In an ideal world, nobody's work would be just about the money. People could pursue excellence in what they do, take pride in achievement, and derive meaning from knowing that their work improved the lives of others.
When you rely on incentives, you undermine virtues. Then when you discover that you actually need people who want to do the right thing, those people don't exist because you've crushed anyone's desire to do the right thing with all these incentives.
Everybody makes money for a living, but most of us actually do something that has a point, in addition to just making money. We examine and treat patients, we teach students, we draw up contracts and wills, we write for newspapers, magazines, and web sites, we clean floors, or we serve meals.
Too little attention is paid to the dark side of incentives. They are anything but a magic bullet. Psychologists have known this for years, but it seems largely hidden from the world of commerce.
Of course, bankers were always interested in making money. But when bankers had clients, they bore some responsibility for the clients' welfare.
