Incentive
/ɪnˈsɛntɪv/
noun
noun: incentive; plural noun: incentives
- a thing that motivates or encourages someone to do something.
"give farmers an incentive to improve their land"- a payment or concession to stimulate greater output or investment.
"tax incentives for investing in depressed areas"
Interestingly, while the definition of incentive looks very economically leaning, it has only been used in this way since the 1940s. First apparently due to the US war economy in the early 40s and then by economists a little later. Prior to this, it was used in the sense of "that which moves the mind or stirs the passion" - it is about lighting a fire within us.
However, from the economic perspective as it is used today and because I was talking about shifting economic incentives to be better for humanity, I think it is worth considering what this means. The capitalist system in its current form eats itself, because it is geared toward maximising profit, a token of some sort, under the understanding that more token means better. This results in the maximisation of the token instead of considering what is being produced and why, resulting in a skewed system that eventuates in insurmountable wealth gap of token that collapses the system, because there aren't enough people with token to demand the goods and services at the prices required to keep the system growing. And of course, this is also driven by the maximisation of the token process which includes reducing the costs of production, meaning less workers producing more.
The less people with token, the less demand.
The reason the economy doesn't work now is because it is created on an idea of scarcity, which makes sense historically due to resource scarcity, which is still a factor today for many things. But the problem with this approach is that if the outcome of production is a scarce and finite resource, the value of it is going to keep climbing, combined with the economic incentive to keep stacking tokens. As said, it eats itself.
But, it doesn't have to be this way if the outcome of production and therefore the why of production were aligned to something that wasn't limited and could always be improved and innovated. If this happens, the incentive for production, and therefore the way to generate wealth becomes a process of providing the best of something that isn't a scarce resource, rather than constricting supply to artificially increase the value.
As I see it, the outcome that should be the indicator of value, is the ability to improve human wellbeing in all the areas that matter. For example, the environment plays a critical role in our wellbeing from survival to thriving, so there should be economic incentive to repair and improve the environmental conditions. This could take the form of cleaning damage already done, or inventing increasingly clean and cheap energy to facilitate all other activities. Clean energy is obviously a massive area of opportunity, because if we have clean, cheap energy, we are able to create equipment that can supercharge our wellbeing factors, for the environment, healthcare, or production in general.
We are barely improving though, because currently the economic incentives are aligned to destructive production to token maximisation. For instance, the fossil fuels industry, or the war industry. These are not wellbeing creators, but they are wealth creators. They are not just polluters of the environment, they pollute our minds, bodies and wellbeing too. But, we keep supporting them consistently because we are also human, and we make emotional decisions that make us feel "safe", which is essentially doing what we know and what we have been conditioned to do. Our human incentive is for stability and safety, so we keep supporting the status quo activities, even though they are the very things that are making our world increasingly unsafe.
There is no reason that economic incentive can't be tied to improving human outcomes at scale, other than the way we as consumers, voters, and industry leaders have chosen to align ourselves. Even the consumers are token stackers in the sense that we will look for the cheapest deals on products that make us feel good, at the expense of our own future wellbeing - and industry is only too happy to oblige us, because they are then incentivised to produce what we demand.
We need to demand better.
But governments are not going to ever do this for us willingly, because they are incentivised by the token maximisation process at any cost also, through industry pressures and personal desires. But it seems that we as consumers will never make the decision to change direction either, because we have been conditioned to search for convenience, ease, and the feeling of safety and familiarity. And of course, industry is driven by demand, so with private consumer and public sector demanding what harms us, they will provide.
In the past, the incentive to "do the right thing" was much higher, because people were part of communities that valued each other and the average person looked to be a net positive within the community. But the more we have disconnected from each other and taken individualistic approaches to life, the shorter our sight has become. For example, many people are choosing not to have children today for various reasons, like economic and environmental concerns. But, this of course has a doubling-down effect on short-sightedness, because these people don't have to worry about what happens to their kids in the future, as long as they feel okay during their own lifespan. What does it matter to pollute when I only have twenty or so years of life left?
Our caveman ancestors would be turning in their unmarked graves.
Back then, life might have seemed like it was about survival, which it was, but it was about survival for a purpose. Continuance. Not just the continuance of the species, because as the brain developed and started having deeper, richer thoughts that could develop tools and improve wellbeing, the why of survival was about continuing the advancement. Wanting better for our children than we had.
