Strings Attached: Untangling the Ethics of Incentives

A reductive approach to social behaviour is bad news for democracy, James Garvey writes

December 8, 2011

When it was decided to affix realistic-looking fly decals to the urinals in Amsterdam's Schiphol Airport, as has been widely reported, it resulted in a dramatic improvement in manly marksmanship: spillage was reduced by as much as 80 per cent. (Mercifully, details of the way this figure was determined are not given.) If a simple tweak to the environment can encourage men to urinate in a socially responsible way, you might think that any number of social improvements could be similarly achieved, and you would not be alone.

The hope that the social world might be structured so as to encourage people to choose something collectively desirable has been seized upon in both London and Washington. David Cameron set up a "nudge unit" in the Cabinet Office in September last year, charging it with using behavioural economics to push individuals towards better choices in their everyday lives. It is formally called the Behavioural Insight Team, and it is advised by nudge guru Richard Thaler. Cass Sunstein, co-author with Thaler of the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, is a regulatory tsar in the White House. It is believed that new ideas about "choice architecture" now inform Barack Obama's policy on things as diverse as the environment and pension planning.

This is all headline-grabbing stuff, but the quieter methods that institutions use to stack the behavioural deck are worth our attention, too. Consider the humble incentive. Governments offer tax breaks to businesses that relocate within their borders. Those accused of a crime might be inclined to plead guilty to a lesser charge in exchange for a reduced sentence. The state of West Virginia pays married couples on welfare an extra $100 (£62) each month in an effort to strengthen the bonds of matrimony. There are conditions attached to International Monetary Fund loans, including the introduction of austerity measures. The subjects of experimental research are offered financial compensation for taking part. Children are presented with cash in exchange for better test scores. You can have a loyalty card at any number of high street shops, if that's where your loyalties lie.

These and other incentive schemes are the focus of Ruth Grant's illuminating Strings Attached: Untangling the Ethics of Incentives. If you're sceptically inclined, you might immediately wonder whether there's really anything of moral concern associated with incentives. An incentive is a voluntary trade, a mutually beneficial bargain struck to the satisfaction of both parties. The accused is offered a deal, and she can take it or leave it. Where's the moral harm in that?

Grant's answer is that incentives are not merely voluntary trades. The incentive, like coercion and persuasion, is a tool that some people use to get other people to do what they want them to do. Conceived in this way, incentives involve the exercise of power, and of course power can be used in more or less morally acceptable ways.

Power is used legitimately, she argues, only when all of the parties involved are treated with dignity, "as beings capable of moral agency on account of their rationality and capacity for freedom". So far, so Kantian, and by this I mean it looks as though the moral bedrock for Grant is the thought that we ought to act so as to treat people as ends in themselves, not just as means to our ends. But she goes on to put this point "more concretely" by saying that incentives must be judged "by whether they serve a rationally defensible purpose, whether they allow for a voluntary response or are based on freely given consent, and whether they accord with the requirements of moral character". Talk of purpose here sounds not Kantian but consequentialist, the view that what matters morally are the consequences we pursue. Her mention of character drags Aristotle into the mix, with his insistence that a virtuous character is at the centre of morality. Can Kant, consequentialism and Aristotle really hang together coherently?

It turns out that for Grant, questions about purpose, consent and character are only the beginning. Context matters, and once we start thinking about concrete cases, further questions arise, having to do with the ranking of purposes, exploitation, the efficacy of incentives, the accountability of those offering incentives, the long-term impact of incentive schemes, fairness, and spheres of influence into which incentives extend. There's a mix of moral theories in her consideration of all this, too, but worries about coherence can fade if you're willing to adopt Grant's view of the world of incentives as a complicated, messy tangle of values. She denies that any rule of thumb or moral principle is enough to help us find our way through it. All of these perspectives, all of these concerns, deserve a hearing, and maybe that's true.

The most illuminating part of the book is Grant's discussion of voluntariness. She cites Isaiah Berlin's distinction between merely having a choice (not being coerced) and the full-blooded experience of autonomous action. When I act autonomously, I am "conscious of myself as a thinking, willing, active being, bearing responsibility for my choices and able to explain them by references to my own ideas and purposes". What's more, we all want, and perhaps need, to think of ourselves in this way. So incentives tend to backfire when they undermine our autonomy.

She cites studies showing that British women are 50 per cent less likely to give blood when offered cash incentives to do so. Children given rewards for learning in many situations perform less well and lose interest more quickly than children who are not rewarded. Being compensated for doing something we might want to do for altruistic or other good reasons leaves us feeling manipulated, precisely because our autonomy is put to one side. Incentives are rooted in the notion that we mostly act in our own interest and this can be insulting - it can convey the thought that we're not trusted to do what we ought to do without a reward.

Grant argues that if people are regarded as self-interested incentive-seekers, that's just what they become. The more we are treated as one-dimensional creatures, motivated by selfish cost-benefit analysis and little else, the more we "get used to an 'incentivized' environment". If you pay your child to mow the lawn, rather than encourage her to help out for better reasons, she's likely to want a bit of cash for doing the washing up, too. When we are viewed as units that might be incentivised to behave as required, the prophecy is self-fulfilling: we become "passive, self-interested, predictable and manipulable".

As governments make more and more use of incentives, Grant claims, we gradually lose what's required for a fully functioning democracy. Instead of "citizens who are active, autonomous agents, capable of developing and pursuing their own life projects", we're becoming not much more than rats in a maze. Incentives are easy substitutes for rational persuasion, seized upon by those pulling the strings in our Big Society, slowly undermining what's required of us as good citizens.

What can we do about it? Grant offers a number of recommendations, among them that "the sense of insult that incentives can provoke is worth cultivating". Think about that the next time you hear that your government is introducing a new incentive to change your behaviour, instead of asking you what you think, explaining its reasons and talking to you about it, like the person you are. You might bin those loyalty cards, too.

The Author

Ruth Grant is a senior fellow at the Kenan Institute for Ethics and professor of political science and philosophy at Duke University. After completing her doctorate in political science at the University of Chicago in 1984, Grant gave birth to twins and "kept a hand in with academic work" by revising her dissertation and teaching. In 1987, she joined Duke's political science department, and a year later her third child was born.

She says it was most likely her father's enthusiasm for intellectual conversation that sparked her interest in philosophy, adding that if she could have lunch with any philosopher it would be Plato or Jean-Jacques Rousseau. Grant has written several acclaimed works, including the award-winning Hypocrisy and Integrity: Machiavelli, Rousseau, and the Ethics of Politics (1997).

Outside her academic life, Grant enjoys hiking in the mountains, and she plays the violin and the viola. Of the fly-fishing lure pictured on the cover of Strings Attached, Grant says: "I had nothing to do with that choice - but I took it as an omen and started fly fishing last summer."

Strings Attached: Untangling the Ethics of Incentives

By Ruth W. Grant

Princeton University Press

200pp, £16.95

ISBN 9780691151601

Published 12 December 2011

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