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Human Nature at Work (Vol. 71)

Updated: Feb 7, 2023

sarahh777 | Sep 28, 2022

Human Nature at Work

Incentives, Incentives, Incentives

In the real estate world, we learn the three most important things to consider are location; location; location. In the human world, the three most important things that make us tick are incentives; incentives; incentives. Isn't that obvious to everyone? Why bother to discuss such a trite subject? Why? We may get it, but does government? And, if not, what are the implications of that? Government understanding the power of incentives is important because it affects how a good government should operate. This is what Main Street Economics is all about. We want to educate people to use economics to understand what good governing and good policy should look like. The Pilgrims were a great example of this. Governor William Bradford was the initial Governor of the Pilgrims at Plymouth and instituted a communal farm system. Great, everyone pitched in and worked the farm together, and everyone shared in the product equally. The result? About half of the Pilgrims starved to death! Why? There was no incentive to work, because everyone was going to get the same thing whether they worked or not. That didn’t work, because they didn't work - there was no incentive to do so. After that, the Governor tried a different approach. Instead of everyone sharing the product equally, each was given their own plots of land and kept whatever they produced on their share of land. They flourished. Why? This is not rocket science; they flourished because they had the proper incentives - they could keep the results of their individual labor. That did work. Governor Bradford eventually understood the power of incentives, and it worked to everyone’s advantage. Unfortunately, government today has lost its way. It gives without earning. It takes from the productive, and gives to the unproductive. It “buys” votes by giving away the farm, and running up deficits and debts in the process - debts we have no means to pay back because we keep running deficits. De Tocqueville nailed it when he said ‘the American Republic will endure until Congress discovers it can bribe the people with its own money.’ We are on the road to disaster, everyone in Congress knows it, but no one will fix the problem because our elected officials lack the courage to tell the public what it needs to hear - for fear of not getting reelected. BOTTOM LINE We can keep on keeping on until the Debt Bomb blows, or we can learn economics , understand the power of proper incentives, and demand our elected officials develop good governing and budgeting so that they can start to fix our problems before disaster strikes. The choice is ours. Please click below to Contact Congress, and let them know your opinion. LEARN ECONOMICS, THEN VOTE SMART

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