Incentives Related Quotes

In a word, learning is decontextualized. We break ideas down into tiny pieces that bear no relation to the whole. We give students a brick of information, followed by another brick, followed by another brick, until they are graduated, at which point we assume they have a house. What they have is a pile of bricks, and they don't have it for long.

School prepares people for the alienating institutionalization of life, by teaching the necessity of being taught. Once this lesson is learned, people loose their incentive to develop independently; they no longer find it attractive to relate to each other, and the surprises that life offers when it is not predetermined by institutional definition are closed.

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.

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

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

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.

Structural factors are those such as ownership and control, dependence on other major funding sources (notably, advertisers), and mutual interests and relationships between the media and those who make the news and have the power to define it and explain what it means. The propaganda model also incorporates other closely related factors such as the ability to complain about the media’s treatment of news (that is, produce “flak”), to provide “experts” to confirm the official slant on the news, and to fix the basic principles and ideologies that are taken for granted by media personnel and the elite, but are often resisted by the general population.1 In our view, the same underlying power sources that own the media and fund them as advertisers, that serve as primary definers of the news, and that produce flak and proper-thinking experts, also play a key role in fixing basic principles and the dominant ideologies. We believe that what journalists do, what they see as newsworthy, and what they take for granted as premises of their work are frequently well explained by the incentives, pressures, and constraints incorporated into such a structural analysis. These structural factors that dominate media operations are not allcontrolling and do not always produce simple and homogeneous results.

The well-known phenomenon of the modern breakdown of the family cannot be understood without recognizing the role of unsound money allowing the state to appropriate many of the essential roles that the family has played for millennia, and reducing the incentive of all members of a family to invest in long-term familial relations.

Cooperatives have lower absentee rates and less worker turnover than their conventional competitors. (For instance, the annual rate of turnover in the Mondragon cooperatives in 1974 was two percent, while in comparable capitalist firms it was 14 percent.)94 Members show relatively high individual work effort, tending to act as their own supervisors, at least to a greater degree than employees do elsewhere. Job rotation, where it happens, enhances the attractiveness of the work. And there are greater incentives to help one another than in a competitive environment.

Girls in virtual networks are subjected to hundreds of times more social comparison than girls had experienced for all of human evolution. They are exposed to more cruelty and bullying because social media platforms incentivize and facilitate relational aggression. Their openness and willingness to share emotions with other girls espouses them to depression and other disorders. The twisted incentive structures of social media reward the most extreme presentations of symptoms.

I do not see anything especially dystopian in offering some relatively unproductive people a minimum income as an incentive to leave the workforce. As long as the result is more opportunity and higher incomes for those who do want to work hard and advance their situation.

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

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

In his 1923 review of James Joyce Ulysses, T. S. Eliot focused on one of his generation's recurrent anxieties--the idea that art might be impossible in the twentieth century. The reasons that art seemed impossible are many and complex, but they were all related to the collapse of ways of knowing that had served the Western mind at least since the Renaissance and that had received canonical formulation in the seventeenth century in the science of Newton and the philosophy of Descartes. In both science and philosophy, the crisis was essentially epistemological; that is, it was related to radical uncertainty about how we know what we know about the real world. This crisis, disorienting even to specialists, was at once a cause of despair and an incentive for innovation in the arts.

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).

A nonindustrial Earth with a population of perhaps one billion people could be far more beautiful than it is now.  Tourism from space could be a major industry, and would serve as a strong incentive to enlarge existing parks, create new ones, and restore historical sights.  The tourists, coming from a nearly pollution-free environment, would be rather intolerant of Earth's dirt and noise, and that too would encourage cleaning up the remaining sources of pollutants here.  Similar forces have had a strong beneficial effect on tourist centers in Europe and the United States during the past twenty years.  The vision of an industry free, pastoral Earth, with many of its spectacular scenic areas reverting to wilderness, with bird and animal populations increasing in number, and with a relatively small, affluent human population, is far more attractive to me than the alternative of a rigidly controlled world whose people tread precariously the narrow path of a steady-state society.  If the humanization of space occurs, the vision could be made real.

A third positive result even further from the traditional tool kit of financial incentives comes from a recent randomized control trial conducted in the U.K., using the increasingly popular and low-cost method of text reminders. This intervention involved sending texts to half the parents in some school in advance of a major math test to let them know that their child had a test coming up in five days, then in three days, then in one day. The researchers call this approach “pre-informing.” The other half of parents did not receive the texts. The pre-informing texts increased student performance on the math test by the equivalent of one additional month of schooling, and students in the bottom quartile benefited most. These children gained the equivalent of two additional months of schooling, relative to the control group. Afterward, both parents and students said they wanted to stick with the program, showing that they appreciated being nudged. This program also belies the frequent claim, unsupported by any evidence, that nudges must be secret to be effective.

The most overwhelming proof that tax incentives have a relatively minor effect on individual charity is the tremendous consistency over time of giving as a percentage of income. Although the tax code has changed frequently and dramatically over the past twenty-three years, giving as a share of personal income has hovered around 1.83 percent. This measure reached as high as 1.95 percent in 1989 and as low as 1.71 percent in 1985. The narrow range has persisted even though the top marginal tax rate has fluctuated in that period from between 28 and 70 percent.

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.

Know then that the arbitrary appropriation by the government of men’s property results in the loss of all incentive to gain, when men realize that what they have accumulated will be taken away firom them. A loss of incentive will lead to a slackening in enterprise, the slackening being proportional to the extent and degree of confiscation. Thus if confiscation is widespread, covering all forms of economic activity, there will be a general slackening, owing to the feeling that no branch offers any longer any hope of gain. If however confiscation be mild, there will be only a relatively slight falling off in economic activity. Now the state of a society and the prosperity of business depend on the intensity of human efforts and the search for gain; should, therefore, men slacken in their economic activity the markets would slump and the state of society deteriorate. People would forsake that country and migrate elsewhere in search of gain, the result being a general depopulation and the desertion of cities. And this deterioration in society would be followed by a weakening of the State, for the State is as the Form whose condition follows that of its Matter, Society. . . Oppression ruins society, while the ruin of society leads to the weakening and destruction of the State.

