Tuesday, February 21, 2012

Current system produces perverse incentives

Spain's jobless benefits bogged down by fraud

Before the end of this story, I knew that there would be no mention of an alternative public policy that would avoid the downsides of the policy described.

There is nothing more predictable than that NPR reporting (and mainstream media generally) includes significant blindspots regarding sharing of natural wealth, public property rights and economic externalities. These topics are not mentioned in news reports.

When people are paid for their unemployed status, they have an economic incentive to be less productive. This is not good for them nor is it good for society (for us). They have incentive to hide or obfuscate their employment status. This is a perverse incentive. A society that encourages people to be open about their employment status is one where there is generally more awareness among members about the experience and abilities of their fellows.

If we respected natural law enough to share natural wealth equally, we might not feel a need for government programs aimed at poverty reduction, since no person would live with the threat of abject poverty.

Equal sharing of natural wealth does not cause people to want to avoid productive work.

Why no mention of that fact in a story such as this?

http://gaiabrain.blogspot.com

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