An Interview with Ruth Grant: The Ethics of Incentives
Ruth Grant is a Professor of Political Science at Duke University, specializing in political theory with a particular interest in early modern philosophy and political ethics. A former RSF Visiting Scholar, Grant is the author of Strings Attached: Untangling the Ethics of Incentives (Russell Sage and Princeton University Press, 2011), which "questions whether the penchant for constant incentivizing undermines active, autonomous citizenship."
Q: When you consider the controversies that currently dominate the political debate, the use of incentives isn't high on the list. People seem more vexed about policies like the health care mandate or income taxes than, say, the use of a tax deduction to encourage charitable donations. Why did you become interested in the use of incentives as a form of power, and why do you think we should talk about them more?
A: I think that I have always been uncomfortable with certain kinds of incentives in my own experience; for example, incentives in the workplace that undermined team spirit or incentives in my child’s classroom that really made her feel manipulated. Other incentives don’t bother me at all. I began to notice that incentives have become the preferred tool of policy in all kinds of settings – governments, businesses, schools, prisons, hospitals – and it seemed important to think through which uses of incentives are innocuous and which are not. The fact that we have invented a new verb – “to incentivize” – is an indication of how much this approach has seeped into the culture. “To incentivize” is a much narrower concept than “to motivate,” which includes incentives, inspiration, arousing curiosity, etc. Something is lost if we automatically consider only incentives when we want to influence people. It seems important to discuss these issues precisely because incentives are pervasive, but also taken for granted.
Q: While incentives are largely viewed now as an alternative to social control, you look at the history of their use at the turn of the 20th century and find a much more controversial and worrying story. How were incentives perceived back then, and in what context were they discussed?
A: The term “incentives” was introduced in America in the early 20th century in several different contexts, including Frederick Taylor’s scientific management in industry and the new field of behaviorism in psychology. (Surprisingly, the term is not found in 18th century writers like Adam Smith). Incentives were introduced in industry as a tool of social engineering, while in psychology, behaviorists believed that they could gain social control by using incentives to induce desired behaviors. Incentives were quite controversial at the time. They were often criticized as dehumanizing, and in the form of piece-rate wages, they were a source of conflict between unionized labor and management.
Q: Someone defending incentives could say they merely offer a choice to the public. So, for example, states didn't have to compete in the Race to the Top education program if they didn't want the strings attached to the federal funds. But you suggest this focus on voluntariness relies on a rather narrow definition of freedom and rationality. Could you elaborate?
A: When incentives are viewed as a type of bargain or trade, the ethical focus is exclusively on whether or not the transaction is voluntary. So, for example, people argue over whether offering large sums of money to a poor person to participate in research is “coercive.” But this is not the only question. When incentives are viewed as a form of power – one way I can get you to do something you otherwise wouldn’t – additional ethical questions arise of the sort that always arise about the use and abuse of power. To return to the example -- if the research is filling out a questionnaire, nobody would really worry about coercion. If the research involves invasive and painful procedures, then the first question is whether the researcher ought to be conducting this study on human subjects at all. (Of course, often the answer will be "yes").
Incentives do offer a choice – but that is not sufficient. Mice in a maze also have choices: left or right? Studies have shown that incentives with human beings often backfire in situations where people find the incentives insulting. Incentives imply that you wouldn’t do the thing you are being asked to do for intrinsic reasons. Studies show that people tend to feel insulted by incentives when they take the place of persuasion; when they micromanage; or when they fly in the face of people’s generous impulses – for example, paying for blood “donations” can decrease the number willing to give. In other words, while incentives offer choices, they are based on a psychology that assumes people are reactive and malleable, like the mouse. They do not treat people as fully autonomous rational agents.
Q: You look at the ethics of plea bargaining and arrive at an interesting conclusion: "The purposes [of the criminal justice system] - truth and justice - cannot be served by a bargaining process." What would you say to an under-staffed prosecutor who needs to get through a thick docket in a short amount of time?
A: This is systemic problem that no individual prosecutor can do much about – except to put truth and justice above expediency at least by making sure not to offer a tempting plea bargain to a defendant in a case where the evidence of guilt is not compelling.
Q: How would some of the tools of behavioral economics work in your analysis of incentives? For example, what do you make of the use of defaults or opt-out? Is it acceptable to try and encourage, say, organ donation or retirement savings by asking people to opt-out, rather than opt-in?
A: Is it acceptable for an employer to deduct a small amount from your paycheck each month to give to a charity? Some employers do this. Should the presumption be that your employer can dispose of your salary in any way he thinks you would approve unless you stop him? There certainly is a question of where the line should be drawn. One of my children went to a college that included a small charge for a political donation with the tuition bill unless the student “opted out.” I thought it was awful because it sent the message that membership in the college community implied a certain “likemindedness” -- which is not a message an educational institution should send. Every case raises its own complex of issues. There is no “rule of thumb.”
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