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under certain structural conditions non-price-based production is extraordinarily robust

There is, in fact, a massive amount of research that supports the idea that when you pay people to do something for you, they stop enjoying it, and distrust their own motivations. The mysterious something that goes away, and that “Factor X” even has a name: intrinsic motivation.

giving rewards to customers can actually undermine a company’s relationship with them

It just is not so easy to assume that because people behave productively in one framework (the social process of peer production that is Wikipedia, free and open source software, or Digg), that you can take the same exact behavior, with the same exact set of people, and harness them to your goals by attaching a price to what previously they were doing in a social process.

Extrinsic rewards suggest that there is actually an instrumental relationship at work, that you do the activity in order to get something else

If you pay me for it, it must be work

It’s what we would call a robust effect. It shows up in many contexts. And there’s been considerable testing to try to find out exactly why it works. A major school of thought is that there is an “Overjustification Effect.” (http://kozinets.net/archives/133)

interesting examples of an effect called crowding

Offering financial rewards for contributions to online communities basically means mixing external and intrinsic motivation.

A good example is children who are paid by their parents for mowing the family lawn. Once they expect to receive money for that task, they are only willing to do it again if they indeed receive monetary compensation. The induced unwillingness to do anything for free may also extend to other household chores.

Once ‘gold-stars’ were introduced as a symbolic reward for a certain amount of time spent practicing the instrument, the girl lost all interest in trying new, difficult pieces. Instead of aiming at improving her skills, her goal shifted towards spending time playing well-learned, easy pieces in order to receive the award (Deci with Flaste 1995)

Suddenly, she managed to follow the prescription, as her own (intrinsic) motivation was recognized and thereby reinforced.

The introduction of a monetary fine transforms the relationship between parents and teachers from a non-monetary into a monetary one

"The effects of external interventions on intrinsic motivation have been attributed to two psychological processes: (a) Impaired self-determination. When individuals perceive an external intervention to reduce their self-determination, they substitute intrinsic motivation by extrinsic control. Following Rotter (1966), the locus of control shifts from the inside to the outside of the person affected. Individuals who are forced to behave in a specific way by outside intervention, feel overjustified if they maintained their intrinsic motivation. (b) Impaired self-esteem. When an intervention from outside carries the notion that the actor's motivation is not acknowledged, his or her intrinsic motivation is effectively rejected. The person affected feels that his or her involvement and competence is not appreciated which debases its value. An intrinsically motivated person is taken away the chance to display his or her own interest and involvement in an activity when someone else offers a reward, or commands, to undertake it. As a result of impaired self-esteem, individuals reduce effort.

External interventions crowd-out intrinsic motivation if the individuals affected perceive them to be controlling

External interventions crowd-in intrinsic motivation if the individuals concerned perceive it as supportive

In that case, self-esteem is fostered, and individuals feel that they are given more freedom to act, thus enlarging self-determination

cultural categories that oppose marketplace modes of behavior (or “market logics”) with the more family-like modes of behavior of caring and sharing that we observe in close-knit communities (”community logics”)

this is labor, this is work, just do it.

When communal logics are in effect, all sorts of norms of reciprocity, sacrifice, and gift-giving come into play: this is cool, this is right, this is fun

So think about paying a kid to clean up their room, paying parishioners to go to church, paying people in a neighborhood to attend a town hall meeting, paying people to come out and vote. All these examples seem a little strange or forced. Why? Because they mix and match the communal with the market-oriented.

Payment as disincentive. In his interesting book Freakonomics, economist Steven Levitt describes some counterintuitive facts about payment. One of the most interesting is that charging people who do the wrong thing often causes them to do it more, and paying people to do the right thing causes them to do it less.

You direct people _away_ from any noble purpose you have, and instead towards grubbing for dollars

When people work for a noble purpose, they are told that their work is highly valued. When people work for $0.75/hour, they are told that their work is very low-valued

you're going to have to fight your way through labour laws and tax issues all the way to bankruptcy

Market economics. If you have open content, I can copy your content to another wiki, not pay people, and still make money. So by paying contributors, you're pricing yourself out of the market.

You don't have to pay people to do what they want to do anyways. The labour cost for leisure activities is $0. And nobody is going to work on a wiki doing things they don't want to do.

No fair system. There's simply no fair, automated and auditable way to divvy up the money

too complicated to do automatically. But if you have a subjective system -- have a human being evaluate contributions to an article and portion out payments -- it will be subject to constant challenges, endless debates, and a lot of community frustration.

Gaming the system. People are really smart. If there's money to be made, they'll figure out how to game your payment system to get more money than they actually deserve

They'll be trying to get as much money out of you as possible, and you'll be trying to give as little as you can to them

If you can't convince people that working on your project is worth their unpaid time, then there's probably something wrong with your project.

People are going to be able to sense that -- it's going to look like a cover-up, something sleazy

Donate.

Thank-you gifts

Pay bounties

Sure, in the old inefficient socialist states like the Soviet Union, where employment was considered both a right and a sacred duty, the system made up as many jobs as they had to (this is why in Soviet department stores it took three clerks to sell a piece of meat)

working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organising or attending motivational seminars

The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger

The answer clearly isn’t economic: it’s moral and political

And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them

Hell is a collection of individuals who are spending the bulk of their time working on a task they don’t like and are not especially good at

they all become so obsessed with resentment at the thought that some of their co-workers might be spending more time making cabinets

It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.)

plagued with debts and a newborn daughter, ended up, as he put it, “taking the default choice of so many directionless folk: law school

Now he’s a corporate lawyer working in a prominent New York firm. He was the first to admit that his job was utterly meaningless, contributed nothing to the world, and, in his own estimation, should not really exist

I would not presume to tell someone who is convinced they are making a meaningful contribution to the world that, really, they are not. But what about those people who are themselves convinced their jobs are meaningless?

(Answer: if 1% of the population controls most of the disposable wealth, what we call “the market” reflects what they think is useful or important, not anybody else.)

should you meet them at parties and admit that you do something that might be considered interesting (an anthropologist, for example), will want to avoid even discussing their line of work entirely

This is a profound psychological violence here. How can one even begin to speak of dignity in labour when one secretly feels one’s job should not exist?

Yet it is the peculiar genius of our society that its rulers have figured out a way, as in the case of the fish-fryers, to ensure that rage is directed precisely against those who actually do get to do meaningful work

in our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it

There’s a lot of questions one could ask here, starting with, what does it say about our society that it seems to generate an extremely limited demand for talented poet-musicians, but an apparently infinite demand for specialists in corporate law?

Even more perverse, there seems to be a broad sense that this is the way things should b

You can see it when tabloids whip up resentment against tube workers for paralysing London during contract disputes: the very fact that tube workers can paralyse London shows that their work is actually necessary, but this seems to be precisely what annoys people

It’s even clearer in the US, where Republicans have had remarkable success mobilizing resentment against school teachers, or auto workers (and not, significantly, against the school administrators or auto industry managers who actually cause the problems)

It’s as if they are being told “but you get to teach children! Or make cars! You get to have real jobs! And on top of that you have the nerve to also expect middle-class pensions and health care?”

If someone had designed a work regime perfectly suited to maintaining the power of finance capital, it’s hard to see how they could have done a better job

The remainder are divided between a terrorised stratum of the – universally reviled – unemployed and a larger stratum who are basically paid to do nothing, in positions designed to make them identify with the perspectives and sensibilities of the ruling class (managers, administrators, etc) – and particularly its financial avatars – but, at the same time, foster a simmering resentment against anyone whose work has clear and undeniable social value