When the incentives are crazy, the behavior is crazy.
People possess a remarkable capacity to rationalize and defend nearly anything, no matter how unreasonable it may seem. Incentives—the invisible hand guiding countless decisions—hold an uncanny power to twist logic, morality, and even self-perception. Understanding this power is crucial to grasping why the world often lurches from one absurdity to the next.
The Three Paths of a Professional Writer — A Lesson in Incentives
Jason Zweig’s sharp delineation of the three professional writing paths serves as a microcosm of human incentive-driven behavior. On the surface, this triad outlines career outcomes based on the honesty of the message and the audience’s appetite for truth or falsehood. But beneath lies a profound commentary on the transactional nature of information and human desire.
Lying to those who want to be lied to is lucrative precisely because it taps into people’s longing for comfort, reassurance, or confirmation of their existing beliefs. This is not merely about deception; it’s about fulfilling psychological needs. The reward structure encourages crafting narratives that mollify fears, endorse prejudices, or promise easy solutions, even when they contradict reality. The monetary gain acts as a potent incentive to perpetuate these lies.
Conversely, telling the truth to those who want truth provides a sustainable but modest livelihood. This group values clarity, nuance, and factual integrity. However, the market for such unvarnished truth is narrower. It demands patience and often eschews sensationalism, meaning financial rewards tend to be steady but limited. Here, the incentive aligns with professional integrity but is tempered by economic realities.
The most precarious path—telling truth to those who want lies—illustrates the peril of clashing incentives. This writer is met with resistance, disbelief, and often financial ruin because the audience’s desire for comforting illusions outweighs their openness to uncomfortable truths. The incentive structure punishes honesty in this context, pushing the truth-teller to either adapt, persist in hardship, or perish.
This framework reveals how incentives govern not just economic outcomes but shape entire information ecosystems, perpetuating cycles of misinformation, selective truth, and self-delusion.
Poverty and Rationalization: When Survival Trumps Conscience
The story of Akinola Bolaji is a stark illustration of how the incentive of survival can warp morality and erode conscience. Spending two decades deceiving vulnerable individuals, Bolaji embodies a tragic calculus where economic desperation eclipses ethical considerations. His candid remark—that poverty dulls the pain of guilt—unveils a psychological shield erected by necessity.
In contexts of scarcity, the brain reprioritizes. The urgent demand to secure basic needs triggers adaptive mechanisms that rationalize harmful actions. This is not a denial of empathy but a survival imperative so compelling that it overrides moral qualms. The incentive to avoid starvation and destitution becomes a force more powerful than societal norms.
Notorious B.I.G.’s experience with drug dealing further illustrates how economic incentives recalibrate life choices early on. The seductive immediacy of lucrative, illicit income rendered his childhood ambitions less tangible, less urgent. The choice between pursuing art—a path with delayed and uncertain rewards—and selling crack for immediate cash is shaped by the stark incentive differential.
These examples spotlight the profound influence of incentives rooted in deprivation and the way poverty reshapes decision-making frameworks. They reveal a human tendency to adapt ethics according to the severity of material conditions, underscoring that incentives do not merely shape behavior—they redefine it.
The Silence of Scientists and the Weight of Responsibility
The tale of scientists in Galileo’s era silently endorsing heliocentrism but withholding public support reflects how incentives shaped by social and political risks influence even intellectual courage. These individuals, aware of the groundbreaking truth, remained mute because their personal circumstances—families, livelihoods, social standing—were tethered to an oppressive status quo.
Incentives here are multifaceted: the incentive to speak the truth clashed with the incentive to preserve personal safety and social harmony. The latter often outweighed the former. This chilling calculation meant that truth-telling was not simply a matter of intellectual honesty but a perilous act with tangible consequences.
This dynamic is not confined to history. Modern equivalents exist where whistleblowers risk careers, scientists face funding pressures, and dissenters suffer social or political backlash. Incentives to conform, to remain silent, or to moderate one’s voice continue to exert tremendous influence on the flow of truth and innovation.
