Do you know about Pigouvian taxes? I’m sad that normal humans don’t know about this. There are so many things that liberals and conservatives argue about that Pigouvian taxes just magically resolve into the best of both worlds! But googling it yields a sea of impenetrable economics jargon, so let me start with my attempt to give a crude sense of the idea.
You know how a carbon tax makes sense as a way to disincentivize greenhouse gas emissions? If the tax were high enough and the tax revenue were effectively spent on undoing the harm of the emissions — see beeminder.com/climate — then there’d be no need for other laws or shaming people about their carbon footprints. Everything would be elegantly priced in. Pigouvian taxes generalize that idea to anything: congestion pricing, sin taxes for drugs that may have adverse societal impacts — anything where some transaction happens between two parties but third parties are also affected.
“It’s a tax on excess indulging. It’s ok to pay it sometimes, just not too often.”
What does this have to do with Beeminder? Well, ice cream, for example, has a cost to you beyond its immediate monetary cost. You can think of your future self as that affected third party. Maybe you don’t want to completely abstain from ice cream but it would be nice if you could make choices about it that factor in its true cost.
I got this idea of Beeminder as a tax from my friend Yassine Meskhout who had previously invented the concept of taxing vs punitive commitment contracts. He describes punitive regimes as generally having an escape valve to ensure you aren’t punished unjustly. Maybe you can’t bike to work when it’s snowing so your fine print on your Beeminder goal stakes out an exemption for that.
The problem with punitive goals, as Yassine describes them, is that the element of discretion makes them quickly lose their force. The fine print expands or it has fuzzy boundaries that keep tempting you to apply it to more questionable circumstances.
A taxing system, by contrast, doesn’t care about your excuses. Too tired? Too busy? Too sick? As Yassine says, “doesn’t matter, pay up.”
The paying up is a clear demonstration that you’d prefer eating the penalty, and is a good and honest demonstration of what your capabilities are that day.
Even though that sounds, and sometimes is, too harsh, we’ve been gradually gravitating to the taxing side of this dichotomy over the years. We used to rave about punishment, like in our old post, “Contra Positive Reinforcement”. We still stand by that post and many users genuinely prefer the punitive mindset. I now personally prefer the taxing mindset and tend to be most impressed with users who think of Beeminder that way.
But people are different and the same person may even need different approaches for different goals. It’s probably worth clarifying, at least in your own head, when creating a goal, whether you want Beeminder to punish you for crossing the bright red line or just tax you for crossing it. And even for a single goal, whether it’s taxing or punitive may depend on the pledge amount. We recommend trying to settle on an amount of money at risk that is motivating but not punishing. This is the beauty of the exponential pledge schedule. It quickly gets you to your Motivation Point without spending too taxing of an amount along the way. 
To review, a punishment framing can encourage an excuse-making mindset over a results-oriented mindset. It can also encourage you to make your goals less ambitious. Instead, try treating Beeminder’s stings as an elegant behavior-shaping tax and accept that some derailments are inevitable. You can view that tax as the cost of the service Beeminder provides: nudges or rumble strips keeping you on track. Finally, you can dial in a sweet spot in terms of both the steepness of the bright red line and the amount of money at risk. The (meta) goal is to be pushed to do as much as possible — or whatever maximizes the motivational value you get from Beeminder — at minimal cost.
P.S. This is part of a series of posts in which we argue for a mental reframing of Beeminder’s stings, from punitive to taxing:
- Bee Nice To Yourself
- Derailing Is Not Failing
- Paying Is Not Punishment
- Announcing No-Excuses Mode
- Derailing It Is Nailing It
 In case you want the econ-jargon version: With Beeminder you’re internalizing the externality imposed on your future self.
 Specifically, the current pledge schedule is constructed so that whatever pledge level you’re at, you’ll have spent a total of exactly half that by hitting all the previous pledge levels.