How to engineer the economic system, so that an individuals self interest leads to fulfilling collective interest So it is said that Adam Smith said that self interest leads to collective interest.

This is obviously not the case. We do not have a society that maximises the collective good*.

My question is, Is there a way to engineer society such that self interest will lead to a collective interest?



*It can be argued that the very poor are not as poor as they were a short time ago, but this is not what I am asking about.
Well, there's mechanism design. We use game theory to study what people do and then reverse it and ask ourselfs what set of rules induce people to rationally choose to do what the mechanism designer wants them to do.

In an auction, we charge the second highest price to the winner, that's a Vickrey-Clark-Groves mechanism. In voting, one might want to apply the Goeree-Zhang mechanism, for example.