Incentive Best Quotes

Educate not Legislate Refusing to pass unnecessary laws requires a converse – encouraging education and understanding. We started by slashing the salaries of legislators (Dubbed “Bloodbath on the Beltway”). That move provided funds to instigate incentive programs for high school teachers – to attract the best and brightest. The result was a generation of bright, energetic 18-year-olds graduating high-school, equipped to tackle the future.

Pick a leader who will make their citizens proud. One who will stir the hearts of the people, so that the sons and daughters of a given nation strive to emulate their leader's greatness. Only then will a nation be truly great, when a leader inspires and produces citizens worthy of becoming future leaders, honorable decision makers and peacemakers. And in these times, a great leader must be extremely brave. Their leadership must be steered only by their conscience, not a bribe.

I consider my ability to arouse enthusiasm among my people the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. THerei s nothing else that so kills the ambitions ofa person as criticism from superiors. I never criticize anyone. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my appreciation and lavish in my praise

Pick a leader who will keep jobs in your country by offering companies incentives to hire only within their borders, not one who allows corporations to outsource jobs for cheaper labor when there is a national employment crisis. Choose a leader who will invest in building bridges, not walls. Books, not weapons. Morality, not corruption. Intellectualism and wisdom, not ignorance. Stability, not fear and terror. Peace, not chaos. Love, not hate. Convergence, not segregation. Tolerance, not discrimination. Fairness, not hypocrisy. Substance, not superficiality. Character, not immaturity. Transparency, not secrecy. Justice, not lawlessness. Environmental improvement and preservation, not destruction. Truth, not lies.

A NATION'S GREATNESS DEPENDS ON ITS LEADER To vastly improve your country and truly make it great again, start by choosing a better leader. Do not let the media or the establishment make you pick from the people they choose, but instead choose from those they do not pick. Pick a leader from among the people who is heart-driven, one who identifies with the common man on the street and understands what the country needs on every level. Do not pick a leader who is only money-driven and does not understand or identify with the common man, but only what corporations need on every level. Pick a peacemaker. One who unites, not divides. A cultured leader who supports the arts and true freedom of speech, not censorship. Pick a leader who will not only bail out banks and airlines, but also families from losing their homes -- or jobs due to their companies moving to other countries. Pick a leader who will fund schools, not limit spending on education and allow libraries to close. Pick a leader who chooses diplomacy over war. An honest broker in foreign relations. A leader with integrity, one who says what they mean, keeps their word and does not lie to their people. Pick a leader who is strong and confident, yet humble. Intelligent, but not sly. A leader who encourages diversity, not racism. One who understands the needs of the farmer, the teacher, the doctor, and the environmentalist -- not only the banker, the oil tycoon, the weapons developer, or the insurance and pharmaceutical lobbyist. Pick a leader who will keep jobs in your country by offering companies incentives to hire only within their borders, not one who allows corporations to outsource jobs for cheaper labor when there is a national employment crisis. Choose a leader who will invest in building bridges, not walls. Books, not weapons. Morality, not corruption. Intellectualism and wisdom, not ignorance. Stability, not fear and terror. Peace, not chaos. Love, not hate. Convergence, not segregation. Tolerance, not discrimination. Fairness, not hypocrisy. Substance, not superficiality. Character, not immaturity. Transparency, not secrecy. Justice, not lawlessness. Environmental improvement and preservation, not destruction. Truth, not lies. Most importantly, a great leader must serve the best interests of the people first, not those of multinational corporations. Human life should never be sacrificed for monetary profit. There are no exceptions. In addition, a leader should always be open to criticism, not silencing dissent. Any leader who does not tolerate criticism from the public is afraid of their dirty hands to be revealed under heavy light. And such a leader is dangerous, because they only feel secure in the darkness. Only a leader who is free from corruption welcomes scrutiny; for scrutiny allows a good leader to be an even greater leader. And lastly, pick a leader who will make their citizens proud. One who will stir the hearts of the people, so that the sons and daughters of a given nation strive to emulate their leader's greatness. Only then will a nation be truly great, when a leader inspires and produces citizens worthy of becoming future leaders, honorable decision makers and peacemakers. And in these times, a great leader must be extremely brave. Their leadership must be steered only by their conscience, not a bribe.

The best incentive for an artist are the harshest criticism

I consider my ability to arouse enthusiasm among my people,” said Schwab, “the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. “There is nothing else that so kills the ambitions of a person as criticisms from superiors. I never criticize anyone. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my approbation and lavish in my praise.

Running and meditation are very personal activities. Therefore they are lonely. This loneliness is one of their best qualities because it strengthens our incentive to motivate ourselves.

I have a very simple rule when it comes to management: hire the best people from your competitors, pay them more than they were earning, and give them bonuses and incentives based on their performance. That’s how you build a first-class operation.

Pick a leader who will not only bail out banks and airlines, but also families from losing their homes -- or jobs due to their companies moving to other countries. Pick a leader who will fund schools, not limit spending on education and allow libraries to close. Pick a leader who chooses diplomacy over war. An honest broker in foreign relations. A leader with integrity, one who says what they mean, keeps their word and does not lie to their people. Pick a leader who is strong and confident, yet humble. Intelligent, but not sly. A leader who encourages diversity, not racism. One who understands the needs of the farmer, the teacher, the doctor, and the environmentalist -- not only the banker, the oil tycoon, the weapons developer, or the insurance and pharmaceutical lobbyist.

When I applied to graduate school many years ago, I wrote an essay expressing my puzzlement at how a country that could put a man on the moon could still have people sleeping on the streets. Part of that problem is political will; we could take a lot of people off the streets tomorrow if we made it a national priority. But I have also come to realize that NASA had it easy. Rockets conform to the unchanging laws of physics. We know where the moon will be at a given time; we know precisely how fast a spacecraft will enter or exist the earth's orbit. If we get the equations right, the rocket will land where it is supposed to--always. Human beings are more complex than that. A recovering drug addict does not behave as predictably as a rocket in orbit. We don't have a formula for persuading a sixteen-year-old not to drop out of school. But we do have a powerful tool: We know that people seek to make themselves better off, however they may define that. Our best hope for improving the human condition is to understand why we act the way we do and then plan accordingly. Programs, organizations, and systems work better when they get the incentives right. It is like rowing downstream.

the best of Cervantes is untranslatable, and this undeniable fact is in itself an incentive [for one and all] to learn Spanish.

Today I realized that I am nothing more than tomorrow's ghost. In a way, it robs my sense of self to know I'm always changing; at the same time, it provides incentive to have the best today possible so I can have a positive influence on tomorrow and, if need be, shake some sense into the living. (Samantha Green)

I speak of a tragic optimism, that is, an optimism in the face of tragedy and in view of the human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life’s transitoriness an incentive to take responsible action.

Thinking like a Freak may sometimes sound like an exercise in using clever means to get exactly what you want, and there’s nothing wrong with that. But if there is one thing we’ve learned from a lifetime of designing and analyzing incentives, the best way to get what you want is to treat other people with decency. Decency can push almost any interaction into the cooperative frame.

Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers—a prize for the best Halloween costume, grades in school, gold stars—and on up through the university. On the job, people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.

Explanations involving conspiracy, greed, and even stupidity are easier to generate and accept than more complex explanations that may be closer to the truth. A bit of wisdom called Hanlon's Razor advises us 'Never attribute to malice that which can be adequately explained by stupidity.' I would add a clumsier but more accurate corollary to this: 'Never attribute to malice or stupidity that which can be explained by moderately rational individuals following incentives in a complex system of interactions.' People behaving with no central coordination and acting in their own best interest can still create results that appear to some to be clear proof of conspiracy or a plague of ignorance.

No intelligent radical can fail to realize the need of the rational education of the young. The rearing of the child must become a process of liberation by methods which shall not impose ready-made ideas, but which should aid the child's natural self-unfoldment. The purpose of such an education is not to force the child's adaptation to accepted concepts. but to give free play to his [and her] originality, initiative, and individuality. Only by freeing education from compulsion and restraint can we create the environment for the manifestation of the spontaneous interest and inner incentives on the part of the child. Only thus can we supply rational conditions favorable to the development of the child's natural tendencies and his latent emotional and mental faculties. Such methods of education, essentially aiding the child's imitative quality and ardor for knowledge, will develop a generation of healthy intellectual independence. It will produce men and women capable, in the words of Francisco Ferrer, “of evolving without stopping, of destroying and renewing their environment without cessation; of renewing themselves also; always ready to accept what is best, happy in the triumph of new ideas, aspiring to live multiple lives in one life.