We ought to care for those closest to us in terms of relatedness. After our immediate family, we ought to pursue our calling diligently as employees and provide just incentives (perhaps through profit-sharing) and reasonable care for our workers as employers. We should seek the wisdom of teachers and elders in society and look to them for leadership, while rejecting their folly when it is discerned. We must put our children and their education, both at home and in school, before our own entertainment, pleasure, and success. We ought not to tolerate insolence or haughtiness in them; nor ought we to punish them too severely, but should lead them as good teachers, by example and patient instruction.

For if single women are looking for government to create a "hubby state" for them, what is certainly true is that their male counterparts have a long enjoy the fruits of a related "wifey state," in which the nation and its government supported male independence in a variety of ways. Men, and especially married wealthy white men, have a long relied on government assistance. It's a government that has historically supported white men's home and business ownership through grants, loans, incentives, and tax breaks. It has allowed them to accrue wealth and offer them shortcuts and bonuses for passing it down to their children. Government established white men's right to vote and thus exert control over the government at the nation's founding and has protected their enfranchisement. It has also bolstered the economic and professional prospects of men by depressing the economic prospects of women: by failing to offer women equivalent economic and civic protections, thus helping to create conditions whereby women were forced to be dependent on those men, creating a gendered class of laborers who took low paying or unpaid jobs doing the domestic and childcare work that further enabled men to dominate public spheres. But the growth of a massive population of women who are living outside those dependent circumstances puts new pressures on the government: to remake conditions in a way that will be more hospitable to female independence, to a citizenry now made up of plenty of women living economically, professionally, sexually, and socially liberated lives.

There is no guarantee that a socialized economy will always succeed. The state-owned economies of Eastern Europe and the former Soviet Union suffered ultimately fatal distortions in their development because of the backlog of poverty and want in the societies they inherited; years of capitalist encirclement, embargo, invasion, devastating wars, and costly arms buildup; poor incentive systems, and a lack of administrative initiative and technological innovation; and a repressive political rule that allowed little critical feedback while fostering stagnation and elitism. Despite all that, the former communist states did transform impoverished countries into relatively advanced societies. Whatever their mistakes and political crimes, they achieved—in countries that were never as rich as ours—what U.S. free-market capitalism cannot and has no intention of accomplishing: adequate food, housing, and clothing for all; economic security in old age; free medical care; free education at all levels; and a guaranteed income. Today by overwhelming majorities, people in Russia and other parts of Eastern Europe say that life was better under communism than under the present freemarket system.

In a traditional society, individuals are aware that they will need children to support them in the future, and so will spend their healthy young years starting a family and investing in giving their children the best life possible. But if long-term investment in general is disincentivized, if saving is likely to be counterproductive as money depreciates, this investment becomes less profitable. Further, as politicians sell people the lie that eternal welfare and retirement benefits are possible through the magic of the monetary printing press, the investment in a family becomes less and less valuable. Over time, the incentive to start a family declines and more and more people end up leading single lives. More marriages are likely to break down as partners are less likely to put in the necessary emotional, moral, and financial investment to make them work, while marriages that do survive will likely produce fewer children. The well-known phenomenon of the modern breakdown of the family cannot be understood without recognizing the role of unsound money allowing the state to appropriate many of the essential roles that the family has played for millennia, and reducing the incentive of all members of a family to invest in long-term familial relations.

[A] central theme is why social, political, and economic institutions tend to coevolve in a manner that reinforces rather than undermines one another. The welfare state is not 'politics against markets,' as commonly assumed, but politics with markets. Although it is popular to think that markets, especially global ones, interfere with the welfare state, and vice versa, this notion is simply inconsistent with the postwar record of actual welfare state development. The United States, which has a comparatively small welfare state and flexible labor markets, has performed well in terms of jobs and growth during the past two decades; however, before then the countries with the largest welfare states and the most heavily regulated labor markets exceeded those in the United States on almost any gauge of economic competitiveness and performance. Despite the change in economic fortunes, the relationship between social protection and product market strategies continues to hold. Northern Europe and Japan still dominate high-quality markets for machine tools and consumer durables, whereas the United States dominates software, biotech, and other high-tech industries. There is every reason that firms and governments will try to preserve the institutions that give rise to these comparative advantages, and here the social protection system (broadly construed to include job security and protection through the industrial relations system) plays a key role. The reason is that social insurance shapes the incentives workers and firms have for investing in particular types of skills, and skills are critical for competitive advantage in human-capital-intensive economies. Firms do not develop competitive advantages in spite of systems of social protection, but because of it. Continuing this line of argument, the changing economic fortunes of different welfare production regimes probably has very little to do with growing competitive pressure from the international economy. To the contrary, it will be argued in Chapter 6 that the main problem for Europe is the growing reliance on services that have traditionally been closed to trade. In particular, labor-intensive, low-productivity jobs do not thrive in the context of high social protection and intensive labor-market regulation, and without international trade, countries cannot specialize in high value-added services. Lack of international trade and competition, therefore, not the growth of these, is the cause of current employment problems in high-protection countries.

Page 141: Group Polarization Patterns Political anger and demands for privileges are, of course, not limited to the less privileged. Indeed, even when demands are made in the name of less privileged racial or ethnic groups, often it is the more privileged members of such groups who make the demands and who benefit from policies designed to meet such demands. These demands may erupt suddenly in the wake of the creation (or sharp enlargement) of a newly educated class which sees its path to coveted middle-class professions blocked by competition of other groups--as in India, French Canada, or Lithuania, for example. * * * A rapid expansion of education is thus a factor in producing inter-group conflict, especially where the education is of a kind which produces diplomas rather than skills that have significant economic value in the marketplace. Education of a sort useful only for being a clerk, bureaucrat, school teacher--jobs whose numbers are relatively fixed in the short run and politically determined in the long run--tend to increase politicized inter-group strife. Yet newly emerging groups, whether in their own countries or abroad, tend to specialize precisely in such undemanding fields. Malay students, for example, have tended to specialize in Malay studies and Islamic studies, which provide them with no skills with which compete with the Chinese in the marketplace, either as businessmen, independent professionals, or technicians. Blacks and Hispanics in the United States follow a very similar pattern of specializing disproportionately in easier fields which offer less in the way of marketable skills. Such groups then have little choice but to turn to the government, not just for jobs but also for group preferences to be imposed in the market place, and for symbolic recognition in various forms. *** While economic interests are sometimes significant in explaining political decisions, they are by no means universally valid explanations. Educated elites from less advanced groups may have ample economic incentives to promote polarization and preferential treatment policies, but the real question is why the uneducated masses from such groups give them the political support without which they would be impotent. Indeed, it is often the less educated masses who unleash the mob violence from which their elite compatriots ultimately benefit--as in Malaysia, Sri Lanka, or parts of India, Africa, or the United States, where such violence has led to group preference policies in employment, educational institutions, and elsewhere. The common denominator in these highly disparate societies seems to be not only resentment of other groups' success but also fear of an inability to compete with them, combined with a painful embarrassment at being so visibly "under-represented"--or missing entirely—in prestigious occupations and institutions. To remedy this within apolitically relevant time horizon requires not simply increased opportunities but earmarked benefits directly given on a racial or ethnic basis.

