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<p>Got it. “Be more polite to prevent resentment.” Sure, that’s reasonable.</p>
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<p>There are a lot of different ways. </p>
<p>One involves the ignorance of property rights, or the ability of an individual to own and exercise control over scarce resources. If these aren’t respected by everyone, then self-interested behavior will lead to the accrual of resources into the hands of those with more power, increasing their power while leaving the weak even weaker and without a course for ever becoming strong. This basically can be said about all things that we ordinarily call “rights”, and what makes political science so important (because this distribution of power between people is what defines the subject). To protect rights, self-interest must be controlled through a system of positive and negative incentives called the legal system that makes the infringement of rights undesirable to the self-interested person.</p>
<p>Then there are externalities, the impact of one person’s actions on an innocent bystander. One example of an externality is pollution - a perfect example of how working in your own interest can hurt others, since pollution can reduce your health. Self-interested companies would pump debris into our air and water supply without restraint if it weren’t for the legal system altering the incentives to make doing so undesirable. </p>
<p>Then there is the unequal distribution of market power, or the ability of a single economic actor to have a substantial influence on market prices. For example, if everyone in town needs water but there is only one well. The owner of the well gets to charge lots of money to use it since water is a necessity and there are no other well owners to compete for customers. Because of this set-up, the self-interested guy can basically extort customers for loads of money that could instead be used for economic development.</p>