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February 09, 2018



I’m reminded of the possibly apocryphal tale of the school that wanted to encourage parents to pick up on time. Occasionally a parent might be late and this would result in a teacher having to wait behind to supervise the child. So the school thought it would incentivise parents to pick up on time with a penalty payment for late pick up.
Parents no longer felt a moral obligation to get the kids as now they had a monetised relationship where their guilty feelings were assuaged by the payment of a small sum for the supervision of their kids. Late pick up skyrocketed.

From Arse To Elbow


The late pick up story was an experiment run by two research economists across 10 schools in Israel, which was later referenced in Freakonomics. It's important to know that it wasn't the schools' idea and the fine (the price) was not set at a realistic level, i.e. high enough to disincentivise lateness.

Their conclusion (apart from the obvious inference that the fine was too low, making it a bargain price for child-care) was that the boundary of the implict contract between school and parent had been shifted by the introduction of the fine. In other words, an interaction hitherto governed by social norms (reciprocity, consideration etc) had been transferred to the realm of commodity exhange.

Interestingly, when the fines were dropped at the end of the experiment, the increased number of late pick-ups did not decline, supporting their conclusion about a boundary shift, so it isn't quite right to describe the fine as a quid pro quo for the avoidance of guilt.

It is also important to note that the experiment was conducted in fee-paying schools only - i.e. parents were still paying after the bounday shift but apparently then considered teachers staying late as an expansion of the core service.

Here's the study: http://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine.pdf

Robert Black

The most basic technology by which this occurs is the limited liability company. the managers are responsible to directors who are responsible for shareholders profits and the shareholders are just seeking a market return and need to invest elsewhere if it is not forthcoming.

All enslaved by a legal sleight of hand.


Not sure of this argument. People can't accurately and fully predict the consequences of their choices; in other words, they can be as genuinely surprised by the outcome as uninvolved people. A bad outcome following a technological implementation of some sort, especially a complex implementation, can't be simply and squarely blamed on its initiators. Nor, I think, can you convincingly argue for extreme conservatism in the face of this uncertainty; often there are real benefits from an implementation.

Paul Derien

"It’s that technology is not merely a neutral set of possibilities for improving the human condition. It plays a central role in shaping both the reality of class relations and our perceptions of those relations – often in ways which we cannot foresee at the time."

It's not only underappreciated, in this case it's understated. Technological changes aren't random with respect to interest: they are directed by those commissioning or purchasing the technology, which is generally not labor. Take the example of bar codes: it does make a clerk's job easier. But by greatly reducing the mental and manual skills once used in the check out process, it lowers the leverage to extract more of the value of the transaction for labor (focusing on the practical rather than the debatable concept of "exploitation.") Now, let's say that issue of shoplifting for self-checkout became a matter where the losses exceeded the savings to capital (and indirectly to non-capital upper management for important power/incentive reasons) over having a human being reinserted in the process. Now, there would be a reason to move back in that direction at the lowest possible skill level, but it could also spur innovation that again removes the human factor - think about coding inserted automatically in products directly in the manufacturing process that was read directly at an establishment's egress rather than at counters. It's true that outcomes often deviate from what is or can be foreseen, but over time the probabilities favor the interests of those making the technological decisions.

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