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

Given the extreme illogicalness of the suburbs - the fact that only with hundreds of billions of dollars in incentives did it make sense for so many Americans to move out of cities and to the suburbs - it seems predictable that their drawbacks would manifest relatively quickly, and that those who could afford it would eventually find other ways of living. That's exactly what's happening: children raised in the suburbs have decided their lives would be better elsewhere, and if they have enough privilege, they have mostly decided to settle in city centers instead.

Natural sociability can be overridden by the development of new institutions that provide incentives for other types of behavior (for example, favoring a qualified stranger over a genetic relative), but it constitutes a form of social relationship to which humans always revert when such alternative institutions break down.

status quo bias. This research demonstrates that people do not like to change unless there is a compelling reason to do so, such as an attractive incentive. Related research shows that people exhibit strong “loss aversion,” in that they are twice as likely to seek to avoid losses as they are to acquire gains.

Some people believe labor-saving technological change is bad for the workers because it throws them out of work. This is the Luddite fallacy, one of the silliest ideas to ever come along in the long tradition of silly ideas in economics. Seeing why it's silly is a good way to illustrate further Solow's logic. The original Luddites were hosiery and lace workers in Nottingham, England, in 1811. They smashed knitting machines that embodied new labor-saving technology as a protest against unemployment (theirs), publicizing their actions in circulars mysteriously signed "King Ludd." Smashing machines was understandable protection of self-interest for the hosiery workers. They had skills specific to the old technology and knew their skills would not be worth much with the new technology. English government officials, after careful study, addressed the Luddites' concern by hanging fourteen of them in January 1813. The intellectual silliness came later, when some thinkers generalized the Luddites' plight into the Luddite fallacy: that an economy-wide technical breakthrough enabling production of the same amount of goods with fewer workers will result in an economy with - fewer workers. Somehow it never occurs to believers in Luddism that there's another alternative: produce more goods with the same number of workers. Labor-saving technology is another term for output-per-worker-increasing technology. All of the incentives of a market economy point toward increasing investment and output rather than decreasing employment; otherwise some extremely dumb factory owners are foregoing profit opportunities. With more output for the same number of workers, there is more income for each worker. Of course, there could very well be some unemployment of workers who know only the old technology - like the original Luddites - and this unemployment will be excruciating to its victims. But workers as a whole are better off with more powerful output-producing technology available to them. Luddites confuse the shift of employment from old to new technologies with an overall decline in employment. The former happens; the latter doesn't. Economies experiencing technical progress, like Germany, the United Kingdom, and the United States, do not show any long-run trend toward increasing unemployment; they do show a long-run trend toward increasing income per worker. Solow's logic had made clear that labor-saving technical advance was the only way that output per worker could keep increasing in the long run. The neo-Luddites, with unintentional irony, denigrate the only way that workers' incomes can keep increasing in the long-run: labor-saving technological progress. The Luddite fallacy is very much alive today. Just check out such a respectable document as the annual Human Development Report of the United Nations Development Program. The 1996 Human Development Report frets about "jobless growth" in many countries. The authors say "jobless growth" happens whenever the rate of employment growth is not as high as the rate of output growth, which leads to "very low incomes" for millions of workers. The 1993 Human Development Report expressed the same concern about this "problem" of jobless growth, which was especially severe in developing countries between 1960 and 1973: "GDP growth rates were fairly high, but employment growth rates were less than half this." Similarly, a study of Vietnam in 2000 lamented the slow growth of manufacturing employment relative to manufacturing output. The authors of all these reports forget that having GDP rise faster than employment is called growth of income per worker, which happens to be the only way that workers "very low incomes" can increase.

A third positive result even further from the traditional tool kit of financial incentives comes from a recent randomized control trial conducted in the U.K., using the increasingly popular and low-cost method of text reminders. This intervention involved sending texts to half the parents in some school in advance of a major math test to let them know that their child had a test coming up in five days, then in three days, then in one day. The researchers call this approach “pre-informing.” The other half of parents did not receive the texts. The pre-informing texts increased student performance on the math test by the equivalent of one additional month of schooling, and students in the bottom quartile benefited most. These children gained the equivalent of two additional months of schooling, relative to the control group. Afterward, both parents and students said they wanted to stick with the program, showing that they appreciated being nudged.

Interesting point is we discuss a lot about compensation and incentives of other people who are no way related and connected with you or business. On top of it we pass judgment. What type of behaviour is this?

Public perceptions of the prevalence of crime seem to be more strongly related to local media coverage of crime—largely a product of broadcasters’ commercial incentives—than to official crime rates

Equal Status: While the two groups might be highly unequal in society at large, they must have relatively equal status in the context in which contact between them takes place. Working alongside each other as colleagues qualifies; working together as boss and subordinate does not. Common Goals: Members of both groups need to work together in pursuit of a shared goal. Pursuing the championship as teammates counts; participating in the same tournament as members of opposing teams does not. Intergroup Cooperation: Members of both groups need to have an incentive to work together cooperatively. Ideally, they need to work together to solve a problem, with each member of the group making a clear contribution. Support from Authorities and Customs: Authority figures need to favor and encourage better intergroup understanding. If a greater mutual understanding is against the law or risks angering your boss, it is far less likely to occur.

