Identity and the Economics of Organizations

Abstract

O n plebes ’ first day at West Point, called R-Day, they strip down to theirunderwear. Their hair is cut off. They are put in uniform. They thenmust address an older cadet, with the proper salute and with the statement: “Sir, New Cadet Doe reports to the cadet in the Red Sash for the first time as ordered. ” Plebes must stand and salute and repeat, and stand and salute and repeat, until they get it exactly right, all the while being reprimanded for every tiny mistake. In the summary of David Lipsky (2003, pp. 145–154), who spent four years tracking a company of cadets at West Point: “On R-Day you surrender your old self in stages. ” But R-day is just the beginning of the training and personal re-engineering that is to come, so that West Point graduates emerge four years later as loyal officers in the U.S. Army. Lipsky shows that, despite some failure, this tough program is remarkably successful in creating officers with the will to lead in battle. Economists ’ current picture of organizations and work incentives has no place for the West Point program and the motivations it seeks to inculcate in recruits. In a standard economic model, an individual’s preferences are fixed, and utility depends only on pecuniary variables. The Army’s aim at West Point is to change cadets ’ preferences. They wish to inculcate non-economic motives in the cadets so that they have the same goals as the U.S. Army. Alternatively stated, the goal of West Point is to change the identity of the cadets, so they will think of themselves, above all else, as officers in the U.S. army. They will feel bad about themselves—they will lose utility—if they fall short of the ideals of such an officer. This change in identit