Incentives: The Most Powerful Force Shaping Human Behavior
By age 35, Akinola Bolaji had spent two decades deceiving people online, masquerading as an American fisherman to exploit vulnerable widows into sending him money. When The New York Times asked how he felt about harming innocent people, his response was telling:
“Definitely there is always conscience. But poverty will not make you feel the pain.”
Desperation can justify almost anything in the mind of the person experiencing it. This extreme example highlights a fundamental truth: incentives are the most powerful force in the world. They shape human decisions, justify actions, and influence behavior more than we care to admit.
The Power of Incentives: Why People Act the Way They Do
When you grasp the overwhelming influence of incentives, the world’s absurdities make more sense. If I asked, “How many people in the world are truly crazy?” I might estimate 3%-5%. But if I asked, “How many people would do something crazy if the incentives were right?” the answer could be well over 50%.
No amount of knowledge, morality, or logic can override what a person desperately wants or needs to believe. As Nobel laureate Daniel Kahneman observed, “It is easier to recognize other people’s mistakes than our own.” The true power of incentives lies not only in how they influence others but in how blind we are to their effect on our own decisions.
Humans Are Storytellers, Not Calculators
People don’t process the world like computers analyzing raw data. Instead, we create narratives that help us navigate complex realities. The best story always wins—not the most accurate or rational one, but the one that sounds the most compelling.
Benjamin Franklin understood this well when he said, “If you would persuade, appeal to interest and not to reason.” Incentives drive the stories we tell ourselves, justifying actions and beliefs even when we suspect they are wrong.
Case Study: The Subprime Mortgage Boom
Consider a personal anecdote: I knew a pizza delivery man who became a subprime mortgage banker in 2005. Overnight, his income skyrocketed. He could earn more in a single day than he previously made in an entire month.
His job depended on approving loans. Feeding his family relied on approving loans. If he refused, someone else would take his place. Quitting to return to delivering pizza was an unthinkable choice.
By the mid-2000s, nearly everyone in the industry knew the subprime mortgage bubble was unsustainable. But incentives kept the machine running—from brokers to CEOs, investors, realtors, appraisers, politicians, and central bankers. Nobody wanted to rock the boat.
This pattern repeats across history: when the rewards for bad behavior are high, even good people find ways to rationalize their actions.
Historical Examples: How Incentives Shape Society
The book What We Knew explores how ordinary German citizens rationalized their support for Hitler in the 1930s. One interviewee explained:
“In 1923, we had inflation. Nobody had anything. Then Adolf came to power with his new idea. People who hadn’t had jobs for years had work. And then the people were all for the system.”
Economic desperation made extreme ideology seem reasonable. When people perceive a leader as their lifeline, they overlook even the most horrifying consequences.
A similar phenomenon occurred in Mexico with drug lord El Chapo. A documentary reveals how he won the loyalty of impoverished villages:
“Chapo would stop, ask about people’s lives, and offer financial help for weddings, celebrations, and medical expenses. Everything that the government should have been to these people, Chapo was.”
Financial, cultural, and tribal incentives explain why people defend—or even participate in—actions they might otherwise condemn.
The Two Key Takeaways
1. Incentives Can Drive Extreme Behavior—For Better or Worse
From financial crises to wars, fraud, and political upheavals, history is full of examples where incentives led good people to do unthinkable things. However, the opposite is also true—when people are placed in environments with positive incentives, they can accomplish extraordinary feats.
2. Ask Yourself: Which of My Beliefs Would Change If My Incentives Were Different?
If your answer is “None,” you’re likely blinded by your own incentives.
Understanding the force of incentives doesn’t just help you make sense of the world—it helps you become more self-aware, more adaptable, and ultimately, more in control of your own decisions.
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