Incentives as Ideology (stumblingandmumbling.typepad.com)

Incentives matter, but big incentives don't work as well as well-designed small incentives. Justifying massive inequality as a necessary incentive doesn't have any theoretical or empirical foundation in reality.

Incentives manufacture their own perversity. Take for example expensive signalling: any incentive system with strong incentives will trivially have paradoxical effects in any situation where expensive signalling is common (for example, within middle classes, teenagers will join social groups that involve explicitly avoiding gainful employment as a means of demonstrating group loyalty -- hence punks, goths, and stoners).