14 October 2018

They got away with it in agriculture, so why not everywhere else?

George Monbiot writes about the European Union's corrupt, insane Common Agricultural Policy:
I’m a Remainer, but there’s one result of Brexit I can’t wait to see: leaving the EU’s Common Agricultural Policy. This is the farm subsidy system that spends €50 billion a year on achieving none of its objectives. Farmed Out, 12 October
(I would say "stated objectives".) I'm not a remainer, and the CAP is one reason why. There's little to add to Mr Monbiot and others' litany of the CAP's disastrous effects on the environment, small farmers, animal welfare, Africa and human health, but the persistence of the CAP is illustrative:

(1) It's been widely challenged for decades, yet its beneficiaries are wealthy and powerful enough to resist any meaningful reform.

(2) Agriculture in all the rich countries is a sector in which government involvement has been pervasive and long lasting.

The key question is: in whose interests are these agricultural policies? The answer is clear: agribusiness and landowners (especially the biggest). The losers? The rest of us: people who eat, taxpayers, plus the farmed animal population, plus the physical environment. Even would-be farmers don't benefit: they have to buy land at prices inflated by government subsidies.

It's not just agriculture. Increasingly, the complexity both of society and our policymaking process is being weaponised in favour of the people who own and run corporations, or the people they pay (in or out of government) to understand and influence policy. Government and their paymasters can get away with this because we accept a policymaking system that doesn't explicitly target outcomes that are meaningful to ordinary people. Currently policymakers can - indeed must - express their decisions as vague declarations of intent and changes in institutional funding and composition, or legislation. Their focus is on the supposed means of achieving vague outcomes, rather than on the outcomes themselves.
 
Issuers of Social Policy Bonds would in contrast have to be explicit about their objectives: transparency and accountability are built into a bond regime, as surely as they are excluded from the current policymaking apparatus. Insane, corrupt programmes, such as Europe's Common Agricultural Policy, have platitudinous, vague, mutually conflicting goals, which sound lofty and high-principled but actually end up shovelling vast sums of taxpayers' and consumers' money into the bank accounts of agribusiness corporates and their lobbyists. If outcomes were built into policymaking, as they would be under a Social Policy Bond regime, such policies would get nowhere. Instead they have lasted for decades, at great cost to everybody except a few millionaire businessmen and landowners, a burgeoning, parasitical bureaucracy and lobbyists . Oh, and fraudsters.

It's the persistence of such stupid policies as the CAP, which swallows up about the 40 percent of the EU budget, that makes imperative a systemic change in the way we formulate policy. Twenty-seven years ago, P J O'Rourke could write this, about the American political system in general, and that country's Farm Bill in particular:
I spent two and a half years examining the American political process. All that time I was looking for a straightforward issue. But everything I investigated - election campaigns, the budget, lawmaking, the court system, bureaucracy, social policy - turned out to be more complicated than I had thought. There were always angles I hadn't considered, aspects I hadn't weighed, complexities I'd never dreamed of. Until I got to agriculture. Here at last is a simple problem with a simple solution. Drag the omnibus farm bill behind the barn, and kill it with an ax. Parliament of Whores, P J O'Rourke, 1991
Since then, little has changed in agriculture, but the complexities in society and policymaking have proliferated and continue to perplex ordinary people. Consequentially, the gap between our corporate-political caste and the people they are supposed to represent has continued to widen. Clarity and transparency about policy objectives are essential if that gap is ever to close. Rewarding people who actually achieve these goals, rather than bodies who merely say they will, will also be necessary. Social Policy Bonds would fulfil both requirements.

