Incentives and priorities need to be aligned. If you pay someone 5 cents to return a bottle, you get more bottles returned. If your boss pays you for making more widgets, you'll concentrate on making more widgets.
This works very well until the incentives and what we want are different. Would you want someone to be paid a ten dollars for hitting you in the nose? No thank you.
I see the government doing this in a couple of cases. The two that stand out to me are 1. Healthcare and 2. Prisons.
Prisons are easy to fix. Get rid of private prisons. Private prisons get paid per prisoner. They don't get paid for how well they do in recovering or whether they are treated with respect or provided a way to successfully integrate back into society. Just paid per prisoner. So the government (government being you and me) pays someone to open build and run a prison that is incentivized to have more prisoners. Bad model. Some things the government should be doing themselves and not privatizing. This would be one of them so we could set up a system that works for us as a society, not for the owners of the jail. The owners have no incentive to improved performance, decrease costs, or reduce the profit margins.
Healthcare is also incentivized incorrectly, but I don't have a solution yet. Doctors get paid when you are sick or unhealthy. Hospitals make more money if your more sick. Seems that removing money from as much of the equation as possible would be helpful, but then you lose the money incentive for better care.
This works very well until the incentives and what we want are different. Would you want someone to be paid a ten dollars for hitting you in the nose? No thank you.
I see the government doing this in a couple of cases. The two that stand out to me are 1. Healthcare and 2. Prisons.
Prisons are easy to fix. Get rid of private prisons. Private prisons get paid per prisoner. They don't get paid for how well they do in recovering or whether they are treated with respect or provided a way to successfully integrate back into society. Just paid per prisoner. So the government (government being you and me) pays someone to open build and run a prison that is incentivized to have more prisoners. Bad model. Some things the government should be doing themselves and not privatizing. This would be one of them so we could set up a system that works for us as a society, not for the owners of the jail. The owners have no incentive to improved performance, decrease costs, or reduce the profit margins.
Healthcare is also incentivized incorrectly, but I don't have a solution yet. Doctors get paid when you are sick or unhealthy. Hospitals make more money if your more sick. Seems that removing money from as much of the equation as possible would be helpful, but then you lose the money incentive for better care.
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