Incentives Important Quotes

I believe that this corporate machinery of scripted programs, comprehension worksheets (reproducibles, handouts, printables, whatever you want to call them), computer-based incentive packages, and test practice curriculum facilitates a solid bottom-line for the companies that sell them, and give schools proof they can point to that they are using every available resource to teach reading, but these efforts are doomed to fail a large number of students because they leave out the most important factor. When you take a forklift and shovel off the programs, underneath it all is a child reading a book.

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 economics of the Internet created a twisted set of incentives that make traffic more important—and more profitable—than the truth.

With any problem, it’s important to figure out which incentives will actually work, not just what your moral compass tells you should work.

It is not unreasonable to want repentance from a wrongdoer before forgiving that wrongdoer, since, in the absence of repentance, hasty forgiveness may harm both the forgiver and the wrongdoer. The forgiver may be harmed by a failure to show self-respect. The wrongdoer may be harmed by being deprived of an important incentive - the desire to be forgiven - that could move him toward repentance and moral rebirth.

cultivation of the hard skills, while failing to develop the moral and emotional faculties down below. Children are coached on how to jump through a thousand scholastic hoops. Yet by far the most important decisions they will make are about whom to marry and whom to befriend, what to love and what to despise, and how to control impulses. On these matters, they are almost entirely on their own. We are good at talking about material incentives, but bad about talking about emotions and intuitions. We are good at teaching technical skills, but when it comes to the most important things, like character, we have almost nothing to say.

The only way of life satisfying the need of all times must be motivated by incentives and rewards – materially, morally and spiritually because motivation for work is produced by incentives and rewards only, an aspect built into the fundamental specification of human nature itself. Any prescription not recognising this important aspect of life is bound to fail in the life-styles of human beings.

Few people read coffee-table photo books, and indeed they are not intended to be read. I find the text in these books is often surprisingly good, perhaps because the author--or more importantly, the editor--feels no need to pander.

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.

John Stott says, ‘The highest of all missionary motives is neither obedience to the Great Commission (important as that is), nor love for sinners who are alienated and perishing (strong as that incentive is, especially when we contemplate the wrath of God), but rather zeal – burning passionate zeal – for the glory of Jesus Christ.’4

The man who is respected merely for being the son of his father loses one of the normal incentives to useful effort. He is likely to develop views of life which attach undue importance to the accident of birth and to think that by merely existing he does enough to command respect. He believes himself rather better than other men and therefore becomes rather worse. All distinctions not based upon intrinsic merit have this bad effect upon character and on this ground, if on no other, deserve to be abolished,

The able-bodied poor don’t want or need charity. The dole only increases their misery, robs them of incentive and, more important, of self-respect.

The list total isn't important, but the birds themselves are important. Every bird you see. So the list is just a frivolous incentive for birding, but the birding itself is worthwhile.

If you’re asking the schools to be the answer, you’re also asking a lot. If you take a kid from a bad background and expect the overburdened teachers to turn him around in seven hours a day, it might or might not happen. What about the other seventeen hours in a day? People often ask us if, through our research and experience, we can now predict which children are likely to become dangerous in later life. Roy Hazelwood’s answer is, “Sure. But so can any good elementary school teacher.” And if we can get them treatment early enough and intensively enough, it might make a difference. A significant role-model adult during the formative years can make a world of difference. Bill Tafoya, the special agent who served as our “futurist” at Quantico, advocated a minimum of a ten-year commitment of money and resources on the magnitude of what we sent into the Persian Gulf. He calls for a wide-scale reinstatement of Project Head Start, one of the most effective long-term, anticrime programs in history. He doesn’t think more police are the answer, but he would bring in “an army of social workers” to provide assistance for battered women, homeless families with children, to find good foster homes. And he would back it all up with tax incentive programs. I’m not sure this is the total answer, but it would certainly be an important start. Because the sad fact is, the shrinks can battle all they want, and my people and I can use psychology and behavioral science to help catch the criminals, but by the time we get to use our stuff, the severe damage has already been done.

The truth is that a more reasoned approach to politics does not come easily, but nor is it impossible. Like literacy, it requires hard work and the right cultural circumstances. And there is reason not to despair completely: the scientific study of our political psychology and biases is still quite young, and its key findings are still to be widely disseminated. We have yet to turn this crucial self-knowledge into common knowledge, and to make it part of our culture. In particular, we have yet to see it change the perhaps most important aspect of our culture, namely our social incentives.

3.  Once people are asked to donate, the social pressure is so great that they get bullied into giving, even though they wish they’d never been asked in the first place. Mullaney knew that number 3 was important to Smile Train’s success. That’s why their millions of mailings included a photograph of a disfigured child in need of cleft surgery. While no fund-raiser in his right mind would ever publicly admit to manipulating donors with social pressure, everyone knew how strong this incentive was. But what if, Mullaney thought, instead of downplaying the pressure, Smile Train were to highlight it? That is, what if Smile Train offered potential donors a way to alleviate the social pressure and give money at the same time? That’s how a strategy known as “once-and-done” was born. Here’s what Smile Train would tell potential donors: Make one gift now and we’ll never ask for another donation again.

The black man is sometimes called an endangered species but receives little of the protection an endangered species is normally accorded. In regions where the owl is endangered, we wouldn’t think of depriving the male owl of its children or the owl’s children of their dad. Yet the U.S. government has a huge program that creates exactly that outcome for the male human who is poor, and especially for the male human who is black and poor. It is called Aid to Families with Dependent Children; it deprives a family of aid if the dad is present, thus depriving the father of the two most important incentives for living: love and feeling needed.

Forgiveness is also important because, as a study of surgical errors found, “when a subordinate sees his technical errors are forgiven, he recognizes there is no incentive to hide them. He is less likely, therefore, to compound his problems by attempting to treat problems that are over his head for fear of superordinate reprisal.

A poll tax (jizya) on non-Muslims was introduced. The details of how this tax was assessed and collected varied greatly across the Middle East, but it was an important element of the fiscal system of the early Islamic polities. It provided a strong incentive for Islamic rulers to deter forcible conversion to Islam, as this would hurt revenues.

Even in recent times, the empirical evidence does not support the claim that trade liberalization or incentive neutrality leads to faster growth. It is true that higher manufacturing growth rates have been typically associated with higher export growth rates (mostly in countries where export and import shares to GDP grew), but there is no statistical relation between either of these growth rates or degree of trade restrictions. Rather, almost all of successful export-oriented growth has come with selective trade and industrialization policies. In this regard, stable exchange rates and national price levels seem to be considerably more important than import policy in producing successful export-oriented growth

The analysis of the psychological motivations behind certain doctrines or ideas can never be a substitute for a rational judgment of the validity of the doctrine and of the values which it implies, although such analysis may lead to a better understanding of the real meaning of a doctrine and thereby influence one’s value judgment. What the psychological analysis of doctrines can show is the subjective motivations which make a person aware of certain problems and make him seek for answers in certain directions. Any kind of thought, true or false, if it is more than a superficial conformance with conventional ideas, is motivated by the subjective needs and interests of the person who is thinking. It happens that some interests are furthered by finding the truth, others by destroying it. But in both cases the psychological motivations are important incentives for arriving at certain conclusions. We can go even further and say that ideas which are not rooted in powerful needs of the personality will have little influence on the actions and on the whole life of the person concerned.

Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites.

