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Saturday, October 7, 2017

Chris Dillow — Capitalism's bad incentives

 Martin Wolf writes that successful leftism “must recognise the crucial role of incentives in shaping human behaviour.” This is correct. I’m not sure, though, that it is a big argument against Corbynism. This is because actually-existing capitalism itself contains many dysfunctional incentives – ones that constrain innovation and encourage rent-seeking - and Corbynism offer the hope of reducing some of these.
I would say that there is a tendency in capitalism (economic liberalism) toward incentives that base rather than noble, and the result is an increasing dysfunctional society where the culture does not correct for this tendency, e.g., morally and ethically, or at least institutionally and legally. Then it becomes a race to the bottom toward degeneracy.

Stumbling and Mumbling
Capitalism's bad incentives
Chris Dillow | Investors Chronicle

1 comment:

  1. Relying upon noble intentions of private business is what brought Beveridge Keynesianism to an end.

    You have to assume that Cheetahs like Gazelle meat and will chase them. Not that they will become vegetarians when you ask them.

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