Money out of place? “Debt” and Incentives

by Richard Ashcroft on February 26, 2012

My interest in David Graeber’s extraordinary book “Debt: The First 5, 000 Years” stems from my work on incentives in healthcare. I don’t have much to say about debt and political economy. On these matters I am an ordinary citizen-punter and the most sophistication I can muster is to parrot John Lanchester’s better lines. But I know a little bit about incentives, and here I want to say a few things about the connections.

The current debate about incentives in healthcare can be split in half. One half concerns the use of incentives to motivate professionals and institutions to provide better, or different, care and services to patients and clients, citizens and customers. This is a very important debate, with roots in Adam Smith’s suspicion of professions as conspiracies against the public, the public choice theorists’ suspicion of regulation by rule-making, and the management consultant’s belief that people’s behaviour at work is driven principally by the available rewards.

Interesting as this debate is, and however troubling it may be to those of us who think that work, especially professional work, is about craft, vocation, public service, and other non-monetary considerations, at the end of the day, work is work and it is paid, or it is not done. Work sits within the economy, and the use of incentives to shape and frame that work surprises no one very much and upsets no one very much. Upset is caused by inequality in remuneration, exploitation in the labour market, and so on. But this doesn’t unsettle the basic idea that work and incentives go together. Who gets the incentive, how much, contingent on what, etc. is all up for argument and negotation, obviously. So is the problem of what money payment is actually paying for: in The City, does the high pay remunerate not only extraordinary hours of work, but also being subject to bullying, sexist and sexual abuse? In the Forces and civil defence, does payment trade off against the level of risk to which one is exposed? However we handle these questions, there is no question of incentives being “out of place”.

The other side of the incentive debate focusses on payments to patients, citizens, clients and consumers.  Here we have two parallel debates. One debate, in social policy, focusses on “conditional cash transfers”. The other debate, in health policy, focusses on “incentives for healthy behaviour”. An example of the former is the Mexican Progresa scheme which makes certain welfare payments conditional on children’s regular attendance at primary school.  An example of the latter is “contingency management” in drug treatment, whereby a drug addicted client of a drug treatment service is paid small rewards in cash or in vouchers if they prove to be drug free at regular intervals over a course of treatment.

There are many things to say about these schemes. Most of the debate, at least in health policy, has focussed on the question of whether these schemes violate autonomy in some way (through coercion, bribery, treating the recipient as a mere “nudgee” etc.)  Within social policy, the incentive debate connects old concerns about the division of the poor into the deserving and the undeserving, conservative criticisms about perverse incentives and rewarding irresponsibility, and newer concerns about “advanced liberalism” and “governmentality” through management of individual conduct.

One thread of these debates on personal incentives to patients and citizens which is sometimes flagged up but which has received little close attention is this: the (putative) wrongness of the use of money incentives in health policy (especially) has to do with introducing money into what should be a non-monetary relationship.  Money is out of place.  In social policy, this debate also gets some attention, but since social policy and the payment of benefits have gone together for so long, the concern there is more with the way incentives are contingent than on the form of the incentive as a money payment.

How can we state the “money out of place” argument clearly?  There are various objections we can make: for instance, that incentives make people do the right thing for the wrong reason, or that they “drive out” non-monetary motivations, or that they reward weakness of will in a few while not benefiting responsible conduct in the many, and so on. But when we sort out these objections, reject those without empirical  support, and focus on the arguments which are specific to the use of money as such, we come down to two basic claims. First, we should not use money in this context; and second, this is because this context involves a form of relationship to which money is or should be alien and which will be displaced or corrupted if money is introduced.

The value of David Graeber’s work in this debate is that he gives us two things. The first thing he gives us is an historical anthropology of money which denaturalises its role in human societies. One difficulty with establishing the “money out of place” arguments in the incentives debate is that this debate is dominated by economists and psychologists who simply cannot see or understand any form of behaviour other than response to reward and satisfaction of consumer preferences. There is a conceptual blindness which means that they cannot even “see” evidence which might unsettle the frameworks from within which they organise their experimental and theoretical work.  So one thing David Graeber enables us to do is show the many myriad ways in which societies are and have been organised without money, or without money being central, or with money used for quite different purposes to those with which “we” are familiar. We don’t, after Graeber, have to take money for granted, either as a real medium of exchange (etc.) or as the fundamental unit of theory within the human and behavioural sciences.   it may be  that much of what economists and psychologists say of money incentives is true; but this then becomes a sociological observation rather than a discovery about Human Nature.

