Social Policy Bonds blog: Price stability is not a goal

14 September 2005

Price stability is not a goal

Much confusion in, for example, the UK Government about price stability, in this case the price of petrol. One of the first benefits of a Social Policy Bond regime is that it would clarify what are ends and what are means to ends. Price stability is not, or should not be, a goal of government policy. Market prices are signals that allocate resources efficiently. They embody masses of information that cannot be assessed by planners. If the price of some essential commodity is too high for some people, then government should give financial assistance to those people to enable them to make their own decisions about how much of the commodity to buy. Today's agricultural subsisidies should be a lesson to all politicians: like a drug habit, they are easy to start and hell to give up.

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Social Policy Bonds in the media

13 June 2018: my short article Make Social Impact Bonds Tradeable, appears on the website of Alliance, a magazine for philanthropy and social investment.

25 May 2018: a short article on Social Policy Bonds and their possible application in India, appears on Market Express (India). It is by Dr Ashok V Desai and titled Incentivizing welfare.

9 October 2015: An article by Greg Bearup on the genesis of the Social Policy Bond idea, and application of a version of it in Australia appears in the Weekend Australian Magazine. (The article can also be downloaded as a pdf from here.)

October 2013: Professor Robert Shiller of Yale University, is named as one of the three winners of the 2013 Nobel Prize in Economics. His Nobel Prize lecture (pdf) delivered on 8 December, mentions Social Policy Bonds. Professor Shiller has for many years encouraged my work on Social Policy Bonds, beginning in late 1996 when he sent me this letter.

3 May 2012: An audio talk by Nobel Prize winner Professor Robert Shiller at the London School of Economics, in which Social Policy Bonds are briefly mentioned, is available here.

18 April 2012: Robert Shiller, Professor of Economics at Yale University, mentions Social Policy Bonds in his new book Finance and the Good Society. He also mentions the concept in a Huffington Post article. It's the eighth of his Ten Ways Finance Can Be a Force for Good in Society, and is also mentioned in a short profile piece about Professor Shiller.