Planet of the Technocrats
There’s a great book out by Harvard’s Michael Sandel on the moral limits of markets (I wrote a long piece about it and its implications for school choice here). But Sandel’s book also contains a lot of interesting information about incentives, and the ways our use of them has both grown and revised the traditional economic thinking that began with Adam Smith’s original 1776 notion of an “invisible hand.”
As Sandel explains, we’ve substantially revised our definition of economics itself — from the 1958 textbook notion of “the world of prices, wages, interest rates, stocks and bonds, banks and credit, taxes and expenditure,” to the modern notion of “a group of people interacting with one another as they go about their lives.”
Because of that tectonic shift, incentives have become the primary weapon in modern social-science policymaking. As Freakonomics author Steven Levitt has written, incentives are now “the cornerstone of modern life.” And economics, he continues, “is, at root, the study of incentives.”
For all of us who care deeply about American public education – and who worry about its future – that shift in understanding should say EVERYTHING to us about