12 October 2018

The finance curse

Nicholas Shaxson writes about the UK's 'finance curse':
A growing body of economic research confirms that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. The most obvious source of damage comes in the form of financial crises – including the one we are still recovering from a decade after the fact. But the problem is in fact older, and bigger. Long ago, our oversized financial sector began turning away from supporting the creation of wealth, and towards extracting it from other parts of the economy. To achieve this, it shapes laws, rules, think tanks and even our culture so that they support it. The outcomes include lower economic growth, steeper inequality, distorted markets, spreading crime, deeper corruption, the hollowing-out of alternative economic sectors and more. The finance curse: how the outsized power of the City of London makes Britain poorer, Nicholas Shaxson, ''The Guardian',5 October
It's not just the finance sector that works to influence policy in ways that drain resources away from ordinary people and small businesses: governments the world over are in thrall to big business. They act as though the interests of big corporations coincide with those of the citizens they are paid to represent. Our economies and societies are so complex that they can believe this, or act as though they believe it, with impunity. The Social Policy Bond idea is an attempt to re-orientate policymakers so that they again think in terms of the well-being of citizens, rather than the financial health of private- or public-sector bodies whose operations might, or might not, generate net welfare gains.

Almost all of us want to see a healthy business sector and an effective welfare system for the most disadvantaged. Government, and often, only government, can and should do the basics: infrastructure, education, health up to certain levels. But when things become complicated we should be targetting ends, rather than the supposed means of achieving them. The finance sector, which should be the financial services sector, has become grotesquely enlarged because of this confusion. So:


Lending to businesses outside the financial world – which many people might think the principal activity of a bank – represents about 3pc of the activity of British banks. The City services only itself, John Kay, 'The Telegraph' (London), 9 September 2015
Fine if the bankers want to do other things, but they shouldn't siphon funds from the rest of the economy, nor manipulate the regulatory environment, to do them. A Social Policy Bond regime wouldn't confuse ends with means, and wouldn't subsidise big business at the expense of ordinary citizens and small businesses. As Mr Kay puts it: 'We do not need an army of the overpaid and overbonused buying and selling from each other.' We don't need it and we certainly shouldn't tax people to pay for it.

06 October 2018

Human nature is peaceful

People (like me) who believe world peace is possible are often put in a box labelled 'Idealists.' So weapons continue to pile up and when we see the horrors of war on our tv screens, we sigh as though violent human conflict were inevitable. The wealthiest amongst us plan escape routes or prepare for war's aftermath. The rest of us dutifully contribute to peacekeeping efforts by such bodies as the United Nations, though with no expectation that they will actually achieve very much.

In War, Peace and Human Nature, Douglas Fry et al argue that (1) the belief that war is part of human nature is itself destructive and (2) war is not part of human nature.

A view, erroneous though it may be that war is ancient and presumably thus reflects some natural feature of humankind or human social life, feeds a suspicious and hostile view toward other peoples and countries, making the preparation for war and the practice of war that much easier. The reasoning, or in many cases “gut reaction,” seems to be: if war is in human nature, then we’d better be prepared to fight and perhaps strike first. This implicit assumption, in great part simultaneously stemming from and reinforcing of the violent view of human nature, can be seen as contributing to arms races, preemptive strikes, excessive spending on weapons, hostility toward others, and inordinate fear of other nations or groups, who are by this thinking, naturally inclined to attack. I am suggesting, in other words, that in widespread assertions that war is ancient, we are seeing a cultural belief with very important real world ramifications. Such a view may be in the short-term self-interests of a minority (e.g., arms dealers), but it is not in the long-term interests of humanity overall.
It's an important point. And much of the rest of the book backs up the assertion, that over the whole period of human existence, war is not an intractable feature of humanity, Mr Fry has this to say, summing up the evidence gathered and written up by other contributors to the book:

[Steven] Pinker's thesis that chronic war stretches back over the far-reaching millennia before the agricultural revolution is not substantiated by the actual data. ... The worldwide archaeological evidence shows that war was simply absent over the vast majority of human existence .... —the time period beginning far to the left side of [an n-shaped] curve. But with a gradual worldwide population increase ..., the shift from universal nomadic foraging to settled communities, the development of agriculture, a transition from egalitarianism to hierarchical societies—and, very significantly, the rise of state-level civilization five thousand to six thousand years ago—the archaeological record is clear and unambiguous: war developed, despots arose, violence proliferated, slavery flourished, and the social position of women deteriorated. This comparatively recent explosion in pre-state and then state-based violence is represented on the rising left side of the letter n in the curve, but taking place within the last 10,000 years. (My emphasis.)
Conclusions? People who believe world peace is possible are not being irrational or going against human nature. Violent political conflict is not inevitable.

