You hear the debate in the U.S. Senate: aid money is wasted money. Giving people or nations money in the form of unemployment benefits or aid is a disincentive to change. Pay unemployed people and they stay unemployed. Pay poor people and they stay poor. Give aid to corrupt governments and those governments stay corrupt.
This is the principle economists use to argue against giving aid. Economists make it sound as though the money itself is the problem, although the same argument is not made against super high CEO bonuses. Somehow, instead of engendering passivity and sluggish risk-averse stupidity, multimillion dollar bonuses magically become an incentive for corporate hot shots to constantly move forward and push the envelope with innovative financial products and productive deals that drive the global economy.
So why don’t we just call aid to Africa a “bonus.” That’s the solution. It’s not an unemployment benefit; it’s a “jobless bonus.” Now that those jobless people are getting a bonus instead of a “benefit” they can go out and invest in stuff. Now these newly empowered bonus spending entrepreneurs are free to start a new business with their unemployment checks and the recession will be over in a flash. Where else could we apply this? Hey, old-fashioned wages are just a disincentive for people to look for another better job, right?
Stop paying people; make them miserable and they are suddenly incentivised to become geniuses. Then give them a jobless bonus and they’ll lead us out of economic hardship altogether. That’s one way of doing it. Or just give them a bonus from the beginning. Bankers figured this out a long time ago when they renamed wages “compensation,” or “incentive package,” or “bonus.”
Those bankers know what they are doing… they’ve got all those economists working for them.