By understanding the weight of these incentives, we grasp how social and economic forces shape not only individual behavior but the collective knowledge and progress of society itself. The silence is a testimony to the power of incentives to constrain human potential and moral action.
Incentives: The Invisible Puppeteer
Incentives act as the unseen architect of human behavior, guiding decisions far more powerfully than logic or morality ever could. Their influence is subtle yet profound, operating beneath conscious awareness to direct actions, shape beliefs, and dictate priorities. Like a puppeteer pulling strings, incentives choreograph individual choices and collective movements alike.
This power stems from the fact that incentives tap directly into our primal drives—whether financial gain, social acceptance, security, or psychological comfort. They are often so deeply embedded that we fail to recognize their sway, mistaking our decisions for independent rational judgments. Yet, time and again, behaviors that seem irrational or even reckless become intelligible when seen through the lens of the incentives at play.
Consider the question of “craziness.” Clinical insanity might afflict a small fraction of humanity—perhaps 3 to 5 percent—but the willingness to engage in seemingly crazy behavior swells dramatically when incentives are aligned. This means that under the right circumstances, half or more of people might partake in actions that defy reason or morality. Incentives, therefore, expand the realm of possible behaviors far beyond what is traditionally considered sane.
Further complicating matters is the way incentives distort perception. Humans are not passive observers but active interpreters of reality, filtering information through desires and fears. We tend to see what we want to see and ignore what contradicts our incentives, creating cognitive blind spots. As Daniel Kahneman highlighted, it’s easier to spot other people’s mistakes than to acknowledge our own.
Ultimately, the power of incentives lies in their ability to rewrite the narratives we tell ourselves—justifying decisions, soothing guilt, and rationalizing actions, even when they contradict our better judgment. This invisible puppeteer shapes everything from mundane daily choices to grand historical events.
The Pizza Delivery Man Turned Subprime Mortgage Banker
The story of a pizza delivery man who became a subprime mortgage banker during the mid-2000s housing boom vividly illustrates how incentives can radically alter behavior and life trajectories. Overnight, this individual’s income surged from a modest delivery job to daily earnings exceeding his prior monthly pay, transforming not only his financial status but his identity and priorities.
Imagine the pressure he faced. His family depended on the success of his new role. Loans had to be made, commissions earned. The fear of being outpaced by colleagues—and losing this newfound livelihood—created a powerful incentive to keep pushing, even as cracks appeared in the market’s foundation.
This was no isolated case. The subprime mortgage crisis was fueled by a system-wide alignment of incentives that rewarded volume over quality, immediate gain over prudence. Brokers were incentivized to approve questionable loans; appraisers to inflate property values; realtors to fuel demand; bankers to package and sell risky securities; regulators and politicians often chose willful blindness. Each actor’s personal incentives compounded, creating a feedback loop propelling the bubble forward.
For the pizza delivery man, walking away from this bonanza to revert to delivering pizzas was not a simple decision but a high bar of moral and economic courage. The incentives to conform—to stay in the game, keep earning, and avoid rocking the boat—were immense. This microcosm reveals how powerful and binding incentives can be, locking individuals into behaviors that are collectively unsustainable and perilous.
El Chapo and the Power of Social Incentives
The case of Joaquín “El Chapo” Guzmán, the infamous Mexican drug lord, reveals how incentives extend beyond money to the realm of social capital, cultural loyalty, and community survival. In the impoverished village where El Chapo held sway, he was not merely a criminal figure but a benefactor and protector, engendering fierce loyalty among locals.
In environments where state institutions fail or oppress, alternative power structures emerge, often grounded in social incentives rather than pure economics. El Chapo’s practice of attending to villagers’ personal lives—funding weddings, celebrations, basic needs—built an informal social contract. His generosity created bonds of obligation and gratitude that transcended fear or coercion.
For the community, supporting El Chapo was a rational response to a harsh reality. The social incentives to remain loyal—belonging, protection, mutual aid—outweighed the moral condemnation imposed from outside. To risk alienation from this network was to invite vulnerability in a landscape of scarcity and violence.