Let’s say that you have committed to running every day for two weeks, and at the end of those two weeks, you “reward” yourself with a massage. I would say, “Good for you!” because we all could benefit from more massages. But I would also say that your massage wasn’t a reward. It was an incentive. The definition of a reward in behavior science is an experience directly tied to a behavior that makes that behavior more likely to happen again. The timing of the reward matters. Scientists learned decades ago that rewards need to happen either during the behavior or milli-seconds afterward. Dopamine is released and processed by the brain very quickly. That means you’ve got to cue up those good feelings fast to form a habit. Incentives like a sales bonus or a monthly massage can motivate you, but they don’t rewire your brain. Incentives are way too far in the future to give you that all-important shot of dopamine that encodes the new habit. Doing three squats in the morning and rewarding yourself with a movie that evening won’t work. The squats and the good feelings you get from the movie are too far apart for dopamine to build a bridge between the two. The neurochemical reaction that you are trying to hack is not only time dependent, it’s also highly individualized. What causes one person to feel good may not work for everyone. Your boss may love the smell of coffee. When she enters a coffee shop and inhales, she feels good. And her immediate feeling builds her habit of visiting the coffee shop. But your coworker might not like the way coffee smells. His brain won’t react in the same way. A real reward — something that will actually create a habit — is a much narrower target to hit than most people think. I

At least a dozen different so-called good institutions have been identified. Without attempting to rank them in order of importance, but just listing them alphabetically, they include: control of inflation, educational opportunities, effectiveness of government, enforcement of contracts, freedom from trade barriers, incentives and opportunities for investment of capital, lack of corruption, low risk of assassination, open currency exchange, protection of private property rights, rule of law,

A century ago, historians of technology felt that individual inventors were the main actors that brought about the Industrial Revolution. Such heroic interpretations were discarded in favor of views that emphasized deeper economic and social factors such as institutions, incentives, demand, and factor prices. It seems, however, that the crucial elements were neither brilliant individuals nor the impersonal forces governing the masses, but a small group of at most a few thousand people who formed a creative community based on the exchange of knowledge. Engineers, mechanics, chemists, physicians, and natural philosophers formed circles in which access to knowledge was the primary objective. Paired with the appreciation that such knowledge could be the base of ever-expanding prosperity, these elite networks were indispensable, even if individual members were not. Theories that link education and human capital to technological progress need to stress the importance of these small creative communities jointly with wider phenomena such as literacy rates and universal schooling.

Perhaps there was, in the dim past, a communistic society, when the family was the only state, and pasturage or simple tillage the only form of life. But “in a more divided state of society,” where the division of labor into unequally important functions elicits and enlarges the natural inequality of men, communism breaks down because it provides no adequate incentive for the exertion of superior abilities. The stimulus of gain is necessary to arduous work; and the stimulus of ownership is necessary to proper industry, husbandry and care.

ACEs instead of obesity, exercise and nutrition would still have been an important part of that. It wasn’t our initial intention to treat our patients’ toxic stress with dodgeball and cooking classes, but we were pleasantly surprised to see how much the kids improved when we added healthy diet and exercise incentives to therapy. I sat down to check in with the moms and grandmas each week, and they reported that when they changed their children’s diet and their levels of exercise went up, the kids slept better and felt healthier, and in many cases, their behavioral issues

A prison is perhaps the easiest place to see the power of bad incentives. And yet in many walks of life, we find otherwise normal men and women caught in the same trap and busily making the world much less good than it could be. Elected officials ignore long-term problems because they must pander to the short-term interests of voters. People working for insurance companies rely on technicalities to deny desperately ill patients the care they need. CEOs and investment bankers run extraordinary risks—both for their businesses and for the economy as a whole—because they reap the rewards of success without suffering the penalties of failure. District attorneys continue to prosecute people they know to be innocent because their careers depend on winning cases. Our government fights a war on drugs that creates the very problem of black-market profits and violence that it pretends to solve. We need systems that are wiser than we are. We need institutions and cultural norms that make us more honest and ethical than we tend to be. The project of building them is distinct from—and, in my view, even more important than—an individual’s refining his personal ethical code.

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.

As incredible as it may sound, the blockchain is the most important development in history since the advent of writing itself, as it’s a cryptographically verifiable, highly replicated, unfalsifiable, and provably complete digital record of a system. It’s the ultimate triumph of the technological truth view of history, as there are now technical and financial incentives for passing down true facts, regardless of the sociopolitical advantages any given government might have for suppressing them. To foreshadow a bit, this ledger of record is history written by the Network rather than the State.

Importantly, intrinsic motivation seems the more potent kind, because, you could argue, the rewards come from within our own brains.42 The contradiction produced here is that sometimes if you coerce people into doing something via rewards like financial incentives, they feel less like it’s their decision to do it, so their motivation becomes contingent on said rewards. Basically, once the reward is received/removed, the associated motivation fades away. This doesn’t seem to happen if it stems from an internal, personal source, if it’s our own decision to do it. One study focused on children who were given art supplies to play with.

They want to find work they’re passionate about. Offering benefits and incentives are mere compromises. Educating people is important but not enough—far too many of our most educated people are operating at quarter-speed, unsure of their place in the world, contributing too little to the productive engine of modern civilization, still feeling like observers, like they haven’t come close to living up to their potential. Our guidance needs to be better. We need to encourage people to find their sweet spot. Productivity explodes when people love what they do. We’re sitting on a huge potential boom in productivity, which we could tap into if we got all the square pegs in the square holes and round pegs in round holes. It’s not something we can measure with statistics, but it’s a huge economic issue. It’s a great natural resource that we’re ignoring.

A more recent concern relates to “financialization” and associated short-termism. Financialization is the growing importance of norms, metrics, and incentives from the financial sector to the wider economy. Some of the concerns expressed are that, for example, managers are increasingly awarded stock options to align their incentives with those of shareholders; companies are often explicitly managed to increase short-term shareholder value; and financial engineering, such as share buybacks and earnings management, has become a more important part of senior managers’ jobs. The end result is that rather than finance serving business, business serves finance: the tail wags the dog. What John Kay described as “obliquity,” the idea that making money was a consequence of, or a second-order benefit of, serving one’s customers and building good businesses, is driven out (Kay 2010).

the importance of sound money can be explained for three broad reasons: first, it protects value across time, which gives people a bigger incentive to think of their future, and lowers their time preference. The lowering of the time preference is what initiates the process of human civilization and allows for humans to cooperate, prosper, and live in peace. Second, sound money allows for trade to be based on a stable unit of measurement, facilitating ever-larger markets, free from government control and coercion, and with free trade comes peace and prosperity. Further, a unit of account is essential for all forms of economic calculation and planning, and unsound money makes economic calculation unreliable and is the root cause of economic recessions and crises. Finally, sound money is an essential requirement for individual freedom from despotism and repression, as the ability of a coercive state to create money can give it undue power over its subjects, power which by its very nature will attract the least worthy, and most immoral, to take its reins.

Another motive [to commit fraud] may be the fraudster’s pathologically mistaken views on what science is about. The immunologist and Nobelist Sir Peter Medawar has argued, perhaps counter-intuitively, that scientists who commit fraud care too much about the truth, but that their idea of what’s true has become disconnected from reality. ‘I believe,’ he wrote, ‘that the most important incentive to scientific fraud is a passionate belief in the truth and significance of a theory or hypothesis which is disregarded or frankly not believed by the majority of scientists – colleagues who must accordingly be shocked into recognition of what the offending scientist believes to be a self-evident truth.’103 The physicist David Goodstein agrees: ‘Injecting falsehoods into the body of science is rarely, if ever, the purpose of those who perpetrate fraud,’ he suggests. ‘They almost always believe that they are injecting a truth into the scientific record … but without going through all the trouble that the real scientific method demands.’104 104. Medawar, The Strange Case of the Spotted Mice , p. 197. 103. David Goodstein, On Fact and Fraud: Cautionary Tales from the Front Lines of Science (Princeton: Princeton University Press, 2010): p. 2.

