Wall Street Incentives

It appears that it isn't only Wall Street "bankers" who respond to incentives. Here's a posting from the Freakonomics web site:

Two French firefighters admitted to starting brush fires on the island of Corsica on July 8 and July 14. Their motivation: overtime bonus pay of 19 euros for nighttime work (July 8) and 38 euros on July 14, for Bastille Day.

It just goes to show that if you want something to be done right then appealing to a person's moral sense may be high minded, but ineffective. It is much more dependable to make sure the financial incentives are right. (Or maybe in this case the disincentives, i.e. jail time & fines.)

This just goes to show that Bush and his radical right wing economic "theorists" who argued that markets must be free and government regulation be removed won't work. People respond to incentives. Laws are incentives if they have teeth. Also, as in the above case, you need to make sure that the positive financial incentives are too tempting that it will lead morally weak people astray.