The power of incentives to cause rationalized, terrible behavior is also

demonstrated by Defense Department procurement history. After the Defense

Department had much truly awful experience with misbehaving contractors

motivated under contracts paying on a cost-plus-a-percentage-of- cost basis, the

reaction of our republic was to make it a crime for a contracting officer in the

Defense Department to sign such a contract, and not only a crime, but a felony.

 

And, by the way, although the government was right to create this new felony,

much of the way the rest of the world is run, including the operation of many

law firms and a lot of other firms, is still under what is, in essence, a

cost-plus-a-percentage-of-cost reward system. And human nature, bedeviled by

incentive-caused bias, causes a lot of ghastly abuse under these standard

incentive patterns of the world. And many of the people who are behaving

terribly you would be glad to have married into your family, compared to what

you’re otherwise likely to get.

 

Now there are huge implications from the fact that the human mind is put

together this way. One implication is that people who create things like cash

registers, which make dishonest behavior hard to accomplish, are some of the

effective saints of our civilization because, as Skinner so well knew, bad

behavior is intensely habit-forming when it is rewarded. And so the cash

register was a great moral instrument when it was created. And, by the way,

Patterson, the great evangelist of the cash register, knew that from his own

experience. He had a little store, and his employees were stealing him blind, so