Natural human sociability is built around two principles, kin selection and reciprocal altruism. The principle of kin selection or inclusive fitness states that human beings will act altruistically toward genetic relatives (or individuals believed to be genetic relatives) in rough proportion to their shared genes. The principle of reciprocal altruism says that human beings will tend to develop relationships of mutual benefit or mutual harm as they interact with other individuals over time. Reciprocal altruism, unlike kin selection, does not depend on genetic relatedness; it does, however, depend on repeated, direct personal interaction and the trust relationships generated out of such interactions. These forms of social cooperation are the default ways human beings interact in the absence of incentives to adhere to other, more impersonal institutions. When impersonal institutions decay, these are the forms of cooperation that always reemerge because they are natural to human beings. What I have labeled patrimonialism is political recruitment based on either of these two principles. Thus, when bureaucratic offices were filled with the kinsmen of rulers at the end of the Han Dynasty in China, when the Janissaries wanted their sons to enter the corps, or when offices were sold as heritable property in ancien regime France, a natural patrimonial principle was simply reasserting itself.

Here are four examples of Lead Magnets I use: A checklist that can be used to properly perform something I explained in a video. A template for determining, say, a business’s profit margin. An advanced guide that goes further into the details of a subject of one of my videos. A unique book that provides substantial value but is offered for free. For me, it is 11 Side Hustle Ideas to Make $500/Day from Your Phone. The appropriate opt-in incentive depends on your content. Here are other types of examples: A DIY carpenter could offer plans to make a corner table. A marketing YouTuber could offer scripts of what to say on sales phone calls. A landscaping expert might offer recommendations for which kinds of grass to use around the United States. YouTuber Nick True at Mapped Out Money, who makes video tutorials that teach the best practices for using the personal budgeting software YNAB, found that he gets the highest sign-up rates when he offers a checklist that relates to the video. His followers really like having a resource that they can use to put his advice into practice. Jess Dante of Love and London runs a YouTube channel helping viewers plan their trips to London by suggesting lesser-known restaurants and stores to visit. Her superstar opt-in incentive is a free London 101 Guide with everything a first-time visitor needs to know. It’s been downloaded more than 45,000 times. Where you make your call to action will also have an impact on your success building your email list. You can make your call to action in a variety of places or ways inside your videos. One of the best ways is to give a short, relevant tease of the bonus or resource you’re offering within the YouTube video and tell people where they can learn more. CHALLENGE Create a Lead Magnet. It’s time to create your first Lead Magnet using the process we’ve just outlined above. You can use your piece of content from the previous chapter as a base or start something new. Don’t spend more than two hours on the first iteration. If you want to turn it into a big thing later on, great. But start SMALL. Go to MillionDollarWeekend.com to get Lead Magnet templates! (See what I did there?)

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.

The situation was similar in the Soviet Union, with industry playing the role of sugar in the Caribbean. Industrial growth in the Soviet Union was further facilitated because its technology was so backward relative to what was available in Europe and the United States, so large gains could be reaped by reallocating resources to the industrial sector, even if all this was done inefficiently and by force. Before 1928 most Russians lived in the countryside. The technology used by peasants was primitive, and there were few incentives to be productive. Indeed, the last vestiges of Russian feudalism were eradicated only shortly before the First World War. There was thus huge unrealized economic potential from reallocating this labor from agriculture to industry. Stalinist industrialization was one brutal way of unlocking this potential. By fiat, Stalin moved these very poorly used resources into industry, where they could be employed more productively, even if industry itself was very inefficiently organized relative to what could have been achieved. In fact, between 1928 and 1960 national income grew at 6 percent a year, probably the most rapid spurt of economic growth in history up until then. This quick economic growth was not created by technological change, but by reallocating labor and by capital accumulation through the creation of new tools and factories. 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.

Economic growth Stalin style was simple: develop industry by government command and obtain the necessary resources for this by taxing agriculture at very high rates. The communist state did not have an effective tax system, so instead Stalin “collectivized” agriculture. This process entailed the abolition of private property rights to land and the herding of all people in the countryside into giant collective farms run by the Communist Party. This made it much easier for Stalin to grab agricultural output and use it to feed all the people who were building and manning the new factories. The consequences of this for the rural folk were calamitous. The collective farms completely lacked incentives for people to work hard, so production fell sharply. So much of what was produced was extracted that there was not enough to eat. People began to starve to death. In the end, probably six million people died of famine, while hundreds of thousands of others were murdered or banished to Siberia during the forcible collectivization. Neither the newly created industry nor the collectivized farms were economically efficient in the sense that they made the best use of what resources the Soviet Union possessed. It sounds like a recipe for economic disaster and stagnation, if not outright collapse. But the Soviet Union grew rapidly. The reason for this is not difficult to understand. Allowing people to make their own decisions via markets is the best way for a society to efficiently use its resources. When the state or a narrow elite controls all these resources instead, neither the right incentives will be created nor will there be an efficient allocation of the skills and talents of people. But in some instances the productivity of labor and capital may be so much higher in one sector or activity, such as heavy industry in the Soviet Union, that even a top-down process under extractive institutions that allocates resources toward that sector can generate growth. As we saw in chapter 3, extractive institutions in Caribbean islands such as Barbados, Cuba, Haiti, and Jamaica could generate relatively high levels of incomes because they allocated resources to the production of sugar, a commodity coveted worldwide. The production of sugar based on gangs of slaves was certainly not “efficient,” and there was no technological change or creative destruction in these societies, but this did not prevent them from achieving some amount of growth under extractive institutions.

Why do some of us work hard and some of us sit on our asses all day? Dan Pink, a New York Times and Wallstreet Journal bestselling author, argues that there are three main motivators―and they’re not what you think. Money doesn’t make the list. In fact, money can be a demotivator. It turns out that once you get beyond work that only requires rudimentary cognitive skill, higher monetary rewards are inversely related to performance. Instead, emotion becomes the driving force. More specifically, Pink defines the three main motivators as autonomy, mastery, and purpose.2 This has been backed up by numerous scientific studies. Here’s one: “Psychologists Teresa Amabile and Steven Kramer interviewed over 600 managers and found a shocking result. 95 percent of managers misunderstood what motivates employees. They thought what motivates employees was making money, getting raises and bonuses. In fact, after analyzing over 12,000 employee diary entries, they discovered that the number one work motivator was emotion, not financial incentive: It’s the feeling of making progress every day toward a meaningful goal.”3 Consider what this means. If you aren’t hardworking, maybe it’s not because you’re lazy, but because you hate what you’re working on! I believe there’s a hustler in all of us. It isn’t about your genetic makeup. It’s about your environment and the emotional state in which you’re operating. If you’re having trouble getting up in the morning and going to work, there’s a good chance you’d be happier hustling. You just need to find the right thing to be hustling toward, and the right people to support you. If you had all the free time in the world, what would you want to master? What would give you a sense of purpose? What would make your heart beat a little louder? The hustle is somewhere inside you. You just have to find it and set it free.

