MARKET INCENTIVE DISORDERS & THE MYTH OF COMPETITIVE BENEFIT

The following is a transcript of Episode 52 of Peter Joseph’s Revolution Now! podcast. Please support Peter Joseph through his Patreon

[Alfie Kohn:]
So, I’d like to begin on almost any topic I speak about by describing a piece of research whose findings may be surprising to some people. The first study I have in mind was done with seven to eleven-year-olds. It involved collages. Half of them were just told to have fun and do it. The other half were told, “This is a contest to see who can do the best collage, and we will have a prize for the best collage doer.”

All the kids did collages, and they were all collected, mixed up, and distributed to a panel of professional artists to evaluate. The artists didn’t know which kids were in which groups. I don’t even think they knew anything about the groups or the design of the experiment.

The results were quite striking. The kids who were told that this was a contest and the point was to be the creator of the best collage did collages that ended up being rated as far less creative, less spontaneous, less original, less complex, less varied.

A few years later, Professor Amabile, who by then had moved on to the Harvard Business School to teach, decided to do a study with business people. She used other kinds of creativity tests that involved figuring out how to solve problems that were not immediately evident. Again, she divided the business people into two groups: those who were simply told to try to figure this out, and others who were told that this was a contest, a competition to see who could be most successful at solving the problem creatively.

The results came out exactly the same way: competition killed creativity.

[Peter Joseph:]

Good afternoon, good evening, good morning, everybody. This is Peter Joseph, and welcome to *Revolution Now*, episode 52.

The opening audio was from a lecture by author Alfie Kohn, who has been talking about the inherent toxicity and counterproductive nature of competition for many years now. And I think he’s written at least a dozen books on the subject, including from the standpoint of child development and education.

I chose that particular excerpt because it speaks to the heart of a vast, enduring mythology that competition is a competent and efficient incentive mechanism towards solving societal problems and evolving one’s personal development. You know the drill: parents and schools push kids into competitive sports with the assumption of healthy personal development, while theorists of market capitalism drill into us that competition is the root of innovation and progress.

When the truth is, forcing two or more people to compete toward a given end has only a very narrow range of efficacy or positivity when it comes to the quality of outcome. Forging a psychological disposition that one must “win” in any given situation to maintain self-worth, very often at the expense of other people’s well-being — which is no doubt the case in the game of market economics, a near-zero-sum game. Remember, for some people to be rich, many people must be poor. You know, those “losers” we hear so much about, that society accepts as normal, in both its derisiveness and as an outcome.

A damaging neurosis indeed that, as common as it is out there, is utterly antisocial and effectively sociopathic in nature. A world of soft sociopaths, as I often refer to it — the state of modern normality defined by a pathological indifference to the well-being of others, hiding behind this ethic, this supposed virtue of competition, in a world defined once again by “winners and losers.”

And it isn’t just the ethic, as that implies it could be changed by personal adjustment or choice, or thinking through it or something. No, it is the operative nature of the structure of market capitalism once again — inescapable, as the system is structured for selfish intent, not social intent. And the world you see around you is the result, right in front of you — the result of a system that does not work to create balance, but rather forces inevitable imbalance at all times, regardless of the myth of Adam Smith’s “invisible hand,” or the grand mythos of general equilibrium theory, and so forth, as we have talked about before.

Just pick your general humanitarian crisis — from poverty to war. When we walk past homeless people on the street, we’re taught not to really give a second thought, perhaps tossing them some change to ease what little caring we may allow. Hence, sociopathic in our overall apathy. Even though most would never admit to that, of course.

And obviously, I’m generalizing culture here. I’m not saying *you*, the listener, feels this way exactly. But when we turn on the news today and see, say, Israel wiping Gaza off the face of the earth in a purely ethnic cleansing genocide, expanding that aggression into other territories in a complete lack of interest in any collaborative coexistence in its colonial intent, driven by the United States, our desensitization also is sociopathic — as people swipe up to the next story about some pop star’s current boyfriend.

So, we’ve normalized general human indifference in the world due to this contrived, scarcity-driven acceptance of competition and the resulting imbalance, as if nothing could ever be done. It’s like that old Jiddu Krishnamurti speech where he talks about how people don’t really love their children like they claim they do, because if they actually did, they would stop all war.

