This line of reasoning allows us to continue our institutionalized policy of 'social Darwinism'. The phrase "survival of the fittest" was coined by Herbert Spencer (rather than Charles Darwin to whom the phrase is often attributed) to explain the self-regulation and sustainability of society. It was Spencer's thought that a potential gain in capital was sufficient motivation for members of society to innovate, advancing society as a whole. At the core of 'social Dawinism' is the belief that the struggle for natural resources (or fiat capital backed by production that utilizes those resources) will force the 'better' humans to succeed while leaving the 'inferior' humans behind. This 'natural' class structure (according to the theory) become more pure the less regulated the distribution of resources is. In other words, without a government welfare state, the best and brightest will eventually come to own the vast majority of the capital we have and distribute it according to their own innovation, while all others will be left with less capital but incentive to do better to gain more. Natural competition between people for this capital leads to better practices, the 'social Darwinists' (who we now call libertarians) argued.
The problem with this is that we know (and have known for some time) that personal gain is not necessarily a good motivational tool. For instance, in this study (published in 1987), we have the following information;
In one study, girls in the fifth and sixth grades tutored younger children much less effectively if they were promised free movie tickets for teaching well. The study, by James Gabarino, now president of Chicago's Erikson Institute for Advanced Studies in Child Development, showed that tutors working for the reward took longer to communicate ideas, got frustrated more easily, and did a poorer job in the end than those who were not rewarded.
Additionally;
The recognition that rewards can have counter-productive effects is based on a variety of studies, which have come up with such findings as these: Young children who are rewarded for drawing are less likely to draw on their own that are children who draw just for the fun of it. Teenagers offered rewards for playing word games enjoy the games less and do not do as well as those who play with no rewards. Employees who are praised for meeting a manager's expectations suffer a drop in motivation.
This leads to interesting conclusions;
Such findings call into question the widespread belief that money is an effective and even necessary way to motivate people. They also challenge the behaviorist assumption that any activity is more likely to occur if it is rewarded. Amabile says her research “definitely refutes the notion that creativity can be operantly conditioned.”So, if capital is not a sufficient motivator to accomplish things (and it's particularly poor motivation, if not counter productive, in the realm of creativity and innovation), why do we use it as a competitional tool rather than simply as a means to perform the task?