Accountants shape society

Who, any more, sees social well-being as anything other than a set of numerical variables to be optimised, subject to financial constraints?

Patients are to be told to examine themselves at home and email their GP with the results rather than meeting face to face. They would send in a short message describing symptoms which would be answered by a doctor between appointments or at the end of the working day. Now you must email your GP, Sophie Borland, ' [UK] Mail Online', 24 January

Perhaps because easily quantified units of manufacturing output used to be strongly correlated with well-being, we tend to think that something like Gross Domestic Product per capita is a reliable indicator of social welfare. An extrapolation from the corporate sector seems to be going on. Corporations measure their success almost entirely in terms of financial variables; with considerations such as market share or employee welfare only really entering the picture insofar as they affect the long-term financial figures. Any negative impacts of their activities that can be successfully offloaded onto society or the environment will be - and have been, spectacularly so in recent years by the financial sector. All that matters is the numbers. Extrapolating from this, we tend to think that corporate success equals a society's success. It isn't true though. Apart from the non-market social and environmental costs of corporate activity there is, increasingly relevant, the concentration of the financial rewards into ever fewer hands.

It's up to politicians to articulate society's concerns, to regulate the corporations, and to redistribute according to society's wishes. And it's failing. Even when it tries, as with the UK's National Health Service, it apes the corporations in choosing a narrow range of micro-indicators as a way of measuring success. Increasing a doctor's throughput, measured in terms of numbers of patients dealt with per day is, like targeting hospital waiting lists, a waste of time. These indicators are too narrow and too easily manipulated to do much good. We should be targeting broad health outcomes: things like longevity, infant mortality and Quality Adjusted Life Years. Unfortunately, government takes the current institutional structures as given, and applies a set of accountancy-type objectives to them. The incentives, as with doctors reading emails, are to satisfy pre-determined criteria - to tick boxes and apply algorithms - rather than to consider the overall health of the patient.

A Social Policy Bond regime would be different. Under a bond regime, broad outcomes that are meaningful to real people (as distinct from corporations) would be explicitly targeted. Any institutions that arise as a result would be well advised to subordinate all its activities to achieving these social goals, or it will find its bonds bought up by a more efficient investor.