Work Incentive Quotes

All things considered, I'd rather have monkeys," Kishan shouted. I shivered. "Tell you what. We'll rent King Kong and The Birds. Then you can decide." He yelled as he ran from a swooping bird, "Are you asking me on a date? Because if you are, it will definitely give me more incentive to come out of this alive." "Whatever works" "You're on.

Should happiness and success be hidden, in view of the misery and poverty around. Would it be a sign of selfishness and un-intellectual behavior, if we admit to a pursuit of happiness? Could it, on the contrary, not work out as a motivation and an incentive? When giving voice to our happiness, could it not be perceived as a positive challenge? Could happiness not be contagious and become a salutary infectious syndrome? A beneficial infection. ( "Happy days are back again" )

Economic institutions shape economic incentives: the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. It is the political process that determines what economic institutions people live under, and it is the political institutions that determine how this process works.

To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person’s mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance.

A businessman who expects his output to be stolen, expropriated, or entirely taxed away will have little incentive to work, let alone any incentive to undertake investments and innovations.

Most of us have no sympathy with the rich idler who spends his life in pleasure without ever doing any work. But even he fulfills a function in the life of the social organism. He sets an example of luxury that awakens in the multitude a consciousness of new needs and gives industry the incentive to fulfill them.

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

It was only after two years' work that it occurred to me that I was a writer. I had no particular expectation that the novel would ever be published, because it was sort of a mess. It was only when I found myself writing things I didn't realise I knew that I said, 'I'm a writer now.' The novel had become an incentive to deeper thinking. That's really what writing is—an intense form of thought.

The best incentive for an artist are the harshest criticism

The strategy for the discoverers and entrepreneurs is to rely less on top-down planning and focus on maximum tinkering and recognizing opportunities when they present themselves. So I disagree with the followers of Marx and those of Adam Smith: the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or “incentives” for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can.

Copyright law has got to give up its obsession with 'the copy.' The law should not regulate 'copies' or 'modern reproductions' on their own. It should instead regulate uses--like public distributions of copies of copyrighted work--that connect directly to the economic incentive copyright law was intended to foster.

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

Pay for the person, not the job. Look at what people in comparable jobs with comparable experience and credentials make, add some small premium over that, and build in bonuses or other incentives so they will be motivated to knock the cover off the ball. Never pay based on the job title alone.

A culture of unaccountability is a culture without incentive, and a culture without incentive is the death of critical and creative thinking.

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

When kids made a decision for themselves they have a vested interest in showing they were right. Lee wanted to prove to me that he had made the right choice so he worked hard and did well. If we'd forced him to go to college somewhere else all the incentives would've been different. Then he would have had a motive to prove that we were wrong.

This was my wake-up call. I opened my eyes to the depressing fact that there are other forces at work in medicine besides science. The U.S. health care system runs on a fee-for-service model in which doctors get paid for the pills and procedures they prescribe, rewarding quantity over quality. We don’t get reimbursed for time spent counseling our patients about the benefits of healthy eating. If doctors were instead paid for performance, there would be a financial incentive to treat the lifestyle causes of disease. Until the model of reimbursement changes, I don’t expect great changes in medical care or medical education.5

The more government takes in taxes, the less incentive people have to work. What coal miner or assembly-line worker jumps at the offer of overtime when he knows Uncle Sam is going to take sixty percent or more of his extra pay? . . . Any system that penalizes success and accomplishment is wrong. Any system that discourages work, discourages productivity, discourages economic progress, is wrong. If, on the other hand, you reduce tax rates and allow people to spend or save more of what they earn, they’ll be more industrious; they’ll have more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress. The result: more prosperity for all—and more revenue for government.4

Due to my self-employment, I had to report my income every few months. Earning $50 extra could make my co-pay at day care go up by the same amount. Sometimes it meant losing my childcare grant altogether. There was no incentive or opportunity to save money. The system kept me locked down, scraping the bottom of the barrel, without a plan to climb out of it.

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

So I disagree with the followers of Marx and and those of Adam Smith: the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or "incentives" for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can.

Do you want to influence the behaviour of people or organisations? You could always preach about values and visions, or you could appeal to reason. But in nearly every case, incentives work better. These need not be monetary; anything is useable, from good grades to Nobel Prizes to special treatment in the afterlife.

A slave lacks incentives; for him it is better to work slowly and badly, since his effort benefits only the master, but free people work hard to save and get ahead,, that is their incentive.

The world is not sliding, but galloping into a new transnational dystopia. This development has not been properly recognized outside of national security circles. It has been hidden by secrecy, complexity and scale. The internet, our greatest tool of emancipation, has been transformed into the most dangerous facilitator of totalitarianism we have ever seen. The internet is a threat to human civilization. These transformations have come about silently, because those who know what is going on work in the global surveillance industry and have no incentives to speak out. Left to its own trajectory, within a few years, global civilization will be a postmodern surveillance dystopia, from which escape for all but the most skilled individuals will be impossible. In fact, we may already be there. While many writers have considered what the internet means for global civilization, they are wrong. They are wrong because they do not have the sense of perspective that direct experience brings. They are wrong because they have never met the enemy.

When I asked the mayor if flood insurance rates had gone up after Sandy, he said, “Not really.” This is how disaster relief works in America. There are lots of incentives to rebuild but few incentives to rebuild differently, much less to rethink the long-term future of cities and towns along the coast.

But clearly, the lesson is that incentives can be a dangerous weapon. A critic of this research might say that the problem is not incentives, but dumb incentives. No doubt, some incentives are dumber than others. But no incentives can ever be smart enough to substitute for people who do the right thing because it’s the right thing.