Lack of creative destruction and innovation is not the only reason why there are severe limits to growth under extractive institutions. The history of the Maya city-states illustrates a more ominous and, alas, more common end, again implied by the internal logic of extractive institutions. As these institutions create significant gains for the elite, there will be strong incentives for others to fight to replace the current elite. Infighting and instability are thus inherent features of extractive institutions, and they not only create further inefficiencies but also often reverse any political centralization, sometimes even leading to the total breakdown of law and order and descent into chaos, as the Maya city-states experienced following their relative success during their Classical Era. Though

Bill Gates, like other legendary figures in the information technology industry (such as Paul Allen, Steve Ballmer, Steve Jobs, Larry Page, Sergey Brin, and Jeff Bezos), had immense talent and ambition. But he ultimately responded to incentives. The schooling system in the United States enabled Gates and others like him to acquire a unique set of skills to complement their talents. The economic institutions in the United States enabled these men to start companies with ease, without facing insurmountable barriers. Those institutions also made the financing of their projects feasible. The U.S. labor markets enabled them to hire qualified personnel, and the relatively competitive market environment enabled them to expand their companies and market their products. These entrepreneurs were confident from the beginning that their dream projects could be implemented: they trusted the institutions and the rule of law that these generated and they did not worry about the security of their property rights. Finally, the political institutions ensured stability and continuity. For one thing, they made sure that there was no risk of a dictator taking power and changing the rules of the game, expropriating their wealth, imprisoning them, or threatening their lives and livelihoods. They also made sure that no particular interest in society could warp the government in an economically disastrous direction, because political power was both limited and distributed sufficiently broadly that a set of economic institutions that created the incentives for prosperity could emerge. This

Any policy that gives people things they haven’t earned is seen as immoral, because it lessens the incentive to be self-disciplined. From this perspective, affirmative action looks immoral to conservatives, on the grounds that it gives preferential treatment to women and minorities. It is a relatively direct consequence of the Strict Father model. The

The reasons why industrial-scale CHP has not been used more widely in the United States are all related to regulatory and institutional hurdles. It can be difficult to make the necessary coordination arrangements with a large building that will accept and use a generator’s waste heat. It also requires navigating many siting, land use, and other rules to put generators into or near heat users. Arrangements with utilities are also a frequent issue. Because cogenerators displace utility sales, utilities don’t have an economic incentive to help them get established—yet utilities have to connect up and monitor the cogenerator and provide backup service when the cogenerator trips off (some cogenerators are “off the grid,” in which case there is no backup, but most are not).

Alexis Tsipras, the Syriza leader, has in recent weeks abandoned his pledge to “tear up” the country’s bailout agreement with international creditors and is emphasising more moderate steps to address Greece’s debt load as well as his deep commitment to the euro. Krishna Guha, of Evercore ISI, warned that — at a minimum — investors now faced “a four-week period of elevated uncertainty in which eurozone risk assets will struggle to perform”. Yet Mr Guha added: “We believe that Tsipras will prove more pragmatic than past Syriza rhetoric suggests. He has opened back channels to Berlin, Paris and Frankfurt, and has every incentive to try to negotiate relatively cosmetic changes to Greece’s programme and ride the early-stage Greek recovery rather than derail it.” Nick Wall, a portfolio manager at Invesco, also noted Mr Tsipras’ recent attempt to tack to the political centre. “They are going to need private sector investors, particularly if they are going to start running deficits again.

The industrial world of pipelines relies heavily on push. Consumers are accessed through specific marketing and communication channels that the business owns or pays for. In a world of scarcity, options were limited, and getting heard often sufficed to get marketers and their messages in front of consumers. In this environment, the traditional advertising and public relations industries focused almost solely on awareness creation—the classic technique for “pushing” a product or service into the consciousness of a potential customer. This model of marketing breaks down in the networked world, where access to marketing and communication channels is democratized—as illustrated, for example, by the viral global popularity of YouTube videos such as PSY’s “Gangnam Style” and Rebecca Black’s “Friday.” In this world of abundance—where both products and the messages about them are virtually unlimited—people are more distracted, as an endless array of competing options is only a click or a swipe away. Thus, creating awareness alone doesn’t drive adoption and usage, and pushing goods and services toward customers is no longer the key to success. Instead, those goods and services must be designed to be so attractive that they naturally pull customers into their orbit. Furthermore, for a platform business, user commitment and active usage, not sign-ups or acquisitions, are the true indicators of customer adoption. That’s why platforms must attract users by structuring incentives for participation—preferably incentives that are organically connected to the interactions made possible by the platform. Traditionally, the marketing function was divorced from the product. In network businesses, marketing needs to be baked into the platform.

Turkey’s deteriorating relationship with Russia after two of its F-16s shot down a Russian SU-24 fighter-bomber over Syria on November 24, 2015, gave Erdogan a new incentive to improve relations with Israel. Russia supplies more than half of Turkey’s natural gas, and Vladimir Putin has shown that he’s willing to use Russia’s energy resources as a geopolitical weapon. Israel, meanwhile, is developing a potentially huge reserve of natural gas, the appropriately named Leviathan field, in the eastern Mediterranean.

We pay very low cash compensation relative to most companies,” says Bezos. “We also have no incentive compensation of any kind. And the reason we don’t is because it is detrimental to teamwork.

