Check out a terrific review of Ruth Grant’s new book STRINGS ATTACHED: Untangling the Ethics of Incentives in yesterday’s Sunday Business section of the New York Times.

WHAT does it mean to treat human behavior as if everyone has a price? That’s the broad question animating “Strings Attached: Untangling the Ethics of Incentives”, by Ruth W. Grant….

Ruth Grant, author of Strings Attached: Untangling the Ethics of Incentives, sat down with our co-publishers The Russell Sage Foundation for a brief Q&A in which she offers her take on what happens when you dig beneath the surface of incentives and view them as a form of power. Here are a few questions to whet your appetite, but head over to the Russell Sage Foundation site to read the complete interview: http://www.russellsage.org/blog/interview-ruth-grant-ethics-incentives

Q: While incentives are largely viewed now as an alternative to social control, you look at the history of their use at the turn of the 20th century and find a much more controversial and worrying story. How were incentives perceived back then, and in what context were they discussed?

A: The term “incentives” was introduced in America in the early 20th century in several different contexts, including Frederick Taylor’s scientific management in industry and the new field of behaviorism in psychology. (Surprisingly, the term is not found in 18th century writers like Adam Smith). Incentives were introduced in industry as a tool of social engineering, while in psychology, behaviorists believed that they could gain social control by using incentives to induce desired behaviors. Incentives were quite controversial at the time. They were often criticized as dehumanizing, and in the form of piece-rate wages, they were a source of conflict between unionized labor and management.

Q: Someone defending incentives could say they merely offer a choice to the public. So, for example, states didn’t have to compete in the Race to the Top education program if they didn’t want the strings attached to the federal funds. But you suggest this focus on voluntariness relies on a rather narrow definition of freedom and rationality. Could you elaborate?

A: When incentives are viewed as a type of bargain or trade, the ethical focus is exclusively on whether or not the transaction is voluntary. So, for example, people argue over whether offering large sums of money to a poor person to participate in research is “coercive.” But this is not the only question. When incentives are viewed as a form of power – one way I can get you to do something you otherwise wouldn’t – additional ethical questions arise of the sort that always arise about the use and abuse of power. To return to the example — if the research is filling out a questionnaire, nobody would really worry about coercion. If the research involves invasive and painful procedures, then the first question is whether the researcher ought to be conducting this study on human subjects at all. (Of course, often the answer will be “yes”).

Incentives do offer a choice – but that is not sufficient. Mice in a maze also have choices: left or right? Studies have shown that incentives with human beings often backfire in situations where people find the incentives insulting. Incentives imply that you wouldn’t do the thing you are being asked to do for intrinsic reasons. Studies show that people tend to feel insulted by incentives when they take the place of persuasion; when they micromanage; or when they fly in the face of people’s generous impulses – for example, paying for blood “donations” can decrease the number willing to give. In other words, while incentives offer choices, they are based on a psychology that assumes people are reactive and malleable, like the mouse. They do not treat people as fully autonomous rational agents.

You can also read a sample from Ruth’s book here: http://press.princeton.edu/chapters/s9546.pdf

Wow, what a lineup! We are so proud to see Carmen Reinhart, the co-author of our New York Times bestselling classic THIS TIME IS DIFFERENT: Eight Centuries of Financial Folly, discuss economic issues on a recent New York Times Opinion talk with Times journalists Tom Friedman, Paul Krugman, and Joe Nocera. This brilliant and entertaining program streamed live on the internet and covered today’s economic issues such as the Eurozone crisis, deleveraging, inequality, Occupy Wall Street, and space aliens. Check out the video if you want to see what great minds have to say about our economic situation and what’s coming next.

Check out this video of Robert Frank’s 11/10 LSE Lecture on his new book: The Darwin Economy: liberty, competition, and the common good. The book’s Facebook page is updated regularly with news, clippings, and author videos!

Thanks to Dan Hamermesh’s much-discussed op-ed in The New York Times on whehter there should be legal protection for the ugly in the workplace, many media outlets have come calling. Check out a recent interview with Dan on Fox News’s Fox & Friends.

Why Beauty is Good for Business

UT Economist and PUP author Daniel Hamermesh on why beauty if good for business.

“Some of our papers show that those companies that had better looking executives–same location, same size–had better sales. And the effect was not small.”

This is the second of five videos in which he explains some of the research he did for Beauty Pays. Tomorrow: “why economists care about beauty.”

King Kong vs. Godzilla!