Sometimes I think my ability to concentrate is being nibbled away by the internet; other times I think it's being gulped down in huge, Jaws-shaped chunks. In those quaint days before the internet, once you made it to your desk there wasn't much to distract you. You could sit there working or you could just sit there. Now you sit down and there's a universe of possibilities – many of them obscurely relevant to the work you should be getting on with – to tempt you. To think that I can be sitting here, trying to write something about Ingmar Bergman and, a moment later, on the merest whim, can be watching a clip from a Swedish documentary about Don Cherry – that is a miracle (albeit one with a very potent side-effect, namely that it's unlikely I'll ever have the patience to sit through an entire Bergman film again). Then there's the outsourcing of memory. From the age of 16, I got into the habit of memorising passages of poetry and compiling detailed indexes in the backs of books of prose. So if there was a passage I couldn't remember, I would spend hours going through my books, seeking it out. Now, in what TS Eliot, with great prescience, called "this twittering world", I just google the key phrase of the half-remembered quote. Which is great, but it's drained some of the purpose from my life. Exactly the same thing has happened now that it's possible to get hold of out-of-print books instantly on the web. That's great too. But one of the side incentives to travel was the hope that, in a bookstore in Oregon, I might finally track down a book I'd been wanting for years. All of this searching and tracking down was immensely time-consuming – but only in the way that being alive is time-consuming.

If I were the Devil . . . I mean, if I were the Prince of Darkness, I would of course, want to engulf the whole earth in darkness. I would have a third of its real estate and four-fifths of its population, but I would not be happy until I had seized the ripest apple on the tree, so I should set about however necessary to take over the United States. I would begin with a campaign of whispers. With the wisdom of a serpent, I would whisper to you as I whispered to Eve: “Do as you please.” “Do as you please.” To the young, I would whisper, “The Bible is a myth.” I would convince them that man created God instead of the other way around. I would confide that what is bad is good, and what is good is “square”. In the ears of the young marrieds, I would whisper that work is debasing, that cocktail parties are good for you. I would caution them not to be extreme in religion, in patriotism, in moral conduct. And the old, I would teach to pray. I would teach them to say after me: “Our Father, which art in Washington” . . . If I were the devil, I’d educate authors in how to make lurid literature exciting so that anything else would appear dull an uninteresting. I’d threaten T.V. with dirtier movies and vice versa. And then, if I were the devil, I’d get organized. I’d infiltrate unions and urge more loafing and less work, because idle hands usually work for me. I’d peddle narcotics to whom I could. I’d sell alcohol to ladies and gentlemen of distinction. And I’d tranquilize the rest with pills. If I were the devil, I would encourage schools to refine yound intellects but neglect to discipline emotions . . . let those run wild. I would designate an athiest to front for me before the highest courts in the land and I would get preachers to say “she’s right.” With flattery and promises of power, I could get the courts to rule what I construe as against God and in favor of pornography, and thus, I would evict God from the courthouse, and then from the school house, and then from the houses of Congress and then, in His own churches I would substitute psychology for religion, and I would deify science because that way men would become smart enough to create super weapons but not wise enough to control them. If I were Satan, I’d make the symbol of Easter an egg, and the symbol of Christmas, a bottle. If I were the devil, I would take from those who have and I would give to those who wanted, until I had killed the incentive of the ambitious. And then, my police state would force everybody back to work. Then, I could separate families, putting children in uniform, women in coal mines, and objectors in slave camps. In other words, if I were Satan, I’d just keep on doing what he’s doing. (Speech was broadcast by ABC Radio commentator Paul Harvey on April 3, 1965)

He had been taught as a child that Urras was a festering mass of inequity, iniquity, and waste. But all the people he met, and all the people he saw, in the smallest country village, were well dressed, well fed, and contrary to his expectations, industrious. They did not stand about sullenly waiting to be ordered to do things. Just like Anaresti, they were simply busy getting things done. It puzzled him. He had assumed that if you removed a human being's natural incentive to work -- his initiative, his spontaneous creative energy -- and replaced it with external motivation and coercion, he would become a lazy and careless worker. But no careless workers kept those lovely farmlands, or made the superb cars and comfortable trains. The lure and compulsion of profit was evidently a much more effective replacement of the natural initiative than he had been led to believe.

How does paying people more money make you more money? It works like this. The more you pay your workers, the more they spend. Remember, they're not just your workers- they're your consumers, too. The more they spend their extra cash on your products, the more your profits go up. Also, when employees have enough money that they don't have to live in constant fear of bankruptcy, they're able to focus more on their work- and be more productive. With fewer personal problems and less stress hanging over them, they'll lose less time at work, meaning more profits for you. Pay them enough to afford a late model car (i.e. one that works), and they'll rarely be late for work. And knowing that they'll be able to provide a better life for their children will not only give them a more positive attitude, it'll give them hope- and an incentive to do well for the company because the better the company does, the better they'll do. Of course, if you're like most corporations these days- announcing mass layoffs right after posting record profits- then you're already hemorrhaging the trust and confidence of your remaining workforce, and your employees are doing their jobs in a state of fear. Productivity will drop. That will hurt sales. You will suffer. Ask the people at Firestone: Ford has alleged that the tire company fired its longtime union employees, then brought in untrained scab workers who ended up making thousands of defective tires- and 203 dead customers later, Firestone is in the toilet.

If you wanted to predict how people would behave, Munger said, you only had to look at their incentives. FedEx couldn’t get its night shift to finish on time; they tried everything to speed it up but nothing worked—until they stopped paying night shift workers by the hour and started to pay them by the shift. Xerox created a new, better machine only to have it sell less well than the inferior older ones—until they figured out the salesmen got a bigger commission for selling the older one. “Well, you can say, ‘Everybody knows that,’ ” said Munger. “I think I’ve been in the top five percent of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little

There is nothing else that so kills the ambitions of a person as criticisms from superiors. I never criticize any-one. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my approbation and lavish in my praise.

Students get the message bout what adults want. When 4th graders in a variety of classroomswere asked what their teachers most wanted them to do, they didn't say, "Ask thoughtful questions" or "Make responsible decisions" or Help others." They said, "Be quiet, don't fool around, and get our work done on time.

Putting aside the concerns about the intentions of the rulers and the incentives for the workers, socialism cannot work because the central planner(s) would lack market prices and hence would have no way of determining, even after the fact, if their “rational” plan for production made an efficient use of resources.

