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- What is the incentive problem
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Card 3 / 19: What is the incentive problem inherent in the slogan, "From each according to his ability, to each according to his needs"?
Answer:
The policy of this slogan severs the connection between work and reward. It is unlikely that workers would contribute as much to the pile of total output, if the amount they got to consume (or give to their family) had nothing to do with their contribution.
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Dr.Robert MurphyAssociated Scholar
Mises Institute
USA
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Attribution:
Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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