Art has no obligation to evolve but it has a powerful incentive to do so. Art that is static, that captures a dead moment, is nothing. It is, at best, nostalgia; at worst, it can be a blight on our sense of who we are, a shame we pack away. Artists who refuse to listen, participate, and change along with the world around them are not being silenced or punished by censorious college sophomores, they are letting obsolescence devour them voluntarily. Political correctness is just the inexorable turn of the gear. Falling behind is preventable.

In some circumstances, a focus on extrinsic rewards (money) can actually diminish effort. Most (or at least many) teachers enter their profession not because of the money but because of their love for children and their dedication to teaching. The best teachers could have earned far higher incomes if they had gone to banking. It is almost insulting to assume that they are not doing what they can to help their students learn, and that by paying them an extra $500 or $1,500, they would exert greater effort. Indeed, incentive pay can be corrosive: it reminds teachers of how bad their pay is, and those who are led thereby to focus on money may be induced to find a better paying job, leaving behind only those for whom teaching is the only alternative. (Of course, if teachers perceive themselves to be badly paid, that will undermine morale, and that will have adverse incentive effects)

I don’t think the people today who start hearing voices, stop eating and sleeping, and run amuck are likely to get good treatment. Having more knowledge, better diagnostic capabilities, better medications with fewer side effects, can’t make up for the fact that most patients are being treated by doctors, therapists, and hospitals, who are operating under constraints and incentives that reward non-treatment, non-hospitalization, non-therapy, non-follow-up, non-care. Lost to follow-up is the best outcome a health insurer can hope for.

Wage-work is serf-work; it cannot, it must not, produce all that it could produce. And it is high time to disbelieve the legend which represents wagedom as the best incentive to productive work. If industry nowadays brings in a hundred times more than it did in the days of our grandfathers, it is due to the sudden awakening of physical and chemical sciences towards the end of last century; not to the capitalist organization of wagedom, but in spite of that organization.

I am not a capitalist in the simplistic left/right sense. But I do believe in the power of the global free-market economy and in using capitalist tools. I believe in the power of teh free market and the power of capital in the marketplace. I also believe that providing unemployment benefits is not the best way to address poverty. The able-bodied poor don't wan tor need charity. The dole only increases their misery, robs them of incentive and, more important, of self-respect.

what matters is to make the best of any given situation. “The best,” however, is that which in Latin is called optimum—hence the reason I speak of a tragic optimism, that is, an optimism in the face of tragedy and in view of the human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life’s transitoriness an incentive to take responsible action.

I love my rejections. They prove that I'm trying'. I'm convinced this quote from Sylvia Plath is one of the best incentives to keep a struggling writer from giving up.

Many people in Nixon’s camp had genuine faith in affirmative action. It wasn’t designed to fail, but it wasn’t designed to succeed, either; the intent behind it was not rooted in a desire to help black people attain equal standing in society. It was riot insurance. It was a financial incentive for blacks to stay in their own communities and out of the suburbs.

18 NEVER PAY YOUR LAWYER BY THE HOUR Incentive Super-Response Tendency To control a rat infestation, French colonial rulers in Hanoi in the nineteenth century passed a law: for every dead rat handed in to the authorities, the catcher would receive a reward. Yes, many rats were destroyed, but many were also bred specially for this purpose. In 1947, when the Dead Sea scrolls were discovered, archaeologists set a finder’s fee for each new parchment. Instead of lots of extra scrolls being found, they were simply torn apart to increase the reward. Similarly, in China in the nineteenth century, an incentive was offered for finding dinosaur bones. Farmers located a few on their land, broke them into pieces and cashed in. Modern incentives are no better: company boards promise bonuses for achieved targets. And what happens? Managers invest more energy in trying to lower the targets than in growing the business. These are examples of the incentive super-response tendency. Credited to Charlie Munger, this titanic name describes a rather trivial observation: people respond to incentives by doing what is in their best interests. What is noteworthy is, first, how quickly and radically people’s behaviour changes when incentives come into play or are altered and, second, the fact that people respond to the incentives themselves and not the grander intentions behind them.

Once there were three tribes. The Optimists, whose patron saints were Drake and Sagan, believed in a universe crawling with gentle intelligence—spiritual brethren vaster and more enlightened than we, a great galactic siblinghood into whose ranks we would someday ascend. Surely, said the Optimists, space travel implies enlightenment, for it requires the control of great destructive energies. Any race which can't rise above its own brutal instincts will wipe itself out long before it learns to bridge the interstellar gulf. Across from the Optimists sat the Pessimists, who genuflected before graven images of Saint Fermi and a host of lesser lightweights. The Pessimists envisioned a lonely universe full of dead rocks and prokaryotic slime. The odds are just too low, they insisted. Too many rogues, too much radiation, too much eccentricity in too many orbits. It is a surpassing miracle that even one Earth exists; to hope for many is to abandon reason and embrace religious mania. After all, the universe is fourteen billion years old: if the galaxy were alive with intelligence, wouldn't it be here by now? Equidistant to the other two tribes sat the Historians. They didn't have too many thoughts on the probable prevalence of intelligent, spacefaring extraterrestrials— but if there are any, they said, they're not just going to be smart. They're going to be mean. It might seem almost too obvious a conclusion. What is Human history, if not an ongoing succession of greater technologies grinding lesser ones beneath their boots? But the subject wasn't merely Human history, or the unfair advantage that tools gave to any given side; the oppressed snatch up advanced weaponry as readily as the oppressor, given half a chance. No, the real issue was how those tools got there in the first place. The real issue was what tools are for. To the Historians, tools existed for only one reason: to force the universe into unnatural shapes. They treated nature as an enemy, they were by definition a rebellion against the way things were. Technology is a stunted thing in benign environments, it never thrived in any culture gripped by belief in natural harmony. Why invent fusion reactors if your climate is comfortable, if your food is abundant? Why build fortresses if you have no enemies? Why force change upon a world which poses no threat? Human civilization had a lot of branches, not so long ago. Even into the twenty-first century, a few isolated tribes had barely developed stone tools. Some settled down with agriculture. Others weren't content until they had ended nature itself, still others until they'd built cities in space. We all rested eventually, though. Each new technology trampled lesser ones, climbed to some complacent asymptote, and stopped—until my own mother packed herself away like a larva in honeycomb, softened by machinery, robbed of incentive by her own contentment. But history never said that everyone had to stop where we did. It only suggested that those who had stopped no longer struggled for existence. There could be other, more hellish worlds where the best Human technology would crumble, where the environment was still the enemy, where the only survivors were those who fought back with sharper tools and stronger empires. The threats contained in those environments would not be simple ones. Harsh weather and natural disasters either kill you or they don't, and once conquered—or adapted to— they lose their relevance. No, the only environmental factors that continued to matter were those that fought back, that countered new strategies with newer ones, that forced their enemies to scale ever-greater heights just to stay alive. Ultimately, the only enemy that mattered was an intelligent one. And if the best toys do end up in the hands of those who've never forgotten that life itself is an act of war against intelligent opponents, what does that say about a race whose machines travel between the stars?

It is a wonderful quirk of our species that the incentives of social life don’t reward strictly ruthless behavior. Leaders who are too domineering are often penalized. Rampant lying and cheating are often caught and punished. Freeloaders frequently get the boot. At the same time, people are often positively rewarded—with friendship, social status, a better reputation—for their service to others. As if our oversized brains and hairless skin didn’t make us an uncanny enough species, our genes long ago decided that, in the relentless competition to survive and reproduce, their best strategy was to build ethical brains.

He will set them off with communications of His presence which, though faint, seem great to them, with emotional sweetness, and easy conquest over temptation. But He never allows this state of affairs to last long. Sooner or later He withdraws, if not in fact, at least from their conscious experience, all those supports and incentives. He leaves the creature to stand up on its own legs—to carry out from the will alone duties which have lost all relish. It is during those trough periods, much more than during the peak periods, that it is growing into the sort of creature He wants it to be. Hence the prayers offered in the state of dryness are those which please Him best... He wants them to learn to walk and must therefore take away His hand; and if only the will to walk is really there He is pleased even with their stumbles. Do not be deceived, Wormwood. Our cause is never more in danger than when a human, no longer desiring, but still intending, to do our Enemy’s will, looks round upon a universe from which every trace of Him seems to have vanished, and asks why he has been forsaken, and still obeys.

As such, I have found that American politics is best understood by braiding two forms of knowledge that are often left separate: the direct, on-the-ground insights shared by politicians, activists, government officials, and other subjects of my reporting, and the more systemic analyses conducted by political scientists, sociologists, historians, and others with the time, methods and expertise to study American politics at scale. On their own, political actors often ignore the incentives shaping their decisions and academic researchers miss the human motivations that drive political decision-making. Together, however, they shine bright light on how and why American politics work the way it does.