There are many, many types of books in the world, which makes good sense, because there are many, many types of people, and everybody wants to read something diferent. For instance, people who hate stories in which terrible things happen to small children should put this book down immediately. But one type of book that practically no one likes to read is a book about the law. Books about the law are notorious for being very long, very dull, and very difficult to read. This is one reason many lawyers make heaps of money. The money is an incentive - the word "incentive" here means "an offered reward to persuade you to do something you don't want to do" - to read long, dull, and difficult books. The Baudelaire children had a slightly different incentive for reading these books, of course. Their incentive was not heaps of money, but preventing Count Olaf from doing something horrible to them in order to get heaps of money. But even with this incentive, getting through the law books in Justice Strauss's private library was a very, very, very hard task. "Goodness," Justice Strauss said, when she came into the library and saw what they were reading. [...] "I thought you were interested in mechanical engineering, animals of North America, and teeth. Are you sure you want to read those enormous law books? Even I don't like reading them, and I work in law.

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.

Once very smart people are paid huge sums of money to exploit the flaws in the financial system, they have the spectacularly destructive incentive to screw the system up further, or to remain silent as they watch it being screwed up by others. The cost, in the end, is a tangled-up financial system. Untangling it requires acts of commercial heroism—and even then the fix might not work. There was simply too much more easy money to be made by elites if the system worked badly than if it worked well. The whole culture had to want to change. “We know how to cure this,” as Brad had put it. “It’s just a matter of whether the patient wants to be treated.

Most peasants did not miss the school. "What's the point?" they would say. "You pay fees and read for years, and in the end you are still a peasant, earning your food with your sweat. You don't get a grain of rice more for being able to read books. Why waste time and money? Might as well start earning your work points right away." The virtual absence of any chance of a better future and the near total immobility for anyone born a peasant took the incentive out of the pursuit of knowledge. Children of school age would stay at home to help their families with their work or look after younger brothers and sisters. They would be out in the fields when they were barely in their teens. As for girls, the peasants considered it a complete waste of time for them to go to school. "They get married and belong to other people. It's like pouring water on the ground." The Cultural Revolution was trumpeted as having brought education to the peasants through 'evening classes." One day my production team announced it was starting evening classes and asked Nana and me to be the teachers. I was delighted. However, as soon as the first 'class' began, I realized that this was no education. The classes invariably started with Nana and me being asked by the production team leader to read out articles by Mao or other items from the People's Daily. Then he would make an hour-long speech consisting of all the latest political jargon strung together in undigested and largely unintelligible hunks. Now and then he would give special orders, all solemnly delivered in the name of Mao.

when we have no memory or little imagination of an alternative to a life centered on work, there are few incentives to reflect on why we work as we do and what we might wish to do instead.

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.

The larger the  government,  the  less  efficient  and  productive  is  the  economy.  Slaves  don’t produce with the enthusiasm, incentive, and imagination that free people do. Bureaucratic programs just don’t work as intended.

The gym exposes deficiencies in our bodies’ strength and stamina—and appearance. You can wear all kinds of daytime clothes that hide or minimize aspects of your body that you would like to be less visible to the eye. But in the gym, you cannot hide them. There you and your coach (and unfortunately everyone around you) can see where you bulge where you shouldn’t. It’s an incentive to get to work. And so this metaphor tells us that when life is going along just fine, the flaws in our character can be masked and hidden from others and from ourselves. But when troubles and difficulties hit, we are suddenly in “God’s gymnasium”—we are exposed. Our inner anxieties, our hair-trigger temper, our unrealistic regard of our own talents, our tendency to lie or shade the truth, our lack of self-discipline—all of these things come out.

In the United States I saw how the market liberates the individual and allows people to be free to make personal choices. But the biggest drawback was that the market always pushes things to the side of the powerful. I thought the poor should be able to take advantage of the system in order to improve their lot. Grameen is a private-sector self-help bank, and as its members gain personal wealth they acquire water-pumps, latrines, housing, education, access to health care, and so on. Another way to achieve this is to let abusiness earn profit that is then txed by the government, and the tax can be used to provide services to the poor. But in practice it never works that way. In real life, taxes only pay for a government bureaucracy that collects the tax and provides little or nothing to the poor. And since most government bureaucracies are not profit motivated, they have little incentive to increase their efficiency. In fact, they have a disincentive: governments often cannot cut social services without a public outcry, so the behemoth continues, blind and inefficient, year after year.

A flush works over my cheeks and grows when Rolondo says, “And here I thought I was pointing out the impact of our divergent socio-economic status when faced with potential agent induced incentives.” We both look at each other for a second then laugh again. “Fucking Sociology major,” I mutter. “Henry-muthafucka-Higgins. You gonna Eliza Doolittle me?” “There you go again, trying to get me to do you. Let the dream die, man.

Other and more powerful forms of association have existed, but the major moral and psychological influences on the individual’s life have emanated from the family and local community and the church. Within such groups have been engendered the primary types of identification: affection, friendship, prestige, recognition. And within them also have been engendered or intensified the principal incentives of work, love, prayer, and devotion to freedom and order.