Or again, supposing prizes were offered to the magistrates in charge of the market for equitable and speedy settlements of points in dispute to enable any one so wishing to proceed on his voyage without hindrance, the result would be that far more traders would trade with us and with greater satisfaction. It would indeed be a good and noble institution to pay special marks of honour, such as the privilege of the front seat, to merchants and shipowners, and on occasion to invite to hospitable entertainment those who, through something notable in the quality of ship or merchandise, may claim to have done the state a service. The recipients of these honours will rush into our arms as friends, not only under the incentive of gain, but of distinction also. Now the greater the number of people attracted to Athens either as visitors or as residents, clearly the greater the development of imports and exports. More goods will be sent out of the country, there will be more buying and selling, with a consequent influx of money in the shape of rents to individuals and dues and customs to the state exchequer. And to secure this augmentation of the revenues, mind you, not the outlay of one single penny; nothing needed beyond one or two philanthropic measures and certain details of supervision.

In their famous Critique of the Gotha Programme Marx and Engels speak about two phases of communism, the lower and the higher. In the lower one there still prevails the "narrow horizon of bourgeois rights" with its inequality and its wide differentials in individual incomes. Obviously, if in socialism society, according to Marx, still needs to secure the full development of its productive forces until a real economy of wealth and abundance is created, then it has to reward skill and offer incentives. The bureaucrat is in a sense the skilled worker, and there is no doubt that he will place himself on the privileged side of the scale... In practice it proved impossible to establish and maintain the principle proclaimed by the Commune of Paris which served Marx as the guarantee against the rise of bureaucracy, the principle extolled again by Lenin on the eve of October, according to which the functionary should not earn more than the ordinary worker's wage. This principle implied a truly egalitarian society -- and here is part of an important contradiction in the thought of Marx and his disciples. Evidently the argument that no civil servant, no matter how high his function, must earn more than an ordinary worker cannot be reconciled with the other argument that in the lower phase of socialism, which still bears the stamp of "bourgeois rights," it would be utopian to expect "equality of distribution.

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

In order to grasp the meaning of this liberal program we need to imagine a world order in which liberalism is supreme. Either all the states in it are liberal, or enough are so that when united they are able to repulse an attack of militarist aggressors. In this liberal world, or liberal part of the world, there is private property in the means of production. The working of the market is not hampered by government interference. There are no trade barriers; men can live and work where they want. Frontiers are drawn on the maps but they do not hinder the migrations of men and shipping of commodities. Natives do not enjoy rights that are denied to aliens. Governments and their servants restrict their activities to the protection of life, health, and property against fraudulent or violent aggression. They do not discriminate against foreigners. The courts are independent and effectively protect everybody against the encroachments of officialdom. Everyone is permitted to say, to write, and to print what he likes. Education is not subject to government interference. Governments are like night-watchmen whom the citizens have entrusted with the task of handling the police power. The men in office are regarded as mortal men, not as superhuman beings or as paternal authorities who have the right and duty to hold the people in tutelage. Governments do not have the power to dictate to the citizens what language they must use in their daily speech or in what language they must bring up and educate their children. Administrative organs and tribunals are bound to use each man’s language in dealing with him, provided this language is spoken in the district by a reasonable number of residents. In such a world it makes no difference where the frontiers of a country are drawn. Nobody has a special material interest in enlarging the territory of the state in which he lives; nobody suffers loss if a part of this area is separated from the state. It is also immaterial whether all parts of the state’s territory are in direct geographical connection, or whether they are separated by a piece of land belonging to another state. It is of no economic importance whether the country has a frontage on the ocean or not. In such a world the people of every village or district could decide by plebiscite to which state they wanted to belong. There would be no more wars because there would be no incentive for aggression. War would not pay. Armies and navies would be superfluous. Policemen would suffice for the fight against crime. In such a world the state is not a metaphysical entity but simply the producer of security and peace. It is the night-watchman, as Lassalle contemptuously dubbed it. But it fulfills this task in a satisfactory way. The citizen’s sleep is not disturbed, bombs do not destroy his home, and if somebody knocks at his door late at night it is certainly neither the Gestapo nor the O.G.P.U. The reality in which we have to live differs very much from this perfect world of ideal liberalism. But this is due only to the fact that men have rejected liberalism for etatism.

Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned

The Republic of Foo, our high-investment, intangible economy of the future, has significantly overhauled its land-use rules, particularly in major cities, making it easier to build housing and workplaces; at the same time, it invests significantly in the kind of infrastructure needed to make cities livable and convivial, in particular, effective transport and civic and cultural amenities, from museums to nightlife. In some cases, this involves rejecting big development plans that destroy existing places. It has faced political costs in making this change, especially from vested interests opposed to new development or gentrification, but the increased economic benefits of vibrant urban centers have provided enough incentive to tip the balance of power in favor of development. The cities of the Kingdom of Bar have chosen one of two unfortunate paths: in some cases, they have privileged continuity over dynamism in its towns—creating places like Oxford in the UK, which are beautiful and full of convivial public spaces, but where it is very hard to build anything, meaning few people can take advantage of the economic potential the place creates. Other cities resemble Houston, Texas, in the 1990s—a low-regulation paradise where an absence of planning laws keeps home and office prices low, but where the lack of walkable centers and convivial places makes it harder for intangibles to multiply. (To Houston’s credit, it has changed for the better in the last twenty years.) The worst of Bar’s cities fail in both regards, underinvesting in urban amenities and making it hard to build. In all three cases, the economic disadvantage of not having vibrant cities that can grow have become larger and larger as the importance of intangibles has increased.

But states have difficulty evaluating cybersecurity threats. If a state does detect an intrusion in one of its vital networks and if that intrusion looks to be from another state, what should the state suffering the intrusion conclude? On the one hand, it might be a defensive-minded intrusion, only checking out the intruded-upon state’s capabilities and providing reassuring intelligence to the intruding state. This might seem unsettling but not necessarily threatening, presuming the state suffering the intrusion was not developing capabilities for attack or seeking conflict. On the other hand, the intrusion might be more nefarious. It could be a sign of some coming harm, such as a cyber attack or an expanding espionage operation. The state suffering the intrusion will have to decide which of these two possibilities is correct, interpreting limited and almost certainly insufficient amounts of data to divine the intentions of another state. Thus Chapter Four’s argument is vitally important: intrusions into a state’s strategically important networks pose serious risks and are therefore inherently threatening. Intrusions launched by one state into the networks of another can cause a great deal of harm at inopportune times, even if the intrusion at the moment of discovery appears to be reasonably benign. The intrusion can also perform reconnaissance that enables a powerful and well-targeted cyber attack. Even operations launched with fully defensive intent can serve as beachheads for future attack operations, so long as a command and control mechanism is set up. Depending on its target, the intrusion can collect information that provides great insight into the communications and strategies of policy-makers. Network intrusions can also pose serious counterintelligence risks, revealing what secrets a state has learned about other states and provoking a damaging sense of paranoia. Given these very real threats, states are likely to view any serious intrusion with some degree of fear. They therefore have significant incentive to respond strongly, further animating the cybersecurity dilemma.

