What Debrett's do not advise you to say in the depths of a defeat is: "There's £35,000 just gone down the toilet." Yet last week it was revealed that a star rugby player said just that – and not about any old game, but in the changing room straight after England had flopped against France and gone crashing out of last month's world cup.

That comment was among the most striking published by the Times in its leaked official documents into England's shambolic performance in New Zealand. Even for those who couldn't care less about rugby, the reports are riveting.

Running through the whole debacle is an obsession with money. "It was more about getting cash and caps than about getting better," one of the squad moans. Just before flying off to New Zealand, players revolted over pay – and some kept leaving the camp to work for sponsors. Even the squad's bodyguards were rumoured to be speculating how much money the tabloids might pay for photos of Mike Tindall's night out.

Cue media outrage about a national team behaving like a bunch of greedy bankers. But it's here that a sporting screw-up turns into something else entirely: a parable about how people's attitudes both to work and to money change when they're paid by results. If you're wondering about the effects of bringing market forces into the health service, say, or any other public service, then take a good look at Twickenham

When in 1995 the officials of rugby union finally gave in to pressure at home and abroad to take the game professional, the smart people whose job it is to say smart things wondered why it had taken them so long. After all, it hadn't done football or rugby league any harm; and the likes of Will Carling were already receiving money in trust funds – so what was wrong with getting above board and up to date? "A veil of dishonesty has now been lifted," ran a Times leader the day after rugby union went commercial. The paper didn't mention the hundreds of millions of pounds its owner, Rupert Murdoch, had laid out in TV deals – but some veils are presumably best left on.

The game was now open to professional contracts and transfer fees; audiences grew and players became bigger, stronger, fitter. And far, far richer. But in the shift from a game played according to social norms (albeit with a bit of cash slipped under the table) to market norms, players' motivations had changed too.

Researchers now know a fair bit about how that shift works. Well over 100 tests have been carried out in which subjects are split in two and set some puzzles, next to a table with some glossy magazines. One group is paid $1 for each puzzle solved; the other does it for free. Time after time, the group working for nothing devote themselves to solving the puzzles. Those getting paid finish fast – then flick through the mags.

This isn't some tract about the horrors of commercialism: Clive Woodward could tell you about how well professional rugby players can do. But pay changes how you approach both your work and your colleagues, in ways for which the standard market arguments don't anticipate.

And the thing about adopting market relations is that they crowd out our social norms behaviour. The childcare centres of Haifa in Israel, for instance, had a big problem with parents arriving late to pick up their children. The teachers never charged latecomers – until two researchers convinced them to adopt a fee for every late child.

With tardiness now costing 10 shekels a pop, more parents should have turned up on time. But no. They came even later, because they saw the late pick-up now not as social embarrassment but as a service. And even when the centres stopped charging, the latenesses remained permanently higher. The introduction of a market norm had made its participants permanently more selfish.

What's happened to England's rugby team this autumn is obviously not just about money. But it's an excellent example of something free marketeers often ignore, but that research proves: that adopting a market system does encourage people to think about cash and their individual wellbeing.

Now imagine a healthcare system in which the sick are treated by staff increasingly encouraged by successive governments to see themselves as providers in a market. Care doesn't necessarily get worse, but it does change – and in ways that patients might not like.