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

The real problem here is that we’re all dying. All of us. Every day the cells weaken and the fibres stretch and the heart gets closer to its last beat. The real cost of living is dying, and we’re spending days like millionaires: a week here, a month there, casually spunked until all you have left are the two pennies on your eyes. Personally, I like the fact we’re going to die. There’s nothing more exhilarating than waking up every morning and going ‘WOW! THIS IS IT! THIS IS REALLY IT!’ It focuses the mind wonderfully. It makes you love vividly, work intensely, and realise that, in the scheme of things, you really don’t have time to sit on the sofa in your pants watching Homes Under the Hammer. Death is not a release, but an incentive. The more focused you are on your death, the more righteously you live your life. My traditional closing-time rant – after the one where I cry that they closed that amazing chippy on Tollington Road; the one that did the pickled eggs – is that humans still believe in an afterlife. I genuinely think it’s the biggest philosophical problem the earth faces. Even avowedly non-religious people think they’ll be meeting up with nana and their dead dog, Crackers, when they finally keel over. Everyone thinks they’re getting a harp. But believing in an afterlife totally negates your current existence. It’s like an insidious and destabilising mental illness. Underneath every day – every action, every word – you think it doesn’t really matter if you screw up this time around because you can just sort it all out in paradise. You make it up with your parents, and become a better person and lose that final stone in heaven. And learn how to speak French. You’ll have time, after all! It’s eternity! And you’ll have wings, and it’ll be sunny! So, really, who cares what you do now? This is really just some lacklustre waiting room you’re only going to be in for 20 minutes, during which you will have no wings at all, and are forced to walk around, on your feet, like pigs do. If we wonder why people are so apathetic and casual about every eminently avoidable horror in the world – famine, war, disease, the seas gradually turning piss-yellow and filling with ringpulls and shattered fax machines – it’s right there. Heaven. The biggest waste of our time we ever invented, outside of jigsaws. Only when the majority of the people on this planet believe – absolutely – that they are dying, minute by minute, will we actually start behaving like fully sentient, rational and compassionate beings. For whilst the appeal of ‘being good’ is strong, the terror of hurtling, unstoppably, into unending nullity is a lot more effective. I’m really holding out for us all to get The Fear. The Fear is my Second Coming. When everyone in the world admits they’re going to die, we’ll really start getting some stuff done.

Our tryst with global modernity enables new choices and norms that create their own problems and their own solutions. The opportunity to study, work and find your own partner exposes us to the harsh markets for mates and monies. Philosophers tell us that capitalism has made us all complicit in our own commoditization. Love, as much as labour, has become an object of trade and exchange value—circulating in a marketplace, compelling us to become slaves to the rational logic of incentives, costs and scarcity.

Conservatives argue that this human tendency toward corruption means that unemployment benefits and government health insurance will make the poor lazy, that they will become food stamp gobblers with no incentive to work for themselves. But I side with the poor and powerless since—as we've seen—they have far less ability to destroy all our lives.

Giving people favors is a time-honored way of gaining loyalty. Pharmaceutical reps do it. The salespeople manning cosmetic counters do it. Lobbyists do it. Men with big crushes on impossibly beautiful women do it. Gifts work on our feelings in a couple of ways: they change the way we experience something, and they push our "reciprocate!" button. When we have the mandate to be objective and an incentive not to be, our biases often win the day-even if we don't think they will. Favors deeply affect our preferences and our loyalties.

I told him about my unsuccessful job hunting. He said it was all part of the pattern of economics - economic injustice. 'You take a young white boy. He can go though school and college with a real incentive. He knows he can make good money in any profession when he gets out. But can a Negro - in the South? No, I've seen many make brilliant grades in college. And yet when they come home in the summers to earn a little money, they have to do the most menial work. And even when they graduate it's a long hard pull. Most take postal jobs, or preaching or teaching jobs. This is the cream. What about the others , Mr. Griffin? A man knows no matter how hard he works , he's never going to quite manage...taxes and prices eat up more than he can earn. He can't see how he'll ever have a wife and children. The economic structure just doesn't permit it unless he's prepared to live down in poverty and have his wife work too. That's part of it. Our people aren't educated because they can't afford it or else they know education won't earn them the jobs it would a white men.

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.

You understand that the feeling which makes them work is not a feeling of pettiness, ambition, forgetfulness, which you have yourself experienced, but a different sentiment, one more powerful, and one which has made of them men who live with their ordinary composure under the fire of cannon, amid hundreds of chances of death, instead of the one to which all men are subject who live under these conditions amid incessant labor, poverty, and dirt. Men will not accept these frightful conditions for the sake of a cross or a title, nor because of threats ; there must be another lofty incentive as a cause, and this cause is the feeling which rarely appears, of which a Russian is ashamed, that which lies at the bottom of each man's soul — love for his country.

It is worth pointing out that there has been some notable success with a concept known as ‘conditional cash transfers’; these are cash payments (in a sense, bonuses) made to give the poor an incentive to perform tasks that could help them escape poverty (for example, good school attendance, working a certain number of hours, improving test scores, seeing a doctor). The idea of conditional cash transfers has met with much success in developing countries such as Brazil, Mexico, Nicaragua and Peru (a similar programme is now being tested in the boroughs of New York City).

Any system that penalizes success and accomplishment is wrong. Any system that discourages work, discourages productivity, discourages economic progress, is wrong. If, on the other hand, you reduce tax rates and allow people to spend or save more of what they earn, they’ll be more industrious; they’ll have more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress. The result: more prosperity for all—and more revenue for government. A few economists call this principle supply-side economics. I just call it common sense.

And for the lowest income folks, what’s their incentive? I’m not coming up with one right off the bat, but the ones that do eventually come to mind sound cynical or beat down or completely delusional. Like, I hope I win the lottery, or, I’m going to shoot up now, or, The world is so fucked. You hear that kind of thing, right? Maybe incentive isn’t the word here. Disincentive, to keep it in that lingo. When you get one pay amount, and someone doing something easier gets a thousand of that pay amount, that’s a disincentive to care about anything. At that point you throw a rock through a window, or vote for some asshole who is going to break everything, which may give you a chance to start over, and if that doesn’t work then at least you have said fuck you to the thousand-getters. And so on.

When groups are small, for example, everyone’s stake in the outcome of the group project is high. At a small biotech, if the drug works, everyone will be a hero and a millionaire. If it fails, everyone will be looking for a job. The perks of rank—job titles or the increase in salary from being promoted—are small compared to those high stakes. As teams and companies grow larger, the stakes in outcome decrease while the perks of rank increase. When the two cross, the system snaps. Incentives begin encouraging behavior no one wants. Those same groups—with the same people—begin rejecting loonshots.

The world of the future. The world I want. A world of obedience and of unity. A world where the thought of each man will not be his own, but an attempt to guess the thought of the next neighbour who’ll have no thought – and so on, Peter, around the globe. Since all must agree with all. A world where no man will hold a desire for himself, but will direct all his efforts to satisfy the desires of his neighbour who’ll have no desires except to satisfy the desires of the next neighbour, who’ll have no desires – around the globe, Peter. Since all must serve all. A world in which man will not work for so innocent an incentive as money, but for that headless monster – prestige. The approval of his fellows – their good opinion – the opinion of men who’ll be allowed to hold no opinion. An octopus, all tentacles and no brain.

