Monday, January 12, 2009

Free Will: Predictably Irrational

Industrial Era capitalism is inundated with irrational reliance upon irrational conventions and assumptions in the context of a post-information society.

For instance, it's incontrovertibly obvious that NOBODY possesses anything even remotely resembling "Full Information," yet conventional economic theory is utterly dependent upon hosts of such irrational presumptions.

In real life economic behavior, Ariely explains, "You rely on our own past behavior, to dictate your next behavior, without clearly thinking about it, until it just becomes a habit."

When we do this over and over again with an entire economic system founded upon absurd and irrational assumptions such as Full Information and an achievable equilibrium, we are clearly setting ourselves up to FAIL time and time again.

Dan Ariely quotations:

"There's a level of compensation that actually undermines and replaces the original motivation; and that I think is a very very dangerous place."

"One of the ways [companies capture the heart and soul of employees] is to obfuscate payment, by paying people monthly. Cash eliminates the long term bond between people."

"You simply cannot contract motivation."

"When people talk about markets, it's like voodoo belief: The Markets will fix things."

Ariely says that when he meets entrepreneurs, they generally want to Improve The World and big cash payoffs from some other source to do something that they don't care about generally have little or no effect. My own observations and experience over the past 35 years completely validates this perspective.

"I actually believe that very little of innovation, creativity, entrepreneurial activity is happening because of economic incentives; I think we have these incredible drives for meaning and help and it's not about [cash] incentives."