B.F. Skinner, a key figure in
behavioral psychology, long argued that rewards will change behavior
because the direction of change is clear. Punishment, he claimed,
rarely works because it is a general opprobrium that the victim of the
punishment is never sure what the punishment was directed at. (Your
father yells at you for spilling your plate on the floor....was he
upset with the particular food that fell? was he in a bad mood?... was
spilling food at that time of day or in that place the wrong thing to
do?) Punishment is confusing, rewards are directives.
I think commerce fails to respond to punishment but does respond to rewards.
A good example is the auto industry. The U.S. government set CAFE auto gas mileage standards in 1975. CAFE was effectively a punishment. If the auto industry didn't meet the legal requirements the individual car maker's would have been punished.
The American auto makers saw
the 1975 CAFE standards in terms of a zero sum game. The market was
largely divided among the three of them. So they first focused their
industrial efforts at reducing the punishment by changing the
law...which they did by 1986. Then they focused on getting through a
loop-hole in the punishment which excluded "light trucks". A large
part of the American car market was built on "light trucks" whence came
the SUV. Punishment didn't work.
The German auto makers, being
good Germans, accepted the punishment and kept their cars the same
while improving their gasoline consumption to the 1986 standard
automobile CAFE requirements.
The Japanese took the punishment as an opportunity. For the Japanese companies it was a reward. Toyota and Honda, already had cars that met the CAFE standards of 1975 and proceeded to improve the low and mid-priced cars in terms of quality and excellence. They saw the market as vastly greater than the American auto companies. The Japanese were right. They never got punished and they doubled their market penetration..ultimately coming to dominate the American market.
Commerce responds best to rewards...probably never responds to punishment, (except by leaving the city, state or country).