Anyway, back to the opening audio. I would pair the example Alfie Kohn uses in regard to competition hurting creativity and problem-solving with another researcher that I’m sure I’ve mentioned in passing before — it’s probably mentioned in my book as well — Daniel Pink, who’s coalesced a lot of great research in a book called *Drive: The Surprising Truth About What Motivates Us*.

As they intersect, two complementary things: competition and monetary reward. While Alfie Kohn highlights the well-established research that competition tends to change the way people think, restricting creative problem-solving, Pink’s research highlights that while monetary reward may motivate people in the most mechanistic and mundane environments to get tasks done, money is also a terrible, polluting force when it comes to creative thinking and problem-solving as well.

In such studies about money, motivation is often divided into intrinsic and extrinsic, with intrinsic being personal drive and hence a sense of meaning and personal purpose toward a given end — you know, doing things you love, relate to, and believe in — while extrinsic means monetary reward, and by extension, a kind of societal reward, where meaning becomes contrived, requiring a social or external reward response.

And when you examine most people’s disposition as to whether they feel successful or not in any given area, such as in their vocation, you tend to find, more often than not, it’s almost always an external measure they base their value on — not relative to themselves, but relative to others by some social standard, like getting lots of money, of course.

In fact, the very term “success” today is almost exclusively a monetary or societal status measure, which is deeply ominous for many reasons, as it distorts motivation. There’s no shortage of such research on the negative effects of monetary reward in a field often referred to as social determination theory. For if you reward people with money, that’s all they think about as the goal. The goal of whatever they’re actually doing becomes secondary in intent.

And the depth of this is very obvious, of course. Just look at the institution of Wall Street — the buying and selling of digital widgets that do nothing in a true economic sense. But much more deeply, consider the context of the “shadow incentive,” as I often talk about. There may be another term for this idea, but this is the one I use, highlighting the tendency for people to, in essence, move against their stated aims in problem-solving in economic affairs, due to the structure of market economics. consciously or subconsciously sabotaging those solution intents for the sake of keeping their clients coming back for more — hence the pursuit only of monetary gain and future monetary gain.

Seemingly criminal, right? But how would you really know? Subconscious behavior is simply too complex, and it’s vast. If an economic agent knows deep down that their survival relies on servicing other people’s problems, making sure those problems continue to exist on some level becomes a common-sense bias. On some level, people realize that the more problems, the better, from the business-service-product standpoint.

That is the heart, of course, of, say, the military-industrial complex, as General Smedley Butler talked about at length in his book *War Is a Racket*. As long as war is profitable, and that profitable elite can influence power — which they ultimately do — wars will be invited and perpetuated.

But back on a more everyday level, how would you know if the people you’re dealing with for whatever goal economically are actually optimized in their efficiency to help you? You wouldn’t. The state of normality would just be the state of normality, altering expectations. The missing efficiency remains hidden, as it would be, because efficiency, conservation, and sustainability is the enemy of the current economic paradigm.

We can talk about planned obsolescence, where entire industries have normalized the use of cheap materials in their products. But if you didn’t know there were better options for design, you would see this as just the normal state of affairs — the normal wear and tear of modern industry. ‘I guess it’s normal to have to buy a new phone or computer or dishwasher or whatever every couple of years, right?’

In fact, I’ll go even further. Let’s think about cross-sector shadow incentive, where entire industries exist on a certain level to assist another industry in favor of the entire national or global income growth machine, which is the macro level of the process, right? This is all about growth, economic growth, from the company to the nation to the world.

An easy example of this is the general state of processed food and nutrition. The fast food we see not only in places like McDonald’s but also in the majority of the aisles in standard grocery stores — because it’s so normalized. There is no doubt a clear and obvious connection between cancer, heart disease, and diabetes, etc., with the introduction of processed foods in national diets. Chemicals and additives and preservatives that are now “normal” to what we eat simply didn’t exist in the human diet until the early 20th century.