Skill teachers are made scarce by the belief in the value of licenses. Certification constitutes a form of market manipulation and is plausible only to a schooled mind. Most teachers of arts and trades are less skillful, less inventive, and less communicative than the best craftsmen and tradesmen. Most high-school teachers of Spanish or French do not speak the language as correctly as their pupils might after half a year of competent drills. Experimentsconducted by Angel Quintero in Puerto Rico suggest that many young teen-agers, if given the proper incentives, programs, and access to tools, are better than most schoolteachers at introducing their peers to the scientific exploration of plants, stars, and matter, and to the discovery of how and why a motor or a radio functions.

We accept human nature as it is, then we base our system on it. Your system must accept that human nature is like that. You get the best out of people for society by incentives and disincentives. If you remove too much of their rewards from the top tier, they will migrate.

human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life’s transitoriness an incentive to take responsible action.

Decision-making becomes more difficult as numbers rise, because incentive traps proliferate. You need only think how hard it is to get a dozen people organized to go out to dinner. Imagine how hopeless would have been the task of organizing hundreds or thousands of persons to traipse around on a moveable feast. Lacking any sustained and separate political organization or bureaucracy required by specialization for war, hunting-and-gathering bands had to depend on persuasion and consensus—principles that work best among small groups with relatively easygoing attitudes.

Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future. Equity can’t create perfect incentives, but it’s the best way for a founder to keep everyone in the company broadly aligned.

Her parties are always the best. She gets the top shelf liquor and plays only eighties music, which is fine by me. Dancing drunk to the eighties is life. But, more than that, she makes a point of inviting handsome men as an incentive for her girlfriends to attend. I’d be fine with just the expensive booze, but I suppose the scenery is a nice plus.

hence the reason I speak of a tragic optimism, that is, an optimism in the face of tragedy and in view of the human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life’s transitoriness an incentive to take responsible action.

Most of all, I blamed the Icelander for the society and emotional remoteness and irrelevance of birds, that feathered people who seemed to reign over us all with economy of presence and with illicit incentive, perhaps waiting for the epoch in which humanity jettisoned our limbs to reunite with the worms so that their beaks might claim the kingdom which had eluded the diffuse protests of thrashing wings for so long. Oh yes, the birds could go get fucked best of all!

In agricultural communities, male leadership in the hunt ceased to be of much importance. As the discipline of the hunting band decayed, the political institutions of the earliest village settlements perhaps approximated the anarchism which has remained ever since the ideal of peaceful peasantries all round the earth. Probably religious functionaries, mediators between helpless mankind and the uncertain fertility of the earth, provided an important form of social leadership. The strong hunter and man of prowess, his occupation gone or relegated to the margins of social life, lost the umambiguous primacy which had once been his; while the comparatively tight personal subordination to a leader necessary to the success of a hunting party could be relaxed in proportion as grain fields became the center around which life revolved. Among predominantly pastoral peoples, however, religious-political institutions took a quite different turn. To protect the flocks from animal predators required the same courage and social discipline which hunters had always needed. Among pastoralists, likewise, the principal economic activity- focused, as among the earliest hunters, on a parasitic relation to animals- continued to be the special preserve of menfolk. Hence a system of patrilineal families, united into kinship groups under the authority of a chieftain responsible for daily decisions as to where to seek pasture, best fitted the conditions of pastoral life. In addition, pastoralists were likely to accord importance to the practices and discipline of war. After all, violent seizure of someone else’s animals or pasture grounds was the easiest and speediest way to wealth and might be the only means of survival in a year of scant vegetation. Such warlikeness was entirely alien to communities tilling the soil. Archeological remains from early Neolithic villages suggest remarkably peaceful societies. As long as cultivable land was plentiful, and as long as the labor of a single household could not produce a significant surplus, there can have been little incentive to war. Traditions of violence and hunting-party organization presumably withered in such societies, to be revived only when pastoral conquest superimposed upon peaceable villagers the elements of warlike organization from which civilized political institutions without exception descend.

More often than not, the people around me weren’t simply deciding to give up. They were living in a culture of dependency that had been passed down from birth. My mother and grandmother gave in to the culture. And they expected me to figure out the best way to live on that same track, to game the system and not even try to escape. My friend Ben agrees. 'Most of the time, what you see in the housing projects are generations of families,' he says. 'People accustomed to this lifestyle. It becomes comfortable, so they don’t move away, and even their children stay and raise kids in the same environment.' In neighborhoods like the ones where Ben and I grew up, there is no perceived incentive to advance. After all, the checks for housing and the food stamps and assistance arrive every month. This is why the system must be reformed. Welfare should exist only for a certain period of time, unless you’re disabled and can’t physically work. It should not last for a generation or more. There are millions of jobs open, without enough people to fill them or, rather, without enough people who have the necessary skills and training. This is where the government should come in, providing incentives for real-world training and educating recipients about a life beyond government dependence.

ANYONE WHO HAS ever lived or worked in a corrupt dictatorship knows what happens. When the system is rigged, when ordinary citizens are powerless, and when whistle-blowers are pariahs at best, three things happen. First, the worst people rise to the top. They behave appallingly, and they wreak havoc. Second, people who could make productive contributions to society are incented to become destructive, because corruption is far more lucrative than honest work. And third, everyone else pays, both economically and emotionally; people become cynical, selfish, and fatalistic. Often they go along with the system, but they hate themselves for it. They play the game to survive and feed their families, but both they and society suffer.

The mated males are biased. They want more females here for their own females. Many of the single males will likely have an issue, since it is tradition.” “Well if the single males want more females here, that’s the only way to do it. They’re only hurting themselves.” His fingers flexed slightly against hers. “Why do you think females would come here, anyway?” “Why wouldn’t they? I knew nothing about this sector and even after my tour I still don’t know much about it. Maybe if there was an attraction here— other than the males— it would bring more females.” He straightened and pushed up so that his hands caged her against the headboard. “This facility puts out the best warriors and we do some of the most intense and covert off-world missions. We will not have attractions here like a… carnival.” She blinked, realizing he’d misunderstood her. Unable to stop herself, a giggle escaped. She cupped the side of his face. Midnight black stubble already covered his jaw. She shivered, remembering the feel of it against her inner thighs not too long ago. “I didn’t mean that kind of attraction. I mean, give the females an incentive, like luxury housing or the chance to run a business here. There are so many business opportunities here for women. So far I’ve only seen one clothing shop and one bakery run by females.” He was silent a long moment as he watched her. “I think I might be biased too.” “How so?” “Because I want to change the law simply to please you.” The way he said it was almost grudging.

Ralph Waldo Emerson would later observe that “Souls are not saved in bundles.”16 Johnson fervently believed in each individual’s mysterious complexity and inherent dignity. He was, through it all, a moralist, in the best sense of that term. He believed that most problems are moral problems. “The happiness of society depends on virtue,” he would write. For him, like other humanists of that age, the essential human act is the act of making strenuous moral decisions. He, like other humanists, believed that literature could be a serious force for moral improvement. Literature gives not only new information but new experiences. It can broaden the range of awareness and be an occasion for evaluation. Literature can also instruct through pleasure. Today many writers see literature and art only in aesthetic terms, but Johnson saw them as moral enterprises. He hoped to be counted among those writers who give “ardor to virtue and confidence to truth.” He added, “It is always a writer’s duty to make the world better.” As Fussell puts it, “Johnson, then, conceives of writing as something very like a Christian sacrament, defined in the Anglican catechism as ‘an outward and visible sign of an inward and spiritual grace given to us.’ ” Johnson lived in a world of hack writers, but Johnson did not allow himself to write badly—even though he wrote quickly and for money. Instead, he pursued the ideal of absolute literary honesty. “The first step to greatness is to be honest” was one of Johnson’s maxims. He had a low but sympathetic view of human nature. It was said in Greek times that Demosthenes was not a great orator despite his stammer; he was a great orator because he stammered. The deficiency became an incentive to perfect the associated skill. The hero becomes strongest at his weakest point. Johnson was a great moralist because of his deficiencies. He came to understand that he would never defeat them. He came to understand that his story would not be the sort of virtue-conquers-vice story people like to tell. It would be, at best, a virtue-learns-to-live-with-vice story. He wrote that he did not seek cures for his failings, but palliatives. This awareness of permanent struggle made him sympathetic to others’ failings. He was a moralist, but a tenderhearted one.

After all," saying yes to life in spite of everything," to use the phrase in which the title of a German book of mine is couched, presupposes that life is potentially meaningful under any conditions, even those which are most miserable. And this in turn presupposes the human capacity to creatively turn life's negative aspects into something positive or constructive. In other words, what matters is to make the best of any given situation. "The best," however, is that which in Latinis called optimum—hence the reason I speak of tragic optimism, that is, optimism in the face of tragedy and in view of the human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life's transitoriness an incentive to take responsible action.

