In the late 1700s, the government of Great Britain was shipping its convicted criminals to Australia. (Australia was essentially a British prison colony.) Specifically, the government hired ships' captains to transport the criminals to Australia. The captains were paid a set amount for each prisoner placed on board the ship. There was, however, a problem: more than one-third of the prisoners died during the voyage, and the rest arrived in Australia beaten, starved, and sick. Conditions on board the ships were terrible, with diseases such as scurvy, typhoid fever, and smallpox afflicting most of the passengers. The British public was outraged when news of the prisoners' condition reached home. True, these were criminals, but the public was not prepared to given them the death sentence. Newspapers wrote editorials in favor of better conditions; clergy appealed to the captains' sense of humanity; the government passed laws requiring better food and water, light and air, and proper medical care. Yet the death rate among prisoners shipped to Australia remained shockingly high.

Then an economist came forward with a suggestion. The government took his suggestion, and the survival rate for prisoners being shipped to Australia improved dramatically, to almost 100%.