These are things to have under your belt in order to make and strengthen boundaries: Educate them. To be blunt, narcissists aren’t exactly in tune with their interpersonal or communication skills. Try using incentives or other motivators to get them to pay attention to how their behavior affects others. They may not empathize or seem to get what you’re saying, but at least you can say you tried to look at it from your point of view. Understand your personal rights. In order to demand being treated fairly and with respect, it’s important to know what your rights are. You’re allowed to say no, you have a right to your feelings, you are allowed privacy—and there are no wedding or relationship vows that say you are at the beck and call of your partner. When a person has been abused for a long time, they may lack the confidence or self-esteem to take a stand on their rights. The more power they take back, though, the less the abuser has. Be assertive. This is something that depends on confidence, and will take practice, but it’s worth it. Being assertive means standing up for yourself and exuding pride in who you are. Put your strategies into play. After the information you’ve absorbed so far, you have an advantage in that you are aware of your wants, what the narcissist demands, what you are able to do and those secret tiny areas you may have power over. Tap into these areas to put together your own strategies. Re-set your boundaries. A boundary is an unseen line in the sand. It determines the point you won’t allow others to cross over or they’ll hurt you. These are non-negotiable and others must be aware of them and respect them. But you have to know what those lines are before making them clear to others. Have consequences. As an extension of the above point, if a person tries ignoring your boundaries, make sure you give a consequence. There doesn't need to be a threat, but more saying, “If you ________, we can’t hang out/date/talk/etc.” You’re just saying that crossing the boundary hurts you so if they choose to disregard it, you choose not to accept that treatment. The narcissist will not tolerate you standing up for yourself, but it’s still important. The act of advocating for yourself will increase your self-confidence, self-esteem and self-worth. Then you’ll be ready to recover and heal.

Growth was so rapid that it took in generations of Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned out badly, you might get shot. Better to avoid all responsibility. An example of what could happen

Human authority. Moralists tend to obey human authorities (family, tribe, government, and cultural customs) too anxiously, since they rely heavily on their self-image as upright persons. Relativists/pragmatists will either obey human authority too much (since they have no higher authority by which they can judge their culture) or else too little (since they may obey only when they know they can’t get away with it). The result is either authoritarianism or a disregard for the proper place of authority. The gospel gives a standard by which to oppose human authority (if it contradicts the gospel), as well as an incentive to obey the civil authorities from the heart, even when we could get away with disobedience. To confess Jesus as Lord was simultaneously to confess that Caesar was not. Though there have been several studies of late that discuss the “counter-imperial” tenor of various texts, it is important to stress that the Bible is not so much against governing authorities or “empire” as such but that it prescribes a proper reordering of power. It is not that Jesus usurped the throne of Caesar but that when we allow Caesar to overstep his bounds, he is usurping the throne of Christ and leading people into idolatry.

in Why Nations Fail, Daron Acemoglu and James Robinson emphasize the importance of legal institutions (and other state institutions) that are “inclusive” through rights and incentives equally available to all people rather than “extractive” (that is, designed to extract resources from the many for the few) if countries are to experience sustained economic growth.15

FOCUSING TOO MUCH ON THE NUMBERS In the second example, I managed the team to a set of numbers that did not fully capture what I wanted. I wanted a great product that customers would love with high quality and on time—in that order. Unfortunately, the metrics that I set did not capture those priorities. At a basic level, metrics are incentives. By measuring quality, features, and schedule and discussing them at every staff meeting, my people focused intensely on those metrics to the exclusion of other goals. The metrics did not describe the real goals and I distracted the team as a result. Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

The highest of missionary motives is neither obedience to the Great Commission (important as that is), nor love for sinners who are alienated and perishing (strong as that incentive is, especially when we contemplate the wrath of God . . .), but rather zeal—burning and passionate zeal—for the glory of Jesus Christ. . . . Only one imperialism is Christian . . . and that is concern for His Imperial Majesty Jesus Christ, and for the glory of his empire.

Though Bellamy populates his world with humans, it actually requires angels - beings unencumbered by human nature. It assumes that all workers agree with the system; that all workers are willing to accept what the system offers without desiring more; and that even without the desire for more as motivation, all will work happily and productively in the service of others. The story naturally omits mention of the massive bureaucracy that the system would require if this were the real world. Therefore, it need not consider that in the real world bureaucrats would not be angels but humans, who almost always have priorities more important than selfless service to others. Let's look only a bit at the other problems that would confront Bellamy's world - such as its lack of incentives to innovate or to find inefficiencies that need fixing - and hone in on the massive bureaucracy that it, and all socialist experiments, require.

Of course, socialism does not end the chaos caused by the destruction of the price system. It perpetuates it. And if it is introduced without the prior existence of price controls, its effect is to inaugurate that very chaos. This is because socialism is not actually a positive economic system. It is merely the negation of capitalism and its price system. As such, the essential nature of socialism is one and the same as the economic chaos resulting from the destruction of the price system by price and wage controls. (I want to point out that Bolshevik-style socialism’s imposition of a system of production quotas, with incentives everywhere to exceed the quotas, is a sure formula for universal shortages, just as exist under all around price and wage controls.) At most, socialism merely changes the direction of the chaos. The government’s control over production may make possible a greater production of some goods of special importance to itself, but it does so only at the expense of wreaking havoc throughout the rest of the economic system. This is because the government has no way of knowing the effects on the rest of the economic system of its securing the production of the goods to which it attaches special importance.

even in recent times, the empirical evidence does not support the claim that trade liberalization or incentive neutrality leads to faster growth. It is true that higher manufacturing growth rates have been typically associated with higher export growth rates (mostly in countries where export and import shares to GDP grew), but there is no statistical relation between either of these growth rates or degree of trade restrictions. Rather, almost all of successful export-oriented growth has come with selective trade and industrialization policies. In this regard, stable exchange rates and national price levels seem to be considerably more important than import policy in producing successful export-oriented growth

Making equality a more important goal than overall economic growth is a mistake for a government, because merely distributing the same amount of wealth in different ways does not change the total amount of wealth a nation produces each year, which is the only way that any nation has grown from poverty to prosperity. Economic freedom and government-forced economic equality are opposing goals, and when government forces economic equality (for example, through heavy taxes on the rich), it can actually diminish economic incentives and harm the GDP.

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.

Things may even be worse than that, however. There’s some reason to think that the rise in ethical consumerism could even be harmful for the world, on balance. Psychologists have discovered a phenomenon that they call moral licensing, which describes how people who perform one good action often compensate by doing fewer good actions in the future. For example, in a recent experiment, participants were told to choose a product from either a selection of mostly “green” items (like an energy-efficient lightbulb) or from a selection of mostly conventional items (like a regular lightbulb). They were then told to perform a supposedly unrelated visual perception task: a square box with a diagonal line across it was displayed on a computer screen, and a pattern of twenty dots would flash up on the screen; the subjects had to press a key to indicate whether there were more dots on the left or right side of the line. It was always obvious which was the correct answer, and the experimenters emphasized the importance of being as accurate as possible, telling the subjects that the results of the test would be used in designing future experiments. However, the subjects were told that, whether or not their answers were correct, they’d be paid five cents every time they indicated there were more dots on the left-hand side of the line and five cents every time they indicated there were more dots on the right-hand side. They therefore had a financial incentive to lie, and they were alone, so they knew they wouldn’t be caught if they did so. Moreover, they were invited to pay themselves out of an envelope, so they had an opportunity to steal as well. What happened? People who had previously purchased a “green” product were significantly more likely to both lie and steal than those who had purchased the conventional product. Their