Now, are food companies thinking to themselves, “Well, I’m going to make some really poor-quality food stuff so my brother over there who works at the cardiologist’s office can get some more money and work”? Of course not. Even though the economic relationship is there, customary bad nutrition leads to more medical expenses. One seemingly separate industry influencing and helping the profitability of another.

It is my view that there is a deeper symbiosis naturally occurring across the economic structure, where seemingly separate outputs turn into inputs for this “market efficiency.” And remember, market efficiency is the opposite of technical efficiency, moving everything toward the larger goal of societal economic growth with great complex depth.

Again, I’m not arguing that there’s a conscious level to this, but as a result of the procedural nature of the shared incentives that define the total system — to move everything toward the same goal, unifying the outcome even though it’s not technically planned — it’s like a recursive emergent synergy, if you will.

And of course, since we’re on this point, I know what the traditional libertarian-minded economist would say: “Oh, if people feel like they’re not being properly served economically, they will simply not support that company, and hence this intelligence for choice self-regulates demand toward more improved service or product quality.” That is the most standard response to any perception of a company or industry doing something badly.

But that requires a population that is not blinded, once again, by the state of normality. And nobody is educated in that way. People born into this society, they have no idea what true technical efficiency means. Nobody’s telling them. The inefficiency of their existence through the commercial reality is just as blinded as the inefficiency of society itself, as you step over homeless people in the street thinking this is just immutable normality, and 20 seconds later, you’re thinking about something different than the problem of global poverty. No different than people eating sickness-producing processed foods, thinking this is just normal.

And normality does some interesting things too, sociologically. In fact, on that particular point, people that go out of their way to try to be healthy are often looked at as weirdos. Have you noticed this? As if it’s abnormal to try and actually better your nutrition as opposed to just microwaving something — you’re a “health nut” or something to that term, some other derisive term.

In the same way, like a kid goes to school and really wants to learn and succeed, and someone looks at them and decides they are a nerd or a geek, another derisive term in this sort of patheticness that we see where people acquiesce to this sort of unhealthy mediocrity, right?
Because unhealthy mediocrity is normal. And modern society holds people in contempt that actually want to do the improved thing. It’s very interesting.

But anyway, back to this shadow incentive issue. Even more, the very structure of the so-called health and medical industry is formed in a distorted way. The true focus of any doctor — or more broadly, the overall health administration approach — should be preventative, needless to say, holistic, and so forth. And people understand that, but they don’t realize that things are not structured that way. The medical practitioner is separated in our society to only deal with problems when they emerge, to profit off the problems when they emerge as well.

You know, in ancient Chinese folklore, there are stories of doctors who maintained the health of a family and were paid to do so. And if somebody got sick, that was considered a failure, and the doctor would treat the illness without any further payment, only to resume payment once everyone was deemed healthy again — the complete reverse of what we have now. And again, that’s pure folklore; I’ve never seen any true documentation of that, nor would I expect it but you can see how someone would conjure up that philosophical myth because it’s such an obvious concept. It’s such an obvious ethical perspective.

In fact, one of my favorite moments in my prior film, *Interreflections*, is the scene where it talks about how positive social measures would always be the reduction of so-called economic opportunities that people gain income from. De-growth. The news reports would come on and not celebrate a company, industry, sector, or nation, or even the globe undergoing economic growth. Because the more that growth is occurring, the more inefficient things are actually becoming, technically. It has to be that way — again, highlighting just how backward, upside-down, unsustainable, and inefficient society is today due to the structure of market economics.

And one more of these — this orientation also applies to the hedonic adaptation and neurotic false scarcity people are trained to feel through advertising, marketing, and this neurotic drive toward social inclusion — being trained to be perpetually dissatisfied with what they have or can do, which really is a form of mental illness. Forging a kind of emotional or satisfaction scarcity, if you will, right?

That sickness, which is deeper than just materialism, is just as prevalent as people go into tremendous debt for luxuries or experiences they don’t actually need, but they think they do because of perceived societal pressures that become internalized. And once such a lifestyle or property features are introduced, it becomes that much harder for people to acclimate out and return to a more healthy, minimalistic state. Cycling, cycling — cultural sickness. A truly healthy mind does not require luxury by definition, which is really a toxic concept. And that is also a powerful part of the same general shadow incentive sickness applied to personal and social psychology.