It turns out that there was good reason to be skeptical. Thanks in large part to increased transparency, the financial services world is now unhealthily tied to an annual compensation cycle. The desire to be paid the most each and every year has created perverse incentives directly impacting almost every facet of the banking and investment world. As the focus on and opportunity for outsized compensation in the financial industry has shifted from investment banking to the investing world, the short-term compensation arms race has moved to the realms of private equity, hedge funds, and managers of public market securities. Given investment managers’ desire to boost their annual—and, in some cases, quarterly—compensation, they’re motivated to pursue strategies that maximize returns on an annual basis, rather than allowing for longer hold periods. As such, these annual compensation structures often lead to shorter-than-ideal investment horizons and lower relative returns, all at the expense of investors—and, arguably, at the expense of the long-term compensation of the investment managers themselves. This was not always the way things were done. Of course it happened, but much less when the investment strategy wasn’t so laser-focused on an annual bonus cycle.

The man who does not feel the slightest remorse when poisoning his customers with noxious drugs covered with pompous labels, thinks he is in honour bound to keep his engagements. But if this relative morality has developed under present conditions, when enrichment is the only incentive and the only aim, can we doubt its rapid progress when appropriation of the fruits of others' labour will no longer be the basis of society?

A new awareness of the integral role that social networks play in long-distance migration goes beyond traditional ‘rational-choice and decision-making models’ drawn from classical economics that content themselves with explaining migration as the outcome of a ‘cost-benefit analysis of the most favorable destination.’ According to recent theory, something more than the push and pull of differential labor markets, hunger, or the search for religious freedom sends people into long-distance emigration. Voluntary migrations do not depend merely on autonomous individuals weighing the costs and benefits of uprooting themselves. Rather, social networks and relationships bind uprooted people on to another like the links in a chain. ‘Chain migration’ is sustained from within, and indeed ‘can become self-perpetuating,’ as ‘each act of migration itself creates the social structure needed to sustain’ further migration. News of another’s good fortune in a distance place, information about unforeseen opportunities, invitations to follow in another’s migratory footsteps, or a familial obligation to do so—the long reach of social relations such as these are the incentive that draws people into exile in other lands and accounts for the enormous scale of some systems of international migration.

Raising from Series A/B firms for a seed Bringing a Series A/B firm in for a seed round is risky business. They’ll want to talk to you to get an early look and learn about what you’re up to. But don’t get too excited! In fact, I’d recommend avoiding those conversations entirely. Whatever capital they commit will be trivial relative to their total balance sheet. No Series A/B firm is serious unless they lead your A or B, and, if for some reason they decide not to do so, you’re screwed because that’s a red flag for other investors. This is called “signaling risk.” Basically, by investing in your seed, they intend to block out others from your next round. It’s a win-win for them because they either lead your next round from a privileged position or, they pass and you’re the one who’s screwed as a founder. So, your incentives are completely misaligned! You may have heard success stories, but that’s a sampling bias — you’ll rarely hear about the companies that do not get the follow-on term sheet. Note: A fund investing in your company at the seed stage is completely irrelevant to their willingness to write a check to lead your Series A or B. The only thing that determines their willingness to invest is your traction and momentum. Letting them in makes them no more willing to invest, and anyone who tries to convince you otherwise is deceiving you. There might be relationship benefits, but you can build on the relationship without letting them on your cap table!

At regular intervals in the past we have witnessed debates about the use of mathematics in economics. The critics of mathematics have focused on two main arguments. First, they have pointed out that mathematical models must by necessity build on so many conceptual simplifications that they are unable to capture the complexity of human relationships and the structure of social and economic life. Second, they have maintained that the increasing standard of theoretical formalization has led to unfortunate consequences for economists’ choice of topics for their research. Those who strive to achieve status and prestige among their colleagues will have an incentive to choose research problems that are easy to formalize rather than being related to important problems in the real world.

managers don’t seem to be aware of this. In a related study, Amabile asked 669 managers to rank five different factors affecting employee morale: support for making progress, recognition for good work, monetary incentives, interpersonal support, and clear goals. Only 5 percent ranked support for making progress first, and most ranked it dead last.

The “Chinese question” found its answer at the national level, in the debate over a California-led plan for Chinese exclusion. In reconstructing the United States, California was emerging as the regional swing vote, just as the state’s enfranchised settlers became single-issue voters. The transcontinental railroad solidified the state’s membership in the Union, which was far from a given considering how often the territory had changed hands in the previous few decades as well as its continual political instability and foreign interference in Mexico, not to mention the temporary sundering of the United States itself. California’s Unionist majority helped repair that split, cutting off the Confederacy’s western tendency. But Unionist didn’t necessarily mean faithfully devoted to principles of abolition democracy and the spirit of the slave revolution. The race-based exclusion of Chinese from the country flew in the face of Reconstruction and the black-led attempt to create a pluralist, racially equal nation. But that seeming contradiction was no contradiction at all for California’s white Jacksonians, because they maintained a consistent position in favor of free white labor and free white labor only. As for the regionally aligned party duopoly, California’s vote swung against the South during the war, but it could swing back. Federal civil rights legislation meant to force the ex-Confederate states to integrate also applied to settler California’s relations with the Chinese, which left the southern and western delegations looking for a solution to their linked nonwhite labor problems. If former slaves and their children were able to escape not just their commodity status but also their working role in the regional economy, southern planters threatened to bring in Chinese laborers to replace them, just as planters had in the West Indies. That would blow the exclusion plan out of the water, which gave California an incentive to compromise with the South. These two racist blocs came to an agreement that permanently set the direction of the modern American project: They agreed to cede the South to the Confederate redeemers and exclude the Chinese.

The triangle of fraud . . .” “What’s that?” He started, as if I’d woken him. “Oh—incentive, opportunity, and rationalization.” He stuck out three fingers and began counting them off. “The first leg, incentive, is pressure to commit the crime. A person is looking for a way to solve their financial issues due to an inability to pay their bills, drug and/or alcohol addiction, or simply status, wanting to have a bigger house or drive a fancier car.” He counted off another finger. “The second leg is perceived opportunity, where the individual identifies ways to commit fraud with the lowest amount of risk, like lying about the number of hours worked, inflated sales or productivity to garner higher pay, creating false invoices for products never purchased and pocketing the money, or selling proprietary company information to competitors.” He counted off the last finger. “The third leg of the triangle, and this is an important one, is where individuals persuade themselves into believing that they’re doing the right thing. They convince themselves that they’re just borrowing the money or feel entitled to it through perceived low pay, uncompensated hours, lack of respect, or trying to provide for their family.” “Okay, but what pushes two men whom we assume are relatively upright individuals into going so far as to kill someone?” “A lot of money.” I laughed.