The genetic economics of sex also predicts that both sexes have a genetic incentive to commit adultery, though for partly different reasons. A philandering man can have additional offspring by impregnating women other than his wife. A philandering woman can have better offspring by conceiving a child by a man with better genes than her husband while having her husband around to help nurture the child. But when a wife gets the best of both worlds from her affair, the husband gets the worst of both worlds, because he is investing in another man’s genes that have usurped the place of his own. We thus get the flip side of the evolution of fatherly feelings: the evolution of male sexual jealousy, designed to prevent his wife from having another man’s child. Women’s jealousy is tilted more toward preventing the alienation of a man’s affections, a sign of his willingness to invest in another woman’s children at the expense of her own.

How is it possible to say yes to life in spite of all that? How, to pose the question differently, can life retain its potential meaning in spite of its tragic aspects? After all, "saying yes to life in spite of everything," to use the phrase in which the title of a German book of mine is couched, presupposes that life is potentially meaningful under any conditions, even those which are most miserable. And this in turn presupposes the human capacity to creatively turn life's negative aspects into something positive or constructive. In other words, what matters is to make the best of any given situation. "The best," however, is that which in Latin is called optimum - hence the reason I speak of a tragic optimism, that is, an optimism in the face of tragedy and in view of the human potential which at its best always allows for: (1) turning suffering into a human achievement and accomplishment; (2) deriving from guilt the opportunity to change oneself for the better; and (3) deriving from life's transitoriness an incentive to take responsible action.

A common problem plagues people who try to design institutions without accounting for hidden motives. First they identify the key goals that the institution “should” achieve. Then they search for a design that best achieves these goals, given all the constraints that the institution must deal with. This task can be challenging enough, but even when the designers apparently succeed, they’re frequently puzzled and frustrated when others show little interest in adopting their solution. Often this is because they mistook professed motives for real motives, and thus solved the wrong problems. Savvy institution designers must therefore identify both the surface goals to which people give lip service and the hidden goals that people are also trying to achieve. Designers can then search for arrangements that actually achieve the deeper goals while also serving the surface goals—or at least giving the appearance of doing so. Unsurprisingly, this is a much harder design problem. But if we can learn to do it well, our solutions will less often meet the fate of puzzling disinterest. We should take a similar approach when reforming a preexisting institution by first asking ourselves, “What are this institution’s hidden functions, and how important are they?” Take education, for example. We may wish for schools that focus more on teaching than on testing. And yet, some amount of testing is vital to the economy, since employers need to know which workers to hire. So if we tried to cut too much from school’s testing function, we could be blindsided by resistance we don’t understand—because those who resist may not tell us the real reasons for their opposition. It’s only by understanding where the resistance is coming from that we have any hope of overcoming it. Not all hidden institutional functions are worth facilitating, however. Some involve quite wasteful signaling expenditures, and we might be better off if these institutions performed only their official, stated functions. Take medicine, for example. To the extent that we use medical spending to show how much we care (and are cared for), there are very few positive externalities. The caring function is mostly competitive and zero-sum, and—perhaps surprisingly—we could therefore improve collective welfare by taxing extraneous medical spending, or at least refusing to subsidize it. Don’t expect any politician to start pushing for healthcare taxes or cutbacks, of course, because for lawmakers, as for laypeople, the caring signals are what makes medicine so attractive. These kinds of hidden incentives, alongside traditional vested interests, are what often make large institutions so hard to reform. Thus there’s an element of hubris in any reform effort, but at least by taking accurate stock of an institution’s purposes, both overt and covert, we can hope to avoid common mistakes. “The curious task of economics,” wrote Friedrich Hayek, “is to demonstrate to men how little they really know about what they imagine they can design.”8

Cassie,” I growl at the young brunette. “How’s the sobriety?” Alex brought the submissive to us. She’s an addict that he councils at Transcend. I don’t want to be mean to her right now, especially since my best friend brought her here, but I’m furious and she’s an outlet. She can’t strike back. “Ninety days sober,” she says with pride. “That’s awesome,” I say enthusiastically and smile at her. “I love how we have to give fuck ups a medal when they behave. I would think it should go to those who never fuck up. What’s the incentive to behave if all you have to do is get shit-faced and steal shit for years and then ninety days on the straight-and-narrow we have to pat you on the back for being a good girl,” I say in a saccharine voice. She gazes at me with huge, glassy brown eyes. I can see the tears forming. Cassie worries her full bottom lip between her teeth and tries not to blink. “But hey, what do I know. It just seems like the system is flawed. The good little boys and girls just don’t get the recognition that a crack-whore thief gets,” I shrug. Cassie blinks and the surface of her tears breaks and they finally slide down her cheeks in shame. “But go you!” I shout sarcastically. I give her a thumbs up and walk down the hall. “Cold… that was just cold, dude,” Alex chuckles at me. That was so bad that I have to laugh or I’d puke. I shake my head as my belly contracts from laughter. “Score on my newest asshattery?” I ask my partner in crime. If I didn’t have him I’d scream. I’ll owe Master Marcus forever. He stripped me bare until Font was naked in the impact room at Brownstone I trained in. Alex walked in and shook my hand- instant best friend. “Ah…” He taps his chin in thought and the bastard tucks his black hair behind his ear. I growl at him because he did it on purpose. He knows how much I miss the feel of my hair swinging at my jawline. Alex arches a perfect brow above his aqua eye and smirks. He runs his hands through his hair and groans in pleasure. “8.5. It was a decent attempt, but you pulled your hit. You’re too soft. I bet you were scared you’d make her relapse.” “Yeah,” I say bashfully. “Not happening, bud. I’m just that fucking good. I better go do some damage control. Don’t hurt any more subs. Pick on the big bastards. They may bite back, but their egos are delicate.

gave up on the idea of creating “socialist men and women” who would work without monetary incentives. In a famous speech he criticized “equality mongering,” and thereafter not only did different jobs get paid different wages but also a bonus system was introduced. It is instructive to understand how this worked. Typically a firm under central planning had to meet an output target set under the plan, though such plans were often renegotiated and changed. From the 1930s, workers were paid bonuses if the output levels were attained. These could be quite high—for instance, as much as 37 percent of the wage for management or senior engineers. But paying such bonuses created all sorts of disincentives to technological change. For one thing, innovation, which took resources away from current production, risked the output targets not being met and the bonuses not being paid. For another, output targets were usually based on previous production levels. This created a huge incentive never to expand output, since this only meant having to produce more in the future, since future targets would be “ratcheted up.” Underachievement was always the best way to meet targets and get the bonus. The fact that bonuses were paid monthly also kept everyone focused on the present, while innovation is about making sacrifices today in order to have more tomorrow. Even when bonuses and incentives were effective in changing behavior, they often created other problems. Central planning was just not good at replacing what the great eighteenth-century economist Adam Smith called the “invisible hand” of the market. When the plan was formulated in tons of steel sheet, the sheet was made too heavy. When it was formulated in terms of area of steel sheet, the sheet was made too thin. When the plan for chandeliers was made in tons, they were so heavy, they could hardly hang from ceilings. By the 1940s, the leaders of the Soviet Union, even if not their admirers in the West, were well aware of these perverse incentives. The Soviet leaders acted as if they were due to technical problems, which could be fixed. For example, they moved away from paying bonuses based on output targets to allowing firms to set aside portions of profits to pay bonuses. But a “profit motive” was no more encouraging to innovation than one based on output targets. The system of prices used to calculate profits was almost completely unconnected to the value of new innovations or technology. Unlike in a market economy, prices in the Soviet Union were set by the government, and thus bore little relation to value. To more specifically create incentives for innovation, the Soviet Union introduced explicit innovation bonuses in 1946. As early as 1918, the principle had been recognized that an innovator should receive monetary rewards for his innovation, but the rewards set were small and unrelated to the value of the new technology. This changed only in 1956, when it was stipulated that the bonus should be proportional to the productivity of the innovation. However, since productivity was calculated in terms of economic benefits measured using the existing system of prices, this was again not much of an incentive to innovate. One could fill many pages with examples of the perverse incentives these schemes generated. For example, because the size of the innovation bonus fund was limited by the wage bill of a firm, this immediately reduced the incentive to produce or adopt any innovation that might have economized on labor.

