What role does rational self-interest play in economic analysis?
Answer:
rational self interest means that consumers are interested in making themselves more better off than worse.
However, this is not always true. Cigarettes and alcohol are 2 examples of products that can lead to more problems than benefit, especially if taken in large quantities.
Therefore, assuming that people are rational is not always a fair assumption, and many economic theory can go out the window.
thats it, easy rite
Though terms have changed, rational self interest has played a central role in economic threory since Adam Smith published "The Wealth of Nations" in 1776. His brilliant idea is that consumers and producers acting in their own self interest will actually improve the public welfare or public interest if they operate in competitive markets.
Rational self interest refers to a mentally separate, physically separate, value-separate and fully categorically trained thinker with experience, a legal citizen self;
the action referred to is capitalism--investment of life-positives r values--courage, time, focus, ability, knowledge, money etc. in the creation of longer-term, higher amounts or more useful types of value for oneself--the disposal of which is that person's responsibility, whomever he chooses to give to, invest in, trade with.
Here's a simple way of understanding rational self interest;
It's the exact same thing as individual liberty--freedom from collectivization by any one or more others: it refers to rights claimed under scientist-drawn regulations and then exercised by the individual without committing crimes against anyone else, presumably with the intention of reinvesting values in long-term good,which does not necessarily mean placing one's own wishes rather than one's highest values as a first priority during the phase of owning, maintaining or expending/consuming values.
Rational self interest means realistic individual liberty.
It's that simple, I claim.
Attack the one--you attack the other.
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