I hear a lot of talk about economic incentives, and I am puzzled. OK, I’m bothered. I think that bother comes from the same source as the irritation when people are referred to as “consumers.” Let me see if I can think this through.
Some economic incentives are clear and simple to understand. A supermarket runs a sale on canned tomatoes, and you go and buy 15 cans, or however many your pantry can hold (two cans, if you’re a New Yorker). The newspaper runs a special: 6 weeks subscription at half price. You take it – what the hell. It’s cheap. You find an electronic gizmo on special, and you buy it – those headphones usually cost $40, but they are on sale for $15, so you are really saving (and therefore sort of earning) $25.
In all these instances, you are, indeed, rightly called a “consumer.” No objection, no annoyance there. And while all three examples involve good prices, only one is really much of a deal, and that is the tomatoes. The supermarket knows this, and they take the hit on the price just to drag you into the store (it’s called a loss leader). Newspaper subscriptions usually are for the long haul, and a six-week reduction, averaged over the life of the paper, isn’t much to bear for the news company. Besides, once you get the paper, you are probably going to maintain your subscription. Who ever calls to cancel? Too much trouble. Again, they are trying to draw you in, to get you started so you will continue. And the headphones are the worst. You don’t need new headphones, and the thought of buying something because it is cheaper than it used to be is crazy. I am far from immune to the impulse, and it is lucky that I have moved houses a lot of late – moving gives you a great incentive to throw out all that junk.
I guess my point about all that is that these “incentives” don’t seem very incentivizing. They prey on our desire to accumulate stuff (more groceries! more news! more electronics!), and the incentive might be powerful, but the economic reality is something else. Buying an extra pair of headphones that you don’t need is not like saving (earning) $25, it is like burning 15 one-dollar bills on a cold day to keep warm.
I should perhaps point out, before going on, that I never took an economics course in my life. And it probably shows.
Even more baffling to me are large-scale incentives. Let me offer my favorite example: myself. I recently took a job as a college professor. I actually was making more money before, but the job I took seemed like it would make me happy (it has) and would make my life sane (ditto). I chose to live near my work, where property taxes are extremely high, rather than go just a few miles away, where they are lower and where property itself is much cheaper. With my imputed savings had I acted differently, I could easily have saved enough money to afford a really high-quality private school for my son, and still come out ahead. That seems a powerful incentive. Yet I chose to do what I did, partially because of my perceived quality of life (driving 20 minutes to work? Been there, done that, and more) and partially because I believe, yes I do, in public education. I am happy to pay my property taxes, and would happily pay more if I were convinced that it would really improve all our schools.
The point here (it’s hard to find, I know) is that there are many things I (we?) do that fly in the face of economic incentive. I am not primarily a “consumer” – I am a human being (just accept that temporarily; you can argue that point in the comments) who makes decisions based on a weighing of factors of which economics is a part but not a whole.
Perhaps this is why those on the left and those on the right can’t seem to talk to each other. If you assume behavior is governed by economics, you view the world one way, and if you assume it is governed by other considerations, the whole picture looks different. Companies are merging, growing larger and more powerful – is this a good thing (cheaper goods for all, and therefore better living) or a bad one (McDonald’s and Walmart for all, and therefore indigestion, zits, and stuff that breaks pretty quickly)? Our quality of life is way up from 100 years ago. Believe me, I have no interest in taking my laundry down to the river to beat it against the rocks. But are we, as a society, living lives of greater human meaning and worth, or is that becoming harder and harder? I guess only the consumers of tomorrow can answer that question.