Some remarks on self‐interest, the historical schools and the evolution of the theory of public goods

Purpose – This paper is devoted to the question of what motivates man in his pursuit of economic activities. Particular attention is given to the notion that economic activities of individuals may not be motivated by their self‐interest alone. Design/methodology/approach – Using literary analysis, the paper first reconsiders the role of self‐interest and non‐selfish motives in the historical schools. Then it is demonstrated that at least some non‐selfish motives were incorporated in the voluntary exchange theory of public economy. Next it is shown that during the evolution of the theory of public goods these non‐selfish motives were lost and that the modern theory of public goods rests entirely on the self‐interest hypothesis. However, over the last two decades results of public goods experiments have cast considerable doubt on the pure self‐interest hypothesis. Findings – A major finding of this paper is that several non‐selfish motives of man that show up in recent public goods experiments were already discussed by representatives of the historical schools. Research limitations/implications – An agenda for future research on the topic is sketched in the final section. Practical implications – Practical implications include that the allocation of many goods, not just public goods, may improve if agents pay more attention to non‐selfish motives of man. Originality/value – The paper adds to the existing body of related writings by linking developments in the evolution of theory of public goods, in particular recent findings from public goods experiments, to a specific aspect already advocated by representatives of the historical schools, that is, the notion that man in his pursuit of economic activities is not motivated by his self‐interest alone. To this extent, the paper is of interest for researchers working on public goods theory, experimental economics and the history of economic thought.