Richard Titmuss argued that Britain's volunteer blood system produced safer blood than America's paid one. A Swedish experiment later offered donors a small payment and found it cut women's willingness to give almost in half. The lesson is about what a price tells people.
Something we’ve been thinking about
In his 1970 book The Gift Relationship, the British scholar Richard Titmuss compared how Britain and the United States collected blood. Britain relied on unpaid volunteers, while much of the American supply came from paid donors. Titmuss argued that the voluntary system produced blood that was safer and more reliable, and that paying for blood drew donors who had reason to hide what was wrong with theirs. Decades later, two economists tested this claim directly.
How we see it through leadership economics
In a 2008 field experiment in Sweden, the economists Carl Mellström and Magnus Johannesson offered people the chance to become blood donors. One group was asked to give unpaid; another was offered a small cash payment, about seven dollars’ worth of Swedish kronor. Among women, the payment cut willingness to donate almost in half, while among men it had no significant effect. A third group could take the payment or pass it to charity, and that option brought willingness back to roughly the unpaid level.
An unpaid request asks a donor whether a stranger’s need is worth her time. The payment seemed to replace that question with a different one, whether the act was worth seven dollars. A person can be glad to give blood and still turn down the chance to sell it, and many of the women did. The third group supports this: a donor who sent the money on to charity was still giving.
Titmuss’s safety argument points to the same thing. The donors’ motives were part of what made the blood safe. It is a problem of Motivation, and what we keep returning to is that a price carries information as well as payment. It tells people what kind of act they are performing and what the act is worth. Assigning the monetary value communicated something about how much blood banks valued the blood.
Much of what holds a good team together is offered the same way, freely, such as unassigned mentoring, an honest warning about a plan, or extra care taken with a new arrival. Without assigning a monetary value to these tasks, people “price” it based on its contribution to the team’s goals. What’s more, when people see others committing time and prioritizing team outcomes, it acts similarly to a market price by communicating how much others on the team value these tasks.
Leaders have tremendous influence on the market price. When they are seen prioritizing cultural norms, expected contributions, and the values of the team, it signals to the rest what is valued and how much.
A quote we’re thinking about
The quality of mercy is not strained.
It droppeth as the gentle rain from heaven
Upon the place beneath.William Shakespeare, “The Merchant of Venice”
In the Jātaka tale of the monkey king, the leader sacrifices himself for his troop's safety.
Before he proposed, Charles Darwin worked the decision out on paper in two columns, weighing what each path would cost him.
Croesus asked a visiting sage who was the happiest man he'd seen, expecting his wealth to settle the question. Solon's answer is about what happiness can be built on.
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