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In the run-up to the G20 in Pittsburgh next week, the issue of compensation for top executives is becoming a hot-button issue. As financial indicators are improving (or becoming less worse), some banks' incentives schemes are returning to their old ways. Goldman Sachs, for instance, sparked a furor when they announced that they were on track for record bonuses earlier in the summer. Goldman's CEO has since wisely attempted to attack the practice of handing out massive bonuses, but the figurative pitch forks have been hoisted and the torches lit.

To properly argue that caps on executive pay would be good policy, I think that you would need to two things. First, some sort of philosophical argument which presents capping executive pay as a "public good" because of their special position in our economy. Given that the same argument was used, in reverse, to justify bailing out financial institutions, there's plenty of material to work with. Secondly, however, you would need to show that any such caps would be practical to implement and actually effective at curbing executive pay. Those kinds of arguments are a lot harder to find

But none of this matters because, politically, this issue is a real winner. As Rory pointed out in the links below, France's Sarkozy is leading the charge, with the governments of Germany and many other countries behind him. The UK authorities are split on the issue, but Gordon Brown, ever in election-campaign mode, seems keen to appeal to popular sentiment. Moreover, as Michael Skapinker argues today, for the first time in a long while the gulf between Europe and America on bonuses has shrunk - the Obama administration is a lot more open to this idea than has traditionally been the case. This issue may very well be watered down at the G20 drafting table, but it's steaming in with a lot of momentum.

But let's ignore all of this silliness. A good friend of mine has sent me something far more interesting: Dan Pink presenting at TED.

Rather than debate whether financials execs "deserve" millions in bonuses, Dan asks instead whether monetary incentives are an effective tool in the first place. According to considerable research in the social sciences, the conclusion is that people working on complex tasks with monetary incentives perform worse than those without monetary incentives.

Roll that conclusion around in your mouth a little. What does it taste like to you?

Cause to me it tastes like a wholesale rejection of the bonus culture on empirical, rather than emotional, grounds. If this conclusion can be applied generally, then not only can we argue that huge bonuses are potentially bad for the public good, but also for the firms themselves.

Less importantly, why is this conclusion so hard for me to accept?