Randall Holcombe is a Research Fellow at the Independent Institute, and DeVoe Moore Professor of Economics at Florida State University. In the past He has also served as President of the Public Choice Society, President of the Society for the Development of Austrian Economics and as a member of the Florida Governor’s Council of Economic Advisors as well as a number of academic roles.

He’s written many books, the most recent of which is Liberty in Peril: Democracy and Power in American History, which was published last September.

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I saw a little story from Chicago during the week. Not something that’s going to make headline news, but it’s interesting. It comes from a City Council budget hearing submission by Library Commissioner Andrea Telli. I told you, this isn’t headline news.

But it is interesting. What the Chicago public libraries did was abolish fines for the late return of books. You know the sort of thing, you get two weeks to read the book, but if you don’t bring it back in time, you have to pay a dime or whatever for every extra day. The theory is that people will be more likely to bring back their books on time if they have to pay a fine for them being late.

Well, Chicago said, forget it, bring us back the books when you can, no worries.

What happened? The return rate soared by 240 per cent. That goes against what you might expect, why would so many more people bring back their books when the penalty is removed? There’s a couple of reasons.

First, these fines are comparatively tiny, and they were only ever likely to be enforced when someone came into the library, probably to return the books, so to a degree they were more of a deterrent than an encouragement to bring the books back.

But secondly, human motivations aren’t as simple as that. People often do things for people, not because they have a financial motivation, but because they want to be good people. And, sometimes financial motivation just doesn’t work.

I’m reminded of a study where a kindergarten set up a system of fines for parents who picked up their kids late. Kindergarten teachers are basically held hostage by parents who show up late, because the kids are too young to kick out onto the street. So they said you pay so much money for every minute past closing time that we have to mind your kid.

Did that make the parents show up on time? No, not by a mile. Actually, it made them show up even later, and significantly later. As the authors of the study wrote, the parents regarded the payment not as a fine, but as a fee, and many thought it was a fee well worth paying. And, the fact that they were paying for the service meant that they lost non-financial motives to be on time, such as the sense of moral duty not to force the teachers to stay late at work.

But what was really interesting was when the kindergarten abandoned the fine system. Did the parents go back to normal, and pick their kids up not-quite-on-time, but not as late when they were paying for the extra time?

No. It seems that the experience of paying the fine, or the fee, permanently changed the parents’ outlook. Once they saw picking up their kids on time was not a moral duty, but a transaction, it seems that they couldn’t go back. Even after the fine system was withdrawn, they still saw it as a transaction, just maybe a better value one. So the introduction of money damaged the social contract.

The point here is that not every motivation is money, even in today’s world, people still can be motivated by a sense of duty to people even when they have no real connection with them. Whether it is fighting to defend people you’ve never met, caring for them as teachers or medics, keeping an orderly line in a busy café or braking to let someone merge into traffic, that sense of duty is, literally, priceless.

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