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Incentives not Motives, or Why I Sympathize with Those Who Might Discriminate Against Me

April 19th, 2011 · No Comments · Politics


Let me open by saying I am an “old” (52) white guy, and if you live in a state that rigidly enforces age discrimination laws you probably think twice about hiring my ilk, and I don’t blame you. Thanks to the legislation put in place the incentives are stacked against me.

One of the essential worldview disconnects that economist Sowell cites in A Conflict of Visions is how one camp believes that motives and internal dispositions matter most, while the other believes incentives are what’s key.

“While the constrained vision takes people’s motives and predispositions as given, and emphasizes incentives to lead to socially desired behavior, the unconstrained vision attempts to change people’s motives and predispositions so that incentives in general are less important, whether in the economic marketplace or in the law. The unconstrained vision seeks a solution — in Condorcet’s words, ‘the reconciliation, the identification of the interests of each with the interests of all,’ so that the path of virtue is no longer arduous.”

What Sowell refers to as “internal dispositions” being primary to one group and “external incentives” to the other.

I believe a litmus test to discern those of the “internal dispositions” school is when you hear phrases like we should “draft our leaders” (so the “virtuous” people are put in charge,) or refer to swaths of politicians (usually members of the opposing camp…) as being “crooks”. The evidence is clear that men of high virtue put in power are presented with powerful incentives to bad things, and a significant percentage (most…) do so. How else do you describe the perpetual desire we have for “change” and the results described here? Gee, just an abnormally large set of “bad eggs” over generations?

Look at Charlie’s Rangel’s history. He’s a good guy. Regrettably, he was presented with a plethora of incentives over decades and those with the Tragic Vision are not surprised by what eventually resulted.

Recent research by Joanna N. Lahey of Boston College backs me up. To the unconstrained thinker, there is a problem: Age discrimination. There is also an obvious solution — make age discrimination illegal. Alert all the pure people of the world that this is a no-no, and they will understand and conform. To the constrained thinker (especially one who understands how real-world hiring goes) they know a reasonable person will act in their self interest, and think twice about hiring someone they can’t fire without probably ending up in a lawsuit:

(emphasis mine)

“Another study I conducted compares labor market outcomes of older people in states where it is easier to sue under age discrimination laws (those with local laws) to older people in states where it is not as easy (those without such laws).

White older men in states where it is easier to sue are less likely to be hired than such men in states where it is more difficult.

Overall, in states where it is easier to sue, older white men work fewer weeks per year than those in states where it is harder to sue. These findings suggest a story in which firms that are in states where it is easier to sue do not wish to hire older men, are afraid to fire older men, and remove older men through strong incentives to retire.”

If you read the whole report, you will see that Lahey qualifies this and says that enforcement is likely not the entire reason behind the difference in the data, just a factor.

Not the first example of the well-intentioned fostering a situation where they get the opposite of what they desired…


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