By Dennis Loo
I just found this delightful video today (it has over 7.3 million hits) that shows in about 10 minutes why the central tenet of neoliberal thought is dead wrong. It originally appeared on Business Insider.
It shows how very conventionally-minded economists at the University of Chicago, Carnegie-Mellon and MIT found out in studies they designed and ran (and paid for by the Federal Reserve Bank) that the accepted wisdom that giving people more money to get them to work harder and better only works for the most mechanical of tasks and has a reverse effect on any task that requires even the most rudimentary kind of thinking.
What people are motivated by in life, in other words, isn't mainly material incentives but engagement, autonomy, purpose and contributing to something larger than themselves. When subjects in a poor rural area of India (Maduri) were given two months more salary as a bonus for harder work they did WORSE than those who were given less bonus cash. This replicated what they found when they carried out this experiment on MIT students.