02 January 2009

The unimportance of getting it right

If non-financial incentives carried much weight, then it would be helpful if they could correlate in some way with desirable social or environmental outcomes. They would then perform some tiny act of offsetting the financial incentives that are on offer to those whose activities end up degrading our wellbeing. Unfortunately though, in the UK at least, the royal honours system has largely followed the prevailing trend and been given over to celebrities, sportspeople or entertainers. Or, as this letter to the Times (2 January), points out, to those civil servants whose approaches are tried, tested - and failed:
Sir, Courtiers in days of yore used to know that it was far better to be wrong in grand company than to be right on your own — so it is today. The Permanent Secretary to the Treasury, a Gordon Brown insider, Nick MacPherson, gets a knighthood for presiding over the management of the economy that has led to the most dangerous financial boom in living memory and which has resulted in the present bust and deep recession. By contrast, the eminent economist Roger Bootle gets nothing, despite having many times warned us that deflation was a more dangerous enemy than inflation and that Mr Brown and the Bank of England should stop worrying unnecessarily about inflation and should, instead, take steps to stem the flow of irresponsible debt, which has fuelled the unsustainable property boom.
Stephen Porter
London NW6

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