Where does the Social Policy Bond idea fit in? Simply: knowing that world peace is possible, we can issue World Peace Bonds as a way of rewarding the people who help achieve it. There are reasons why such bonds have not been issued (they're untried, they threaten existing institutions ...etc) but a big one is that people think that world peace is some Edenic, idealistic vision, not for this world. What Mr Fry and the other contributors to his book show is that world peace is not only possible, but it was, for the greater part of man's existence, a reality.

29 September 2018

Giving greed a chance

Looking at the scale of social and environmental problems that mankind faces, you might think that we don't have the resources necessary to make fundamental changes in the way we operate. Changes such as eliminating extreme poverty, improving health outcomes, dealing with environmental problems, and reducing violent political conflict. The good news, though, is that we are not short of funds to address these, and other, challenges.
Brooke Harrington in Capital without borders, writes about people working in the wealth management industry:
Their work radically undermines the economic basis and legal authority of the modern tax state.... Using trusts, offshore firms, and foundations, professionals can ensure that inequality endures and grows in a way that becomes difficult to reverse short of revolution. Brooke Harrington, Capital without borders, September 2016
And then there is corporate welfare.  Nathan Jensen writes, about the US:
Every year, states and local governments give economic-development incentives to companies to the tune of between $45 billion and $80 billion. Why such a wide range? It’s not sloppy research; it’s because many of these subsidies are not public. Do Taxpayers Know They Are Handing Out Billions to Corporations? 'New York Times', 24 April
People are behaving perfectly rationally given the incentives on offer. In most cases they are behaving perfectly legally too. But the result, from an ordinary person's point of view is a massive misdirection of resources into activities that are destroying our social and physical environment. We have greed - otherwise known as self-interest - and we have untold wealth. It's my contention that we could solve the world's problems without having to rely on changing human nature, by redirecting our greed and that wealth into unambiguously useful activities.

The vehicle by which we could do this is the Social Policy Bond. The idea is that Social Policy Bonds direct self-interest into achieving socially beneficial outcomes. Governments don't have to try to work out how to achieve these outcomes, nor who shall be charged with doing so. It is the self-interest of bondholders that ensures that resources flow only the most efficient ways of achieving our goals.With just a little bit (relative to the magnitude of the problems at hand) of tinkering, we can substitute 'our goals' meaning humanity's goals, for those individual and corporate goals, the pursuit of which is not only diverting resources from more useful activities, but is actively undermining our chance of survival. Social Policy Bonds would channel our self-interest into the achievement of these goals. It would seem to be safer and more humane to do issue Social Policy Bonds and give greed the chance to solve our problems, than to carry on as we are and hope that the revolution Ms Harrington fears turn out not to be catastrophic.

21 September 2018

The importance and neglect of sustained personal care

Michael Hobbes writes:
In 2017, the U.S. Preventive Services Task Force...found that the decisive factor in obesity care was not the diet patients went on, but how much attention and support they received while they were on it. Participants who got more than 12 sessions with a dietician saw significant reductions in their rates of prediabetes and cardiovascular risk. Those who got less personalized care showed almost no improvement at all. Everything You Know About Obesity Is Wrong, Michael Hobbes, 'Huffpost', 19 September
Markets can't readily capture things like 'personalised care', so our political system gives them little weight. Yet they prove to be crucial in determining not only meaningful outcomes like physical and mental well-being, but also more measurable quantities, such as morbidity; elements of which can be monetarily valued. Just as reducing crime doesn't - or shouldn't - mean simply giving more cash to police forces, so improving a nation's health shouldn't just mean dispensing spending more on doctors, hospitals, dietary advice or encouraging more exercise. Unfortunately, institutions have their own goals, and that includes government itself (the bodies that dole out taxpayer funds) and the public- or private-sector agencies (that allocate these funds). These bodies have little incentive to do things that fall outside their purview, however beneficial or efficient they might be. So if more 'personalised care' is found to be the best way of tackling not only obesity but also, say mild depression, or attention deficit disorder in children, then it's unlikely to be promoted over the diets or drugs that show an immediate, financial benefit to existing organisations.

