On: The Mystery of the Kibbutz.

Episode: N/A

Date: October 2018

Background: Author of “The Mystery of the Kibbutz”.

Key Subjects:

• The evolution of the kibbutz (communal farm) movement in Israel.
• Issues that need to be addressed in order for a kibbutz to thrive:
  • Self-interest, lack of incentives.
    • Solutions: stability of job and income, form of insurance.
  • Adverse selection:
    • Solutions: select motivated individuals only.
  • Free riders:
    • Solutions: create small cohesive group with shared ideals, monitor and enforce norms (social sanctions, peer pressure, catch and punish cheaters).
  • Brain drain.
    • Solution: high exit costs (no savings, no private property, can’t take anything with you when you leave).
    • Solution: allows for more effective non-monetary appreciation (value of nurses, teachers, etc.), better alignment of skills and goals.
  • Lack of privacy.
  • Skills of individuals not always aligned with goals of kibbutz.
• Importance of scale: concept of extended family, only works when people know each other.
• Maximization of a different pie: allows for non-monetary incentives (such as social values) to be weighted as well.

Key Takeaways:

• Small communities allow for better alignment of skills and goals.

Worth Listening:

7/10