The Seventh Central Pay Commission was appointed in February 2014 by the Government of India (Ministry of Finance) under the Chairmanship of Justice Ashok Kumar Mathur. The Commission has been given 18 months to make its recommendations. The terms of reference of the Commission are as follows:  1. To examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure including pay, allowances and other facilities/benefits, in cash or kind, having regard to rationalisation and simplification therein as well as the specialised needs of various departments, agencies and services, in respect of the following categories of employees:-  (i) Central Government employees—industrial and non-industrial; (ii) Personnel belonging to the All India Services; (iii) Personnel of the Union Territories; (iv) Officers and employees of the Indian Audit and Accounts Department; (v) Members of the regulatory bodies (excluding the RBI) set up under the Acts of Parliament; and (vi) Officers and employees of the Supreme Court.   2. To examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure, concessions and facilities/benefits, in cash or kind, as well as the retirement benefits of the personnel belonging to the Defence Forces, having regard to the historical and traditional parties, with due emphasis on the aspects unique to these personnel.   3. To work out the framework for an emoluments structure linked with the need to attract the most suitable talent to government service, promote efficiency, accountability and responsibility in the work culture, and foster excellence in the public governance system to respond to the complex challenges of modern administration and the rapid political, social, economic and technological changes, with due regard to expectations of stakeholders, and to recommend appropriate training and capacity building through a competency based framework.   4. To examine the existing schemes of payment of bonus, keeping in view, inter-alia, its bearing upon performance and productivity and make recommendations on the general principles, financial parameters and conditions for an appropriate incentive scheme to reward excellence in productivity, performance and integrity.   5. To review the variety of existing allowances presently available to employees in addition to pay and suggest their rationalisation and simplification with a view to ensuring that the pay structure is so designed as to take these into account.   6. To examine the principles which should govern the structure of pension and other retirement benefits, including revision of pension in the case of employees who have retired prior to the date of effect of these recommendations, keeping in view that retirement benefits of all Central Government employees appointed on and after 01.01.2004 are covered by the New Pension Scheme (NPS).   7. To make recommendations on the above, keeping in view:  (i) the economic conditions in the country and the need for fiscal prudence; (ii) the need to ensure that adequate resources are available for developmental expenditures and welfare measures; (iii) the likely impact of the recommendations on the finances of the state governments, which usually adopt the recommendations with some modifications; (iv) the prevailing emolument structure and retirement benefits available to employees of Central Public Sector Undertakings; and (v) the best global practices and their adaptability and relevance in Indian conditions.   8. To recommend the date of effect of its recommendations on all the above.

the limits amplified the corrosive effects of ambition on the legislators, who focused from day one on how best to use their limited time as a springboard to their next post. That produced incentives to go for a big, short-term splash and leave the long-term mess to the next wave of their successors.

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Thinking like a Freak may sometimes sound like an exercise in using clever means to get exactly what you want, and there’s nothing wrong with that. But if there is one thing we’ve learned from a lifetime of designing and analyzing incentives, the best way to get what you want is to treat other people with decency. Decency can push almost any interaction into the cooperative frame.

Why should you buy the cow, if you can get the milk for free?” Answer: There is no reason, no incentive, no need to buy the cow. If the cow continues to supply free milk, the milk’s value and the cow’s value are greatly reduced and free milk will keep that cow feeling empty, misused and unwanted. This is the harsh reality of giving out discounts. Of course, we are not cows, but rather sons and daughters of the Most High God, so let’s be mindful not to discount the price that was paid for us on Calvary.

We begin with the proposition that capitalism is not chiefly an incentive system but an information system. We continue with the recognition, explained by the most powerful science of the epoch, that information is best defined as surprised-what we cannot predict rather than what we can. The key to economic growth is not acquisition of things by the pursuit of monetary rewards but the expansion of wealth through learning and discovery.

But if there is one thing we’ve learned from a lifetime of designing and analyzing incentives, the best way to get what you want is to treat other people with decency. Decency can push almost any interaction into the cooperative frame. It is most powerful when least expected, like when things have gone wrong. Some of the most loyal customers any company has are the ones who had a big problem but got treated incredibly well as it was being resolved. So while designing the right incentive scheme certainly isn’t easy, here’s a simple set of rules that usually point us in the right direction: 1.  Figure out what people really care about, not what they say they care about. 2.  Incentivize them on the dimensions that are valuable to them but cheap for you to provide. 3.  Pay attention to how people respond; if their response surprises or frustrates you, learn from it and try something different. 4.  Whenever possible, create incentives that switch the frame from adversarial to cooperative. 5.  Never, ever think that people will do something just because it is the “right” thing to do. 6.  Know that some people will do everything they can to game the system, finding ways to win that you never could have imagined. If only to keep yourself sane, try to applaud their ingenuity rather than curse their greed.

The consideration of this attribute would make us humble. How dejected would a person be if he were sure all the angels in heaven and men upon earth, did perfectly know his crimes, with all their aggravations! But what is created knowledge to an infinite and just censuring understanding! When we consider that he knows our actions, whereof there are multitudes, and our thoughts, whereof there are millions; that he views all the blessings bestowed upon us; all the injuries we have returned to him; that he exactly knows his own bounty, and our ingratitude; all the idolatry, blasphemy, and secret enmity in every man's heart against him; all tyrannical oppressions, hidden lusts, omissions of necessary duties, violations of plain precepts, every foolish imagination, with all the circumstances of them, and that perfectly in their full anatomy, every mite of unworthiness and wickedness in every circumstance; and add to this his knowledge, the wonders of his patience, which are miraculous upon the score of his omniscience,that he is not as quick in his revenge as he is in his understanding, but is so far from inflicting punishment, that he continues his former benefits, arms not his justice against us, but solicits our repentance, and waits to be gracious with all this knowledge of our crimes; should not the consideration of this melt our hearts into humiliation before him, and make us earnest in begging pardon and forgiveness of him? Again, do we not all find a worm in our best fruit, a flaw in our soundest duties? Shall any of us vaunt, as if God beheld only the gold, and not any dross; as if he knew one thing only, and not another? If we knew something by ourselves to cheer us, do we not also know something, yea, many things, to condemn us, and therefore to humble us? Let the sense of God's infinite knowledge, therefore, be an incentive and argument for more humiliation in us. If we know enough to render ourselves vile in our own eyes, how much more doth God know to render us vile in his! 6.

The oxytocin studies point to a dynamic, generative quality in societal trust. The molecule is both an incentive and a reward for altruism. Not only does it feel good to experience positive social signs from others—smiles, handshakes, opened doors, bargains kept, and cooperative merging in traffic—but it feels good to reinforce those feelings of trust among both friends and strangers. It works best of all when we do it face-to-face: in the kitchen, over a fence, on the sidewalk, in the agora. Distance and geometry matter, as we will see.

The second way was explained to me by a group of General Electric executives a few years back. I pressed them about their rather extreme ‘rank and yank’ system (which has been modified recently, but not much), where each year the bottom 10 percent of employees (‘C players’) are fired, the top 20 percent (‘A players’) get the lion’s share – about 80 percent – of the bonus money, and the mediocre middle 70 percent (‘B players’) get the remaining crumbs. I pressed them because a pile of studies shows that giving a few top performers most of the goodies damages team and organizational performance. This happens because people have no incentive to help others – but do have an incentive to undermine, bad-mouth, and demoralize coworkers, because pushing down others decreases the competition they face. Performance also suffers because hard workers who aren’t anointed A players become bitter and withhold effort.

Yet getting people to use simple language isn’t always easy. Smart talkers have considerable incentive for saying things that are incomprehensible. Unfortunately, people who spew out incomprehensible ‘jargon monoxide’* are rated as smarter than those who use simple words – especially when they are renowned for their expertise. This attribution even occurs when people use unintelligible language to mask meaningless and useless ideas. So beware that when people seem so smart that you can’t understand a word they say, these pretenders may have learned that blasting out jargon monoxide is the best way to get ahead and mask their incompetence at the same time. Authentic experts have no incompetence to mask but must beware of ‘the curse of knowledge’: The more people know about something, the harder it is for them to package explanations and instructions in ways that others can comprehend. Stanford’s Pamela Hinds, for example, showed that people with the greatest expertise at operating a cell phone did the worst job of teaching novices to operate the phone. This curse happens because experts have a hard time putting themselves in the shoes of neophytes. Experts’ actions become so automatic to them that they forget the simple steps they had to learn and other struggles they faced as novices.

I figured that the best way to affect people’s behavior was through their wallets, and was intrigued by the idea of creating economic incentives that aligned individual egoism with the common good. Alas, I soon grew disillusioned, concluding that economics was largely a form of intellectual prostitution where you got rewarded for saying what the powers that be wanted to hear.

beating the competition or one’s peers is a far more powerful weapon than financial incentives. Why do people need cash incentives to fulfill their work obligations to colleagues and customers? It is recognition of effort that is important. Managers will only strive to achieve ambitious goals if they know that their ‘best efforts’ will be recognized and not punished if they fail to get all the way.

