Saturday, June 22, 2024

Interested

There is a lot of "conventional wisdom on LinkedIn. The sort of thing that affirms people's preexisting understanding of the world around them, and is seen as valuable mainly because the person who posted it has some combination of fame and wealth. Consider the following, posted by Ray Dalio:

In other words, be wary of the fact that people's self-interest, combined with a drive for efficiency, can lead to deceit, and understand how to best safeguard one's own interests.

People do things for us, including operating in our interests, because they perceive it to be in their interests to do so. I've known a lot of people who have loved their jobs; but none enough that they would do them for free. And those people who do work without being paid either expect other benefits to themselves (even if it's only "exposure," or feeling good for contributing), or don't have any other viable options. But this is nothing new, it's been part of economic thought for the past 250 years.
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

Adam Smith "An Inquiry into the Nature and Causes of the Wealth of Nations" 1776
Likewise, "For example, most people will operate in a way that maximizes the amount of money they will get and that minimizes the amount of work they have to do to get it," is also generally understood, because in many circumstances, it's what's termed as "efficiency." Just swap out "money" for "food" and one has the direct reasons for the advances in agricultural technology that have allowed the world to support some 8.11 billion people. And the Walmart slogan of "Save Money. Live Better," can easily be rendered as "maximizing the standard of living that people will attain and minimizing the amount of money they have to spend (and thus work they have to do) to attain it."

And of course these factors drive perverse incentives. Back when Fry's Electronics was still around, looking for assistance with assorted computer accessories could be a hassle. Stop in front of an expensive big-screen television, however, and obsequiously helpful salespeople would materialize from thin air seeking the commission on the purchase, even if they added no value to the shopping experience. But there is no field of human endeavor that is free from perverse incentives. Accordingly, there are people who will look for them, and seek to use them to their advantage. So the best thing may simply to be aware when one is creating perverse incentives oneself (and sometimes, it can't be helped), and then being vigilant.

There is no field of human endeavor that is free from perverse incentives. Accordingly, there are people who will look for them, and seek to use them to their advantage. So the best thing may simply to be aware when one is creating perverse incentives oneself (sometimes, it can't be helped), and then being vigilant, rather than implying that this basic fact of human nature stems from dishonest impulses.

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