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In reply to Craufurd Goodwin's question on the shift in the meaning  
of the term "incentives."  I know he said to sent it to a specific  
address, but maybe the list is interested in the question too. 
 
 
Craufurd: Great question. I don't have anything like a full answer,  
but one piece might be this.  
 
My study of Hayek and some of the turn of the century literature on  
the possibility and prospects for socialism seem to show that what  
modern economists call "incentives" were referred to as motivation,  
as a psychological question, or sometimes even as an ethical  
question back then.  You can see this in Hayek's 1935 essays in his  
edited work COLLECTIVIST ECONOMIC PLANNING.  I think that motivation  
was studied in business schools by industrial psychologists or  
efficiency experts.  People promoting the Taylor system and all that.  
 
Then sometime in the 1960s (I don't know the literature very well  
here so can't give you the watershed articles) economists started  
thinking that these questions of motivation in fact were fair game.   
It went hand in hand with the development of information theory.  
  
What this crude history suggests is that there never was a change  
in the meaning of incentive, or at least not a point-at-able  
shift in which the word lost one meaning as it added the other.  
Rather, there was one meaning (the old one having to do with the  
passions).  Then another concept not called by the term "incentives"  
but rather by terms like "motivation" or "effort" grew up.  Then this  
new concept was dubbed "incentives" sometime pretty recently.  
 
I have no idea how the first meaning died out. 
 
How does that sound as a first cut?  Bruce 
 
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