16 July 2008

The logic of incremental adaptation

Social systems seem to behave in similar ways to ecological systems. An economy is not (despite lazy journalism) something that is steered, but rather a complex web of agents, flows beset by time lags, and mutations - some adaptive, some not. Same with society as a whole. The current economic system is undergoing a shakeout, and I see two broad scenarios. Everything will be done to try to shore it up: taxpayer bailouts of financial institutions, vastly inefficient biofuel programs, subsidies to those who make the most noise, who have the biggest clout, or who make the largest political campaign contributions. Even that might not be enough, and the second possibility, a systemic collapse, will ensue. Then Milton Friedman's phrase comes to mind: 'Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.'

To be honest, I can't see Social Policy Bonds being deployed before such a crisis. To my knowledge, nobody has issued them in the 20 years or so that the idea has been in the public arena. However, the idea is at least lying around, and I think it's a lot better than some of the other ideas that could be (or indeed have been) picked up at times of severe social disruption. I am about to finish a book of about 70000 words on Social Policy Bonds. If any reader can help me find a publisher please could you contact me?

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