Barry Schwartz on the Situation of Incentives

Barry Schwartz is the Dorwin Cartwright Professor of Social Theory and Social Action at Swarthmore College. Barry Schwartz studies the relationship between economics and psychology, delivering startling insights into modern life.

In his 2004 book The Paradox of Choice, Schwartz tackles one of the great mysteries of modern life: Why is it that societies of great abundance — where individuals are offered more freedom and choice (personal, professional, material) than ever before — are now witnessing a near-epidemic of depression? Conventional wisdom tells us that greater choice is for the greater good, but Schwartz argues the opposite: He makes a compelling case that the abundance of choice in today’s western world is actually making us miserable.

Infinite choice is paralyzing, Schwartz argues, and exhausting to the human psyche. It leads us to set unreasonably high expectations, question our choices before we even make them and blame our failures entirely on ourselves. His relatable examples, from consumer products (jeans, TVs, salad dressings) to lifestyle choices (where to live, what job to take, who and when to marry), underscore this central point: Too much choice undermines happiness.

Schwartz’s previous research has addressed morality, decision-making and the varied inter-relationships between science and society. Before Paradox he published The Costs of Living, which traces the impact of free-market thinking on the explosion of consumerism — and the effect of the new capitalism on social and cultural institutions that once operated above the market, such as medicine, sports, and the law.

At the third annual conference on Law and Mind Sciences, which took place in March of 2009, Professor Schwartz’s outstanding presentation was titled “Addicted to Incentives: How the Ideology of Self Interest Can Be Self-Fulfilling.” Here’s the abstract:

“If you want someone to do something, you have to make it worth their while.”  This uncontroversial statement is the watchword of our time. It is the core assumption of economics and of rational choice theory.  It is the linchpin of free market ideology.  And it explains why the first place we look in matters of public policy—from regulating financial markets to improving the quality of education to reducing the high costs of health care—is to the incentive system that governs the behavior of current practitioners.  Uncontroversial.  Self-evident.  And false.  In this talk, I will argue that the reductive appeal to self-interest as the master human motive is a false description of human nature.  At the same time, it can become a true description if people live in a world in which incentives are presumed to explain everything and are used to produce the behavior we want.  Just as people can become addicted to heroin, they can become addicted to incentives.  Looking at modern American society as it is gives us a picture of what people can be, but not of what they must be.

You can watch his presentation on the three (roughly 9-minute) videos below.

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For more information about the Project on Law and Mind Sciences, click here.  For a sample of related Situationist posts, see “Barry Schwartz on Wisdom,” “A Choice Worth Having,” “Can’t Get No Satisfaction!: The Law Student’s Job Hunt – Part II,” and “Just Choose It!”  To review all of the Situationist posts that discuss the problem with, or illusion of, choices, click here. “