Better doesn't mean more stuff, it means more wellbeing.
And the thing with wellbeing is that it is not a finite commodity, it has no ceiling. We can keep improving our live experience infinitely. Yet currently, because of the maximisation of token mentality, we are choosing to reduce our wellbeing to gather more tokens of value. It is nonsensical, because we have forgotten what is valuable for a human. All the token in the world doesn't provide wellbeing, unless it is spent on wellbeing creating activities. But, if we shifted our economic focus to value the wellbeing providers (in all their diverse forms), then industry would shift its production to provide for demand. There would still be the economic incentive to produce, but what is produced would change, and in short order, everything would change.
The current economic incentives are misaligned if looking to provide wellbeing for humanity, because the damaging practices are over-incentivised and highly supported by a minority of people who benefit enormously from things staying much as they are. They are able to keep collecting increasing rates of token, even as the rest of humanity collapses in on itself and ultimately life becomes unliveable. But, those economic winners will struggle in a largely uninhabitable world also.
It is not only nonsensical, it is stupidity.
The current economic practices that we all think are just the way it is, have not been in place for very long at all. In fact, a lot of the shift to "building shareholder wealth" (at any cost) came into play in the early 1970s with the shifting US economics to a public debt model.
This wasn't done to improve wellbeing, it was done to generate power and control globally in order to maximise the token generation of the few, at the expense of the many. Life of the average American started to shift dramatically from that point. Prior, a family would be able to live on one salary, have a house, car and a little bit of savings to today, where people can't even afford to be in a relationship, let alone have children.
All the possible technological advancement made in that time, all the potential to create a better level of wellbeing, was instead shifted into maximising shareholder wealth at any cost. Are we better off as a society because of it? I we enjoying life more, having stronger relationships and community, feel real meaning in our world and loving and being loved with grater depth? Are we trying to advance our species as individuals, or just satisfy our immediate desires?
All of it comes down to the economic incentives.
And they can be changed at any point.
Taraz
[ Gen1: Hive ]
Be part of the Hive discussion.
- Comment on the topics of the article, and add your perspectives and experiences.
- Read and discuss with others who comment and build your personal network
- Engage well with me and others and put in effort
And you may be rewarded.
I think somewhere along the line we lost sight of the fact that future generations are going to have to live here too and we should be doing what we can to make things better for them. Instead everything is internal now and we are only doing what we think is best for us. Not everyone of course, but the majority.
Exactly. And the more individualistic we become, the less we will care about anyone else, or the pains of the future. Compassion is dead.
And empathy.
The system really does reward profit over wellbeing and that’s why we keep repeating the same mistakes. But no one is willing to change. people at the top care about the profits and nothing else. Recently, Mr. President used the term, "Con-job," for green energy initiatives. On the other hand, the arising great power aka China is making progress in renewable energy resources, still it is not enough. To me, their progress is just a delusion while climate change is crushing everyone, everywhere. All these things have a devastating impact on economy as well as health, so everything is just inter-linked. However, I do believe that change is inevitable and people can push for wellbeing by how they spend, vote, and live. By choosing cleaner options, supporting local economies, valuing mental + physical health and holding companies accountable. If enough people demand better living standards instead of cheaper stuff, industries and policies will have to adjust. It’s not about rejecting the system completely, but about slowly redirecting it toward things that actually make life better. Change doesn’t need to be perfect or instant— it just needs to be occurring.
Yes. They are trying to make money out of the con, rather than making money out of fixing the issue. It is the same with pharma, they don't want cures, they want ongoing need.
It just won't be enough in time. It has to be across the board. Ten years of all investment going into making the world better, would have a dramatic effect. instead, we play games pretending we are doing something, even though things keep getting worse.
We live in an era in which civilization has become disconnected from nature, and we are trying to repair our planet with the same tools that destroyed it markets, competition, and symbolic rewards.
The real solution, in my opinion, is not to "motivate people to protect the environment" but to rebuild our relationship with it based on belonging and responsibility, not profit.
Some governments have begun to exploit and use green hydrogen which is considered a good clean energy source in addition to solar energy which has not been fully utilized to date.
Rebuilding relationship with universe
Yes, it is exactly that.
That is the motivation of connection, to protect it. The relationships are for sure important with nature, but the rewards for protecting it shouldn't be symbolic, they should be tangible. We should see the change, feel the change, and experience the wellbeing it brings.