While families had incentives to curtail women’s work outside the home, employers had countervailing incentives to try to tap this large potential source of workers. Early New England mill owners, for example, tried to reassure parents of the safety and propriety of letting their daughters work in their businesses by having all-female workforces, often overseen by older women who in effect were chaperons, especially when the young women lived away from home.

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

Various ambitions to complete the poem, to see it in print, to enjoy the gratification of someone's comment about it—serve in some measure as incentives to the writer's work. Though each of these is reasonable, each is a threat to the other ambition of the poet, which is to write as well as Keats, Yeats, or Williams—or whoever it was who scribbled onto a page a few lines whose force the reader once felt and has never forgotten. Every poet's ambition should be to write as well. Anything else is only a flirtation.

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.

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.

I think my political transformation began with my exposure to the business-as-usual attitude of many civil service bureaucrats during the war; then came the attempted Communist take-over of the picture business, which a lot of my liberal friends refused to admit ever happened; next, I had a brief experience living in a country that promised the kind of womb-to-tomb utopian benevolence a lot of these liberal friends wanted to bring to America. In 1949, I spent four months in England filming The Hasty Heart while the Labor Party was in power. I saw firsthand how the welfare state sapped incentive to work from many people in a wonderful and dynamic country.

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.

Embrace Reality and Deal with It 1.1 Be a hyperrealist. a. Dreams + Reality + Determination = A Successful Life. 1.2 Truth—or, more precisely, an accurate understanding of reality—is the essential foundation for any good outcome. 1.3 Be radically open-minded and radically transparent. a. Radical open-mindedness and radical transparency are invaluable for rapid learning and effective change. b. Don’t let fears of what others think of you stand in your way. c. Embracing radical truth and radical transparency will bring more meaningful work and more meaningful relationships. 1.4 Look to nature to learn how reality works. a. Don’t get hung up on your views of how things “should” be because you will miss out on learning how they really are. b. To be “good,” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded. c. Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything. d. Evolve or die. 1.5 Evolving is life’s greatest accomplishment and its greatest reward. a. The individual’s incentives must be aligned with the group’s goals. b. Reality is optimizing for the whole—not for you. c. Adaptation through rapid trial and error is invaluable. d. Realize that you are simultaneously everything and nothing—and decide what you want to be. e. What you will be will depend on the perspective you have. 1.6 Understand nature’s practical lessons. a. Maximize your evolution. b. Remember “no pain, no gain.” c. It is a fundamental law of nature that in order to gain strength one has to push one’s limits, which is painful. 1.7 Pain + Reflection = Progress. a. Go to the pain rather than avoid it. b. Embrace tough love. 1.8 Weigh second- and third-order consequences. 1.9 Own your outcomes. 1.10 Look at the machine from the higher level. a. Think of yourself as a machine operating within a machine and know that you have the ability to alter your machines to produce better outcomes. b. By comparing your outcomes with your goals, you can determine how to modify

My desire to work—my desire to engage with my creativity as intimately and as freely as possible—is my strongest personal incentive to fight back against pain, by any means necessary, and to fashion a life for myself that is as sane and healthy and stable as it can possibly be. But that’s only because of what I have chosen to trust, which is quite simply: love.

The United States has not consciously chosen a grand strategy over the last several decades; rather it has made a series of policy decisions that have largely resulted from political motivations while being sold as part of a coherent plan after the fact, or more precisely, as a collection of coherent plans that are advocated for or forgotten about depending on the needs of the moment. Thus, those who want to change American foreign policy should not expect to succeed primarily by making arguments as to why the United States is implementing the wrong grand strategy. Rather, one would have to work to change the incentive structures that lead some ideas to gain currency, and government officials to make certain decisions but not others.

Covering politics like sports has created a self-reinforcing incentive structure that is not dissimilar to the one the ESPN’S SportsCenter has on the fundamentals of basketball. There is a long-running concern from basketball purists that the fundamentals of the game – passing, defense, and footwork – are eroding. The theory goes that players want to be like the stars they see on SportsCenter. You don’t get on SportsCenter by doing the nitty-gritty work of winning basketball games. The more extreme the play, the more dramatic the showboating and celebrating, the more likely to be a feature in a coveted highlight segment. The reward system benefits the opposite behavior most basketball coaches would like to see in their players. This is the SportsCenter effect.

This figuring-out step is crucial, since overly optimistic economic models have often assumed that demand and incentives are enough to stimulate the production of any product. Incentives work to motivate intermediaries and traders, but makers, who are the ones that provide the substance of what is traded, need more than an incentive to make something. They need to know how to do it.

The Chinese Communist Party has seen fit to protect most property rights because it recognizes that it has a self-interest in doing so. But the party faces no legal constraints other than its own internal political controls if it decides to violate property rights. Many peasants find their land coveted by municipal authorities and developers who want to turn it into commercial real estate, high-density housing, shopping centers, and the like, or else into public infrastructure like roads, dams, or government offices. There are large incentives for developers to work together with corrupt local officials to illegally take land away from peasants or urban homeowners, and such takings have been perhaps the largest single source of social discontent in contemporary China.33

The economic approach is both broader and simpler than that. It relies on data, rather than hunch or ideology, to understand how the world works, to learn how incentives succeed (or fail), how resources get allocated, and what sort of obstacles prevent people from getting those resources, whether they are concrete (like food and transportation) or more aspirational (like education and love).

Another Presidential election was less than two years off. There would have to be fast work to ward off disaster. Far-sighted people, North and South, even foresaw the laboring people soon forsaking both of the old parties and going Socialist. Politicians and business men shuddered at the thought of such a tragedy and saw horrible visions of old-age pensions, eight-hour laws, unemployment insurance, workingmen’s compensation, minimum-wage legislation, abolition of child labor, dissemination of birth-control information, monthly vacations for female workers, two-month vacations for prospective mothers, both with pay, and the probable killing of individual initiative and incentive by taking the ownership of national capital out of the hands of two million people and putting it into the hands of one hundred and twenty million.

