'You might as well smoke'

Compared to smoking cigarettes, use of Western smokeless tobacco (ST) products is associated with a very small risk of life-threatening disease …. This means that smokers can realize substantial health benefits by switching to ST, an obvious substitute. But consumers and policy makers have little chance of learning that ST is much less dangerous than smoking because popular information provided by experts and advocates overstates the health risks from ST relative to cigarettes. Source

Carl Phillips and the other authors of You might as well smoke; the misleading and harmful public message about smokeless tobacco refer mainly to US health sources, including federally funded bodies. They do a thorough job of showing the biased information against smokeless tobacco but, understandably, they do not attempt to explain why it’s biased. I think it’s worth speculating on the reasons, because they apply to other policy areas, and I am thinking here of such varied, crucial issues such as broader health concerns, climate change, the use of market forces, and education.

In trying to promulgate the Social Policy Bond idea I frequently encounter opposition to the deployment of market forces to achieve social goals. In essence, my opponents are less interested in outcomes than in the motivations of people working to achieve these outcomes. Or perhaps they are trying to identify themselves as more compassionate or caring than the ‘private sector’ taken as a whole. I hasten to add that there are ‘pro-market’ people who oppose Social Policy Bonds for the opposite reason: that there’s no need for government intervention of any kind to help achieve social or environmental objectives. For both groups, outcomes are deemed less important than ideology or process.

It’s the same in other policy areas. Most of us aren’t climate experts, and the arguments about climate change are now so politicized now that people will make their minds up based such irrelevant concerns as the stridency or smugness of one faction or another. The chances of getting coherent effective global action against climate change is in my view negligible. When our leaders choose make policy, the effect of that policy on the climate outcome comes very low on the list of the things they worry about.

There is an answer. A diverse society, with all sorts of information sources, will never agree about much, even if it could forget its ideological biases or prejudices. But if we target meaningful outcomes, and let the market decide how to achieve those outcomes, and how much achieving these outcomes will cost, then there is a chance of a coherent approach. That’s why I advocate Social Policy Bonds. Under a Social Policy Bond regime, if an outcome such as climate stability is deemed worthwhile, then it will be the market that decides exactly how many resources should be devoted to achieving it. Markets in Social Policy Bonds would be valuable not only because they allocate resources efficiently, but because of the enormous quantity of information they would generate about the cost of achieving targeted goals.