Incentives
Incentive structures are they systemic ways in which we provide positive and negative feedback to the participants in that system to get them to do the things that make the system work.
"When you're failing, there's a very powerful incentive to put ideology aside and just do what seems to work." -Fareed Zakaria
Since humans lack free will, they tend to respond better to incentives than rational arguments. When we change the fundamental incentives that drive institutional behavior, it can have a dramatic impact on how effectively it can perform its function. This provides a model for dramatically reforming corrupt institutions by changing the generating equation that creates those patterns of behavior.
Personal Incentive Structures
Our brains are controlled by incentives, and study after study has shown that even the most willful of us are powerless against them.
Our day to day lives and habits are controlled by the incentive structures we put around us. Temptations aren't avoided with willpower, but with willful avoidance. In order to make any change you want to make, you must first change your environment so the desired change is rewarded and alternatives are discouraged, avoided, or ignored in favor of more salient options.
Perverse Incentives
Perverse incentives occur when these systems unintentionally encourage the opposite of their desired outcome. The most egregious examples of waste, fraud and abuse in history come when the rewards for doing wrong outweigh the rewards for doing good. This is further complicated by our brain's tendency to favor immediate rewards over long-term consequences, increasing the saliency of the temptation to cheat.
Perceived Incentives
The perception of perverse incentives and corruption can be just as damaging. When individual instances of corruption are generalized to everything an institution does, trust is lost and it is no longer able to serve the public effectively.
Correctly identifying perverse incentives in cases such as cancer research funded by the tobacco industry can cause people to look for these things everywhere, and misattribute them to support the position of their in-group instead of identifying legitimate sources of corruption.
A classic example is the common accusation that climate change research is fueled by a government grant industrial complex that has compromised 97% of academia.[1] The alternative theory, favored by Occam's razor, is that human-caused climate change is the scientific consensus and the 3% who disagree tend to be funded by the most profitable industry in history. Many of those who commit this fallacy will point to legitimate examples like regulatory capture of the FDA by the pharmaceutical industry, then use that to justify speculating about profit motives to support their conspiracy theories, rather than looking for evidence of corruption and questioning institutional authority once you find it.
Corruption is Just Bad Incentives
Creating a better society can only be done by changing the incentive structures of our economy and government.
Justice is only achieved through elaborate checks and balances to balance the strong incentives to cheat that all parties have.
"Power tends to corrupt; absolute power corrupts absolutely." -Lord Acton
Politicians almost never begin their careers with the intention of becoming corrupt. They all believe they are doing what is best for their country. But as soon as they become a part of a system that incentivizes fundraising and media presence over lawmaking, it is inevitable that they will serve the interests of donors over voters.
Podcast hosts and other content creators don't usually start out spreading misinformation and grift. But the economics mean that those who do can get lucrative deals with the Daily Wire and PragerU, or sponsorships from various grifters selling bogus supplements, MLMs, poor investments, and doomsday prepper gear.
Making moral arguments against corruption, and hoping that everyone will resist these temptations, is a recipe for failure and frustration. The only solution is to address the incentive structures that lead to corruption.
The advantage of this approach is that it is non-partisan. Systemic changes that improve the balance of power and remove perverse incentives should have very broad support among voters, and opposed only by entrenched corrupt power structures. In a democracy, as long as there are candidates willing to run on these broadly popular positions, they can always defeat the entrenched powers. There is no need for revolution, only persuasion.
Incentives and Motivation in Video
Need an incentive to watch more YouTube videos? If learning about incentives doesn't incentivize you then maybe something random will.