Our large, complex societies need to take a broader approach; one that rewards social outcomes. Social goals should have primacy over institutional goals. We should reward approaches that solve our social problems, even if there is currently no organisation following that approach.

Enter Social Policy Bonds. Under a bond regime, it is the social goal that's targeted, and we do not asssume that existing bodies can implement the best ways of achieving it. Non-market approaches - such as personalised care - often fall through the cracks. And finding the best approach for a particular problem at a particular time in a particular place needs a suppleness that large, top-down organisations usually lack. Our social and environmental problems need diverse, adaptive approaches. Social Policy Bonds would stimulate the research, experimentation and adoption of the best of these approaches. They would reward people for solving our problems, rather than for simply turning up to work and carrying out an approved activity. They would reward innovative approaches if they are the most efficient and, if current bodies can't implement them, they will give rise to a new type of organisation: ones whose protean composition and structure would be entirely subordinate to their goals - which would be exactly those of society. It's unlikely that existing health bodies in most countries would find room for the sort of sustained, personalised diestary advice that Mr Hobbes mentions. Social Policy Bonds targeting health, on the other hand, would encourage people to investigate such an approach and, if they find it as beneficial as it appears, see that it's adopted.

11 September 2018

Conflict Reduction Bonds ex machina*

The Economist foresees an imminent human catastrophe in the Syrian city of Idlib: 
In the battle last year for Mosul, an Iraqi city of [fewer] than 1m[illion], the American-led coalition killed at least 1,000 civilians despite using mainly precision-guided, or “smart”, bombs. Idlib, whose population is three times larger, will face Russian bombs that are almost entirely unguided, or “dumb”, meaning they are quite likely to miss their targets and instead hit civilians. The battle for Syria’s last rebel redoubt looms, the 'Economist', 8 September
Meanwhile Katherine Bourzac writes about research into an innovative way of dealing with the brine generated by reverse osmosis, which would otherwise be dumped into the sea with possibly damaging effects on the marine environment:
[A]llowing forward, not reverse, osmosis [makes] it possible to get more and more water to flow across a salt-excluding membrane into a container of brine, increasing the pressure. That pressurised water can be used to drive a turbine and generate electricity in a process called pressure-retarded forward osmosis. Our thirst for water is turning the oceans saltier, Katherine Bourzac, 'New Scientist', 8 September 
The details aren't important. My point is the contrast between the two visions for humanity. On the one hand, we face a human-induced scene of carnage, avoidance of which is assumed to be beyond our capabilities. On the other, we have scientists and engineers researching ingenious ways of improving the environmental consequences of extracting fresh- from sea-water.

Is it too simplistic and naive to think that the immense human costs of the forthcoming Idlib catastrophe outweigh any benefits that might accrue to the competing factions in the Syrian conflict? And, if we accept that, why do we assume that we can't do anything about avoiding them?

The answer, I think, is that our multitudes of political systems aren't fit for purpose. They are incapable of aggregating the wishes of ordinary human beings, and weighting them against the perceived, narrow, self-interest of (in this case) politicians, warlords and arms merchants in Syria and beyond; maybe a couple of hundred guys who could halt the catastrophe, but choose not to. The problem, as we see from New Scientist, is not a lack of human ingenuity. The problem is that, while some of it's channelled into schemes that benefit humanity, far too much is channelled into endeavours you might think of as low priority or - much worse - into creating and prolonging human catastrophe.

We could, and many of us do, sneer at the profit motive as a solution to human problems. There are many, especially on the left, so blinded by ideology that they see monetary incentives as unacceptable ways of solving our human problems. Presumably these people are waiting for some sort of psychological revolution, or deus ex machina* or maybe they feel it more important to belong to a tribe of believers in their bankrupt ideas than actually pay people to solve problems that in their view, shouldn't exist and wouldn't exist if we were all nice to each other.