This intertwining of financial, cultural, and tribal incentives illustrates the complexity of human motivation. It explains how destructive systems persist, sustained not merely by greed but by social dynamics that reward allegiance and punish dissent. Understanding these layered incentives is key to grasping why certain behaviors and power structures endure despite their visible harms.
Seeing What We Want to See: The Telescope That Didn’t Work
The story of Heaven’s Gate is a striking example of how incentives shape not just behavior but perception itself. Members of this cult were so invested—emotionally, financially, and spiritually—in the belief that a spaceship would arrive to carry them to paradise that their entire worldview depended on its fulfillment. Their incentive wasn’t just to believe; it was to maintain a coherent, hopeful narrative that justified their devotion and sacrifice.
When they pooled resources to purchase a high-powered telescope, it was a concrete step toward confirming their faith. The anticipation was palpable. However, the telescope revealed only the comet, with no spaceship in tow. For most, this would have been definitive disconfirmation. But for the cult members, the incentive to preserve their belief was so strong that the only logical conclusion was that the telescope was broken.
This behavior highlights how incentives can create powerful cognitive biases—particularly confirmation bias and motivated reasoning. The desire to avoid cognitive dissonance, to protect one’s identity and emotional investment, warps interpretation of facts. The members’ rejection of objective evidence demonstrates how incentives tied to psychological needs—hope, belonging, meaning—can override empirical reality.
More broadly, this phenomenon is not confined to fringe cults. It permeates politics, religion, social identity, and even personal relationships. The incentive to see what aligns with our desires makes pure objectivity elusive. It explains why people cling stubbornly to beliefs despite contradictory evidence, and why persuasion often requires addressing underlying incentives, not just presenting facts.
Objectivity: A Mask We Wear
Henry Luce’s attempt to launch Facts, a magazine dedicated solely to objective truth, quickly collided with a hard reality: pure objectivity is nearly impossible to achieve. Even in journalistic practice, choices about what stories to cover, how to frame them, and which details to highlight are influenced by incentives—commercial pressures, audience preferences, ideological leanings, and editorial judgments.
Recognizing these constraints, Luce rebranded his effort as Time, focusing on delivering concise, digestible news that saved readers time. This pragmatic pivot acknowledged that readers’ incentives—to be informed quickly and efficiently—often outweigh the desire for exhaustive, unfiltered truth.
This admission sheds light on the fundamental tension between idealism and reality in information dissemination. Incentives shape every level of media production, from headline crafting designed to capture clicks, to editorial decisions that align with political or economic interests. Media organizations compete in markets where attention is currency, and incentives reward narratives that engage emotions and confirm biases rather than strictly adhere to neutrality.
For consumers of information, this means recognizing that objectivity is less a given and more a striving ideal, constantly negotiated under the weight of competing incentives. Understanding this dynamic encourages critical media literacy, fostering skepticism not toward facts themselves, but toward the complex forces that shape their presentation.
When Doing Nothing Isn’t an Option
In many professional domains, the incentive structures favor action over restraint—even when inaction would be the wisest or most ethical choice. This paradox is especially evident in medicine, law, and finance, where practitioners face pressures from clients, institutions, and their own careers to “do something.”
In medicine, for example, doctors may know that watchful waiting or no intervention is best for certain conditions. Yet, patient expectations, fear of litigation, insurance reimbursement models, and institutional protocols incentivize ordering tests, prescribing medications, or recommending procedures. The act of doing something is often equated with competence and care, while inaction risks being perceived as neglect or failure.
Similarly, lawyers may feel compelled to advise actions—filings, negotiations, lawsuits—that generate fees, even when restraint might better serve the client. Financial advisors can push products or trades to justify their role and commissions, despite evidence that passive or no action might be optimal.
These incentives create a systemic bias toward complexity and intervention, sometimes leading to overtreatment, unnecessary expenses, or even harm. Professionals find themselves navigating between what is scientifically or ethically ideal and what is socially and economically demanded.
This dynamic reveals how incentive structures deeply influence decision-making processes, often in counterintuitive ways. Understanding these pressures is vital for reforming systems better to align incentives with genuine well-being and optimal outcomes.