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When the time came to apply for college, I decided against physics and other technical fields, and ended up at the Stockholm School of Economics, focusing on environmental issues. I wanted to do my small part to make our planet a better place, and felt that the main problem wasn't that we lacked technical solutions, but that we didn't properly use the technology we had. I figured that the best way to affect people's behavior was through their wallets, and was intrigued by the idea of creating economic incentives that aligned individual egoism with the common good. Alas, I soon grew disillusioned, concluding that economics was largely a form of intellectual prostitution where you got rewarded for saying what the powers that be wanted to hear. Whatever a politician wanted to do, he or she could find an economist as advisor who had argued for doing precisely that. Franklin D. Roosevelt wanted to increase government spending, so he listened to John Maynard Keynes, whereas Ronald Reagan wanted to decrease government spending, so he listened to Milton Friedman.

To be able to use rich-country methods of production requires rich-country infrastructure—roads, railways, telecommunications, factories, and machines—not to mention rich-country educational levels, all of which take time and money to achieve. Yet the gaps between rich and poor provide plenty of incentives to make the investment in that infrastructure and equipment, and, as Robert Solow showed in one of the most famous papers in all of economics, average living standards should draw closer over time.4 Why this has not happened is a central question in economics. Perhaps the best answer is that poor countries lack the institutions—government capacity, a functioning legal and tax system, security of property rights, and traditions of trust—that are a necessary background for growth to take place.

The challenge for the principal, then, is to devise incentives to ensure that she (the agent) will act in the best interest of her principal. This

It is confidently asserted that the doctrine of perseverance leads to indolence, license, and even immorality. A false security is said to result from it. This is a mistaken notion, however, for, although the Bible tells us that we are kept by the grace of God, it does not encourage the idea that God keeps us without constant watchfulness, diligence, and prayer on our part. It is hard to see how a doctrine which assures the believer of a perseverance in holiness can be an incentive for sin. It would seem that the certainty of success in the active striving for sanctification would be the best possible stimulus to ever greater exertion.

Corporations have a unique role to play in creating a cleaner environment, and they also have economic incentives to use energy more efficiently as demand and costs rise globally. If every company in the S&P 500 voluntarily reported and disclosed its energy costs, clearly and explicitly as a line item on the balance sheet, there would be pressure to reduce that cost, just as there is for every other expense item. This would result in analyst and investor pressure on corporate executives to be more efficient with their energy output and to source cheaper and alternative sources, which would have a far greater impact on carbon emissions and pollution than any political treaty in history. As an added advantage, reducing costs increases profitability, which provides the appropriate incentives for corporate executives to act in their shareholders’ best interests and effect positive social change. According to PwC, 98 percent of the S&P 500 companies surveyed can link investments in emissions reduction to value creation.55 As a result, these corporations are discovering new ways to enhance efficiencies, create new markets, and build a competitive advantage.

Geithner’s proposed terms for the loan—which drew heavily on the work of bankers he had asked to explore options for private financing for AIG—included a floating interest rate starting at about 11.5 percent. AIG would also be required to give the government an ownership share of almost 80 percent of the company. Tough terms were appropriate. Given our relative unfamiliarity with the company, the difficulty of valuing AIG FP’s complex derivatives positions, and the extreme conditions we were seeing in financial markets, lending such a large amount inevitably entailed significant risk. Evidently, it was risk that no private-sector firm had been willing to undertake. Taxpayers deserved adequate compensation for bearing that risk. In particular, the requirement that AIG cede a substantial part of its ownership was intended to ensure that taxpayers shared in the gains if the company recovered. Equally important, tough terms helped address the unfairness inherent in aiding AIG and not other firms, while also serving to mitigate the moral hazard arising from the bailout. If executives at similarly situated firms believed they would get easy terms in a government bailout, they would have little incentive to raise capital, reduce risk, or accept market offers for their assets or their company. The Fed and Treasury had pushed for tough terms for the shareholders of Bear Stearns and Fannie and Freddie for precisely these reasons. The political backlash would be intense no matter what we did, but we needed to show that we got taxpayers the best possible deal and had minimized the windfall that the bailout gave to AIG and its shareholders.

In an age of extreme automation and globalization, how can the 90 percent for whom income is stagnant or falling respond? For the Tea Party, the answer is to circle the wagons around family and church, and to get on bended knee to multinational companies to lure them to you from wherever they are. This is the strategy Southern governors have used to lure textile firms from New England or car manufacturers from New Jersey and California, offering lower wages, anti-union legislation, low corporate taxes, and big financial incentives. For the liberal left, the best approach is to nurture new business through a world-class public infrastructure and excellent schools. An example is what many describe as the epicenter of a new industrial age: Silicon Valley—with Google, Twitter, Apple, and Facebook—and its environs, as well as the electric car and solar industries. The reds might be the Louisiana model, and to some degree, the blues are the California one.

The ability to make rational decisions is limited, or bounded, by the extent of people’s information. To broaden employees’ understanding, a firm should promote a tradition of teamwork and interdependence and develop future leaders by rotating them among work assignments in different departments and geographic locations. In order to reduce structural secrecy, there may be short-term opportunity costs, but the long-term benefits are significant.12 Firms must think about long-term greed and what it means. Through actions and training, leaders must explain the pressures on short-term thinking and how the firm resolves the conflicts of short- and long-term goals. Potentially conflicting or confusing organizational goals, such as putting clients first while also having a duty to shareholders, require strong signals from leadership as to what is acceptable and unacceptable behavior. These nuances cannot be left to statements of principles; they must be modeled by leaders’ actions each day. Leaders must understand that external influences can shape the culture. For example, there are competitive, technological, and regulatory pressures. Responses to them can have unintended consequences, including drifting from principles. This can increase the probability of an organizational failure. An organization needs to understand to what extent models impact behavior, decisions made by business leaders, and organizational culture. For example, boards of directors of public companies should ask questions if earnings per share (EPS) estimates are too consistent with analysts’ estimates. They should ask whether the firm is managing to models or to what is in the best long-term interests of the firm. Leaders get too much credit and too much blame. Leaders need to uphold the firm’s shared values—and that is a key component to leadership.13 But too little emphasis is given to the organizational elements that shape behavior or provide an environment for leadership or change. An organization’s structure, incentives, and values last longer and have more impact than those of individual leaders. Usually when there is a change or loss or failure there is a tendency to blame one thing or one person, when typically there are complex organizational cultural reasons. It is the duty of leaders and board members to examine what is responsible, not who is responsible.

The proliferation of state and local tax incentives designed to attract or retain business investment…has proven troublingly resistant to reform. Despite a growing recognition…that the competition over business incentives is at best a zero-sum game…the size of the incentive packages offered for large corporate facilities reaches ever-new heights…. The only consistent winners are the large businesses that can pit one jurisdiction against another for reduced tax burdens, while other taxpayers and citizens pay the costs in constrained government services and higher taxes.

The best bet for poor countries is to rely on one simple idea: When markets are free and the incentives are right, people can find ways to solve their problems

Here’s what your welcome email should address: • Deliver your opt-in incentive. • Share some social proof in the form of testimonials or links to places you’ve been featured. • State why are you the best person to inspire, educate, or teach your subscriber about the topic and why the topic is important. • Open a conversation loop. Ask them a specific question that will enable

The twenty-first-century task is clear: to create economies that promote human prosperity in a flourishing web of life so that we can thrive in balance within the Doughnut’s safe and just space. It starts with recognising that every economy—local to global—is embedded within society and within the living world. It also means recognising that the household, the commons, the market and the state can all be effective means of provisioning for our many needs and wants, and they tend to work best when they work together. By deepening our understanding of human nature we can create institutions and incentives that reinforce our social reciprocity and other-regarding values, rather than undermine them. Once we accept the economy’s inherent complexity, we can shape its ever-evolving dynamics through smart stewardship. That opens up the possibility of turning today’s divisive and degenerative economies into ones that are distributive and regenerative by design. And it invites us to become agnostic about growth, creating economies that enable us to thrive, whether or not they are growing.

More often than not, the people around me weren’t simply deciding to give up. They were living in a culture of dependency that had been passed down from birth. My mother and grandmother gave in to the culture. And they expected me to figure out the best way to live on that same track, to game the system and not even try to escape. My friend Ben agrees. 'Most of the time, what you see in the housing projects are generations of families,' he says. 'People accustomed to this lifestyle. It becomes comfortable, so they don’t move away, and even their children stay and raise kids in the same environment.' In neighborhoods like the ones where Ben and I grew up, there is no perceived incentive to advance. After all, the checks for housing and the food stamps and assistance arrive every month.

However, the best platforms tend to decrease the incentive for users to switch between competing networks by creating additional value through software tools that make transacting easier and through the use of data and personalization.

