IN the early 1810s, with Prussia at war against Napoleon’s France, Princess Marianne devised an inspired money-raising scheme: Each wealthy Prussian who gave a piece of gold jewellery to the state to pay for the war effort was rewarded with an iron replica engraved with the words “Gold gab ich für Eisen” (I gave gold for iron), a pun on the iron trinkets and the “iron” nationalism shown by their donations. Very quickly, the haute riche began competing to see who wore the most iron necklaces or bracelets at balls and galas, showing off not only how rich but also how patriotic they were.
Princess Marianne’s scheme showed canny awareness of behavioural psychology. First, people generally don’t care what objects are used in status-signalling games. If owning pebbles conferred wealth and prestige, then the beaches would be bare. Second, any form of public good is helped along if someone is provided with a selfish gain in return. Charitable donations are now routinely tax-deductible, carbon tax credits reward “good” behaviour, and even apps like Waze provide consumers with quicker travel advice in exchange for their input on crashes or road closures.
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