Linking compensation to production DOES lead to greater efficiency. Of course the outcomes for individuals are not the same. The least productive get no more than they did before, and the most productive get a LOT more.
In summary the article says:
The series of experiments provided a fascinating confirmation that financial incentives can trump social networks, with some precision and much detail about the mechanisms involved. Bandiera and her colleagues have now stopped the experiments, in the belief that there is nothing more to be gained from this particular seam of inquiry. The owner does not seem to agree: He's hired a consultant to keep on hatching new performance pay schemes.
The Fruits of their Labor
Saturday, August 23, 2008
public force vs private cooperation
King is an economist whose posts I enjoy reading. An excerpt from one:
What folks like Speaker Kelliher lack is not a failure to understand public finance theory, but the ideal that persuasion and cooperation are the best form of social organization. Government is force, wherever it appears. Sometimes force can reduce transactions costs but not often, and the temptation to use force for other things, once granted in the case of fire or police, is something to which every politician, of every party, succumbs. Don Boudreaux makes the case:
Just as many on the right naively fantasize that foreign problems are best solved by force, "liberals" fantasize that domestic problems - real and imaginary - are best solved by force. Jobs disappearing in Ohio? No problem - force Americans to buy fewer foreign goods. Too many Americans without health insurance? Force taxpayers to give it to them. The "distribution" of income doesn't satisfy some Very Caring Person's criterion? Government should forcibly redistribute. A mine collapses in West Virginia? Uncle Sam should force mine-owners to increase safety. See? All very simple.
read the whole thing at: Westover does public finance, from his blog SCSUScholars
What folks like Speaker Kelliher lack is not a failure to understand public finance theory, but the ideal that persuasion and cooperation are the best form of social organization. Government is force, wherever it appears. Sometimes force can reduce transactions costs but not often, and the temptation to use force for other things, once granted in the case of fire or police, is something to which every politician, of every party, succumbs. Don Boudreaux makes the case:
Just as many on the right naively fantasize that foreign problems are best solved by force, "liberals" fantasize that domestic problems - real and imaginary - are best solved by force. Jobs disappearing in Ohio? No problem - force Americans to buy fewer foreign goods. Too many Americans without health insurance? Force taxpayers to give it to them. The "distribution" of income doesn't satisfy some Very Caring Person's criterion? Government should forcibly redistribute. A mine collapses in West Virginia? Uncle Sam should force mine-owners to increase safety. See? All very simple.
read the whole thing at: Westover does public finance, from his blog SCSUScholars
Tuesday, August 19, 2008
FEC finds man guilty for putting decal on his own car
One more piece of our liberty taken away for our own good. Once we lose the right of individuals to express political views, what is left?
FEC finds man guilty for putting decal on his own car
FEC finds man guilty for putting decal on his own car
Monday, August 18, 2008
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