I don't think we can afford those views. The challenges we face on all fronts - environmental, as well as political and military - are too huge and too urgent. As well, just as teachers (these days) are paid, so too would providing incentives for people to, for instance, eliminate war, bring more people and more resources into that endeavour. Some might become rich by helping eliminate war (is that so terrible?); others might simply earn the same salary as they would say, by advertising pet-food or working as a warehouse person in a plant that manufactures chemical weapons.

For centuries religious leaders, monarchs, ideologues, international organisations and politicians of all stripes have failed to end war. Even now, as with Idlib, we think we are powerless to prevent it. Why does violent political conflict continue to cause untold suffering, despite most people’s deeply-felt wish to live in peace?

We cannot answer these questions now, but I don't think we need to. What we can do is reward peaceful outcomes, however they are achieved and whoever does so. Nobody can possibly identify and remove all the possible causes of violent political conflict. But what we can do is reward the sustained periods of peace and leave it to a motivated coalition to explore potential solutions and implement the most promising ones. Currently, instead of rewarding peace, governments finance activities, or institutions, or programmes, or policies that are supposed to work for peace, but have signally failed to achieve it. The answer, I think, is to make the rewards conditional on the ending of war.

Conflict Reduction Bonds would do this. Backed by governments, philanthropists, non-governmental organisations and the public, possibly under the auspices of the United Nations, they would be issued on the open market for whatever price they would fetch, and would be tradeable at all times. They would be redeemed for a fixed sum only when the number of people killed or injured by violent political conflict reached a very low level. Importantly, the bonds would make no assumptions as to how to bring about greater peace - that would be left to bondholders. Unlike normal bonds, Conflict Reduction Bonds would not bear interest and their redemption date would be uncertain. Bondholders would gain most by ensuring that peace is achieved quickly. The broad effect would be twofold:
  • More resources would be devoted to achieving the outcome of peace
  • Market incentives and efficiencies would be injected into every stage of peace building.
Many peace-building bodies, whether public- or private-sector, work in admirable and diverse ways, but their efforts are relative to the size of the problem, small-scale and uncoordinated. For all such bodies, the financial rewards from building peace are not correlated with their effectiveness in actually doing so. This negatively affects not only, as some would have it, the salaries of employees, but their number, the resources they have at their disposal, and their incentives. Conflict Reduction Bonds, in contrast, would explicitly reward movement toward a targeted peace outcome. They would focus on an identifiable outcome and channel market efficiencies into exploring ways of achieving it. They could be the most effective means of achieving the peace that people all over the world yearn for and deserve.

For more on Conflict Reduction Bonds and variants see here.  
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*Deus ex machina is a plot device whereby a seemingly unsolvable problem in a story is suddenly and abruptly resolved by an unexpected and seemingly unlikely occurrence...Its function can be to resolve an otherwise irresolvable plot situation [or]...to bring the tale to a happy ending.... Source

03 September 2018

Armed conflict and astrology: root causes distract

Just because we don't know everything about cause and effect, that doesn't mean we throw up our hands in frustration and decide to do nothing. Or, the more common reaction when a social problem becomes inescapably visible: or create ineffectual bureaucracies ostensibly aimed at solving them (climate change, nuclear proliferation) but actually doing very little.

Take armed conflict: it's not difficult to reel off whole screeds of plausible reasons for its occurrence, or even its inevitability. Poverty, ignorance, despair, and differences of wealth, ethnicity, religion, class, culture or ideology: all these are thought to be some of the 'root causes' of war and violence. As also are: inequalities in access to resources, scarcity and economic decline, insecurity, the violation of human rights, exclusion or persecution of sectoral groups, and state failures including declining institutional and political legitimacy and capacity. Other key foundations for conflict could be historical legacies, regional threats, the availability of weapons, economic shocks, and the extension or withdrawal of external support. Demography is also significant: large numbers of unemployed males can catalyse conflict.

