Mr Barry Schwartz on economics and morality:
‘Moral skill is chipped away by an over reliance on rules that deprives us of the opportunity to improvise and learn from our improvisations. And moral will is undermined by an incessant appeal to incentives that destroy our desire to do the right thing. And without intending it, by appealing to rules and incentives we are engaging in a war on wisdom…
We need incentives. People have to make a living, but incessant reliance on incentives demoralizes professional activity; in two senses of that word. It causes people who engage in that activity to lose morale, and it causes the activity itself to lose morality…
Barack Obama said, before he was inaugurated, “We must ask, not just is it profitable, but is it right.” And when professions are demoralized, everyone in them becomes dependent on and addicted to incentives, and they stop asking is it right?”‘
Indeed, too many times, we do not ask: is it right?
Mr Schwartz’s talk raises many questions. Take carbon emission trading for instance.
It is promising in theory. Economists believe that all decisions come with some form of trade off and justly so; it is impossible to seek current levels of comfort and efficiency yet leave our environment entirely untarnished. We can only try, continually, to minimise our burden on the environment, and when firms have to pay for carbon permits an amount that compensates for the burden imposed on the environment, they are compelled to reduce their carbon footprint.
But what are the consequences of substituting moral obligation with financial disincentive? When everything is reduced to transactions, how differently will people treat the people and things around them?
In Predictably Irrational, Mr Dan Ariely related how a day care centre in Israel imposed a fine to discourage parents from picking up their children late. Unexpectedly, incidents of late-coming increased. Economists explain this phenomenon as the accidental creation of new markets; by fining parents who come late, the centre had replaced moral obligation in the form of guilt with a financial disincentive and inadvertently extended their service beyond office hours. Consequently, parents who were willing to pay the fine for more personal/work time felt entitled to come late.
Without discussing the issue of ethics at this moment, can this possibly be a reason why so many Singaporeans, regardless of socioeconomic stratum, have such a repugnant sense of entitlement?
1. Dr John Hui Keem Peng, in a letter to The Straits Times: ‘I once came across a patient who saw me for complaints arising from complications of an abortion she underwent a week earlier. During the consultation process, it became clear to me that she was hurting not just physically, but also emotionally. She told me that this was not her first abortion, but her third. As she fought back tears, she explained that she “had to” go through with the procedure as she was on the Home Ownership Plus Education (Hope) Scheme. The scheme provides financial and material benefits to young, low-income families that choose not to have more than two children. Once they have more than two children, they are no longer eligible for the benefits.’