22 November 2008

Incentives to preserve the commons

Lewis Lapham wrote:
The United States has been ridding itself of its First World status for as log as it has been privatizing its critical infrastructure (a k a the common good), at the same time despoiling the natural resource embodied in the health, welfare courage, and intelligence of its citizenry. Over the past eight years, under the absentee landlord economic policies of the Bush Administration, the stepped-up rate of disinvestment has resulted in ...Third World confusion and management.... Estate Sale, 'Harper's Magazine', May 2008 (subscription)
The people who devised American democracy probably never envisaged such irresponsibility from those entrusted with power. The constitutional checks and balances are mainly about process, not outcomes. In a large society, erosion of the commons is permitted, encouraged, or even necessary, when we vote for individuals, ideologies, image or economic abstractions. Highly aggregated, highly mobile societies, whose composition is constantly changing, cannot evolve the ways in which traditional commons used to be safeguarded. If we want to keep the benefits of living in such societies, where appeals to do the right thing are likely to be ignored until it's too late, we shall have to constrain our behaviour more directly than through legislation. All the incentives are to externalise social and environmental costs, and corporations and their mates in government are adept at finding effective ways of doing so.

One answer may be to redress the balance: issue Social Policy Bonds that have as their explicit goal the preservation of the commons. Devise ways of measuring environmental health (not too difficult) and social cohesion (more difficult, but not impossible) that can be targeted. Monetary incentives for the preservation of the commons need not compromise principles of trust, character and stewardship. Social Policy Bonds that rewarded the maintenance of the common good would simply mean that people who want to benefit the commons have have more resources with which to do so.

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