Thursday, July 21, 2005

Correct Analysis of Motivation to Work

Excellent analysis from Edward Lotterman, an economist from St Paul’s, Minnesota, USA, published by Pioneer Press ( in an article discussing a court case over payments to part-time governors of a non-profit hospital.

The pay dispute, while interesting, is not the focus of my comments. These focus on Edward Lotterman’s reference to Adam Smith on the reason why people work in a market system.
Edward Lotterman’s statements follow which are right on target for their accuracy (so unusual in most quotations of his views):

“What motivates humans to work? Economics assumes that people base all actions on maximizing satisfaction in life. Satisfaction can come from meeting physical needs and wants. It also can come from how others regard you or the simple self-satisfaction involved in many activities, even tiring ones.

Earning money to buy goods or services is an important reason most people work. Adam Smith famously argued, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." Or as a modern bumper sticker puts it, ‘I owe, I owe, so off to work I go.’

But earning a living is not the only reason people exert themselves. People sweat to achieve a beautiful lawn or dining room. They put in hours organizing a church program or scouting event.” (Copyright:

It is good to see an economist looking beyond the cash reason for working, while, of course, it most often is a major reason, given the total dependence upon others that we are subject to in our modern market society.


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