🤯Unknown Unknowns #67 - The Dark Path of Incentives

My favorite fable is the story of the farmer and his horse.

It’s an old Zen story, and this version is from Derek Sivers:

A farmer had only one horse. One day, his horse ran away.
His neighbors said, “I’m so sorry. This is such bad news. You must be so upset.”
The man just said, “We’ll see.”
A few days later, his horse came back with twenty wild horses following. The man and his son corralled all twenty-one horses.
His neighbors said, “Congratulations! This is such good news. You must be so happy!”
The man just said, “We’ll see.”
One of the wild horses kicked the man’s only son, breaking both his legs.
His neighbors said, “I’m so sorry. This is such bad news. You must be so upset.”
The man just said, “We’ll see.”
The country went to war, and every able-bodied young man was drafted to fight. The war was terrible and killed every young man, but the farmer’s son was spared, since his broken legs prevented him from being drafted.
His neighbors said, “Congratulations! This is such good news. You must be so happy!”
The man just said, “We’ll see.”

I told this story to a friend once and he said, "That is the most Chris Wong story ever."  I was really proud at that moment - equanimity is important to me.

Life is a wave - luck and fate oscillate from good to bad, always eventually swinging the other way.  Trying to artificially straighten the wave causes overcorrection.  The wave will correct naturally.  Those trying to correct the wave overestimate their ability to discover unknown unknowns.

---

Our Webinar on Newsletters Last Week:
Louie Bacaj and I ran a webinar this past week.  We taught 92 strangers the best things we’ve learned about how starting a newsletter can be made easy and valuable.

We decided to upload it to YouTube so you can watch it here.

This coming week, we will be running the second cohort of our live 3 week course on Newsletters.  Everyone will start, publish, and get personalized feedback on their newsletters.

---

Discoveries:

We’re already inclined to try to flatten our own waves rather than ride them out.  What happens when incentives are used to attempt to shape waves?  What unintended consequences result?

1️⃣

My friend Alina Okun gives the example of how countries use tax laws in order to attempt to shape citizens behavior.

In a democratic country, where the government cannot control its citizens by force (thankfully!), it “controls” them through tax incentives by either incentivizing or disincentivizing behavior.

Government intervention usually comes in the form of subsidizing demand and restrict supply.  What’s the unintended consequence of that?  Higher prices!  Hello inflation!

=> Newsletter Here

2️⃣

The United Arab Emirates is looking into building a mountain in order to cause more rainfall.  Yes, you read that right.  I feel this is the middle of a Greek myth about hubris.

If humans tinkering with the land is such a thing (and it’s always been such a thing, right back to prehistoric forest-clearances, irrigation, hunting and the domestication of animals), then maybe it’s equally fruitful to consider how our the land tinkers with us.

This project is still a theoretical exercise so we can only speculate on any unintended consequences, but any project that sounds like a Bond villain’s pet project does not bode well.

=> Essay Here

3️⃣

South Carolina’s alcohol laws careened after Prohibition like a drunk after a bar crawl.  Going from no alcohol, to no alcohol in restaurants, to allowing BYOB, South Carolina settled on allowing restaurants to only serve alcohol out of airplane liquor bottles - which just happen to be larger than a standard pour.

South Carolina’s restrictions on alcohol resulted in more alcohol per drink, not less, earning the state the reputation of “serving the nation’s strongest drinks” — all in the name of moderation.

=> Essay Here

4️⃣

Punished by Rewards by Alfie Kohn discusses whether rewarding kids for good behavior is a positive or negative.  It seems simple, give a reward for the behavior that a parent wants.  However, “the author comes to the conclusion that rewards ‘motivate people to get rewards’.”  

Whoever came up with the concept of rewarding for good behavior clearly never heard of the concept of “Gaming the system”.  Nor how fast kids learn:

Our 10mo seems to have figured out she can make this awful choking/coughing sound to immediately get the attention of everyone near here.

Not even 1 yet and she's already trolling people. Very proud.

— Nat Eliason (@nateliason) September 9, 2022

=> Book Here

---

Questions, suggestions, complaints?  Email me at [email protected].  Feedback welcome.

If you enjoyed this newsletter, please share it with a friend or two.  And feel free to send anything you find interesting to me!

Leaving you in peace,

Chris