The other thing that David Graeber’s work can directly contribute to the debates about personal incentives is the close attention to the meaning of money in specific settings. He shows very convincingly that money is not one thing, and that while there may be dominant meanings of money in particular times and places, meanings so dominant that they become “obvious”, “natural” and hegemonic, these are nevertheless local, contextual and can only predominate through hard pratical and discursive work.  Thus, in the incentive debates, we need to pay close attention to what meanings attach to money, payment, exchange and so on.  It is not enough for public health policy makers and ethicists (like myself) to simply stipulate that an incentive is not a payment, reward, bribe, etc., and that the offer of an incentive is not coercive, a trade, or what have you. We have to pay close attention to what the donor and recipient think is going on when an offer of an incentive is made. When explaining incentives in health I often use the analogy of a way-marker during a long run. Thinking of running for an hour, or for7-8 miles is difficult and sometimes dispiriting; whereas thinking that in 10 minutes I will see a lovely view over the fields, or I will beat my personal best on this section, is a better motivator as it is near at hand, evidently appealing, and its achievement is palpable. So with an incentive scheme to aid me stopping smoking. Well and good; if that is the account a would-be quitter of smoking gives himself, so be it. The aims and narratives of donor and recipient are aligned. But there are other accounts, and those can shape the effect of the incentive scheme in particular cases and in general, and they can shape the acceptability (and consequently, the ethics) of the scheme.

SoDavid  Graeber’s book prompts me to think we need a better anthropology of incentives. What it doesn’ tprompt me to think is that we can read this off from his book, and deductively infer what incentives really are (even if we qualify that with here and now). We can certainly look at the social policy context of what is often called “neoliberal governance”, with a better informed eye thanks to his book, and David Harvey’s work, to name another influential writer in this domain.  But we need to be careful and specific about what is actually going on when a doctor offers a structured incentive to a patient in a therapeutic context. We don’t get just to assume or diagnose from the fact of money changing hands that the doctor-patient relationship is corrupted, the patient is being bribed or paid to stay healthy, or that she is being “interpellated” as a “responsibilised subject”.  We can certainly worry about whether that is happening; and be concerned about transformations of the doctor-patient relationship, the patient role, the concept of illness behaviour, and so on. We don’t have to buy the economists’ and psychologists’ assumption that there is nothing out of the ordinary here. The best tribute we can pay to David Graeber’s work here is to slow down and listen.



Omega Centauri 02.26.12 at 5:51 pm

I think you could easily expand your subject to include parenting and schooling. Should we provide structured or unstructured incentives to our children and students? If so what form should they take? Should they be intangible social and psychological only? Admiration, pride, the permission to wear a special marker etc.. Or should we allow material or monetary incentives as well or instead of? These of course all have moral and practical consequences.


Substance McGravitas 02.26.12 at 6:32 pm

One of the weaknesses in the book was that it often seemed mechanistic in describing these great human movements – which is unavoidable in its scheme – but it didn’t give a lot of voice to what the everyday feeling of debt means. The sense of relief and “rightness” I feel when I pay off a loan is a powerful thing, the elimination of a constant and oppressive tension. How can “relief” be provided without money?


Billikin 02.26.12 at 7:57 pm

I am reminded of an old joke.

Matron (offering monetary incentive to boy): Johnny, would you be good for a nickel?

Johnny (proudly refusing): No, ma’am. I’m good for nothing!


Billikin 02.26.12 at 8:02 pm

Substance McGravitas: “The sense of relief and “rightness” I feel when I pay off a loan is a powerful thing, the elimination of a constant and oppressive tension.”

Paying off a loan does not always yield a sense of rightness. It can even yield an abiding resentment.

Substance McGravitas: “How can “relief” be provided without money?”

There are many ways, of course. :)


William Timberman 02.26.12 at 8:29 pm

Thinking about this in context with dsquared’s call for more, rather than less rational financial exchanges as a norm, what always floats to the surface for me is the power relations involved.

This is probably because I’m American, and thus very conscious of the way traditional cultures bind the individual to the group in ways that can become stifling to anyone whose needs — intellectual or otherwise — are not being served by the group he’s been born into. American history and culture is full of the tales of people fleeing old Europe, marrying or otherwise pursuing an imagined destiny outside their group or beyond their station — think Hester Street, or The Great Gatsby — and remaking themselves free of any of the previous familial, ethnic, or religious constraints on their behavior. Money, and rational transactions with strangers were the key to this process. In fact, the pride Americans take in bureaucracies which function without bribery, or in being beholden to no one, is at bottom, a symbol of negotiating acceptance into a group on the basis of what we as individuals feel we have to contribute, rather than what convention expects of us.

Americans would say — or would have said, until very recently — that this is the essence of modernity, and that it’s a good thing. Now, we’re not so sure. Europeans and Asians might see this new uncertainty as the natural consequence of a developing cultural maturity, but I suspect that there’s more to it than that.

