Beautiful, comprehensive, straightforward idea. If only it would have worked . . . Human beings act upon incentives, the Tragedy of the commons is an old case study, and it would be so much better for all of us if everybody would just act as economists want them to – rationally. Well, I think it won’t.
Just remember Major major major major’s father, who receives a farm subsidy for every crop of alfalfa that he does not grow with his farmland and uses this money to buy more land to not grow alfalfa on. He believes that receiving money for not producing something is divinely ordained.
Incentives are personal and subjective, and what makes one person happy does not necessarily makes others happy, sometimes even the opposite is true. In many cases, what makes people happy is not what’s good for them. That’s just another thing we all learned in kindergarten.
I personally think that economists should just stop assume that common sense is general, or stable, or common. Some people want to be happy, some want to be miserable, and some just don’t want anything in particular. Instead of trying to manipulate others by different incentives, try for once to listen to what people say. Sometimes they actually mean it.
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