Against Infinite Incentives

The most chilling aspect of Max Weber’s analysis of industrialization is the revelation (obvious once noted) that it began with an empirical failure of classical economics. Specifically, when industrialists tried to increase the supply of labor with higher wages, the increased demand — rather than stimulating supply — depressed it. Workers preferred to keep their incomes stable and work less as wages rose. Correcting this design flaw in human nature, required — on Weber’s account — a sort of divine intervention. Specifically, Protestantism tied work, whatever its worldly incentives, to eternal salvation. Which begs the question: To what extent are worldly economics underwritten by infinite, rather than finite, incentives. What do I mean by infinite incentives? Some examples might help.

  • The exchange of a finite amount of labor for a finite amount money — the kind Adam Smith and Karl Marx were concerned with — provides a finite incentive.
  • The exchange of an indeterminate, possibly ever-increasing amount of labor for an eternal afterlife provides an infinite incentive.
  • Conversely, precarity provides an infinite disincentive. When workers would not work more because of higher wages, industrialists tried the reverse — lowering wages — with better effect. Workers were compelled to work, not to fulfill finite material needs, but to avoid the threat of their eternal non-existence.

It is as if capitalism corrected the human drive toward freedom with its pathological form, the desire to be free even of finitude.

Once you notice the invocation of infinite incentives, you see how pervasive they are, and what an obstacle they pose to a workable, finite economics. A finite economics, which is derided as technocratic wherever it is proposed, would allocate finite resources to a finite number of finite beings with the maximum benefit and efficiency. Simple enough, except that these finite beings are, either by nature or cultivation, hopeless infinitists.

  • The capitalist is an infinitist because he claims that the limitation of incentives (through taxation, for example) is equal to the elimination of incentives all together. If accumulation cannot be, at least in principle, unlimited, no one will undertake it at all.
  • The socialist, however, is also an infinitist. Marx correctly identified — despite his supposed materialism — the strange, generative property of human labor that allowed it to be stretched and expanded without end, making it the only possible source of surplus value. In this light, socialism seeks to snuff out the capitalist’s unbounded dream of infinite accumulation, but only by transmuting it into the infinite freedom of an unplanned utopia. (Utopias can never be planned, lest they be technocratic.)

Thus, progressives are faced with a dilemma. A thoroughly materialist, finite economics would resist the urge to manipulate actors with infinite incentives — be they capitalist or Bolshevik — yet this would amount to unilateral disarmament, since capital would not relinquish its unbounded growth function (to steal an image from calculus). This is the essence of the complaint against incrementalism from infinitists on the left, that any finite economics lacks the depth and the weight to counter the pull of capitalism.

One might argue, however, that infinitism (utopianism) on the left just fights one overreach with another. I can imagine a Critique of Economic Reason, which would seek to definitively articulate the limited scope of a finite economics and more securely place infinite, regulative ideals beyond the reach of economic exploitation. To paraphrase Kant, such a project would deny infinite incentives to make room for finite freedom.

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