Sometimes inward factors are cited; such as individual pathologies; perhaps a history of being abused that predisposes someone to take up violence in later life. Often blamed too are the media, and the frequency with which our children are exposed to images of violence - especially when violence is presented as an acceptable and effective way of solving problems.

No doubt all these factors can and do play a part in fomenting and fanning the flames of conflict. But (1) every 'root cause' will have its own root cause and (2) even aside from the impossibility of eliminating every potential cause of conflict, there is no inevitability that these causes will lead to armed conflict. Selective memory has strengthened these linkages in the collective mind, but for each of these 'root causes' there are examples that disprove any simple cause-and-effect relationship. There are, for example, dozens of countries in which people of different ethnicity and religion live happily side-by-side.

Perhaps Tolstoy summed it up best:
The deeper we delve in search of these causes the more of them we discover, and each single cause or series of causes appears to us equally valid in itself, and equally false by its insignificance compared to the magnitude of the event. War and Peace, page 85, Leo Tolstoy, 1867
Searching for alleged root causes, then, might not be the best way of trying to solve a problem. Applying the Social Policy Bond principle could be the answer.For instance, instead of policymakers' trying to look for and deal with root causes of armed conflict, they could raise the revenue to back Conflict Reduction Bonds. Then it would be up to bondholders to identify the most cost-effective ways of reducing conflict. That might involve looking for root causes, but only if doing so will be the most efficient way of achieving the outcome we seek. 


As an aside, I'll quote the former Grand Archdruid, John Michael Greer on the subject of astrology : 
Why do the positions of the planets relative to the 30° wedges of the ecliptic that astrologers call the zodiacal signs, and the position of these relative to another set of wedges of space, the mundane houses, which are calculated from the point of view of the observer, predict the future? Why do those 30° wedges have the effects they do, even though the stars that occupied those wedges in Babylonian times have moved on due to the precession of the equinoxes?  And why should the chart cast at the moment of the spring equinox of 2019 in London provide insight into how Britain will fare through Brexit? There’s a simple answer to this, which is that nobody knows. Astrology didn’t come into being because somebody decided to cook up an elaborate theory about planetary influence. It came into being because people who watched the skies in various parts of the world in ancient times noticed that certain relationships among those little bright dots in the night sky provided reliable advance warning of certain events down here on Earth. An astrological interlude, John Michael Greer, 29 August (my emphasis)
My point: the important thing is to solve problems, not try to work out why they have arisen. It might be a good idea to look for root causes, but it might be more efficient instead to aim for the outcome that we want without doing so. Trying to understand fully the relationships between cause and effect may be a waste of time, or actually delay and impede the achievement of our social and environmental goals. Outcomes are more important than theory, whether we are talking about ending war or predicting the future.

27 August 2018

Incentives to avoid long-term disasters

Someone by the name of Amaxen comments on a recent story about cybersecurity:
[T]o managers, security is not something you can point to as an achievement, isn't something you can really 'measure', doesn't make a contribution to the bottom line of whatever organizational goal you have, and ultimately you could spend infinite money on security and still not guarantee it, while on the other hand a system in development slipping schedule is very visible to managers, so there's always a tendency throughout the organization to push the priority for security down when it comes to making tradeoffs, and this despite the full knowledge by IT managers that this is a thing they should account for. Source
We overuse narrow, short-term, readily available numerical indicators, often to the exclusion of the bigger picture. Managers do it with cybersecurity but it happens universally; for instance when it comes to valuing equities or, more critically, when we target, implicitly or explicitly macro-economic variables such as Gross Domestic Product. We focus on aspects of reality that can be captured by numbers even when any correlation between those numbers and the well-being of a society or ecology is incidental or even negative.

This tendency works against our best interests, because those things that we can't accurately monitor can be crucial. An organisation cannot measure the probability of a cyberdisaster, but it can measure the money it spends on cybersecurity. We can't accurately measure societal well-being but we can measure economic growth. We can't measure the probability of a nuclear war, but we can measure the funding of bodies ostensibly aimed at reducing it.