The Wall Street Journal (The Wall Street Journal) - Clip This Article on Location 1055 | Added on Tuesday, May 5, 2015 5:10:24 PM OPINION Baltimore Is Not About Race Government-induced dependency is the problem—and it’s one with a long history. By William McGurn | 801 words For those who see the rioting in Baltimore as primarily about race, two broad reactions dominate. One group sees rampaging young men fouling their own neighborhoods and concludes nothing can be done because the social pathologies are so overwhelming. In some cities, this view manifests itself in the unspoken but cynical policing that effectively cedes whole neighborhoods to the thugs. The other group tut-tuts about root causes. Take your pick: inequality, poverty, injustice. Or, as President Obama intimated in an ugly aside on the rioting, a Republican Congress that will never agree to the “massive investments” (in other words, billions more in federal spending) required “if we are serious about solving this problem.” There is another view. In this view, the disaster of inner cities isn’t primarily about race at all. It’s about the consequences of 50 years of progressive misrule—which on race has proved an equal-opportunity failure. Baltimore is but the latest liberal-blue city where government has failed to do the one thing it ought—i.e., put the cops on the side of the vulnerable and law-abiding—while pursuing “solutions” that in practice enfeeble families and social institutions and local economies. These supposed solutions do this by substituting federal transfers for fathers and families. They do it by favoring community organizing and government projects over private investment. And they do it by propping up failing public-school systems that operate as jobs programs for the teachers unions instead of centers of learning. If our inner-city African-American communities suffer disproportionately from crippling social pathologies that make upward mobility difficult—and they do—it is in large part because they have disproportionately been on the receiving end of this five-decade-long progressive experiment in government beneficence. How do we know? Because when we look at a slice of white America that was showered with the same Great Society good intentions—Appalachia—we find the same dysfunctions: greater dependency, more single-parent families and the absence of the good, private-sector jobs that only a growing economy can create. Remember, in the mid-1960s when President Johnson put a face on America’s “war on poverty,” he didn’t do it from an urban ghetto. He did it from the front porch of a shack in eastern Kentucky’s Martin County, where a white family of 10 eked out a subsistence living on an income of $400 a year. In many ways, rural Martin County and urban Baltimore could not be more different. Martin County is 92% white while Baltimore is two-thirds black. Each has seen important sources of good-paying jobs dry up—Martin County in coal mining, Baltimore in manufacturing. In the last presidential election, Martin Country voted 6 to 1 for Mitt Romney while Baltimore went 9 to 1 for Barack Obama. Yet the Great Society’s legacy has been depressingly similar. In a remarkable dispatch two years ago, the Lexington Herald-Leader’s John Cheves noted that the war on poverty sent $2.1 billion to Martin County alone (pop. 12,537) through programs including “welfare, food stamps, jobless benefits, disability compensation, school subsidies, affordable housing, worker training, economic development incentives, Head Start for poor children and expanded Social Security, Medicare and Medicaid.” The result? “The problem facing Appalachia today isn’t Third World poverty,” writes Mr. Cheves. “It’s dependence on government assistance.” Just one example: When Congress imposed work requirements and lifetime caps for welfare during the Clinton administration, claims of disability jumped. Mr. Cheves quotes

If policies were based upon climate science rather than climate studies, this simple, straightforward analysis would spell the end of any onerous climate policy. However, while our similar studies can be scientifically cited,7 to date, there has been an understandable reluctance to publish this in the tier-1 scientific literature, such as Nature or Science, as that would indicate a massive, unexplainable, and persistent failure of the studies driving global climate policy. Paltridge recently speculated that when this is ultimately permitted, the cost to all science (not just climate science) is going to be dear and lasting, much to the detriment of our society and our public policies.8 It will provoke serious doubt that the present incentive structure in science—which requires that the practitioners keep their problems ‘important’—has far-reaching and disastrous unintended consequences.

The highest of missionary motives is neither obedience to the Great Commission (important as that is), nor love for sinners who are alienated and perishing (strong as that incentive is, especially when we contemplate the wrath of God . . .), but rather zeal—burning and passionate zeal—for the glory of Jesus Christ. . . . Only one imperialism is Christian . . . and that is concern for His Imperial Majesty Jesus Christ, and for the glory of his empire.2

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.

It is also important to briefly emphasize the difference between a land tax and a property tax. The former taxes the value of the land only (just the dirt) while the property tax includes both the land and the improvements that have been made. The land tax creates an incentive to improve one’s property (since only the land is taxed, taxes don’t increase when the property is improved) while the property tax creates an incentive to allow properties to decline (improving a property raises one’s taxes). If we want cities to be successful, if we want to build wealth within our state, we will stop discouraging people from improving their property.

Deuteronomy is an exciting book that is very relevant today. I first realized this about twenty-five years ago when, early in my ministry, I read the book for my devotions. I found that there was so much I can learn about the Christian life and ministry that I began to list it all. I ended up with a huge list that has had a huge impact on my ministry. For example, I made a list of 142 incentives to obedience from Deuteronomy. So when I was asked by my friends at Crossway whether I would be interested in writing the Deuteronomy commentary in the series I responded with an enthusiastic yes. Why am I so excited about Deuteronomy? Primarily because in this book Moses is attempting to do something that is still so important for all Christians. He is close to death, and they are close to entering the promised land without him, the one who led them for forty years. Deuteronomy gives Moses’ farewell addresses to them. His aim is to motivate them to go forward and conquer the land and to help them to be faithful to God amidst all the challenges to such faithfulness that they will face. He warns them of challenges, he encourages them to a life of holiness, and he tells them the consequences of living and of failing to live such a life. All the time Moses was aware of the temptation the people would have to compromise their faith by assimilating aspects of Canaanite religion. Are these not some of our greatest challenges today? How can we remain faithful to God? How can we avoid compromise when the lure of the society around us is so powerful? And how can we help our children and the people we lead to be faithful? Deuteronomy tells us how Moses tackled these challenges. After citing a story that appears in Deuteronomy, Paul writes, “Now these things happened to them as an example, but they were written down for our instruction” (1 Corinthians 10:11). Therefore I have approached every passage of Deuteronomy as having significance to Christians today. Because all of Deuteronomy is part of God’s inspired Word, that affirmation should be accepted without question. But it is often not, for many Christians think that in this era of grace many of the teachings of the Old Testament are not significant for us. Indeed we may not use some of the laws and regulations that are given there because they apply only to the Jewish nation. But the religion of this nation had the same basic ingredients that the Christian religion has today. Their life was to be a response of faith and obedience to the God who had graciously acted to redeem them. So even the laws that are specific to Israel have principles behind them that help us in the life of faith today. When I studied Deuteronomy this time around with a view to writing this book, I found another feature that makes it extremely helpful.

As a group grows, the balance of incentives shifts from encouraging individuals to focus on collective goals to encouraging a focus on careers and promotion. When the size of the group exceeds a critical threshold, career interests triumph. That’s when teams will begin to dismiss loonshots and only franchise projects—the next movie sequel, the next statin, the next turn of the franchise wheel—will survive. Even more important, we will see how to control that transition: how to change the magic number.

The first 20 percent often begins with having the right data, the right technology, and the right incentives. You need to have some information—more of it rather than less, ideally—and you need to make sure that it is quality-controlled. You need to have some familiarity with the tools of your trade—having top-shelf technology is nice, but it’s more important that you know how to use what you have. You need to care about accuracy—about getting at the objective truth—rather than about making the most pleasing or convenient prediction, or the one that might get you on television. Then you might progress to a few intermediate steps, developing some rules of thumb (heuristics) that are grounded in experience and common sense and some systematic process to make a forecast rather than doing so on an ad hoc basis.

It is important to come up with innovative approaches to incentivize COVID related innovation; the incentives offered by the IP system may not be enough

The companies with the highest returns on their technology investments did more than just buy technology; they invested in organizational capital to become digital organizations. Productivity studies at both the firm level and the establishment (or plant) level during the period 1995-2008 reveal that the firms that saw high returns on their technology investments were the same firms that adopted certain productivity-enhancing business practices. The literature points to incentive systems, training, and decentralized decision making as some of the practices most complementary to technology. Moreover, the right combinations of these practices are much more important than any of the individual practices. Copying any one practice may not be very difficult for a firm, but duplicating a competitor's success requires replicating a portfolio of interconnecting practices. Upsetting the balance in a company's particular combination of labor and capital investments, even slightly, can have large consequences for that company's output and productivity. As in a fine watch, the whole system may fail if even one small and seemingly unimportant piece is missing or flawed.

