LyrArc Article Gist
Shiller points to a Gallup poll that shows that two thirds of Americans don't see a recovery in two or more years. He cites the economist Samuel Bowles who points to the errors of thinking that a high performing economy can be based on self-interest alone. In these lectures titled "Machiavelli's Mistake" at Yale, Bowles warns that the overuse and abuse of incentives that appeal to individual's self interest only could lead to a collective disorientation. He points to a book "Identity Economics" that carries the same theme. In that book economists George Akerloff of the University of California, Berkeley, and Rachel Kranton of the University of Maryland, show that an economy works well when peple identify with it . Their self-esteem has to be woven into the activities of the society and economy. This describes today's mood where other polls done by Wall Street Journal and NBC in January 2010 show a majority of people do not see a bright future for their children's generation. And it has become hard for ordinary Americans to identify with activities in an economy where individuals are pursuing their self interest regardless of how it benefits the society and the economy as a whole.