Works like a Charm: Incentive Rhetoric and the Economization of Everyday Life
Guest post by Robert O. McDonald
“Incentives,” in the hands of their practitioners and cheerleaders, appear to be magic words: They convince businesses to relocate to new localities, they entice customers to purchase new products, they reward voters, video gamers and professional athletes alike for a desired behavior. Indeed, the Latin word “incentivum” means “that which sets the tune,” so we can think of an “incentive” the same way we do of the Pied Piper, who plays a mesmerizing tune that seduces us into obedience. You have probably heard this word in many settings—or used it yourself!—and it seems like an innocuous way to explain someone’s behavior. An incentive is designed as a causal, measurable, and ostensibly non-coercive way to reveal someone’s preferences, and motivate them.
Works like a Charm: Incentive Rhetoric and the Economization of Everyday Life suggests that this story is not so simple, that “incentives” replace complex social, cultural, and political ways of interpreting the world into a narrowly economic one, one that privileges instead the concepts of prices, preferences and “utility maximization.” As a result, inequalities—economic, sexual, racial—become naturalized as if by magic: People rationally select their fates based on their available incentives. For instance, during Congressional debates over an equal pay bill, the Paycheck Fairness Act, some lawmakers suggested that women have unique “incentives” for raising children, so they cannot be paid equally to their male counterparts. In effect, the term “women’s incentives” functioned hydraulically, to fill the gender pay gap, metaphorically taking the place of money.
Rather than being causal, in the simple sense of “X” incentive causes “Y” outcome, instead I argue that incentives reveal a strategy of retroactive causality, in that any incentive is retroactively reconstructed as having been a secret cause all along. Incentives appeal to our desire for stable, linear explanations of causality, and they fill in the anxiety-inducing gap that we deal with as human beings. Every question, from “Why is there racial discrimination in the housing market?” to “Why does my husband keep his nightstand light on so late at bedtime?” can be explained through this framework.
In the 1990s, Nobel economist Gary Becker argued that when people fail to sign up for social welfare benefits, it is because they value “personal dignity” over the money they would earn from a successful application. For Becker, this functions as evidence that welfare benefits should be more difficult to apply for, and less generous, to increase the total social dignity of impoverished people. Attention to retroactive causality reveals that this hidden object, “dignity,” did not preexist the relation, but emerges to rationalize an unequal playing field.
This turn to “incentives” reveals an entire governing strategy, a total way of seeing the world. In the words of one well-known economist, the entire field of economics could be summarized as “People respond to incentives. The rest is commentary.” Given how well-placed mainstream economists are in policymaking and advising, we should be skeptical of the truth claims that emerge from a simple incentive-based framework. We should be especially skeptical of a framework that imagines human beings as both passive and rational, voluntarily choosing from an available menu of options, rather than constrained by structural forces that not only enforce inequalities, but rationalize them as inevitable.
In Works like a Charm, I propose a 5-part way to “break the spell” of incentives, of which I’ll discuss just one here. Incentives tend to appear as dyadic relations between parties—one incentivizer, one incentivized. If you are familiar with “nudges,” authors Cass Sunstein and Richard Thaler use the term “choice architect” to refer to anyone who can organize a meaningful choice for anyone else. This can be a parent, manager, teacher, salesperson, and so on. If we merely think of incentives as a dyadic relation, enormous social hierarchies of wealth and power are flattened—and indeed reversed—when the chooser, rather than the “choice architect” is presented as the key actor. Incentives seduce us to look downward in a social hierarchy, and I suggest that we focus our critical attention upward.
The 2020 CARES Act included a provision for supplemental unemployment insurance benefits, to make laid-off workers whole. When economists, media figures, and legislators advocated for an end to these benefits, the refrain of “no one wants to work anymore” was accompanied by the argument that the benefits provided an “incentive” to remain unemployed. (Jon Taffer, host of the CNBC show Bar Rescue, likened those receiving unemployment benefits to dogs, saying “they only feed a military dog at night because a hungry dog is an obedient dog.” Taffer later apologized for his comments.) Yet, according to Morgan Stanley, the Wall Street Journal, and the Economist, ending these benefits failed to appreciably alter the unemployment rate; it settled around 4 percent, roughly the level prior to the COVID-19 pandemic. Therefore, ending this specific benefits program was designed to provide an alibi for why businesses could not remain open, why goods and services became more expensive: greedy unemployed workers.
The claim that unemployment benefits remove the “incentive to work” has been an arrow in the rhetorical quiver of conservatives for as long as the benefits have existed, but arises in acute moments like these not because of their dubious truth value, but because they provide a causal explanation for why the world does not appear to spontaneously adhere to the principles of economic theory. The “great resignation,” the cries of “no one wants to work anymore,” and that the “government creates disincentives to work” all confront the conundrum of an absent cause—this cause is not merely death on a massive scale, but the absent cause of complexity. Absent a robust explanation for why things did not go “back to normal,” incentives to work (or lack thereof) symbolically filled the gap.
When incentives are the primary way of narrating human activity, they crowd out alternative explanations and force all participants into a language game that economists are always capable of winning. “Incentives” to work (or not) stick out, and stick around, in the rhetorical repertoire of political figures and policymakers because they are a natural outgrowth of a fundamentally economic way of viewing human life.
Incentive rhetoric is seductive—it purports an account of causality that appeals to our desire for linearity and stability. It is also inescapable—corporations and politicians employ it, and figure us as passive, utility maximizing price-takers, mere bundles of preferences and choices that can be acted upon. The next time you encounter an incentive, take a pause, ask what tune is being played, and consider marching elsewhere.
Robert O. McDonald is Assistant Professor of Rhetoric in the Department of Communication Studies at the University of Kansas.