Financial incentives

Reading the excellent book Critical mass: how one thing leads to another, you realize quite graphically in just how many ways quite small causes can have very large effects in physics and in society. You get the same impression when looking into the causes of social calamaties such as war or violence of any sort. I find this encouraging. There are many people working for the social good but there is also a very large pool of extraordinary talent, creativity and diligence that is, to put it mildly, not fully aligned with public goals. Much of this skill and ingenuity is deployed in the pursuit of private goals, many of which have negative social and environmental externalities - as well, of course, as benefits, both private and public. For instance, there are prodigious talents, very evident here in the UK, devoted to marketing of just about anything. Humanity could gain a lot if a fraction of them were encouraged to move into fields paying a greater social dividend.

There is no need for compulsion though. A Social Policy Bond regime could do the job quite simply, by increasing the financial incentives on offer. Collectively we are squeamish about paying people large sums of money to achieve social and environmental goals, and I share this feeling too, to a degree. But people do respond positively to incentives, and it's not always greed. People crave respect and in the west nowadays that comes largely through being wealthy.

As an aside consider Japanese society:

The Japanese have understood that what people are largely pursuing in the workplace is not so much money as the respect of the people around them, and therefore maintain a sophisticated - indeed, bizarrely over-elaborate to the Western eye - economy of respect in addition to the economy of money. They have understood that a large part of what money-seeking individuals really want is just to spend that money on purchasing social respect, through status display or whatever, so it is far more efficient to allocate respect directly. Japan, a refutation of neo-liberalism, Robert Locke.

But this aspect of Japanese society is exceptional in the world context and we cannot rely on it, or on altruism, to meet the serious social and environmental challenges we face. Under a Social Policy Bond regime people or institutions would become richer and many of them would be rich to start with. But such wealth would be concentrated only if the public good were also served. A bond regime would create a means by which wealth would be inextricably linked to our social goals.