As even libertarians will eventually come to realize, the No Man Is an Island principle is inescapable, even in the Land of the Free. What matters, whether you’re defaulting on a loan, declaring bankruptcy and walking away, or whipping yourself with chains during Muharram, or giving away all your possessions at a potlatch ceremony, is what, and more especially who governs your behavior, and whether or not you view that governance as legitimate.


marcel 02.26.12 at 10:35 pm

William Timberman wrote: In fact, the pride Americans take in bureaucracies which function without bribery

Interesting. My grandfather, who traded the Pale of Settlement for the US as a teenager just over a century ago, took pride in his old age that he could avoid a speeding ticket just like a gentile by slipping a Chicago cop a $20 bill.


William Timberman 02.26.12 at 11:25 pm

Yeah, marcel, you’re right: honored as often in the breach as in the observance. But still, when you hear Americans bragging about how they can get a driver’s license without paying the mordida, like people have to in those less enlightened countries, this is what they’re bragging about. And certainly racism, chauvinism, or whatever have you is part of this bragging, but not all of it. It’s the same with the ideal of meritocracy. We don’t often approach it very closely, but we did once consider it the ideal.


Different John 02.27.12 at 1:06 am

Oddly enough, my considerable (>55 years) life experience in America has never exposed me to an American “bragging about how they can get a driver’s license without paying the mordida”, not a single one, nor to any expression of pride in “bureaucracies which function without bribery”. Both peculiar things to do, if you ask me, which you didn’t. It seems more likely to me that Americans think government ought to function that way, and we just take it for granted that ours does, while recognizing that in some other parts of the world government comes with this extra, well, “feature” perhaps is not the best word…


William Timberman 02.27.12 at 1:56 am

Peculiar, perhaps, but done. And perhaps not peculiar to someone, such as myself, who used to listen to Americans returning from other parts of the world where bureaucracies functioned as extensions of the family, or clan, or party, and had to be bargained with, or pleaded with if approached by someone without any recognized social influence.

We make take such things for granted more often than we remark on them, true but they are discussed — these days mostly by right-wingers, I admit. And Graeber has some interesting things to say about why, I think.


straightwood 02.27.12 at 2:41 am

Unfortunately, the machinery for establishing and administering financial incentives is too ponderous to counter the nimble ingenuity exhibited by individuals in gaming the incentives. Moreover, as unethical gamesters concentrate in vital sectors (e.g., Wall Street), the extreme skewing and undermining of incentives can reach catastrophic proportions.

Trivers, in his insightful but pessimistic book, “The Folly of Fools” uses the metaphor of the endless struggle of the biological immune system against parasitism to model the struggle between societal governing structures and mechanisms of deceit. This is the best way to view the management of incentives: a dynamic undertaking that requires aggressive management. Unfortunately, current political dogma focuses on perfecting and preserving simplistic (and easily gamed) incentive systems.


scott 02.27.12 at 1:27 pm

The incentive systems established by every other industrialized nation in Europe and Asia for delivering health care seem to manage to give comparable outcomes for as little as half as much as we pay in this country. I would think studying those incentives would be worth anyone’s time and attention.


Sara Goldrick-Rab 02.27.12 at 3:52 pm

Great post. I recommend also looking at the work of Princeton sociologist Viviana Zelizer, who has written about the social meanings of money. More work on this topic is long overdue, given the incredible prevalence of people who believe incentives can solve everything.


Don Levit 02.27.12 at 4:00 pm

Regarding financial incentives and health care, we need to look at health care as part of a menu of benefits.
Health care does not stand alone.
If we pay more for health care, we reap less benefits elsewhere.
Retirement plans are a great example.
Today, employees and employers are spending about $2 in health care expenses for every dollar put in retirement plans.
There is a much better way to finance future health care expenses. It can be accomplished not on a pay-as-you-go basis, as we currently have.
Rather, reserves must be built that are owned by the insurer, but provide individual accounts of primary benefits for each participant.
This can raise the deductible on the secondary plan, freeing up premiums to contribute to retirement plans.
Don Levit


Alex 02.28.12 at 10:11 am

There is a poster, produced by the NHS to publicise “NHS Choices” (it’s their website, essentially), displayed in my nearest pharmacy, that depicts various people expressing their preferences between different NHS hospitals. One of them speechbubbles “I want the hospital with the best results for my operation”, another “I want to be treated quickly”, some others other points I forget, and another “I want the hospital with the best food”.

To be honest, at least one of these people is clearly not in a mental state in which they can be responsible for their own choices…


engels 02.29.12 at 12:11 am

Great post. For my money the best thing you’ve done since Bittersweet Symphony.


Michael H Schneider 02.29.12 at 1:07 am

This probably goes without saying, but I’m going to say it anyway.

SoDavid Graeber’s book prompts me to think we need a better anthropology of incentives.

Should be ‘we need many better anthropologies … ” because various possible incentives take meaning and value that will vary wildly among, between, and even within cultures. In fact, the category ‘incentives’ may only have meaning in some, but not all, cultures (in the same way that categories such as ‘family’ can get all squidly when looking acrtoss a cultural gap)..

Comments on this entry are closed.