Nothing better than producing a legion of consumers with tremendous emotional dissatisfaction that are forging endless needs, turning all these wants they see into their needs, fueling the drive of the system even more. Nothing better than having that kind of mental illness float around culture, which is ubiquitous.

Now, excuse me if I sound a little hoarse today, or a little nasally. I do have a cold I’m trying to get over. Those tangents aside, let’s return to the subject of money and competition once again briefly. There’s another author I’ve referenced in the past, a guy named Michael Sandel, who wrote a book called *What Money Can’t Buy: The Moral Limits of Markets*. Not a very groundbreaking text, but the sentiment is very wise. He poses a different basic moral concern: Do we really want to live in a world where everything is organized around the incentives of money?

As time has increased in our slow grind within this late-stage capitalist period, like many call it, because we are inching toward the complete breakdown point, where we’ve completely ruined the ecosystem and culture itself — spiraling into destabilization — late-stage capitalism — this market logic, we could call it, or marketization, has increasingly been applied to just about everything in our society, turning everything that exists and everything we do into a commodity — from children being paid to read books for their school to pay-to-play dynamics where, believe it or not, one can shoot and kill an endangered species if they pay enough money, with the logic being that they’re going to use that money to further help save that species, which I always thought was just fantastic.

In fact, it would all make a great dystopian novel taken to extremes. I mean, we already know that money controls politics, and that’s the fundamental problem. And of course, people look at the state and they say, “Oh, the state, it sucks. Government sucks. It’s so corrupt.” But they don’t realize it sucks because of capitalism, as opposed to this false duality that’s been created where the state is a boogeyman.

But imagine a dystopian novel generally where every action we engage in throughout the day is organized around some kind of cost-benefit analysis — from getting paid to get up on time in the morning, to getting paid to hang out with your kids or to have sex with your partner or something.

I remember actually years ago talking to my prestigious percussion teacher, who was extremely successful in a true craft sense — also a permanent fixture in the New York Philharmonic, Juilliard, and so on — and a great teacher and friend. And I explained to him in my early 20s that I really had no interest in associating my work in music with money or business. And I thought it deeply cheapened it. And it was quite a contentious conversation, bringing into question what exactly he was teaching me for. What is the goal of learning a craft? To develop it on its own merit or to get work out of it? Because it changes things.

And aside from the ridiculous debt, it’s one of the reasons I dropped out of going to a music conservatory, where these classical musicians are being trained to practice orchestral excerpts all day long because ultimately they’re just trying to get a job in some kind of orchestra and so forth. And for any of the artists out there that contend with this, believe me, I get the cognitive dissonance. It’s hard, which is why to this day, I keep my own musical work as a hobby, or being an amateur, as they say.

Interestingly enough, I was reminded recently that the etymology of the word “amateur” comes from the French root meaning “one who loves.” While an amateur is considered someone who is not really proficient in modern usage of the word, it actually simply means one who cultivates and participates in something but does not pursue it professionally and hence seeks no monetary gain. So the amateur is actually sincere, and the professional does it to get paid, which is polluting.

So be an amateur. Don’t be a professional, if you can. But obviously, everyone does what they have to do, with their degrees of tolerance.

Now, okay, pulling back my tangents once again, what we find in the research of Kohn and in the research of Pink is that money and competition, which go hand-in-hand in our economy, are horrible problem-solving motivators that actually keep people thinking in a very narrow, typical way — in the box. It’s not about innovation at all. It’s about energizing a market for profitability, and any true innovation that occurs is usually a side effect and misguided from the start, at that.

As I also talk about in my recent Substack article, which I encourage everyone to read, titled “The Competitive Illusion: How Markets Breed Inefficiency and Monopoly,” (and I’ll put a link in the description of this podcast), I give a statistical example of pharmaceutical companies that spend the vast majority of their research and investment on things that already exist, as opposed to working to truly develop medical technologies to fight more complex problems, which are desperately needed. Why? Because they know they can reliably make money off of duplicate technology, as opposed to the long, arduous, and tenuous process of deep experimental research into more foreign, yet important, disease areas, which might not have a monetary return.