One of my favorite examples comes from the heady days of America Online (AOL). The company would routinely send out CDs in an attempt to get people to sign up for its product. One group within the company, responsible for acquisitions, was given financial incentives for hitting subscription goals. And so all tactics were designed to do just that: sign people up. There were offers of 100 free hours in the first month, which became 250 free hours, then even 700 hours. I remember when the offer got to 1,000 free hours, as long as they were used in the first 45 days (which left 1.7 hours of sleep per night for anyone who could take advantage of the promotion). It worked. Whatever tactics the acquisition group members developed were designed to do one thing and one thing only—maximize their bonus. The problem was there was another group responsible for retention; they had to find ways to get all the people who had canceled their subscriptions to come back. By creating a system in which each group was preoccupied with its own metrics without concern for anyone else’s or even what would serve the company best, the leaders of AOL had effectively incentivized their people to find ways to cost the company more money.

In addition to asking how much room there is in the asking price, I also ask what the seller would accept if I were able to close quickly, and whether or not they have received any full price offers. To a certain extent, you can also base the amount of your initial offer on what incentives you can provide to the seller. If you can offer all of the above mentioned incentives, you are in the best position to have your offer accepted, even over a competing offer that may be higher, but does not incentivize the seller.

people often find equity unattractive. It’s not liquid like cash. It’s tied to one specific company. And if that company doesn’t succeed, it’s worthless. Equity is a powerful tool precisely because of these limitations. Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future. Equity can’t create perfect incentives, but it’s the best way for a founder to keep everyone in the company broadly aligned.

The so-called “Goulash capitalism” episode in Hungary clearly illustrated the problem. In 1994, shortly after the privatization of agriculture and food production, the country was swept by an epidemic of lead poisoning. After searching far and wide for the cause, doctors and scientists finally tracked down the source of the problem. Manufacturers of paprika—a staple of Hungarian cuisine—had been grinding up old paint, much of it lead-based, and adding it to the spice in order to improve its colour. The practice was so widespread that Hungarian officials were forced to order all the paprika in the country removed from store shelves and destroyed. At the time, no laws were in place to prevent such a catastrophe, simply because it had not occurred to anyone that this kind of thing would happen. Under communism, in which firms had no competition, no one had any incentive to poison their customers, and so consumer protection laws were unnecessary. In making the transition to the market, policy-makers assumed that producers would compete with one another to produce the best-quality paprika. They didn’t realize that producers would compete only to produce the best-looking paprika.

Airlines have no incentive to fix this problem until we, collectively, as a society, demand it. We don't insist on a solution because it's still culturally acceptable to be cruel to fat people. When even pointing out the problem - saying, 'my body does not fit in these seats that I pay for' - returns nothing but abuse and scorn, how can we ever expect that problem to be addressed? The real issue here isn't money, it's bigotry. We don't care about fat people because it is okay not to care about them, and we don't take care of them because we think they don't deserve care. It's the same lack of care that sees fat people dying from substandard medical attention, being hired at lower rates and convicted at higher ones, and being accused of child abuse for feeding their children as best they can.

The best way to gauge how much you love someone is by how much you’re willing to sacrifice for them. I’m not talking about dramatic gestures, like giving up your career or taking a bullet. It’s the little things, forfeiting tiny parts of yourself that have lesser value than the thing you’re trying to attain.

The right people will do the right things and deliver the best results they’re capable of, regardless of the incentive system.

Some people would argue that we don’t do a very good job. But taking the long view, that is clearly not true. Consider the historical trend in homicide (not including wars), which is both the most reliably measured crime and the best barometer of a society’s overall crime rate. These statistics, compiled by the criminologist Manuel Eisner, track the historical homicide levels in five European regions. The steep decline of these numbers over the centuries suggests that, for one of the gravest human concerns—getting murdered—the incentives that we collectively cook up are working better and better.

PayPal’s big challenge was to get new customers. They tried advertising. It was too expensive. They tried BD [business development] deals with big banks. Bureaucratic hilarity ensued. … the PayPal team reached an important conclusion: BD didn’t work. They needed organic, viral growth. They needed to give people money. So that’s what they did. New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer. It felt like things were working and not working at the same time; 7 to 10 percent daily growth and 100 million users was good. No revenues and an exponentially growing cost structure were not. Things felt a little unstable. PayPal needed buzz so it could raise more capital and continue on. (Ultimately, this worked out. That does not mean it’s the best way to run a company. Indeed, it probably isn’t.)2 Thiel’s account captures both the desperation of those early days and the almost random experimentation the company resorted to in an effort to get PayPal off the ground. But in the end, the strategy worked. PayPal dramatically increased its base of consumers by incentivizing new sign-ups. Most important, the PayPal team realized that getting users to sign up wasn’t enough; they needed them to try the payment service, recognize its value to them, and become regular users. In other words, user commitment was more important than user acquisition. So PayPal designed the incentives to tip new customers into the ranks of active users. Not only did the incentive payments make joining PayPal feel riskless and attractive, they also virtually guaranteed that new users would start participating in transactions—if only to spend the $10 they’d been gifted in their accounts. PayPal’s explosive growth triggered a number of positive feedback loops. Once users experienced the convenience of PayPal, they often insisted on paying by this method when shopping online, thereby encouraging sellers to sign up. New users spread the word further, recommending PayPal to their friends. Sellers, in turn, began displaying PayPal logos on their product pages to inform buyers that they were prepared to honor this method of online payment. The sight of those logos informed more buyers of PayPal’s existence and encouraged them to sign up. PayPal also introduced a referral fee for sellers, incentivizing them to bring in still more sellers and buyers. Through these feedback loops, the PayPal network went to work on its own behalf—it served the needs of users (buyers and sellers) while spurring its own growth.

The comparison companies in our research—those that failed to become great—placed greater emphasis on using incentives to “motivate” otherwise unmotivated or undisciplined people. The great companies, in contrast, focused on getting and hanging on to the right people in the first place—those who are productively neurotic, those who are self-motivated and self-disciplined, those who wake up every day, compulsively driven to do the best they can because it is simply part of their DNA.

The Depression afforded Stalin unprecedented leverage: suddenly, the capitalists needed the Soviet market as much as the Soviets needed their advanced technology. Without the Great Depression would the capitalists have developed such overwhelming incentives to pursue the Soviet market no matter what? Indeed, the capitalist powers not only sold their best technology to the Communist regime, they continued doing so even after the Soviets were found to be violating contracts by purchasing designs for one factory and using them for others, trickery that was amply recorded in indignant internal foreign company records;

Finding the Competitive Levers When there’s a battle between two networks, there are competitive levers that shift users from one into the other—what are they? The best place to focus in the rideshare market was the hard side of the network: drivers. More drivers meant that prices would be lower, attracting valuable high-frequency riders that often comparison shop for fares. Attract more riders, and it more efficiently fills the time of drivers, and vice versa. There was a double benefit to moving drivers from a competitor’s network to yours—it would push their network into surging prices while yours would lower in price. Uber’s competitive levers would combine financial incentives—paying up for more sign-ups, more hours—with product improvements to improve Acquisition, Engagement, and Economic forces. Drawing in more drivers through product improvements is straightforward—the better the experience of picking up riders and routing the car to their destination, the more the app would be used. Building a better product is one of the classic levers in the tech industry, but Uber focused much of its effort on targeted bonuses for drivers. Why bonuses? Because for drivers, that was their primary motivation for using the app, and improving their earnings would make them sticky. But these bonuses weren’t just any bonuses—they were targeted at quickly flipping over the most valuable drivers in the networks of Uber’s rivals, targeting so-called dual apping drivers that were active on multiple networks. They were given large, special bonuses that compelled them to stick to Uber, and every hour they drove was an hour that the other networks couldn’t utilize. There was a sophisticated effort to tag drivers as dual appers. Some of these efforts were just manual—Uber employees who took trips would just ask if the drivers drove for other services, and they could mark them manually in a special UI within the app. There were also behavioral signals when drivers were running two apps—they would often pause their Uber session for a few minutes while they drove for another company, then unpause it. On Android, there were direct APIs that could tell if someone was running Uber and Lyft at the same time. Eventually a large number of these signals were fed into a machine learning model where each driver would receive a score based on how likely they were to be a dual apper. It didn’t have to be perfect, just good enough to aid the targeting.

Follow-Up Framework Opt-In: Offer a desirable bribe (also called a “hook” or “lead magnet”) in exchange for an email address (at a minimum). Hook Delivery: Deliver what was promised for the prospect opting in. Digital delivery can range from digital reports to emails to audio or video content. The benefit of digital delivery is that you can provide immediate gratification to your prospect and it’s free to send. Sellucation: Sellucation is selling through education. Each Follow-Up installment is an opportunity to address common questions, handle objections, and amplify the problem while presenting your solution. It’s education with the implicit intent of driving sales. Social Proof: Reiterating the social proof you presented in the Engage & Educate phase with testimonials, reviews, awards, partner logos, and case studies will enhance your credibility and build trust. Promotions: Offering free consultations, discounts, and other incentives can motivate your prospect to take action. Communicating an expiration associated with the promotion can create a sense of urgency that further persuades prospects to move forward.