Urbanization, by making people more anonymous and less dependent on their village networks, has permitted greater mixing of the castes. New jobs lowered the importance of the caste network in finding employment opportunities and increased the incentives for young people from lower castes to get educated. In part the village community was also perhaps less bad than Ambedkar had feared. Villages have proven capable of collective action that transcends caste lines, for example, when they embraced universal primary education and free school meals for all children, regardless of caste.

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

Goldman, or even systemically important, publicly traded banks. It has much broader implications for organizations generally. This sociological study opened my eyes to the organizational elements as they relate to a culture and the importance of understanding them as they relate to organizational, competitive, technological, and regulatory pressures. The organizational elements help form the culture, the incentives and behavior—they can help a firm be “long-term greedy.” In addition, organizational elements can help constrain or manage organizational drift.

Driver Behavior & Safety Proper driving behavior is vital for the safety of drivers, passengers, pedestrians and is a means to achieve fewer road accidents, injuries and damage to vehicles. It plays a role in the cost of managing a fleet as it impacts fuel consumption, insurance rates, car maintenance and fines. It is also important for protecting a firm’s brand and reputation as most company- owned vehicles carry the company’s logo. Ituran’s solution for driver behavior and safety improves organizational driving culture and standards by encouraging safer and more responsible driving. The system which tracks and monitors driver behavior using an innovative multidimensional accelerometer sensor, produces (for each driver) an individual score based on their performance – sudden braking and acceleration, sharp turns, high-speed driving over speed bumps, erratic overtaking, speeding and more. The score allows fleet managers to compare driver performance, set safety benchmarks and hold each driver accountable for their action. Real-time monitoring identifies abnormal behavior mode—aggressive or dangerous—and alerts the driver using buzzer or human voice indication, and detects accidents in real time. When incidents or accidents occurs, a notification sent to a predefined recipient alerts management, and data collected both before and after accidents is automatically saved for future analysis. • Monitoring is provided through a dedicated application which is available to both fleet manager and driver (with different permission levels), allowing both to learn and improve • Improves organizational driving culture and standards and increases safety of drivers and passengers • Web-based reporting gives a birds-eye view of real-time driver data, especially in case of an accident • Detailed reports per individual driver include map references to where incidents have occurred • Comparative evaluation ranks driving according to several factors; the system automatically generates scores and a periodic assessment certificate for each driver and/or department Highlights 1. Measures and scores driver performance and allows to give personal motivational incentives 2. Improves driving culture by encouraging safer and more responsible driving throughout the organization 3. Minimizes the occurrence of accidents and protects the fleet from unnecessary wear & tear 4. Reduces expenses related to unsafe and unlawful driving: insurance, traffic tickets and fines See how it works:

Six Steps to Getting Started Right Now As we saw from the stories in Chapter 1, you don’t need a lot of money or special training to operate a business. You just need a product or service, a group of people who want to buy it, and a way to get paid. We’ll look at each of these things in more detail throughout the book, but you don’t have to wait to get started. Here are the six steps you need to take: 1. Decide on your product or service. 2. Set up a website, even a very basic one (you can get a free one from WordPress.org). 3. Develop an offer (an offer is distinct from a product or service; see Chapter 7 for help). 4. Ensure you have a way to get paid (get a free PayPal account to start). 5. Announce your offer to the world (see Chapter 9 for more on this). 6. Learn from steps 1 through 5, then repeat. Almost all microbusiness building follows this sequence of events. Of course, we’ll be discussing specifics as we go along, but it’s always better to start from where you are than to wait for everything to be perfect. If you have an existing business and are thinking about how to apply the concepts from this book, focus on either getting money in the bank or developing new products or services. These are the most important tasks of your business-not administration, maintenance, or anything else that takes time without creating wealth or value. If you’re not sure what to do, think about any of these ideas: Can you contact your customer list with a special offer or incentive? Can you introduce a new product or service to complement your existing portfolio? If you’re a coach or consultant, can you offer a special deal for clients who prepay? Is there a new way you can attract subscribers, clients, or customers? But one way or another . . . just do something.

The use of a fair benchmark assumes heightened importance when incentive fee arrangements fail to incorporate investor-friendly characteristics such as clawbacks and high-water marks. A clawback forces managers to disgorge past incentive fees when subsequent performance falls short of the benchmark. (In vivid imagery, taloned investors claw back previously paid fees.) In the absence of a clawback, investors face the ugly prospect of paying fees for performance that came and went. A high-water mark requires managers to fill performance deficits produced after having received incentive fees, prior to earning more incentive fees. In the absence of a high-water mark, investors face the unattractive possibility of paying fees on past gains without getting an offset for subsequent losses. Granum Value Fund investors benefit neither from a clawback nor from a high-water mark.

What are some other goods with significant positive externalities? One extremely important example is education. Being able to read obviously generates significant benefits for the person doing the reading. But it also generates huge benefits for others. Being literate means that people don’t have to tell you in person what to do, they can just put up a sign. The fact that we live in a society with a high general education level generates huge benefits for us all. However, because we are unable to charge people for all the benefits that our education confers upon them, individuals do not always have an incentive to choose an education level that is socially optimal. Even with massively subsidized education, plenty of people still drop out of high school. This may be individually rational, but it imposes significant costs upon society— decreased productivity being the most obvious.

But “in a more divided state of society,” where the division of labor into unequally important functions elicits and enlarges the natural inequality of men, communism breaks down because it provides no adequate incentive for the exertion of superior abilities.

The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites.

Total spending or demand did not expand rapidly. It was important that excess demand conditions were modest – there was sufficient demand to create clear financial incentives to innovate but not so much as to spill over into inflation and the associated misallocation of resources.

Incentives were important in attracting a candidate to accept a particular job, but once on the job it hardly mattered at all. People who are driven to perform do so based on internal drive, not on external incentives. They want to do a good job.

Intrinsic motivation is of great importance for all economic activities. It is inconceivable that people are motivated solely or even mainly by external incentives.

Markets can govern behavior through the use of mechanism design and various incentives—not money alone, but the trifecta of human motivations that may be summarized as fun, fame, and fortune. In fact, on many platforms, money is far less important than the more intangible, subjective form of value known as social currency. The idea behind social currency is to give something in order to get something. If you give fun in a photo, you can get people to share it. Social currency, measured as the economic value of a relationship, includes favorites and shares.39 It also includes the reputation a person builds up for good interactions on eBay, good news posts on Reddit, or good answers on Stack Overflow. It includes the number of followers a user attracts on Twitter and the number of skill endorsements she garners on LinkedIn.

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.

Product immediately after exercise insurance solutions No investment insurance purchase in a very simple Prostatis action, even though he is trained only exception in the industry. There are many new threats that can lure the unwary with remote media policy is clearly insufficient for your needs. It is important to do your due diligence and scientific evidence, ask yourself just before the market does not provide a sound purchasing decisions. This short article will help you, just accept, shoulders that decisive action must begin with knowledge. Those most critical factors giving a positive self basically want to cover the first edition. That's pretty strong earnings, unemployment, and some cannot Prostatis even be informed. Talk to your employer and give generally positive, they are not. Relevance Tab justified confidence that the business aspects, really, that this, after all, attractive to employers incentives, long-term employees, and where the only specialized services for industry and again the other for employees of highest quality that are more difficult problem to treat, made only more secure, since it is to find a person. Although the direction of transmission of buying Prostatis insurance on their own, more attention is considerable, certainly in the sense that the plan to "complete" and "renewable insurance." This suggests that other, as you continue to receive payment of costs should not be fully covered by commercial insurance. Not even know that the level of demand in the economy Although in good condition I, and the company has taken the right path, and then joined a vague clause to complete the plan in principle and in its way through, you can also apply safeguards Generally they produce, the plan rescission period is 10 days during the working sets, make sure it's perfect, then throw the cards, if not immediately. The scenario is especially the Prostatis fact that it contains the option to change the terms and other demanding applications. Currently, for many years a large number of hits includes hands. As "absolutely certain legal requirements" specialized insurance services for investment in more selective inside to be taken, especially in the stop position of education on the basis of a different plan that incorporates the experience, regardless evaluation or situations require the exercise includes products and services for the same price evaluation face to face selling. Similarly, principles and manipulated so as the experience of many destructive aspect of the current market containing the entire industry. An insurance company to a higher potential, to ensure that purchasers or plans worth more to feel a little pressure, the result is inevitable that insurance is available against people who have contact to practice for a few days . Basically it is to maintain the power to print money to unrealistic levels.

