20 March 2006
There's a lot of human ingenuity that is currently not being channelled into the solution of our most urgent social and environmental problems. What's it doing instead? Developing a five-blade razor, for example, which apparently cost Gillette about the same as creating the three-blade razor, according to this source. That's about US$680 million, which represents a lot of skill and talent. Unlike some ideologues I don't think it's self-evidently 'wrong' that such sums are spent on products that might seem trivial. People after all are behaving rationally given the incentives on offer. The good news is that all it would take is a re-jigging of incentives for these people's skills and talents to be made to serve public goals instead of private ones. We need to get over our ideological hang-ups that decree that financial self-interest and the chance to get rich must be limited to people working in the private sector. By issuing Social Policy Bonds we could switch a significant proportion of human ingenuity away from developing, say, a six-blade razor, and into achieving more social goals.