So where do Social Policy Bonds come in? They would change the identity of the people doing the measuring and they reward success and, just as crucially, terminate failures. An organisation wanting to reduce the threat of cyberdisaster could take out some form of broadly defined insurance against that sort of disaster: one that would apply beyond the career horizons of the security officers in that organisation. But, unlike a conventional insurance policy, the issuers of the policy would take an active role in monitoring the organisation's systems. It would be highly motivated to do so effectively, because its contract with the organisation would penalise any failure.

At the policy level, instead of (or as well as), for example, paying bodies of the United Nations or non-governmental organisations to turn up for work and write papers, we could issue Nuclear Peace Bonds that would reward people for achieving a sustained period of nuclear peace, whoever they are and however they do so.

What about societal well-being? Trickier. Thinking aloud: We could stop assuming it's correlated with Gross Domestic Product (or GDP per capita) and put more effort into measuring it and its components. We could stop ignoring things like inequality and levels of trust that are (currently) not that easy to measure but that, on all the evidence, are crucial components of social well-being. We could compile something like the Human Development Index with objective measures that correlate strongly with well-being. Government could target improvements in this and other objective indicators, rather than blindly aim for economic growth at all costs, which seems to be the default activity. Alternatively it could also concentrate solely on such undisputed components of well-being (health, for instance or, at a global level, absence of conflict) and, as in the previous examples, issue bonds that reward the absence of large falls in those components.

The important points are that the people doing the achieving of our goals should have incentives to be efficient and to take a long-term view. Social Policy Bonds, being tradeable, allow us to target remote goals, because the composition and structure of our motivated coalition of goal-achievers can change in response to changing events and circumstances. We need diverse, adaptive solutions to our problems, which are exactly the sort of solutions that government at any above the least aggregated level, can't provide. Social Policy Bonds would give people incentives to find those solutions and implement them.

19 August 2018

One size never fits all

Much of the world's strife originates in the emotional insecurities of the people in power. Piling up weaponry, seeing hostility when it's not there, stamping out any quibbles and dissent about the way things are done: these are not admirable traits, but they are widespread and destructive. Perhaps only the most psychologically secure leaders can allow a mixed economy with a healthy business sector to flourish, or question the accepted ways of doing things: the ways that created the hierarchy that gives them the power they enjoy.

A revealing joke in Beijing elite circles describes how Deng Xiaoping, father of the past 40 years of reform and economic opening, assembled two teams, one comprising the country’s best technocrats, and the other China’s most ingenious Marxist theoreticians. Deng asked the first team what policies the economy needed, and commanded the second team to define those policies as socialist. Reform-minded elites fear Mr Xi has reversed that process. How to read summer grumbles about China’s swaggering leader, the 'Economist', 11 August
Deng was pragmatic, and his reforms remarkable, and they helped lift hundreds of millions of Chinese out of poverty. The current regime seems to be less secure:
[L]ocal experiments with reform have been cited by some Western scholars as examples of China’s “adaptive authoritarianism”. This is a way of describing the party’s ability to avoid the fate of its counterparts in other communist-ruled countries by flexibly adjusting policy in order to satisfy public demands for greater prosperity. The pilot system has been an important means of achieving this. There are signs, however, that it is losing steam. Local experiments with reform are becoming rarer under Xi Jinping, the 'Economist', 18 August
If this is accurate, then I think it's unfortunate. Society is so complex and our social and physical environments are changing so quickly, that old ways of doing things need to be questioned. One approach will rarely work effectively over a wide geographical area, or for extended periods of time. Unfortunately, people in the grip of an ideology - who may, indeed, owe their livelihoods or lives to their belief in an ideology - rarely consider approaches that conflict with their conditioning.

I'm all for ritual, belief and ideology when practised by consenting adults. Less so, when they dicatate policy that denies our diversity and humanity. How often do we speak with good, well-meaning people who are committed to a particular political party, or who identify themselves with a particular political grouping? Then you come across their blind spot, where application of their ideology led to undeniably unfortunate results…but they can’t see that. We probably all have such blind spots. The richness and complexity of history, and the application of selective memory mean that most of us can plausibly attribute all the bad things that happen to the beliefs, politicians, countries or cultures that we don’t like, and all the good things to the successes of the ideology that we favour.

