How to set up a system (1)

No I'm not going to talk about my job here, neither am I going to discuss information technology in general.

The system I refer to is the rules of society itself, written and unwritten, forming a system which encourages certain behavior.

Many people say that city people are worse than those from the village - less friendly, less helpful, and less polite. Yes this is true. But what is the reason for that? Is it because people who move from the village to the city magically get a reduction in moral values? Of course not; the reason is that in a small village, everyone knows each other, so good and bad deeds have direct repercussions. In a small village, help someone lift a heavy load back to his home, the next day when you need help that guy may appear and give you a hand. In the big city, you help someone and most likely you will never meet that person again. In a small village, you never give way for others to cross that narrow bridge and people will pin you down as an inconsiderate person, while in the big city you cut someone off on the road and most likely you will never meet that person again.

So we can see that in an anonymous setting where reputation does not matter, people tend to be more selfish. This effect is even more pronounced on the Internet.

Looking at the corporate world today, we can see that a huge amount of speculation and other such risky acts are going on. Why this shift towards instability? The answer is that in the past most businesses were family-controlled, so leaders would look at the long run, while now corporations on the stock market hire CEOs who do not have a stake in the long-term performance. So the logical choice for these CEOs is to take huge risks, since if these gambles pay off they get huge bonuses, while if they fail and the company goes bankrupt, they can always move on to another job.

In the same vein, if within a company the boss proclaims that the salesman who gets the most sales will get a holiday to Hawaii, I wouldn't be surprised if salespeople are not very keen on helping each other. On the other hand if he says that if the sales team hits target everyone will get a holiday trip, the level of cooperation would probably rise instantly.

And it is no surprise that in Communist countries productivity is low, for if everyone is paid the same no matter what the result of their work is, human nature causes everyone to slack. Communism would be perfect if we were angels; unfortunately we are not.

If life is a game, the rules under which we play it determine our playstyle. In my next post, I will discuss how to tweak rules to achieve certain effects in how people play the game of life.