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

While there has indeed been an increase in coercive state practices over the past several decades relative to much of the twentieth century, when viewed as part of the long history of capitalism, the carceral excesses of neoliberalism have much in common with the dispossession of the peasantry from the land in England and, globally, the ‘Bloody legislation’ used to terrorize those who violated newly established norms of private property, the criminalization of women who contravened historically specific norms of chastity and femininity, and the violent disciplining of different segments of the population deemed insufficiently ‘rational’ to respond to the market-based incentives that are so often assumed to be the key disciplinary mechanisms underpinning capitalist society

Over the past thirty years the orthodox view that the maximisation of shareholder value would lead to the strongest economic performance has come to dominate business theory and practice, in the US and UK in particular.42 But for most of capitalism’s history, and in many other countries, firms have not been organised primarily as vehicles for the short-term profit maximisation of footloose shareholders and the remuneration of their senior executives. Companies in Germany, Scandinavia and Japan, for example, are structured both in company law and corporate culture as institutions accountable to a wider set of stakeholders, including their employees, with long-term production and profitability their primary mission. They are equally capitalist, but their behaviour is different. Firms with this kind of model typically invest more in innovation than their counterparts focused on short-term shareholder value maximisation; their executives are paid smaller multiples of their average employees’ salaries; they tend to retain for investment a greater share of earnings relative to the payment of dividends; and their shares are held on average for longer by their owners. And the evidence suggests that while their short-term profitability may (in some cases) be lower, over the long term they tend to generate stronger growth.43 For public policy, this makes attention to corporate ownership, governance and managerial incentive structures a crucial field for the improvement of economic performance. In short, markets are not idealised abstractions, but concrete and differentiated outcomes arising from different circumstances.

Local and state tax incentives are much less visible because they do not constitute a direct charge to local budgets and are often paid for by future generations through municipal debt. This relative invisibility makes it much less probable that the local political process can be counted on to prevent bad incentive deals.

This is why your opt-in incentive has to act as a primer for a related product or service that you have to offer.

Spoils System In politics and government, a spoils system (also known as a patronage system) is a practice in which a political party, after winning an election, gives government civil service jobs to its supporters, friends (cronyism), and relatives (nepotism) as a reward for working toward victory, and as an incentive to keep working for the party—as opposed to a merit system, where offices are awarded on the basis of some measure of merit, independent of political activity.

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:

As we enter the new millennium, perhaps it is worth reflecting on the fact that this could be a turning-point in the evolution of civilization, for our technologies have evolved to the point where there is no longer a need for an underclass of slaves, serfs, and wage-slaves. This division of society into a hierarchical order of upper and lower social classes did not exist until civilization was invented. The low level of technological development made this necessary to allow a class of specialists (mathematicians, inventors, poets, scientists, philosophers) the leisure for the creative work that is a prerequisite for the creation, maintenance, and further development of civilization. But slaves and underclasses are no longer needed in order to free up enough leisure time and energy for the elite to do work that is creative rather than alienated. Therefore we no longer need social classes and their concomitant, relative poverty and economic inequality, and their concomitant, violence. If we permit ourselves — and by ourselves I mean all of us, all human beings — to enjoy the fruits of the creative labor that has preceded us, we could create a society that would no longer need violence as the only means of rescuing self-esteem. Implicit in this argument is the idea that money is neither a necessary incentive for creative work, nor the main incentive. The play that infants and children engage in is clearly an inborn, inherent trait of human beings. Play has been called the work that children do, the mans by which they acquire the skills and knowledge that enable them to develop and mature into adults. Play has also been described, when applied to adults, as simply another name for work that one enjoys. We could use the word to refer to unalienated labor, creative work, work that is an end in itself. I believe that the wish and the need to engage in this creative work/play is only conditioned out of human beings by the alienating conditions to which the underclass and even the middle class in our society are subjected.

the Times reported that police departments had an extraordinary incentive to use their new equipment for drug enforcement: the extra federal funding the local police departments received was tied to antidrug policing. The size of the disbursements was linked to the number of city or county drug arrests. Each arrest, in theory, would net a given city or county about $153 in state and federal funding. Non-drug-related policing brought no federal dollars, even for violent crime.

Once superintelligent AI has settled another solar system or galaxy, bringing humans there is easy — if humans have succeeded in programming the AI with this goal. All the necessary information about humans can be transmitted at the speed of light, after which the AI can assemble quarks and electrons into the desired humans. This could be done either in a low-tech way by simply transmitting the 2 gigabytes of information needed to specify a person’s DNA and then incubating a baby to be raised by the AI, or the AI could assemble quarks and electrons into full-grown people who would have all the memories scanned from their originals back on Earth. This means that if there’s an intelligence explosion, the key question isn’t if intergalactic settlement is possible, but simply how fast it can proceed. Since all the ideas we've explored above come from humans, they should be viewed as merely lower limits on how fast life can expand; ambitious superintelligent life can probably do a lot better, and it will have a strong incentive to push the limits, since in the race against time and dark energy, every 1% increase in average settlement speed translates into 3% more galaxies colonized. For example, if it takes 20 years to travel 10 light-years to the next star system with a laser-sail system, and then another 10 years to settle it and build new lasers and seed probes there, the settled region will be a sphere growing in all directions at a third of the speed of light on average. In a beautiful and thorough analysis of cosmically expanding civilizations in 2014, the American physicist Jay Olson considered a high-tech alternative to the island-hopping approach, involving two separate types of probes: seed probes and expanders. The seed probes would slow down, land and seed their destination with life. The expanders, on the other hand, would never stop: they'd scoop up matter in flight, perhaps using some improved variant of the ramjet technology, and use this matter both as fuel and as raw material out of which they'd build expanders and copies of themselves. This self-reproducing fleet of expanders would keep gently accelerating to always maintain a constant speed (say half the speed of light) relative to nearby galaxies, and reproduce often enough that the fleet formed an expanding spherical shell with a constant number of expanders per shell area. Last but not least, there’s the sneaky Hail Mary approach to expanding even faster than any of the above methods will permit: using Hans Moravec’s “cosmic spam” scam from chapter 4. By broadcasting a message that tricks naive freshly evolved civilizations into building a superintelligent machine that hijacks them, a civilization can expand essentially at the speed of light, the speed at which their seductive siren song spreads through the cosmos. Since this may be the only way for advanced civilizations to reach most of the galaxies within their future light cone and they have little incentive not to try it, we should be highly suspicious of any transmissions from extraterrestrials! In Carl Sagan’s book Contact, we earthlings used blueprints from aliens to build a machine we didn’t understand — I don’t recommend doing this ... In summary, most scientists and sci-fi authors considering cosmic settlement have in my opinion been overly pessimistic in ignoring the possibility of superintelligence: by limiting attention to human travelers, they've overestimated the difficulty of intergalactic travel, and by limiting attention to technology invented by humans, they've overestimated the time needed to approach the physical limits of what's possible.