We all know the analogy of the Manhattan Project being used as the framework to really push forward a goal. It’s not unexpected but still interesting to see how we don’t really see that kind of thing except in the arena of warfare. Maybe in extreme disease conditions, but really even then, not as much. Warfare appears to be the only thing in society that people refuse to acknowledge financial limitations for, right? Everything else is restrained by the so-called budget, which we all know in the world of fiat currency — or currency in general, in fact — doesn’t really matter. It’s all a complete illusion. That’s what you gain from MMT theory, which is not an application, it’s an accurate observation.

Anyway, from the abolition of global poverty to replacing the entire hydrocarbon economy with renewable energy, if there was truly this kind of focused, dedicated energy, unified toward such an end to get the job done — without the competitive, distracting, market-focused influence of capitalism and the illusion of budgets — I have no doubt these things could be achieved for the betterment of humanity. And that includes true cures for cancers, heart disease, and everything else.

But we don’t see that, because everything is diffused with this sick survival mechanism that ultimately revolves around the word ‘scarcity.’ Scarcity is not just the concept of something being limited — it is the economic and sociological foundation by which all of this other sickness is born in abstraction. Tragically, the very basis of capitalist economics, once again, that says, “Everything is scarce, and therefore we exploit scarcity for money, fueled by this assumed animalistic law of the jungle, this competitive perspective that everyone just has to fight, and it’s normal.” No, it’s all unnecessary madness.

And for those that are new to this podcast, yes, we all know that scarcity exists in the world, but that observation is, in fact, completely detached from the structural nature of the market economy. For markets only exist to benefit from scarce conditions, fighting back once again the existence of abundant conditions, because abundance has no value. Abundance doesn’t create jobs or profit, and so forth, and there exists no endogenous system mechanism in market economics to embrace the distribution of abundance. Zero.

And it’s truly philosophically distorted as well, when you dig down, where market value is measured only in those scarce terms, placing a number or price that ostensibly ranks the scarcity. And hence the higher the rank of scarcity, the more it is “worth” — that value.

As I highlight, in fact, in the opening of my new film, *Zeitgeist: Requiem* (which is not online yet, sorry about that, but it will be), with a speech by Edgar Cahn, a famous man for promoting moneyless time bank systems — brilliant guy — when you look deep at what we value in life, truly, what really defines us as human beings, true life support behaviors and mechanisms of our existence, these are all considered effectively worthless in the market lens. Abundant water or clean air has no market value — technically worthless by way of the price mechanism. Good health and raising a child properly are also fundamentally worthless through the eyes of the system.

And it may seem like a trivial observation, but it isn’t. It is the ecosystem of modern philosophical development we find ourselves, related to all the things I’ve just covered since the beginning of this podcast, in fact.

In fact, as an aside, during the course of The Zeitgeist Movement, we had thousands and thousands of public events all over the world. And we started all of this with a simple notion: let’s find a way to budget it out and make everything free to the public when possible. And we noticed something interesting: if it was free, fewer people showed up than they would if you charged something nominal. Why? Because people are trained to not believe in free. They don’t trust it. They see it as weak or cheap, no pun intended, as it is cheap from the monetary perspective, right? See how the crossover of value is occurring. It’s very distorted.

And you can go down the line of various social experiments that have been done over the years with the people on the street trying to hand out free money to people, and everyone just walks right past them. That’s a little bit separate, but it still speaks to the basic disbelief that people have been trained to absorb, propagandized by this scarce market value orientation.

In fact, I’d also recommend people look up the Veblen Good as well, which also speaks to that same thought process, but at a different extreme. The Veblen Good was about luxury items priced so exorbitantly that rich people would buy it just because they saw the status value of the price — no other real reason. It’s like that old Gordon Gekko comment in the movie *Wall Street*, where he points to the painting and says something to Buddy, the other character, like, “See this painting here? I bought it for $1,000 10 years ago. Today I can sell it for a million. The illusion has become reality. It’s bullshit.”

