A prison is perhaps the easiest place to see the power of bad incentives. And yet in many walks of life, we find otherwise normal men and women caught in the same trap and busily making the world much less good than it could be. Elected officials ignore long-term problems because they must pander to the short-term interests of voters. People working for insurance companies rely on technicalities to deny desperately ill patients the care they need. CEOs and investment bankers run extraordinary risks — both for their businesses and for the economy as a whole — because they reap the rewards of success without suffering the penalties of failure. District attorneys continue to prosecute people they know to be innocent because their careers depend on winning cases. Our government fights a war on drugs that creates the very problem of black-market profits and violence that it pretends to solve. We need systems that are wiser than we are. We need institutions and cultural norms that make us more honest and ethical than we tend to be. The project of building them is distinct from — and, in my view, even more important than — an individual’s refining his personal ethical code.

Extracting money from users of a program by restricting their use of it is destructive because the restrictions reduce the amount and the ways that the program can be used. This reduces the amount of wealth that humanity derives from the program. When there is a deliberate choice to restrict, the harmful consequences are deliberate destruction. The reason a good citizen does not use such destructive means to become wealthier is that, if everyone did so, we would all become poorer from the mutual destructiveness. This is Kantian ethics; or, the Golden Rule. Since I do not like the consequences that result if everyone hoards information, I am required to consider it wrong for one to do so. Specifically, the desire to be rewarded for one's creativity does not justify depriving the world in general of all or part of that creativity.

We do not live in a world that mainly suffers bad policies due to lack of ideas about better ones, or lack of elegant explanations supporting good policies, but one that suffers bad policies due to system and meta-system level incentives.

Society is structured to distract people from the decisions that have a huge impact on happiness in order to focus attention on the decisions that have a marginal impact on happiness.

[Society] is structured to distract people from the decisions that have a huge impact on happiness in order to focus attention on the decisions that have a marginal impact on happiness.

… Wage theft, the intentional dumping of oil, shark finning—in each of those categories you’ll find people who are the culprits, but if you really try to understand what makes them tick, you’ll see that they’re pretty desperate characters who are victims themselves of a larger, screwed-up system…