The Extremes Are the Norm
History and human behavior teach us a vital lesson: extremes are not rare anomalies but recurring patterns driven by the powerful sway of incentives. Whether in financial markets, politics, social movements, or individual conduct, extreme outcomes emerge frequently because incentives push people toward behaviors that defy moderation.
Take financial bubbles as an example. What starts as cautious optimism can spiral into euphoric speculation as incentives—like quick profits, career advancement, or peer pressure—mount. People buy into inflated valuations not because they are blind to risk, but because the potential rewards, amplified by social proof and fear of missing out, create irresistible incentives to join the frenzy. These extremes persist far longer than rational analysis suggests because the incentives to deny or delay reality remain strong.
Similarly, wars and social upheavals often escalate because leaders and participants are incentivized by power, prestige, ideological zeal, or economic gain. Once momentum builds, the incentive to de-escalate or seek compromise diminishes, entrenching extreme actions.
Yet, incentives can also catalyze remarkable achievements. When aligned with positive values, incentives spur creativity, innovation, and progress. Talent flourishes in environments where recognition, purpose, and fair reward converge. The same force that drives destructive extremes can fuel extraordinary human potential.
Recognizing that extremes are normative rather than exceptional reshapes how we understand crises and breakthroughs. It challenges complacency and urges vigilance in designing incentives that promote balance, sustainability, and ethical conduct.
A Self-Reflection: What Views Would You Change?
Introspection about the influence of incentives on our beliefs and values is essential for intellectual honesty and growth. Each of us operates within a web of incentives—financial, social, emotional—that subtly shape what we think, how we prioritize, and which truths we accept or reject.
Consider your current convictions. Which ones would shift if your incentives were altered? For instance, would you advocate different political policies if your livelihood depended on industries affected by those policies? Would your social circle or cultural outlook change if your incentives aligned with alternative communities? Would your risk tolerance adjust if your financial incentives shifted?
This exercise reveals the extent to which incentives can blind us to our own biases. Believing that our views are purely objective or immune to influence is often an illusion. Many are unaware of how their incentives silently steer their judgments and decisions.
Admitting this vulnerability is not weakness but strength. It fosters humility and openness, creating space for meaningful dialogue and learning. By consciously interrogating how incentives shape us, we can strive to make more deliberate, thoughtful choices, less driven by unconscious pulls.
The Ultimate Persuasion: Firsthand Experience
No amount of abstract argument or external evidence can rival the conviction forged by firsthand experience. Incentives embedded in direct encounters shape not only what we believe but how deeply we hold those beliefs.
When someone lives through an event—whether it’s success, failure, trauma, or triumph—the emotional and psychological stakes are high. These experiences activate incentives tied to identity, memory, and survival, making the resulting beliefs resilient to outside challenge.
For example, a person who has suffered economic hardship firsthand is more likely to adopt perspectives shaped by that struggle, regardless of contrary statistics or theories. Similarly, witnessing injustice or kindness up close imprints moral lessons that guide future actions.
This experiential incentive is why persuasion often fails without shared context or empathy. Facts divorced from lived reality struggle to penetrate the protective barriers built around personal narratives.
Understanding that firsthand experience wields the ultimate persuasive power invites humility in debates and fosters approaches that seek connection rather than confrontation. It also reminds us that incentives influence not just external behavior but the very lens through which we interpret the world—making them arguably the most potent force in shaping human existence.
Conclusion
Incentives are the invisible forces beneath every human decision, quietly steering individuals and societies toward outcomes that are both extraordinary and perilous. They illuminate why good people sometimes make baffling choices and why entire systems can spiral into chaos or soar to remarkable heights.
By recognizing the profound power incentives wield—shaping perceptions, rationalizations, and actions—we equip ourselves with a crucial lens for understanding human behavior. The challenge lies not in ignoring incentives but in consciously aligning them with values that promote integrity, progress, and resilience. Only then can we harness this formidable force to create a world where our actions reflect not just what benefits us momentarily but what sustains us collectively.