(Via this Coding Horror blog post
is a fantastic illustration and explanation of motivation and reward. The speaker is Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us
. He says that money is a good motivator for mechanical tasks. If you pay people for each pound of tomatoes they pick, they'll pick more tomatoes than if you pay a flat rate each day. But if the task requires any cognitive skill, people do worse
if there's a performance incentive. If you give people the freedom to do something interesting, you'll get much better results than if you offer an innovation bonus and tell them to work on something. Money is a motivator, but to a limited extent: pay people enough to take the issue of money off the table
This is a pretty good description of my motivations. My actual salary isn't particularly important to me; I'd probably be happy to do the work I'm doing for half the salary (but not a quarter of the salary, 'cause then I'd have to put a lot more focus into getting by on a tight budget). What motivates me at work is (a) interesting projects, (b) socially beneficial results, and (c) having fun.
Pink concludes that, beyond being profit maximizers, people are purpose maximizers. This jives with something I've thought for a while: economists study things in terms of money because it's easy to measure, but that lens is insufficient to capture a wide spectrum of human activities and motivations. "Purpose" isn't easily transferrable, it's hard to measure, it doesn't seem to follow mathematical rules, but it's how those crazy Homo sapiens sapiens
Maybe the problem with the Soviet system is that they wanted a very industrial society, but they applied a system that's suited to post-industrial creative jobs. For all Marx's focus on factories and industrial workers, he described a communist society "where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic." [Idealism and Materialism
 Even worse, if you offer huge financial incentives for easily-measured results to smart investment bankers, you can tank the world economy.