Conflicts of interest are important to pay attention to, especially in politics but also in other aspects of the business world. Our capitalist society is founded on the fact that people will naturally act in their own interests. A conflict of interest occurs when someone is in some position of responsibility that would allow them to personally benefit themselves or their loved ones at the expense of whatever group they represent or over which they have responsibility.
Disclosure is generally required when a conflict of interest is present. If the conflict is severe enough, the person will step aside and let someone else handle the decisions in question.
So what happens when the person with the conflict of interest is the expert in the topic? For example, if a state legislator is also a public school teacher, bills relating to funding public education and specifically relating to teachers' salaries would obviously be conflicts of interest. Do we want everyone with a stake in public education to step out of the room and let only the construction experts work on the public education budget? Then when it's time to allocate money for construction projects, those who work in construction will leave the room while the teachers come back in and set the construction budget? Of course not. Neither group has the expertise to efficiently allocate the money for the other group. Disclosure is always appropriate, but recusal may not be the best course of action in such a situation.
So, my humble reader(s), if you've made it this far, here's your theoretical situation. A professor writes a textbook and wants to use it in class. Requiring students to purchase the textbook results in more money for him or her, so there's the conflict of interest. Letting someone else choose another book may result in a less effective classroom experience if the professor's book would be better aligned to the structure of the class. Anyone that is a proponent of open education already has a solution most of the way formulated. What about all the capitalists out there? What's your solution?