Can Do #16: Why incentives matter
(Marc Chagall, Peace Window, 1964)
Welcome to the 16th edition of Can Do, a newsletter where I share my journey of building a Career Multiverse™.
You can also read my previous editions and follow me on Twitter.
Newsletter at a Glance
● Career Multiverse™: Incentives
● Article: How to Fall Back In Love With Reading
● Tweet: The benefits of writing online
Career Multiverse™
I think a lot about incentives.
It doesn’t sound like a sexy topic, but hear me out.
The U.S. Tax Code is 6,871 pages long. When you include the tax regulations and official tax guidance from IRS, the estimated length is nearly 75,000 pages. From time to time, someone will comment that tax rules should not be written by politicians who do not prepare tax returns.
That comment misses the point that the tax code has less to do with tax returns or even tax revenue and everything to do with incentives. In a democratic country, where the government cannot control its citizens by force (thankfully!), it “controls” them through tax incentives by either incentivizing or disincentivizing behavior.
Similarly, in corporations, employers “control” their employees through compensation packages. To earn a bonus, you have to behave in a certain way.
In schools, teachers “control” their students through grades. You get the point.
Conceptually, this all makes sense and generally seems like a good idea, that is until we come across a sea of examples of incentives leading to unintended outcomes:
companies creating off-shore entities to limit government oversight
employees at Wells Fargo opening thousands of fake bank accounts to meet their incentive targets
students cheating on exams to get better grades
My interest in web3 and DAOs is the reason I think about incentives so much. Entities in web3 are incentivized through tokenomics. Tokenomics is an emerging field at the intersection of economics (especially macroeconomics and game theory), mathematics, statistics, cryptography, IT, organizational behavior, and other related disciplines. It does not yet have a universal definition as different people focus on different aspects of it.
I am fascinated by tokenomics because of all the good it can do, but I am also acutely aware that poorly designed incentives can lead to unintended consequences. In October, I will be taking the Token Engineering Fundamentals course. I am sure that half of it will be over my head. I am not looking to get their certification as I have no desire to become a token engineer. I just want to elevate my knowledge from a very basic level to something a bit more useful.
Article
How to Fall Back In Love With Reading
One of my frustrations with traditional education (I should start a list as I have been complaining about traditional education a lot lately) is that it destroys the love of reading. By middle school, most kids view reading as a chore.
That’s unfortunate for many reasons. One reason mentioned in this article is people who read books a few hours a week live longer than those who don’t read or only read articles in periodicals.
Tweet
I have been posting on LinkedIn and Twitter every day. It still feels uncomfortable, but it is starting to get easier. This tweet is a great reminder to keep at it.
Thank you for reading!
Alina