It won't work any longer, if it ever did. In an increasingly complex world, relationships between policy programmes and their outcomes are ever more difficult to identify and the consequences of failure ever more disastrous. Our lazy tendency to impose a binary worldview on such potential crises as climate change, ownership and control of resources could prove disastrous. It would be a tragedy if the excerpt above, about China's stifling of experimental approaches is accurate. The Chinese people in particular have seen where a top-down, monolithic approach leads.

It’s time to quit looking for an all-embracing ideology that tells us whom we can rely on, or how best to approach every political, social or environmental problem. We must accept that cannot rely on any god, religion, political approach or economic belief system - not when it comes to policymaking that affects people. We need diverse, adaptive approaches that transcend ideology.

My suggestion is that instead we subordinate policy to outcomes. It’s much easier to get consensus on what we as a society want to achieve than on the ways to achieve it or on who shall be paid for achieving it. Social Policy Bonds would allow this: governments would still get to raise revenue for achieving our social and environmental goals and still articulate society's goals. But under a bond regime they would relinquish control over how our goals shall be achieved and who shall achieve them. In this way, they could target long-term problems whose solutions have so far eluded us and for which there is no obvious single pathway. National problems such as poor health, crime, unemployment. And global problems such war, climate change, or nuclear catastrophe.

05 August 2018

How to avoid a nuclear war

Andrew Cockburn quotes a four-star general, Lee Butler, former head of the US Strategic Air Command, and who wrote recently:
Arms control is now relegated to the back burner with hardly a flicker of heat, while current agreements are violated helter-skelter. ...Sad, sad times of the nation and the world, as the bar of civilization is ratcheted back to the perilous era we just escaped by some combination of skill, luck, and divine intervention. How to start a nuclear war, Andrew Cockburn, 'Harper's Magazine', August
Eric Schlosser's Command and Control, bears this out, with its alarming tales of accidents and blunders that came close to bringing about catastrophe during the Cold War. It's quite disturbing how little incentive the people in control, at all levels, have to think about the potential impacts on society rather than on themselves or the organisation of which they were part.

The goal of sustained nuclear peace makes an ideal target for the Social Policy Bond idea. It's a complex, long-term goal that will require diverse, adaptive solutions. It's a goal that, from all indications, is unlikely to be reached under current policy. And it's an easy goal to verify.

My proposal would be to issue bonds that reward a sustained period of nuclear peace. This could be defined, as, say the non-detonation of a nuclear device that kills more than 50 people for 30 years. They could be backed by a combination of governments, non-governmental organisations, philanthropists and members of the public. With sufficient backing the bonds would help offset and (one hopes) outweigh the the incentives currently on offer, which essentially are those of the military and weapons manufacturers to maintain a nuclear posture.

Those billions of us who would benefit from nuclear peace are presumably a massive numerical majority, but we have few means of expressing our wishes in a way that is likely to bring it about. The tendency is to assume that governments will do what's necessary, with the support of hard-working, well-intentioned people in the private sector.
But these people are not rewarded for success, which is not only problematic in itself, but also discourages people from investing in their efforts. More cogently, it's not working.

We need to reward those who achieve nuclear peace at least as much as those working to undermine it. We don't know exactly how to reduce the chances of a nuclear exchange, nor who will be best placed to do so, over the long period during which our goal is to be achieved, but we have no excuse for not encouraging people to find out. Nuclear Peace Bonds would apply the Social Policy Bond principle to this goal. Investors in the bonds would form a protean coalition of people dedicated to achieving it as efficiently as possible. Their goal would be exactly the same as society's. Human ingenuity knows no limits. Currently, too much of it is devoted to relatively unimportant or socially questionable. Nuclear Peace Bonds would encourage some of that ingenuity into helping avoid a global catastrophe.

My short piece on Nuclear Peace Bonds is here. The links in the right-hand column of that page point to papers on similar themes: Conflict Reduction, Disaster Prevention, and Middle East Peace