This post is part of a series in which Influencers describe the books that changed them. Follow the channel to see the full list.

It was 1973, and I was a 27-year-old assistant professor of psychology at Swarthmore College. My training had been in the branch of psychology known as behaviorism, more specifically, in the brand of behaviorism associated with B.F. Skinner. Skinner’s view of human nature was that you could understand pretty much everything about human behavior by understanding the consequences of people’s actions. Consequences — rewards and punishments — shaped us to be what we were. This hardly seems like an earth-shaking view. The importance of consequences is reflected in the emphasis we put on incentivizing teachers to teach, students to learn, bankers to take prudent financial decisions, and employees in general to work hard. Whenever something goes wrong, we tend to blame it on bad (ie., dumb) incentives. What made Skinner’s views stand out was that he thought if we understood incentives, we wouldn’t need to understand much else.

I was critical of Skinner’s views because I thought they were too reductive. Yes, incentives explained a part of what made people act as they did, but not everything. My research was focused on identifying some of the limits of Skinner’s approach, largely by conducting fairly narrowly constructed empirical investigations. I shared with Skinner the view that there was a “human nature” and that scientific psychology would eventually discover what it was. I just thought that Skinner had the details wrong.

During this time, I met and formed a close friendship with a philosopher colleague named Richard Schuldenfrei. Schuldenfrei had a deep interest in social science, but he was critical of it in ways that I had not previously encountered. In particular, he was dubious about any notion that there was a “human nature” that was constant across different forms of social, cultural, and economic life. I had no idea what he was getting at. I thought he was just being an anti-scientific skeptic. We argued this point over and over, getting nowhere. Then, he suggested I read a book — The Great Transformation, by economic historian Karl Polanyi. The book was an account of how the industrial revolution transformed societies, economies, and the people who lived and worked in them. His argument was that the industrial revolution transformed the nature of work, transformed the relation between work and the rest of life, transformed human social relations, and transformed human aspirations. In a word, the industrial revolution changed everything.

When I read the book, the scales were lifted from my eyes, and I finally understood what my friend Schuldenfrei was getting at. Skinner had something very important right, but what he had right was not something fundamental and eternal about human nature. Instead he was right about what human nature can become in a society dominated by free-market industrial organization. Skinner, properly understood, was providing a history, and not an eternal truth. Schuldenfrei and I went on to publish a paper, with another philosopher named Hugh Lacey, that argued that Skinnerian psychology was “factory psychology.” More important, it changed how I look at all kinds of psychological research and psychological processes forever more. It is fair to say that The Great Transformation transformed what I did and how I thought for the rest of my career. Polanyi’s story is not without its critics, and it is certainly possible that many of the details of his argument were incorrect. But in providing a vision of how social institutions affect the most fundamental human attributes, it is a milestone. Anyone who thinks they know the “secret” of what people are really like down deep should have a look at this book. They will be both educated and humbled. And anyone who thinks that the secret to efficient and productive economic organization is getting the incentives right should read this book.

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