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

Charming ladies, as I doubt not you know, the understanding of mortals consisteth not only in having in memory things past and taking cognizance of things present; but in knowing, by means of the one and the other of these, to forecast things future is reputed by men of mark to consist the greatest wisdom. To-morrow, as you know, it will be fifteen days since we departed Florence, to take some diversion for the preservation of our health and of our lives, eschewing the woes and dolours and miseries which, since this pestilential season began, are continually to be seen about our city. This, to my judgment, we have well and honourably done; for that, an I have known to see aright, albeit merry stories and belike incentive to concupiscence have been told here and we have continually eaten and drunken well and danced and sung and made music, all things apt to incite weak minds to things less seemly, I have noted no act, no word, in fine nothing blameworthy, either on your part or on that of us men; nay, meseemeth I have seen and felt here a continual decency, an unbroken concord and a constant fraternal familiarity; the which, at once for your honour and service and for mine own, is, certes, most pleasing to me. Lest, however, for overlong usance aught should grow thereof that might issue in tediousness, and that none may avail to cavil at our overlong tarriance,

You haven't said yet weather I may help you while I am here" Elnora hesitated. You better say 'yes,'" he persisted. It would be a real kindness. It would keep me out doors all day and give an incentive to work. I'm good at it. I'll show you if I am not in a week or so. I can 'sugar' manipulate lights, and mirrors, and all the expert methods. I'll wager moths are think int the old swamp over there" They are," said Elnora. "Most I have I took there. A few nights ago my mother caught a good many, but we don't dare go alone" All the more reason why you need me. Where do you live? I can't get an answer from you, I'll just go tell your mother who I am and ask her if I may help you. I warn you young lady, I have a very effective way with mothers. They almost never turn me down." Then it's probable you will have a new experience when you meet mine," said Elnora. "She never was known to do what anyone expected she surely would.

In contrast to mainstream artificial intelligence, I see competition as much more essential than consistency," he says. Consistency is a chimera, because in a complicated world there is no guarantee that experience will be consistent. But for agents playing a game against their environment, competition is forever. "Besides," says Holland, "despite all the work in economics and biology, we still haven't extracted what's central in competition." There's a richness there that we've only just begun to fathom. Consider the magical fact that competition can produce a very strong incentive for cooperation, as certain players spontaneously forge alliances and symbiotic relationships with each other for mutual support. It happens at every level and in every kind of complex, adaptive system, from biology to economics to politics. "Competition and cooperation may seem antithetical," he says, "but at some very deep level, they are two sides of the same coin.

Women are often convinced by many different social norms, expectations, and incentives to live within constraints that similarly placed (in terms of race, class, culture, and time period) men need not consider. This sort of internally constrained vision, whether it is because of false consciousness, shame, stereotype, or trauma, is the kind of violation of their positive freedom that should most concern feminists. Capitalism, by providing an option outside kin and traditional community norms for independence and social power, can allow women the wherewithal to escape these constraints. Even if a particular woman does not choose to work outside the home or compete in the marketplace as an entrepreneur, the fact that women have this option under capitalism increases the freedom of all women. Enlarging the set of things that women are seen as capable of can reduce the sense that women have that they are inferior, and this can increase their confidence in a wider set of social circumstances. It puts the lie to the idea that women are incapable, and helps women to stand up to ill-treatment and violence.

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.

If America’s universities are indeed poor value for money, why might that be? The main reason is that the market for higher education, like that for health care, does not work well. The government rewards universities for research, so that is what professors concentrate on. Students are looking for a degree from an institution that will impress employers; employers are interested primarily in the selectivity of the institution a candidate has attended. Since the value of a degree from a selective institution depends on its scarcity, good universities have little incentive to produce more graduates.

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

Within a few centuries, the new capitalist spirit challenged the basic Christian ethic: the boundless ego of Sir Gales Overreach and his fellows in the marketplace had no room for charity or love in any of their ancient senses. The capitalist scheme of values in fact transformed five of the seven deadly sins of Christianity-pride, envy, greed, avarice, and lust-into positive social virtues, treating them as necessary incentives to all economic enterprise; while the cardinal virtues, beginning with love and humility, were rejected as 'bad for business,' except in the degree that they made the working class more docile and more amenable to cold-blooded exploitation.

So there is little doubt that financial incentives work well, even if the outcome is undesirable. Consider a 2011 traffic accident in the Chinese city of Foshan. A two-year-old girl, walking through an outdoor market, was hit by a van. The driver stopped as the girl’s body slid beneath the vehicle. But he didn’t get out to help. After a pause, he drove away, running over the body again. The girl later died. The driver eventually turned himself in to the police. A recording that was widely reported to be a phone call with the driver was broadcast on the news. “If she is dead,” he explained, “I may pay only about 20,000 yuan”—roughly $3,200. “But if she is injured, it may cost me hundreds of thousands yuan.

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

It could be argued that one of democracy’s greatest weaknesses is the ability to reform itself. Reform of democracy must, however, be at the heart of a successful plan to improve economic growth and global prosperity. So far this chapter has detailed how the democratic system inherently contains incentives for policymakers to implement bad policy choices that undermine long-term economic success. Nevertheless, as we seek solutions to remedy democracy’s failings, we should acknowledge that politicians in a liberal democracy need not be malicious or even inept to fall prey to short-term thinking. They are wholly rational actors—responding to voters, succumbing to media pressure, and battling to stay in office, even if it means they do so at the expense of the economy’s longer-term success. When democracy works, it delivers economic growth and fundamental freedoms in a way that no other system can. And when it fails, it is rarely, if ever, replaced by a system that can do a better job of delivering for its population. Therefore, creating growth requires that we preserve democratic capitalism’s core strengths—freedom, efficient markets, transparency, and correctly constructed incentives—and reform its weaknesses. Something must be done to remedy the political class’s severe case of myopia, correcting the mismatch between long-term economic challenges and election cycles, safeguarding independent economic choices from political pressures, and eliminating dysfunction and gridlock.