A good deal of theorizing about the importance of private property rights concerns what is called the tragedy of the commons. Grazing fields in traditional English villages were collectively owned by the village’s inhabitants; since no one could be excluded from access to these fields, whose resources were depletable, they were overused and made worthless. The solution to the risk of depletion was to turn the commons into private property, whose owners would then have a strong incentive to invest in its upkeep and exploit its resources on a long-term, sustainable basis. In an influential article, Garrett Hardin argued that the tragedy of the commons exists with respect to many global resources, such as clean air, fisheries, and the like, and that in the absence of private ownership or strong regulation they would be overexploited and made useless.3 In

In cases like these, most economists advocate taxing the pollution. Such taxes are called “Pigovian” after Arthur Pigou, a British economist of the early twentieth century who was one of their early champions. The taxes have two important benefits. First, they reduce the amount of undesirable activity; if a utility gets taxed based on the amount of sulfur dioxide it releases into the atmosphere, it has strong incentives to invest in scrubber technology that leaves the air cleaner. Second, Pigovian taxes raise revenue for the government, which could be used to compensate those harmed by the pollution (or for any other purpose). They’re a win-win. Taxes of this type are popular across the political spectrum and among people in many fields; members of the “Pigou Club,” a group of advocates identified by economist Gregory Mankiw, include both Alan Greenspan and Ralph Nader.

Identifying Cultural Norms The following domains are areas in which cultural norms may vary significantly from company to company. Transitioning leaders should use this checklist to help them figure out how things really work in the organizations they’re joining. Influence. How do people get support for critical initiatives? Is it more important to have the support of a patron within the senior team, or affirmation from your peers and direct reports that your idea is a good one? Meetings. Are meetings filled with dialogue on hard issues, or are they simply forums for publicly ratifying agreements that have been reached in private? Execution. When it comes time to get things done, which matters more—a deep understanding of processes or knowing the right people? Conflict. Can people talk openly about difficult issues without fear of retribution? Or do they avoid conflict—or, even worse, push it to lower levels, where it can wreak havoc? Recognition. Does the company promote stars, rewarding those who visibly and vocally drive business initiatives? Or does it encourage team players, rewarding those who lead authoritatively but quietly and collaboratively? Ends versus means. Are there any restrictions on how you achieve results? Does the organization have a well-defined, well-communicated set of values that is reinforced through positive and negative incentives?

Offer Incentives to Get All-Important Early Wins For most start-ups, creating incentives for early investors is a sensible path. Whether through a seeder or founder’s shares, preferential terms can align the manager and early adopters to encourage growth. As the industry faces scrutiny on fees, the opportunity to offer something that clients are actively seeking is a win-win proposition. If a manager canvasses a wide range of potential investors, he will encounter both supporters and critics of seeding and discounted shares. Among the pools of capital invested in hedge funds, the fund of funds community tends to embrace founder’s shares more actively than others. In doing so, funds of funds have a place in the industry ecosystem by providing R&D for the industry. Except for the fortunate few whose brand allows a mega-launch, a start-up needs flag wavers in its corner to create positive signaling effects and branding. Both seeders and founder’s share investors can help.

this book claims two important points: that leaders will tend to behave in a way that is consistent with what concentrated interests desire, and one must look at behavior, rather than directly at what people say or even what they truly "believe," to achieve a nontrivial conclusion about causation in the case of any particular decision. Regardless of what leaders believe, and no matter how cynical or idealistic they are, America does not have anything that we can reasonably call a grand strategy, but leaders who are motivated by a combination of ideas and short-term political goals in a system in which their incentive structure is shaped by concentrated interests.

The importance of the size of the pie, rather than just its division, is linked to another important distinction – between ex ante (before the event) incentives and ex post (after the event) outcomes

Here are a few different types of emails you can send: Common FAQs – An email that answers repeat questions you get from readers and subscribers Affiliate case study – An email that details the results from taking a course or using a tool that you’re an affiliate for Teaser to an existing post – An email that links to pillar or cornerstone pieces on your blog Tools and resources – An email that shares your favorite tool collection The Start Here – An email that links to your most important resources Break the myths – An email that lays out myths that your subscribers may think are true Behind the scenes – An email that gives an insiders’ peek into what’s going on with your business Personal story – An email that gives an insiders’ peek into your struggles or backstory One-click survey – An email that asks a simple question to segment subscribers or allows them to choose their own email journey Survey or How can I help you? – An email asking for responses or providing an offer to help Postpurchase welcome email – An email sent immediately after purchase to buyers of your offer Unexpected incentive email – A simple cheat sheet, guide, or PDF that subscribers were not expecting Favorite thing – A collection of your favorite books/blogs/stock photo sites, etc. I have used every one of these emails in my email marketing mix. Doing so breaks up the monotony of sending the same style of email each week, and each of these emails feeds your marketing goals differently as well.

we need simply look at how capitalism changed after the idea of shareholder supremacy took over—which only happened in the final decades of the twentieth century. Prior to the introduction of the shareholder primacy theory, the way business operated in the United States looked quite different. “By the middle of the 20th century,” said Cornell corporate law professor Lynn Stout in the documentary series Explained, “the American public corporation was proving itself one of the most effective and powerful and beneficial organizations in the world.” Companies of that era allowed for average Americans, not just the wealthiest, to share in the investment opportunities and enjoy good returns. Most important, “executives and directors viewed themselves as stewards or trustees of great public institutions that were supposed to serve not just the shareholders, but also bondholders, suppliers, employees and the community.” It was only after Friedman’s 1970 article that executives and directors started to see themselves as responsible to their “owners,” the shareholders, and not stewards of something bigger. The more that idea took hold in the 1980s and ’90s, the more incentive structures inside public companies and banks themselves became excessively focused on shorter-and-shorter-term gains to the benefit of fewer and fewer people. It’s during this time that the annual round of mass layoffs to meet arbitrary projections became an accepted and common strategy for the first time. Prior to the 1980s, such a practice simply didn’t exist. It was common for people to work a practical lifetime for one company. The company took care of them and they took care of the company. Trust, pride and loyalty flowed in both directions. And at the end of their careers these long-time employees would get their proverbial gold watch. I don’t think getting a gold watch is even a thing anymore. These days, we either leave or are asked to leave long before we would ever earn one.

It's very, very important to create human systems that are hard to cheat. Otherwise, you're ruining your civilization because these big incentives will create incentive-caused bias and people will rationalize that bad behavior is OK.Then,

As an example, early on at eBay we found we needed a product principle that spoke to the relationship between buyers and sellers. Most of the revenue came from sellers, so we had a strong incentive to find ways to please sellers, but we soon realized that the real reason sellers loved us was because we provided them with buyers. This realization led to a critical principle that stated, “In cases where the needs of the buyers and the sellers conflict, we will prioritize the needs of the buyer, because that's actually the most important thing we can do for sellers.

