Economists talking about “incentives” remind me of a scene from the classic film “Cool Hand Luke.” Luke (Paul Newman), a prisoner on a southern chain-gang, stands up to the corrupt prison authorities. For his efforts he is badly beaten by the guards and thrown into a ditch. From the top of the levee the Captain (Strother Martin) looks out at the chain gang and proclaims this immortal line: “What we’ve got here, is a failure to communicate.”
Well, OK. You could put it that way. But in doing so you are entirely distorting the reality of what is going on (and of course that was the Captain’s intention.) Unfortunately economists seem unaware of just how badly their talk about “incentives” distorts the realities they are talking about. Continue reading Incentives?