But such are the deranged people that spend hundreds of thousands of dollars on sports cars — the plutocracy, the plutonomy, as it’s called. It’s not about the car itself or what it does, it’s about the absurdity of the price they can afford, pathologically associating true value to that cost in some kind of emotional sense.

In fact, speaking of art, I guarantee you, you could take two pieces of unaccredited modern-looking art — one painted by a five-year-old and the other by an acclaimed artist — and hang them in an art gallery. Put a price tag for the five-year-old’s at $1 million, and the price tag at the other one for $1,000, and all the bourgeois high-society weirdos will fawn over that $1 million piece of the five-year-old child’s art, as it’s not the art that matters, it’s the price that matters. That is the programming.

Okay, and one more thing. Going back to this issue of money and competition as deeply inhibiting social and personal development, particularly in the realm of creative problem-solving, is this not what we desperately need? We have a serious crisis of creativity in the world. And from a structuralist or sociological perspective, we seriously need to generate a better precondition to inspire far deeper thinking and creative problem-solving if we expect to resolve any of the major issues on the table today, which are legion. Yes, structural change has to happen, but even within this system, there are certain improvements that could happen to buy us some time.

Just take a look out the window. I don’t know how many of you folks are keeping inventory of the spectrum of war, socioeconomic inequality, disease epidemics, global financial instability, resource overshoot, biodiversity loss, pollution, exploding negative market externalities, increasing levels of migration from all the destabilized regions in the world, and so forth, which are only going to get worse due to the looming environmental collapse, and so on.

But the picture painted of the near future is not positive, to say the least. And one has to be completely delusional to argue otherwise. Those “gainsayers,” you know, that hide behind one little statistic, like Steven Pinker, who says, “Oh, we’re living in one of the most peaceful times in human history by standards of social violence.” Sorry, that metric doesn’t fly. It doesn’t mean anything when you look at the landscape of problems that are going to emerge social instability, which we can see right in front of us on multiple levels of trajectory. Just because things are peaceful at the moment by some abstracting comparison is absolutely meaningless, not to mention debatable in and of itself.

So, once again, we need a revolution of creativity. And hopefully, some of that can emerge in the terrible sickness of our system, but our system restricts creativity, with general political debate based entirely on group blame. The conservative factions focus on the external; the so-called progressive factions just blame the conservative factions. Again, it’s all really just a form of group blame, with nobody challenging the structure of our society — at least not to the degree that’s required, realizing that is the true problem. Except, of course, for the handful — tiny handful — of people that listen to this podcast and other ignored contemporaries.

I mean, I say this with actually great affection and amusement. Just look at how many subscribers there are to this YouTube channel. I know there’s thousands more that listen through other channels, but 12,000 subscribers on this channel over three to four years? That’s pathetic. That is super pathetic. But you know, that’s the way it is. That’s where we are in this evolution. There is no revolutionary thought happening whatsoever on the level that’s required, at least in terms of what people are choosing to pay attention to.

Now, this has been a rant-filled episode, which is not my actual intent. I have an entire section here on how to think about moving from competition to collaboration in a self-regulatory structure. And since we’re already about 33 minutes in here, I’m going to wait.

This is going to be part one, if you will, and then we’ll resume part two, where I want to talk about all of these features — going back to FA Hayek and this collective intelligence that emerges through the competitive ethic of this self-regulatory phenomenon of workers versus employers and choice and rational choice and all this stuff that is actually very fascinating to read about, with Hayek being the prime example in terms of his thought process, because he was actually very aware of cybernetics, as I talked about before, and he superimposed systems theory retroactively on his belief structure trying to validate it.

But regardless of that, in the next podcast, the thought exercise ultimately will be: well, if competition is supposed to be this magical mechanism of collective intelligence — which clearly it’s not — and there are all these defining well-researched, or I should say well-thought-about, principles in regard to what it’s supposed to do to achieve balance, as I talk about in my article about monopolies, well, let’s reframe that and think about what it would mean to swap out competition with collaboration.

So that’s what’s going to be in the next podcast. Part two, once again. Thank you all very much. This program is brought to you by my Patreon. I really appreciate those few that continue to support these efforts. And take care out there. I’ll talk to you soon.