I think we can create a future that is both fair and sustainable by adjusting our motivations to focus on health and caring for the environment.
The worst paid professions, are the ones that look after our healthcare and education - other than the doctors. Sad eh?
This is the very reason I'm shocked by investors who dive into areas that are not directly responsible for the well-being of humans, especially in third world countries. Were I investing in third world countries, I'd start from areas like agriculture, infrastructure, healthcare, education, etc. These are the foundations of our very existence. But then I guess everyone has a right to invest their resources where they choose. Most of these investors are minded for profits not to provide real value for humanity. If this perspective shifts then they will invest their resources where it's most effective for the society.
But they don't have the highest ROI. Look at the salary of a nurse, and the crap they have to put up with. And then look at the salary of an investment banker.
Yeah, but giving value to society, not profit would be the main purpose of the investments. I can never choose profitability over giving value to the society as an investor. I would live with the low ROI. I'm thinking like a man hoping to change the world and not become the world's richest.
Thats why that nurse, with all the crap they contend with and the not-so-good pay would stick to the job if she sees that area as her calling with which she can make a positive impact in the society.
Taraz I've worked on ways we could change the way we incentivize human beings. My belief is that timebanking abd regenerative finance is a radical solution we need today
what do you mean by timebanking in this context?
Exchange of time credits (incentivize good behavioral patterns)...
It is regrettable that with the advancement of technology, there is fierce competition among brand-name companies, which has led to a situation where they do not care about environmental issues. Companies implement a system of providing incentives when sales representatives exceed sales volumes. When these companies try to control the market by inflating prices so that each other surpasses the other, opportunities arise to reduce the cost of the relevant product, even cheap, low-quality raw materials. Consumers are tempted to buy even inferior materials at low prices because of popular brand names. Such a popular pizza establishment recently opened in our city, and consumers stated that the second day they served very inferior pizza recipes. Therefore, the government should also investigate the quality of these, and it is beneficial to provide incentives to institutions that do justice to the environment.
They do not care about any issues. Everything comes down to bottom line. This is why in order to make a difference, it has to be done in a way that affects the bottom line of business.
We are becoming more individualistic every day. In a world where community bonds are weakening and on the verge of breaking, doing the right thing can only be achieved through collective consciousness.
It's important for individuals to act consistently on certain issues. On the one hand, someone who avoids lamb to reduce their carbon footprint should also be able to refuse a cheap plane ticket when they see one.
In a world that has forgotten community, it is impossible to have a solid collective.
I think we are in a point of no return. I'd wish we have powerful men interested to give incentives to develop clean ways for the economy health. Unfortunately, I don't see this solution coming. Maybe China bring us the light, but I don't know, there's always shit under the bed.
Yes we do have the power to do that and we're doing it. But it will take sometime stay strong. Good things take time and lots of effort
A revolution?
Yes, are you ready to revolt??
lol yes there is. There are no strong men in the world today - just profit-seekers.
hive really lites my fire!! :P
“Incentive” typically involves government involvement. So you’re right back where you started.
Any meaningful change will have to be cultural. That begins with instilling values at home. We don’t value virtue as much as we once did. On the whole, science and technology advance lower cost, higher production, and an agnostic point of view. Science has shed its philosophical foundations and transformed society into a technocratic process.
“Incentive” is such a technocratic solution. As though we are candy machines that take a coin and spit out the treats. Input incentive and output desired behavior.
Real change starts at home. I’m certain you are offering Little Steps good understanding of what is of value in life. It’s the sort of thing that has to be passed down to each generation.
I agree with you that the current model has nothing to do with the benefit to society. However, the current model is all about keeping economy running. USA is overall a technological powerhouse with no equal in the world, China comes as a second but it was built up with American companies investing giant amounts of capital about twenty years ago to produce stuff cheaper.
Right now there is a shift away from producing stuff in China, so American companies are unlikely to do a second round of investment into China to modernize those factories. More likely there will be domestic investment into robotics driven factories here which would put those out of date Chinese factories out of business unless China invests its own capital to bring them up to the new robotics / AI standards. Even then China cheap labor advantage will be gone...
Public debt by itself is not a problem it is leverage that let's you pump up your economy particularly when dollar is the reserve currency... The only problem is when rates are high the interest payments are becoming expensive, but here we have Fed to the rescue with their rate cutting program...