These organizations will not reexamine their offices or their management practices. They won’t interrogate who benefits from existing structures, because they’re pleased with who benefits from existing structures. They will view hybrid work as an annoyance to be tolerated or an incentive to be lorded over workers to keep them productive. And to ensure that their newly liberated employees are on their best behavior, they will take the easiest, laziest way out.

Wage-work is serf-work; it cannot, it must not, produce all that it could produce. And it is high time to disbelieve the legend which represents wagedom as the best incentive to productive work. If industry nowadays brings in a hundred times more than it did in the days of our grandfathers, it is due to the sudden awakening of physical and chemical sciences towards the end of the last century; not to the capitalist organization of wagedom, but in spite of that organization.

Overcrowding works in a different way for creators than for viewers. For creators, the problem becomes—how do you stand out? How do you get your videos watched? This is particularly acute for new creators, who face a “rich get richer” phenomenon. Across many categories of networked products, when early users join a network and start producing value, algorithms naturally reward them—and this is a good thing. When they do a good job, perhaps they earn five-star ratings, or they quickly gain lots of followers. Perhaps they get featured, or are ranked highly in popularity lists. This helps consumers find what they want, quickly, but the downside is that the already popular just get more popular. Eventually, the problem becomes, how does a new member of the network break in? If everyone else has millions of followers, or thousands of five-star reviews, it can be hard. Eugene Wei, former CTO of Hulu and noted product thinker, writes about the “Old Money” in the context of social networks, arguing that established networks are harder for new users to break into: Some networks reward those who gain a lot of followers early on with so much added exposure that they continue to gain more followers than other users, regardless of whether they’ve earned it through the quality of their posts. One hypothesis on why social networks tend to lose heat at scale is that this type of old money can’t be cleared out, and new money loses the incentive to play the game. It’s not that the existence of old money or old social capital dooms a social network to inevitable stagnation, but a social network should continue to prioritize distribution for the best content, whatever the definition of quality, regardless of the vintage of user producing it. Otherwise a form of social capital inequality sets in, and in the virtual world, where exit costs are much lower than in the real world, new users can easily leave for a new network where their work is more properly rewarded and where status mobility is higher.75 This is true for social networks and also true for marketplaces, app stores, and other networked products as well. Ratings systems, reviews, followers, advertising systems all reinforce this, giving the most established members of a network dominance over everyone else. High-quality users hogging all of the attention is the good version of the problem, but the bad version is much more problematic: What happens, particularly for social products, when the most controversial and opinionated users are rewarded with positive feedback loops? Or when purveyors of low-quality apps in a developer platform—like the Apple AppStore’s initial proliferation of fart apps—are downloaded by users and ranked highly in charts? Ultimately, these loops need to be broken; otherwise your network may go in a direction you don’t want.

Unfortunately, many remnants of Industrial Revolution management still remain. In an overzealous quest to be competitive, ensure quality, and comply with regulations, most large organizations have designed work environments that make it difficult for employees to experiment, stretch beyond their specialized roles, leverage their unique skills, or see the ultimate impact of their work. Most leaders today don’t personally believe that people work best under these conditions. But each generation of managers walks into organizations where there are deeply entrenched assumptions and policies about control through standardized performance metrics, incentives and punishments, promotion tournaments, and so on. As a result, organizations deactivate their employees’ seeking systems and activate their fear systems, which narrows their perception and encourages their submission.

In Vietnam, lying became so much part of the system that sometimes not lying seemed immoral...The teenage adrenaline-drained patrol leader has to call in the score so analysts, newspaper reporters, and politicians back in Washington have something to do. Never mind that Smithers and his squad may have stopped a developing attack planned to hit the company that night, saving scores of lives and maintaining control over a piece of ground. All they'll be judged on, and all their superiors have to be judged on, is the kill ratio. Smithers's best friend has just been killed. Two other friends are missing pieces of their bodies and are going into shock. No one in the squad knows if the enemy is 15 meters away waiting to open up again or running. Smithers is tired and has a lot of other things on his mind. With scorekeepers often 25 kilometers away, no one is going to check on the score. In short, Smithers has a great incentive to lie. He also has a great need to lie. His best friend is dead. "Why?" he asks himself. This is where the lying in Vietnam all began. It had to fill the long silence following Smithers's anguished "Why?" So it starts. "Nelson, how many did you get?" Smithers asks. PFC Nelson looks up from crying over the body of his friend Katz and says, "How the fuck do I know?" His friend Smithers says, "Well, did you get that bastard that came around the dogleg after Katz threw the Mike-26?" Nelson looks down at Katz's face, hardening and turning yellow like tallow. "You're goddamn right I got him," he almost whispers. It's all he can offer his dead friend. "There's no body." "They drug the fucker away. I tell you I got him!" Nelson is no longer whispering. … The patrol leader doesn't have a body, but what are the odds that he's going to call his friend a liar or, even more difficult, make Katz's death meaningless, given that the only meaning now lies in this one statistic? No one is congratulating him for exposing the enemy, keeping them screened from the main body, which is the purpose of security patrols. He calls in one confirmed kill. ... Just then PFC Schroeder comes crawling over with Kool-Aid stains all around his mouth and says, "I think I got one, right by the dogleg of the trail after Katz threw the grenade." "Yeah, we called that one in." "No, it ain't the one Nelson got. I tell you I got another one." Smithers thinks it was the same one but he's not about to have PFC Schroeder feeling bad, particularly after they've all seen their squad mate die. … the last thing on Smithers's mind is the integrity of meaningless numbers. The message gets relayed to the battalion commander. He's just taken two wounded and one dead. All he has to report is one confirmed, one probable. This won't look good. Bad ratio. He knows all sorts of bullets were flying all over the place. It was a point-to-point contact, so no ambush, so the stinkin' thinking' goes round and round, so the probable had to be a kill. But really if we got two confirmed kills, there was probably a probable. I mean, what's the definition of probable if it isn't probable to get one? What the hell, two kills, two probables. Our side is now ahead. Victory is just around the corner. … [then the artillery has to claim their own additional kills…] By the time all this shit piles up at the briefing in Saigon, we've won the war.

consider my ability to arouse enthusiasm among my people,’ said Schwab, ‘the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. ‘There is nothing else that so kills the ambitions of a person as criticisms from superiors. I never criticise anyone. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my approbation and lavish in my praise.

The Joy of Self-Care It can be a joy to take care of yourself and you deserve it. You already know that you deserve to take a shower and brush your teeth. In fact, more self-care is deserved than that. You need to pay attention to your body, mind, and spirit. If you take time out every day to take care of yourself, you will be more productive, a brighter light and a support in the world. Gradual Morning Movement Get up early enough to have time to do a routine in the morning. At least, take a moment to rest before getting out of bed. Grab a couple of takes. Allow yourself in bed to wake up. Perform a few simple laps. Make sure you have time to eat a good breakfast when you get out of bed, clean and floss your teeth, and go out for a breath of fresh air before getting on with your busy day. Enjoying yourself before you prepare your day is good for you. It is said you are blocked from enlightened bliss by discontent and too much seriousness and are signals that you are attached to your physical body and the world's cares. Lightening is healthy for body, mind, and spirit all around. You can still participate in the world with more lightness and non-attachment to the results, and care about the state of affairs. In other words, do your world's best job without incentive aspirations. Let the job be where you find happiness. Let self-care be the same. Please take care of yourself. Eating the Rainbow When shopping for food, pick up food in all the rainbow colors. Look for recipes online if there's a food of a certain color and it's new to you. Ask friends and colleagues if they have any season and swap favorite recipes. Please try new things and see how many different colors in one day you can eat. For the Good of All You help yourself and those around you when you take care of yourself. You are a light for others by being healthy, and a model of how good health might look and feel. As you get healthy, others will wonder how you've done that. Taking pleasure in taking care of yourself makes it possible for others to see that it is possible and feel good doing the same thing. And, you have the energy and ability to give back when you're healthy.

training. To find the best educational narrow-scale model, we have to look not at unthreatened schools of education and the like, too much driven by our two counterproductive psychological tendencies and other bad influences, but, instead, look where incentives for effective education are strongest and results are most closely measured. This leads us to a logical place: the hugely successful education now mandatory for pilots.

Why might that be? It is simply a manifestation of the “first who” principle: It’s not how you compensate your executives, it’s which executives you have to compensate in the first place. If you have the right executives on the bus, they will do everything within their power to build a great company, not because of what they will “get” for it, but because they simply cannot imagine settling for anything less. Their moral code requires building excellence for its own sake, and you’re no more likely to change that with a compensation package than you’re likely to affect whether they breathe. The good-to-great companies understood a simple truth: The right people will do the right things and deliver the best results they’re capable of, regardless of the incentive system.