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Incentives and Rules

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http://www.ted.com/talks/barry_schwartz_on_our_loss_of_wisdom.htm

This is a very good video about how our society deals with problems.

Barry Schwartz makes a passionate call for "practical wisdom" as an antidote to a society gone mad with bureaucracy. He argues powerfully that rules often fail us, incentives often backfire, and practical, everyday wisdom will help rebuild our world. 
Essentially, he argues that in modern society, there are basically two tools we use when faced with trying to make people do the right thing and they both fail.

Rules - Rules exist generally because people have historically screwed up. So you make a rule to ensure the screw up does not happen again. But rules fail to account for an ever changing world and infinite circumstances. Rules are needed, but they can get too detailed and actually cause people to do more harm than good or even prevent people from acting for the good.

Incentives - Incentives exist to entice people to do things. We…