Lorenzo & his humble friends

The fool doth think he is wise, but the wise man knows himself to be a fool

Tag: capitalism

What money can’t buy

Smoking is big in the Czech Republic. A few years ago the Czech government considered raising the tax on cigarettes. Major cigarette corporation were very unhappy. To contrast the decision of the government, Philip Morris commissioned a study on the effects of raising the tax on the national budget. The study found that the government actually gains more money than it loses from smoking and a higher taxation would have had negative effects. How so? The cost-benefit analysis showed that of course smokers impose higher medical costs on the national budget; but only as long as they are alive. And smokers tend to die much earlier, thus saving the government a lot of money in pensions, health care, and housing for the elderly. Each smoking-related death saved the government $1,227.

The puzzle of motivation

Traditional rewards aren’t always as effective as we think. Dan Pink starts from the candle problem, an experiment done by Sam Glucksberg, who is now at Princeton University. This shows the power of incentives. Here’s what he did: he gathered his participants and he said, “I’m going to time you. How quickly you can solve this problem?” To one group he said, “I’m going to time you to establish norms, averages for how long it typically takes someone to solve this sort of problem.” To the second group he offered rewards. He said, “If you’re in the top 25 percent of the fastest times, you get five dollars. If you’re the fastest of everyone we’re testing here today, you get 20 dollars.” Now this is several years ago. Adjusted for inflation, it’s a decent sum of money for a few minutes of work. It’s a nice motivator.

Question: How much faster did this group solve the problem? Answer: It took them, on average, three and a half minutes longer. For Americans believing in the free market, bonuses, incentives this plainly makes no sense.

This talk is about the capacity to look for solutions on the periphery. Rewards, incentives, bonuses, instead, narrow our focus and restrict our possibilities.

Don’t act. Just think

The person talking in this short clip looks like an old peasant with a strong rural accent. He is Slavoj Žižek, a Slovene philosopher and cultural critic strongly influenced by Jacques Lacan, Hegel and Karl Marx. Although being very left wing, thus fundamentally different from my political ideology, he defends some brilliant ideas. He says that capitalism is a form of religion and that there is simply no alternative to it. Most of the critics of today’s capitalism feel even embarrassed when you confront them with a simple question: “Okay, we heard your story . . . protest horrible, big banks depriving us of billions, hundreds, thousands of billions of common people’s money. . . . Okay, but what do you really want? What should replace the system?”. The twentieth century alternatives to capitalism and market miserably failed. And this is a serious problem: how to abolish market without regressing again into relations of servitude and domination. In this clip, Žižek has two proposals that are extremely appealing – and, most importantly, very very practical. This is a fascinating video, I think you should watch it.

Clic here for the full transcript.