One: Reward and Punishment Super Response Tendency I place this tendency first in my discussion because almost everyone thinks he fully recognizes how important incentives and disincentives are in changing cognition and behavior. But this is not often so. For instance, I think I've been in the top five percent of my age cohort almost all my adult life in understanding the power of incentives, and yet I've always underestimated that power. Never a year passes but I get some surprise that pushes a little further my appreciation of incentive super power.

Perhaps the most important rule in management is "Get the incentives right.

maker.As usual in human affairs, what determines the behavior are incentives for the decision maker., and "getting the incentives right" is a very very important lesson.

Finally, the Comanche sweep into the Texas plains may have been a response to a changing commercial geography. The expulsion of their Taovaya allies from the Arkansas to the Red River in the 1750s under Osage pressure prompted French traders to refocus their operations from the Arkansas channel to the lower Red River, where an important trading satellite, Fort St. Jean Baptiste aux Natchitoches, had been established in 1716. This sudden shift in commercial gravity must have been a strong incentive for Comanches

Look at stocks as part ownership of a business. 2. Look at Mr. Market—volatile stock price fluctuations—as your friend rather than your enemy. View risk as the possibility of permanent loss of purchasing power, and uncertainty as the unpredictability regarding the degree of variability in the possible range of outcomes. 3. Remember the three most important words in investing: “margin of safety.” 4. Evaluate any news item or event only in terms of its impact on (a) future interest rates and (b) the intrinsic value of the business, which is the discounted value of the cash that can be taken out during its remaining life, adjusted for the uncertainty around receiving those cash flows. 5. Think in terms of opportunity costs when evaluating new ideas and keep a very high hurdle rate for incoming investments. Be unreasonable. When you look at a business and get a strong desire from within saying, “I wish I owned this business,” that is the kind of business in which you should be investing. A great investment idea doesn’t need hours to analyze. More often than not, it is love at first sight. 6. Think probabilistically rather than deterministically, because the future is never certain and it is really a set of branching probability streams. At the same time, avoid the risk of ruin, when making decisions, by focusing on consequences rather than just on raw probabilities in isolation. Some risks are just not worth taking, whatever the potential upside may be. 7. Never underestimate the power of incentives in any given situation. 8. When making decisions, involve both the left side of your brain (logic, analysis, and math) and the right side (intuition, creativity, and emotions). 9. Engage in visual thinking, which helps us to better understand complex information, organize our thoughts, and improve our ability to think and communicate. 10. Invert, always invert. You can avoid a lot of pain by visualizing your life after you have lost a lot of money trading or speculating using derivatives or leverage. If the visuals unnerve you, don’t do anything that could get you remotely close to reaching such a situation. 11. Vicariously learn from others throughout life. Embrace everlasting humility to succeed in this endeavor. 12. Embrace the power of long-term compounding. All the great things in life come from compound interest.

But look, the list itself doesn’t matter. The record doesn’t matter. It’s like when a bunch of friends are playing football in the back yard, you go all out to win, but afterwards it doesn’t matter who won. Here’s what’s different about it, though,” he said, turning serious. “The list total isn’t important, but the birds themselves are important. Every bird you see. So the list is just a frivolous incentive for birding, but the birding itself is worthwhile. It’s like a trip where the destination doesn’t have any significance except for the fact that it makes you travel. The journey is what counts.” Skua in fight When the boat pulled back in to the dock, I was deep in thought.

To apply first principles thinking to the field of value investing, consider several fundamental truths. Understand and practice the following if you want to become a good investor: 1. Look at stocks as part ownership of a business. 2. Look at Mr. Market—volatile stock price fluctuations—as your friend rather than your enemy. View risk as the possibility of permanent loss of purchasing power, and uncertainty as the unpredictability regarding the degree of variability in the possible range of outcomes. 3. Remember the three most important words in investing: “margin of safety.” 4. Evaluate any news item or event only in terms of its impact on (a) future interest rates and (b) the intrinsic value of the business, which is the discounted value of the cash that can be taken out during its remaining life, adjusted for the uncertainty around receiving those cash flows. 5. Think in terms of opportunity costs when evaluating new ideas and keep a very high hurdle rate for incoming investments. Be unreasonable. When you look at a business and get a strong desire from within saying, “I wish I owned this business,” that is the kind of business in which you should be investing. A great investment idea doesn’t need hours to analyze. More often than not, it is love at first sight. 6. Think probabilistically rather than deterministically, because the future is never certain and it is really a set of branching probability streams. At the same time, avoid the risk of ruin, when making decisions, by focusing on consequences rather than just on raw probabilities in isolation. Some risks are just not worth taking, whatever the potential upside may be. 7. Never underestimate the power of incentives in any given situation. 8. When making decisions, involve both the left side of your brain (logic, analysis, and math) and the right side (intuition, creativity, and emotions). 9. Engage in visual thinking, which helps us to better understand complex information, organize our thoughts, and improve our ability to think and communicate. 10. Invert, always invert. You can avoid a lot of pain by visualizing your life after you have lost a lot of money trading or speculating using derivatives or leverage. If the visuals unnerve you, don’t do anything that could get you remotely close to reaching such a situation. 11. Vicariously learn from others throughout life. Embrace everlasting humility to succeed in this endeavor. 12. Embrace the power of long-term compounding. All the great things in life come from compound interest.

Goal displacement through diversion of effort to what gets measured. Goal displacement comes in many varieties. When performance is judged by a few measures, and the stakes are high (keeping one’s job, getting a raise, raising the stock price at the time that stock options are vested), people will focus on satisfying those measures—often at the expense of other, more important organizational goals that are not measured.1 Economists Bengt Holmström and Paul Milgrom have described it in more formal terms as a problem of misaligned incentives: workers who are rewarded for the accomplishment of measurable tasks reduce the effort devoted to other tasks.2 The result is that the metric means comes to replace the organizational ends that those means ought to serve.

Influence. How do people get support for critical initiatives? Is it more important to have the support of a patron within the senior team, or affirmation from your peers and direct reports that your idea is a good one? Meetings. Are meetings filled with dialogue on hard issues, or are they simply forums for publicly ratifying agreements that have been reached in private? Execution. When it comes time to get things done, which matters more—a deep understanding of processes or knowing the right people? Conflict. Can people talk openly about difficult issues without fear of retribution? Or do they avoid conflict—or, even worse, push it to lower levels, where it can wreak havoc? Recognition. Does the company promote stars, rewarding those who visibly and vocally drive business initiatives? Or does it encourage team players, rewarding those who lead authoritatively but quietly and collaboratively? Ends versus means. Are there any restrictions on how you achieve results? Does the organization have a well-defined, well-communicated set of values that is reinforced through positive and negative incentives?

Among his many notable findings that he presented in his follow-up study on creativity is that a creative person tends to maintain a complex personality. By complex, Csikszentmihalyi specifically meant that these creative contributors “contain contradictory extremes.” He wrote that creative people “tend to be smart, yet also naive at the same time.” Csikszentmihalyi noted what many psychologists have since confirmed: intellectual intelligence beyond a base-level competency neither correlates with high creative output nor with a fulfilled life. Perhaps people with high IQs are able to master the conventional, crystallized thinking of any domain, yet they have little incentive, Csikszentmihalyi speculated, to be curious, “to question, doubt, and improve on existing knowledge.” This is probably why the German poet Goethe wrote that ‘naiveté is the most important attribute for genius.

the Omani ruler Seyyid Said had moved his capital from Oman to Zanzibar in 1832. He brought with him South Asian traders from the Persian Gulf to run his commercial and financial affairs. He encouraged them through a variety of incentives including guarantees of religious tolerance, a minimum of five per cent duty on imports and removal of restrictions on South Asian land ownership. The earlier policy in Zanzibar of treating South Asians as foreign traders was reversed and they were granted equal privileges with Arab traders, including permission to trade