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Posts tagged ‘Adam Smith’

(How) Does Capitalism Incentivize? Part I

Cross-posted from The Prindle Post.  

In my youth my parents would defend capitalism by saying that it incentivized work in contrast to communism.  If you thought you could get paid the same amount whether you worked hard or not, you would see no reason to work hard or better.  It isn’t just my parents.  A recent This American Life podcast, “Same Bed, Different Dreams (transcript),” includes a recording smuggled out of North Korea in the early 1980s of Kim Jong-Il saying that North Korean filmmakers have no incentive to make creative and interesting work because of communism.  How did everyone from one of the last communist dictators to my parents come to believe that capitalism incentivizes hard work, creative and inventive work, while communism does not? Read more