Economic growth springs not chiefly from incentives—carrots and sticks, rewards and punishments for workers and entrepreneurs. The incentive theory of capitalism allows its critics to depict it as an inhumane scheme of clever manipulation of human needs and hungers scarcely superior to the more benign forms of slavery. Wealth actually springs from the expansion of information and learning, profits and creativity that enhance the human qualities of its beneficiaries as it enriches them. Workers’ learning increasingly compensates for their labor, which imparts knowledge as it extracts work. Joining knowledge and power, capitalism focuses on the entropy of human minds and the benefits of freedom. Thus it is the most humane of all economic systems.

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.

For most people, the question of free will is really one about making choices in life. How do you choose what to eat for breakfast? How do you choose where to go on vacation? Where to work? Whom to marry? Whom to vote for? People imagine that they make these choices “freely.” Ideologies such as liberalism and capitalism encourage people to think that way. This makes people very incurious about themselves. As long as I think that my choices reflect my free will, I have no incentive to investigate what made me choose this or that—I simply did it of my own free will. Therefore I completely identify with whatever choices I make, and I remain ignorant about the biological, social, and cultural forces that have really shaped my decisions. This is how belief in free will becomes a big barrier to self-exploration and self-understanding.

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.

Nevertheless, scholars keep obsessing about selfish motives, simply because both economics and behaviorism have indoctrinated them that incentives drive everything that animals or humans do. I don’t believe a word of it, though, and a recent ingenious experiment on children drives home why. The German psychologist Felix Warneken investigated how young chimpanzees and children assist human adults. The experimenter was using a tool but dropped it in midjob: would they pick it up? The experimenter’s hands were full: would they open a cupboard for him? Both species did so voluntarily and eagerly, showing that they understood the experimenter’s problem. Once Warneken started to reward the children for their assistance, however, they became less helpful. The rewards, it seems, distracted them from sympathizing with the clumsy experimenter.50 I am trying to figure how this would work in real life. Imagine that every time I offered a helping hand to a colleague or neighbor—keeping a door open or picking up their mail—they stuffed a few dollars in my shirt pocket. I’d be deeply offended, as if all I cared about was money! And it would surely not encourage me to do more for them. I might even start avoiding them as being too manipulative. It is curious to think that human behavior is entirely driven by tangible rewards, given that most of the time rewards are nowhere in sight. What are the rewards for someone who takes care of a spouse with Alzheimer’s? What payoffs does someone derive from sending money to a good cause? Internal rewards (feeling good) may very well come into play, but they work only via the amelioration of the other’s situation. They are nature’s way of making sure that we are other-oriented rather than self-oriented.

The use of rewards—what might be called positive coercion—does not work in the long run any better than threat and punishment, or negative coercion. In the reward, the child senses the parent’s desire to control no less than in the punishment. The issue is the child’s sense of being forced, not the manner in which the force is applied. This was well illustrated in a classic study using magic markers.2 A number of children were screened to select some who showed a natural interest and inclination for playing with magic markers. Those who did were then divided into three different groups. For one group, there was no reward involved and no indication what to do with the markers. Another group was given a small reward to use the markers, and the third was promised a substantial reward. When retested sometime later, the group that had been most rewarded showed the least interest in playing with the magic markers, while the children who had been left uninstructed showed by far the greatest motivation to use them. Simple behaviorist principles would suggest it ought to have been the other way around, another illustration that behavioral approaches have no more than short-term efficacy. At work here, of course, was residual counterwill in response to positive coercion. In a similar experiment, the psychologist Edward Deci observed the behaviors of two groups of college students vis-à-vis a puzzle game they had originally all been equally intrigued by. One group was to receive a monetary reward each time a puzzle was solved; the other was given no external incentive. Once the payments stopped, the paid group proved far more likely to abandon the game than their unpaid counterparts. “Rewards may increase the likelihood of behaviors,” Dr. Deci remarks, “but only so long as the rewards keep coming... Stop the pay, stop the play.” We

Just like married couples, companies can fall into the dissonance trap if they think they’re sending employees one message but those employees hear something very different. CEOs who think their firms are great places to work often are stunned when I tell them their staffs find these companies stifling, unrewarding, unfriendly, or just plain awful. This is a bad situation because it’s an open loop: There’s no feedback to correct the dissonance, so it grows worse over time. The CEO typically grows bitter, decides that “these people are underproductive whiners,” and implements punitive changes that make matters worse. The employees, in turn, grow even more annoyed or angry. Left uncorrected, this can lead to the worst-case scenario of a CEO giving people the least possible incentive to keep them working and those people doing the least they can to just hold onto their jobs, a situation that can bring a company to its knees.

We are not talking just about dollars and cents. We are talking about lives. Consider one chilling example: drug-resistant infections. As America’s breakthroughs in antibiotics recede into the past, bacteria are evolving to defeat current antibiotics. For more and more infections, we are plunging back into the pre-antibiotic era. In the United States alone, two million people are sickened and tens of thousands die each year from drug-resistant infections—mostly because private companies see little incentive to invest in the necessary research, and the federal government has failed to step in.87 Though federal funding for the National Institutes of Health ramped up in the mid-1990s, it has fallen precipitously since, cutting the share of young scientists with NIH grants in half in roughly six years.88 As one medical professor lamented recently: “In my daily work in both a university medical school and a public hospital, it’s a rare month that some bright young person doesn’t tell me they are quitting science because it’s too hard to get funded. . . . A decade or two from now, when an antibiotic-resistant bacteria or new strain of bird flu is ravaging humanity, that generation will no longer be around to lead the scientific charge on humanity’s behalf.”89

