We still have deception and tribalism anyway. Wouldn't it be wiser to at least preserve also our better innate traits? Altruism is universally recognized as a positive trait, no matter what economist try to tell you.
> can often lead to more overall output
which translates in institutionalized theft, as we clearly see today when the output is not then fairly distributed but only goes up
> people are more motivated if they're pursuing something in their own interest rather than someone else's
That's your huge assumption. There are plenty of incredibly relevant scientists who never cashed on inventions/discoveries that changed the world. How do they fit in your scheme?
We can also discuss how the USSR turned from a starving rural economy into an industrial world power in decades, based on a completely different incentive system than "my self-interest". Or how most of the poverty in the past century was solved by China and not by "greed first" countries.
> That works amazingly well when the price accounts for all the costs and benefits - you get lots and lots of output of a good thing - and less well when it does not
Another big assumption. I have countless examples of the market not self adjusting for the greater good.
Greed has always existed troughout history. It never changed things for the better. What changed things was the scientific discoveries that led to the industrial revolution and social struggle.
To say greed caused our modern lifestyle is like saying that drinking water causes death, since everyone who dies has drank water at least once.