Proper Incentives attain desired goals
If free market capitalism is actually practiced, then society's problems will take care of themselves, I believe. Although there might be an 'appearance' of hardship or 'pain' of adjustment, the free market model works much better than the mangaged model of socialism. As a case in point: the Little Rock school system.
In Little Rock Arkansas, they decided to by-pass the teachers union and give direct cash bonuses to teachers who had students who increased a certain test result by 4% or more. The amount of the bonuses went up as the students results went up. And the bonuses were for each individual student. So if you had 100 students improve, your bonus was multiplied by a factor of 100. Well, teachers are not stupid, despite what they say through their unions. They voted 100% to continue this program. And so far, the test results look promising. The kids are doing well, the teachers are happy about it, and the parents must be happy too. How blissful, everyone is happy. Sounds like a socialist dream right? - wrong. It is a capitalist dream. All of this was possible because of the financial incentive to improve. A goal without an incentive is just wishful thinking, but a goal with a proper incentive will always attain the desired results.
The incentive principle works like this: If you say 'son, mow this yard and I'll pay you $5'. You might get the lawn mowed at some point, as long as you put in additional effort to get a teenage body in motion. But if you say 'son, mow this yard and I'll pay you $5 - And if you finish within 1 hour, I'll quadruple your payment to $20'. Well then you would probably get your lawn mowed in less than an hour, without any extra effort on your part, because the boy now has a financial incentive. Your goal all along was to get the lawn mowed quickly, but your goal may not have been met without the additional incentive in place. This type of completion incentive is used in the construction industry all the time, and it works. There is also the opposite incentive in place as well...finish late and you'll have your contract reduced by $1,000 a day. So the contractor will aim to finish early to protect is job as well as his company. You could then say to your son 'if you finish late you have to buy me dinner'...which brings up another point - the incentives must be practical and attractive to the individual doing the work in order for them to work. If it's not practical for your son to buy you dinner with what money he has, then he'll develop a defeatist attitude, especially if the 'goal' is set too high for him to attain.
I have to wonder what the reaction of the teachers union in Little Rock was when they saw the 100% approval vote by their members. After all, they voted FOR a capitalist idea instead of the typical socialist ideas they've promoted in the past. But the proof is always in the pudding, and history will always give us examples of sound principles working. And most of the time we have examples right in front of our faces, if we just choose to notice instead of listening to the socialist advocates scream 'oppression'.
Capitalism always works everytime it's tried, and socialism is nothing but a drag...literally.
In Little Rock Arkansas, they decided to by-pass the teachers union and give direct cash bonuses to teachers who had students who increased a certain test result by 4% or more. The amount of the bonuses went up as the students results went up. And the bonuses were for each individual student. So if you had 100 students improve, your bonus was multiplied by a factor of 100. Well, teachers are not stupid, despite what they say through their unions. They voted 100% to continue this program. And so far, the test results look promising. The kids are doing well, the teachers are happy about it, and the parents must be happy too. How blissful, everyone is happy. Sounds like a socialist dream right? - wrong. It is a capitalist dream. All of this was possible because of the financial incentive to improve. A goal without an incentive is just wishful thinking, but a goal with a proper incentive will always attain the desired results.
The incentive principle works like this: If you say 'son, mow this yard and I'll pay you $5'. You might get the lawn mowed at some point, as long as you put in additional effort to get a teenage body in motion. But if you say 'son, mow this yard and I'll pay you $5 - And if you finish within 1 hour, I'll quadruple your payment to $20'. Well then you would probably get your lawn mowed in less than an hour, without any extra effort on your part, because the boy now has a financial incentive. Your goal all along was to get the lawn mowed quickly, but your goal may not have been met without the additional incentive in place. This type of completion incentive is used in the construction industry all the time, and it works. There is also the opposite incentive in place as well...finish late and you'll have your contract reduced by $1,000 a day. So the contractor will aim to finish early to protect is job as well as his company. You could then say to your son 'if you finish late you have to buy me dinner'...which brings up another point - the incentives must be practical and attractive to the individual doing the work in order for them to work. If it's not practical for your son to buy you dinner with what money he has, then he'll develop a defeatist attitude, especially if the 'goal' is set too high for him to attain.
I have to wonder what the reaction of the teachers union in Little Rock was when they saw the 100% approval vote by their members. After all, they voted FOR a capitalist idea instead of the typical socialist ideas they've promoted in the past. But the proof is always in the pudding, and history will always give us examples of sound principles working. And most of the time we have examples right in front of our faces, if we just choose to notice instead of listening to the socialist advocates scream 'oppression'.
Capitalism always works everytime it's tried, and socialism is nothing but a drag...literally.
posted by Rockin Rod at 4:35 AM
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