Bill Gates, like other legendary figures in the information technology industry (such as Paul Allen, Steve Ballmer, Steve Jobs, Larry Page, Sergey Brin, and Jeff Bezos), had immense talent and ambition. But he ultimately responded to incentives. The schooling system in the United States enabled Gates and others like him to acquire a unique set of skills to complement their talents. The economic institutions in the United States enabled these men to start companies with ease, without facing insurmountable barriers. Those institutions also made the financing of their projects feasible. The U.S. labor markets enabled them to hire qualified personnel, and the relatively competitive market environment enabled them to expand their companies and market their products. These entrepreneurs were confident from the beginning that their dream projects could be implemented: they trusted the institutions and the rule of law that these generated and they did not worry about the security of their property rights. Finally, the political institutions ensured stability and continuity. For one thing, they made sure that there was no risk of a dictator taking power and changing the rules of the game, expropriating their wealth, imprisoning them, or threatening their lives and livelihoods. They also made sure that no particular interest in society could warp the government in an economically disastrous direction, because political power was both limited and distributed sufficiently broadly that a set of economic institutions that created the incentives for prosperity could

The (nuclear proliferation) optimists emphasized the constraints on further proliferation and anticipate a relatively benign proliferation future, due in large part to the success of initiatives to materially strengthen the nonproliferation regime, including the development of far-reaching norms and processes. Proliferation pessimists, on the other hand, are convinced that there are powerful incentives to acquire nuclear weapons, for purposes of political prestige, regional security, and getting more "bang from the buck" relative to the economics of building and sustaining large conventional forces.

acts of violence may be easier to explain through constructs like relative deprivation in aid programming, perceived injustice among ethnic groups or business networks, local and tribal rivalries, perverse economic incentives, and traditional modes of warfare (none of which are specific to counterinsurgency theory, or even to theories of conflict at all) rather than through a counterinsurgency lens.

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.

Socialism’s main defects are the inability of political decision-makers to make rational decisions without the information provided by prices generated by marketplace transactions; the misalignment of incentives and resources; and the subjugation of economic necessities to political mandates with no basis in material economic reality. It is the last of these, above all, that makes socialism dangerous. As Mises’s colleague F. A. Hayek argued in The Road to Serfdom, central planners frustrated by their inability to mold the economic world to their will inevitably are tempted to run roughshod over the rights and interests of the individuals they purport to serve. Sometimes this takes the relatively innocuous form of high-handed officials in the Canadian public-health service denying a procedure or timely access to care; sometimes it takes one of the diverse forms explored with such horrific vigor by Kim Jong Il.

Theories of generational difference make sense if they are expressed as theories of environmental difference rather than of psychological difference. People, especially young people, will respond to incentives because they have much to gain and little to lose from experimentation. To understand why people are spending so much time and energy exploring new forms of connection, you have to overcome the fundamental attribution error and extend to other people the set of explanations that you use to describe your own behavior: you respond to new opportunities, and so does everybody else, and these changes feed on one another, amplifying some kinds of behavior and damping others. People in my generation and older often tut-tut about young people’s disclosing so much of their lives on social networks like Facebook, contrasting that behavior with our own relative virtue in that regard: “You exhibitionists! We didn’t behave like that when we were your age!” This comparison conveniently ignores the fact that we didn’t behave that way because no one offered us the opportunity (and from what I remember of my twenties, I think we would have happily behaved that way if we’d had the chance). The generational explanations of Napster’s success fall apart because of the fundamental attribution error. The recording industry made that error when it became convinced that young people were willing to share because their generation was morally inferior (a complaint with obvious conceptual appeal to the elders). This thesis never made sense. If young people had become generally lawless, we’d expect to see a rise not just in sharing music but also in shoplifting and other forms of theft.

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

If (as is generally accepted) over 75% of a typical software project’s life-cycle costs will be in maintenance and debugging and extensions, then the common price policy of charging a high fixed purchase price and relatively low or zero support fees is bound to lead to results that serve all parties poorly. Consumers lose because, even though software is a service industry, the incentives in the factory model all work against a vendor’s offering competent service. If the vendor’s money comes from selling bits, most effort will go into making bits and shoving them out the door; the help desk, not a profit center, will become a dumping ground for the least effective employees and get only enough resources to avoid actively alienating a critical number of customers.

Solution #1. ELIMINATE PAYOFFS IN CLINICS TO PROMOTE VACCINATIONS. It should be illegal for doctors to accept bonuses or other incentives from insurance or pharmaceutical companies for vaccinating patients. This practice is clearly a conflict of interest. When you take your child to a doctor, you want them to focus on your child and their health, and not on a yearend bonus some other company is paying to push vaccines. These bonuses/kickbacks provide a monetary incentive to the doctor and their office not related to the patient’s health, which is clearly a conflict of interest, and should be illegal. Without this bonus/kickback in their minds, perhaps the doctors can get back in the business of simply taking care of their patients, answering their questions, and providing them with better overall healthcare. If the pediatric office has no money dangling over them in the form of bonuses/kickbacks, then there should be no incentive to bar entrance to any family who wants to receive healthcare, unless the office is so full that they cannot accommodate new patients. This taking away of the bonus/kickback money will remove prejudice and bias against those who do not want to follow the recommended vaccine schedule, or who question the safety of the vaccines. And thereby, all patients will receive equal healthcare service under the law without bias. After all, isn’t this, shouldn’t this be the goal?