Once made explicit, all of this might appear self-evident to
someone who paid attention in a basic economics course. Why
is it important, and why does it bear emphasizing? There are
Recognizing the marginal importance of incentives prevents
individuals from looking for panaceas or overnight
revolutions, of which our world yields extremely few, if any.
On the other hand, it also inculcates one against despair.
Any sufficiently strong incentive will result in a desirable
or undesirable statistical shift, but it is unlikely to
completely solve a problem. On the other hand, it is also
unlikely to completely doom the state of affairs, either.
Human beings are remarkably resilient and intricately
Crimes, disasters, bad laws, and health defects will destroy
some and keep down others—but human innovation and
creativity will not completely die; it will flourish
somewhere, in some way or another, where the negative
incentives are not strong enough to thwart the civilizing
desires of the best among us. But it is also important to
recognize that human existence is a continual struggle
against both natural perils and the follies and even the
evils committed by our fellow men. We will need more than
one incentive to be favorably arranged if we are to keep
these enemies of civilization at bay.
The marginal functioning of incentives is also a cause for
hope. If a destructive policy were to completely cripple
some facet of human life, then there might not be a way to
resist it effectively. But because some individuals are
sufficiently strong internally so as not to be
diverted from their course by the policy, they can amass the
will and the resources to resist it. Moreover, people can
condition themselves to respond more or less strongly to
certain incentives. The more a person can train himself to
persevere in the face of significant externally imposed
costs, the more likely that person is to succeed despite
such obstacles. Such successes are the building blocks upon
which all human civilization has been built.
It is instructive to remember that there has never been an
even tolerably calm and safe environment for innovators to
flourish; at every time and place in history, some force—deliberate
or not, more severe or less so, but never particularly mild—stood
in the way of the thinkers and creators to whom we owe our
progress. Where the carriers of civilization overcame these
forces, they created a more favorable environment for us. We
must, likewise, strive against the challenges of our time.
By overcoming existing negative incentives, we can create
positive ones for the future, through the examples we set
and the work we bring forth.