon him the conditions under which he must make his selections between alternatives. But when he has arrived at a thorough comprehension of the principles of his own conduct, as he stands confronted by market prices, he will find that those market prices are themselves constituted by other people’s acting precisely on the principles on which he acts; so that he is in fact himself, by his own action, contributing towards the formation of those very market prices which appear to be externally dictated to him. Because other people are doing exactly what he is doing a phenomenon arises, as the resultant of the sum of their individual actions, which presents itself to each one of them, severally, as an alien system imposed from without.

About this Quotation:

A common criticism of business people is that they are selfish, which no doubt many are. But so too are the people who work for them and the people who buy their goods and services. To Philip Wicksteed this is beside the point. He prefers to see the economic relations between people as constituting a piece of impersonal machinery which is unconcerned about the motives of the people who are part of its operations. On the other hand, the business person is forced to make another person’s wishes and goals part of their own concern, at least temporarily, if they wish to make a sale, and for a much longer period of time if they wish to make repeat sales. This works to the advantage of the consumer because this means that there are millions of people you do not know, whose motives you know nothing about, whom you may not even like if you met them face to face, yet who are all devoted to satisfying you needs and wants. The apparent contradiction of this does not escape Wicksteed, that a vast impersonal economic machine is the best, most efficient, and cheapest way to satisfy our very personal goals.

More Quotations