Talk given at the occasion of the opening symposium (11 april 2017) of the research project 'What Good Markets are Good for.'

1. Rules, Incentives and the
Smell of the Place
Jaap Winter
President Executive Board at
Vrije Universiteit Amsterdam
11 April 2017
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Phyleon leadership & governance

2. Crisis and typical human reactions
• Looking for others to blame
• Blame and fix the system
• Allow us not to look at ourselves, afraid of what we might see:
inability to face responsbility
• We fix it by institutions: rules and incentives (products of our
mind)
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Phyleon leadership & governance

3. Paradoxes of rules
• Paradox 1: people think and say they want less rules, but when left in the
dark they want clear rules that tell them what to do
– Seek certainty in rules and procedures
• Paradox 2: the more rules we make the less responsible people become
(while we make the rules because people have behaved irresponsibly)
– Responsible for compliance, not for effects of behaviour on others
– Automatons, applying rules without making judgements;
– what is outside rules is free territory, not further judgement required
– Judgement is outsourced to rulemaker, compliance department,
enforcement agency
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Barry Schwartz: more and more rules
chip away our moral skills

4. Incentives
Barry Schwartz: more and more incentives destroy our moral will
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People perform less on tasks that
require more than rudimentary
cognitive skills (Pink on Motivation)
Ubiquitous cheating (fudging
and fraude) (Ariely on
Dishonesty)

5. The Smell of the Place
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Sumantra Goshal:
Compliance, Control, Constraint, Contract
= world of rules and incentives
Stretch, Discipline, Support, Trust
= world of motivation, purpose,
values and virtues

6. Practicing being human
• Aristotle
• Virtue ethics, practical wisdom
• Thomas Acquinas
• Habit of praying
• Benjamin Franklin
• Daily practice
• Peter Sloterdijk
• Anthropotechnik
Denn da ist keine Stelle, die dich nicht
sieht. Du musst dein Leben Ändern (Rilke)
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7. Education and Research
• Redirect our collective stories (on remuneration, on purpose,
on regulation)
– Generations (30 years of business school teaching)
– New sciences of behaviour to enhance old wisdoms
• Correct overreliance on our intellectual designs, technical
insights and skills
• Learn how to make judgements
– Social mind in action: practice!
• Re-emphasise importance of humanities
– Humanities to make themselves more relevant for other disciplines
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Phyleon leadership & governance

8. Talk given at:
From ‘Ratrace’ to ‘Relationships’
Markets in Service of People
Openings symposium research project
‘What Good Markets Are Good For’
Funded by the:
Templeton World Charity Foundation
11 april 2017
Partners symposium : CLUE+, VU-Centrum Ethos, Goldschmeding Foundation, Socires