INCENTIVE: THE CORE SOLUTION
This is the 2nd in a series of 17, to be published every 3 days.
There is a popular movie titled “The Theory of Everything”. I want a new one titled “The Solution to Everything”. I had an epiphany this morning while brushing my teeth. (A very philosophical time). I recently Tweeted: “Incentive is the key to an efficient system.” I think it may be the answer to almost everything that needs fixing. Think of Capitalism and its success as an economic system. Sure, there are a few rough areas, but the system does work. If it was to be summarized in one word, that would be incentive.
I don’t believe changing our tax structure will disincentivize our system, just make it more fair. There were plenty of ambitious people when the top marginal tax rate was 90%. With a reliable social safety net in place, people will be encouraged to take risks, to innovate. It may be considered crass to imply that nothing will happen without some form of incentive, but think about it for a minute. In capitalism, the incentive is mostly monetary, but in other situations, other incentives can work. We need to find a way to reach everybody. This will require a multipronged approach. Some will be incentivized by monetary rewards, some by fame, some by internal satisfaction. We must appeal to all these motivations and any others that come to light. The economics and psychology of human behavior often takes peculiar detours. We must be cognizant of the consequences of our actions and take action quickly to correct deviations from our intended course. Keeping the carrot in front of the donkey is the answer to making it move. I know it’s cliché, but don’t be part of the problem, be part of the solution.
Many of you might be better at coming up with motivational ideas than me. I would appreciate any comments you might have.