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
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