New York University, Stern School of Business prof and Princeton University Press author Matthew Richardson discussed his new book, with Viral Acharya, Stijn van Nieuwerburgh, and Lawrence J. White, GUARANTEED TO FAIL: Fannie Mae, Freddie Mac, and teh Debacle of Mortgage Finance on the Emmy-winning program The Daily Show with Jon Stewart. Check out the clip!

Harvard Business School professor Max Bazerman and Notre Dame business ethics professor Ann Tenbrunsel are taking questions about business, ethics, and everything in between over at Freakonomics, so make sure to post your queries and comments here.

While you’re there, make sure to read the authors’ recent guest post adapted from their recent Princeton book, Blind Spots: Why We Fail to Do What’s Right and What to Do about It.

Can you conceive of a world where business wants stronger government? Jack Donahue and Richard Zeckhauser explain why it is the best interest of business to have a strong, functioning, and collaborative government as a partner in this original Bloomberg Government article.

If you have a Bloomberg account, you can read this terrific article online: http://www.bgov.com/news_item/0EfXRKdDrw8iYcwLplzlvw

Otherwise, Bloomberg has generously provided this screen grab for our readers, too.

Two Princeton books have recently been mentioned on strategy+business‘ online list of the “Best Business Books 2010.” Raghuram G. Rajan’s Fault Lines: How Hidden Fractures Still Threaten the World Economy made the cut for the category, “The Economy,” and was reviewed by David Warsh, while Boris Groysberg’s Chasing Stars: The Myth of Talent and the Portability of Performance appeared in the category, “Human Capital” and was reviewed by Sally Helgesen.

Click here and here to see the reviews. And if you would like to see a list of other recent award-winning books from PUP, please click here!

Five Princeton books were recently featured in Financial Times‘ Nonfiction Round-Up for 2010! Here’s what FT had to say about them:

Business & Economics

	Banking on the Future: The Fall and Rise of Central Banking, by Howard Davies and David Green The best assessment yet of the role played by the leading western central banks – the US Federal Reserve, the ECB and the Bank of England – in the run-up to the financial crisis and beyond, from two former insiders at the top level of UK policymaking.
	Zombie Economics: How Dead Ideas Still Walk Among Us, by John Quiggin A critical look, from a left-leaning perspective, at some of the defining intellectual fashions of the past three decades. Quiggin is a writer of great verve who marshals some powerful evidence.
	Fault Lines: How Hidden Fractures Still Threaten the World Economy, by Raghuram G Rajan A high-powered yet accessible analysis of the financial crisis and its aftermath, Fault Lines was awarded the FT/Goldman Sachs Business Book of the Year. Rajan, a University of Chicago economist, was one of the few who warned that the crisis was coming and his book fizzes with striking and thought-provoking ideas.

Science & Environment

Honeybee Democracy, by Thomas D Seeley The year’s most enchanting science book. Seeley, biology professor at Cornell University, distils the insights of 40 years studying and keeping bees. He focuses on the astonishing “democratic” process that takes place when a swarm of thousands of bees leaves an overcrowded hive to find a new home: how scouts evaluate potential sites and advertise their merits, how a final choice is made, and how the swarm navigates to its new nest.

Sport

Gaming the World: How Sports Are Reshaping Global Politics and Culture, by Andrei S Markovits and Lars Rensmann A very readable guide to the recent globalisation of sport by academics who understand both US and European sports. Packed with examples, from David Beckham to Kobe Bryant, the book explores the tension between sport’s globalisation and the fact that most teams still arouse the greatest emotions in their local areas.

Definitely a great year of non-fiction books! Congratulations to all authors mentioned!

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Congratulations to Raghuram G. Rajan, whose book, Fault Lines: How Hidden Fractures Still Threaten the World Economy, has been shortlisted for the 2010 Financial Times/Goldman Sachs Business Book of the Year Award!

Of the 200 books entered for the award, the judges chose six books which, in their opinion, provided “the most compelling and enjoyable insight into modern business issues.” Lionel Barber, Financial Times editor and chairman of the judging panel, commented:

The overall winner of the 2010 Book Award will be announced on October 27 at an award dinner in New York, at which Vartan Gregorian, President of the Carnegie Corporation of New York, will be the keynote speaker. The winning author will receive £30,000 and the other shortlisted authors will each receive £10,000. Best of luck to Raghuram!

To see a list of other recent award-winning books from Princeton University Press, click here.

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