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

Managerial abilities, bureaucratic skills, technical expertise, and political talent are all necessary, but they can be applied only to goals that have already been defined by military policies, broad and narrow. And those policies can be only as good as strategy, operational art of war, tactical thought, and plain military craft that have gone into their making. At present, the defects of structure submerge or distort strategy and operational art, they out rightly suppress tactical ingenuity, and they displace the traditional insights and rules of military craft in favor of bureaucratic preferences, administrative convenience, and abstract notions of efficiency derived from the world of business management. First there is the defective structure for making of military decisions under the futile supervision of the civilian Defense Department; then come the deeply flawed defense policies and military choices, replete with unnecessary costs and hidden risks; finally there come the undoubted managerial abilities, bureaucratic skills, technical expertise, and political talents, all applied to achieve those flawed policies and to implement those flawed choices. By this same sequence was the fatally incomplete Maginot Line built, as were all the Maginot Lines of history, each made no better by good government, technical talent, careful accounting, or sheer hard work. Hence the futility of all the managerial innovations tried in the Pentagon over the years. In the purchasing of weapons, for example, “total package” procurement, cost plus incentive contracting, “firm fixed price” purchasing have all been introduced with much fanfare, only to be abandoned, retried, and repudiated once again. And each time a new Secretary of Defense arrives, with him come the latest batch of managerial innovations, many of them aimed at reducing fraud, waste, and mismanagement-the classic trio endlessly denounced in Congress, even though they account for mere percentage points in the total budget, and have no relevance at all to the failures of combat. The persistence of the Administrator’s Delusion has long kept the Pentagon on a treadmill of futile procedural “reforms” that have no impact at all on the military substance of our defense. It is through strategy, operational art, tactical ingenuity, and military craft that the large savings can be made, and the nation’s military strength greatly increased, but achieving long-overdue structural innovations, from the central headquarters to the combat forces, from the overhead of bases and installations to the current purchase of new weapons. Then, and only then, will it be useful to pursue fraud, waste, and mismanagement, if only to save a few dollars more after the billions have already been saved. At present, by contrast, the Defense Department administers ineffectively, while the public, Congress, and the media apply their energies to such petty matters as overpriced spare parts for a given device in a given weapon of a given ship, overlooking at the same time the multibillion dollar question of money spent for the Navy as a whole instead of the Army – whose weakness diminishes our diplomatic weight in peacetime, and which could one day cause us to resort to nuclear weapons in the face of imminent debacle. If we had a central military authority and a Defense Department capable of strategy, we should cheerfully tolerate much fraud, waste, and mismanagement; but so long as there are competing military bureaucracies organically incapable of strategic combat, neither safety nor economy will be ensured, even if we could totally eliminate every last cent of fraud, waste, and mismanagement.

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.

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

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

[...] Kevin had grown up playing left-handed. Seeing him take on Andrew right-handed was ballsy enough, seeing him actually score was surreal. Kevin kicked them off the court [...], but instead of following [...] he stayed behind with Andrew to keep practicing. Neil watched them over his shoulder. "I saw him first," Nicky said. "I thought you had Erik," Neil said. "I do, but Kevin's on the List," Nicky said. When Neil frowned, Nicky explained. "It's a list of celebrities we're allowed to have affairs with. Kevin is number three." Neil pretended to understand and changed the topic. "How does anyone lose against the Foxes with Andrew in your goal?" "He's good, right? [...] Coach bribed Andrew into saving our collective asses with some really nice booze." "Bribed?" Neil echoed. "Andrew's good," Nicky said again, "but it doesn't really matter to him if we win or lose. You want him to care, you gotta give him incentive." "He can't play like that and not care." "Now you sound like Kevin. You'll find out the hard way, same as Kevin did. Kevin gave Andrew a lot of grief this spring [...]. Up until then they were fighting like cats and dogs. Now look at them. They're practically trading friendship bracelets and I couldn't fit a crowbar between them if it'd save my life." "But why?" Neil asked. "Andrew hates Kevin's obsession with Exy." "The day they start making sense to you, let me know," Nicky said [...]. "I gave up trying to sort it all out weeks ago. [...] But as long as I'm doling out advice? Stop staring at Kevin so much. You're making me fear for your life over here." "What do you mean?" "Andrew is scary territorial of him. He punched me the first time I said I'd like to get Kevin too wasted to be straight." Nicky pointed at his face, presumably where Andrew had decked him. "So yeah, I'm going to crush on safer targets until Andrew gets bored of him. That means you, since Matt's taken and I don't hate myself enough to try Seth. Congrats." "Can you take the creepy down a level?" Aaron asked. "What?" Nikcy asked. "He said he doesn't swing, so obviously he needs a push." "I don't need a push," Neil said. "I'm fine on my own." "Seriously, how are you not bored of your hand by now?" "I'm done with this conversation," Neil said. "This and every future variation of it [...]." The stadium door slammed open as Andrew showed up at last. [...] "Kevin wants to know what's taking you so long. Did you get lost?" "Nicky's scheming to rape Neil," Aaron said. "There are a couple flaws in his plan he needs to work out first, but he'll get there sooner or later." [...] "Wow, Nicky," Andrew said. "You start early." "Can you really blame me?" Nicky glanced back at Neil as he said it. He only took his eyes off Andrew for a second, but that was long enough for Andrew to lunge at him. Andrew caught Nicky's jersey in one hand and threw him hard up against the wall. [...] "Hey, Nicky," Andrew said in stage-whisper German. "Don't touch him, you understand?" "You know I'd never hurt him. If he says yes-" "I said no." "Jesus, you're greedy," Nicky said. "You already have Kevin. Why does it-" He went silent, but it took Neil a moment to realize why. Andrew had a short knife pressed to Nicky's Jersey. [...] Neil was no stranger to violence. He'd heard every threat in the book, but never from a man who smiled as bright as Andrew did. Apathy, anger, madness, boredom: these motivators Neil knew and understood. But Andrew was grinning like he didn't have a knife point where it'd sleep perfectly between Nicky's ribs, and it wasn't because he was joking. Neil knew Andrew meant it. [...] "Hey, are we playing or what?" Neil asked. "Kevin's waiting." [...] Andrew let go of Nicky and spun away. [...] Nicky looked shaken as he stared after the twins, but when he realized Neil was watching him he rallied with a smile Neil didn't believe at all. "On second thought, you're not my type after all [...].