29 August 2009

Agricultural subsidies

Is there anything to be said in favour of the west's agricultural subsidies? No there isn't. And here's more:
A study in the American Journal of Clinical Nutrition found that a dollar could buy 1,200 calories of potato chips or 875 calories of soda but just 250 calories of vegetables or 170 calories of fresh fruit. With the backing of the government, farmers are producing more calories — some 500 more per person per day since the 1970s — but too many are unhealthy calories. Given that, it's no surprise we're so fat; it simply costs too much to be thin. Getting real about the high price of cheap food, 'Time', 21 August

27 August 2009

Targeting the bigger disasters

[A] robust system needs to produce frequent crashes, with citizens immune to them, rather than infrequent total collapses which we cannot cope with. By constraining cycles and assuming "no more boom and bust" (as [the UK] current government did) you end up with a very large bust – and I am sure that I do not need more events like the recent crisis to prove the point. Nassim Nicholas Taleb, 27 August
Experts in process engineering, with whom I've recently talked, have suggested that Social Policy Bonds might well control the smaller, frequent crashes, or their equivalents. In other words, you could use the bonds to, say, reduce unemployment or achieve universal literacy and numeracy. But, they say, that would come at the cost of an increased risk of a bigger problem. My response is twofold: First, we could issue Social Policy Bonds that target as a priority the bigger problems: global catastrophe or major disasters, however caused. Social Policy Bonds are a versatile concept: the exact nature of any disaster to be avoided need not be specified in advance. And second, I point out that the bonds are to be compared with the current system, which as Mr Taleb rightly points out, is geared toward actively encouraging bigger catastrophes.

24 August 2009

The bean counters move into childcare

A US study, as reported by Frank Furedi, suggests that between 1981 and 1997:
there has been a noticeable increase in the amount of time that children spend on scheduled activities. ...Children's free time has declined, and free time is increasingly structured. [They] spend less time playing and more time 'going places'. This development ... reduces the amount of time family members spend just sitting around, talking and not doing anything in particular. In turn, parents spend more time organizing and driving children from one stimulating activity to the next. Paranoid Parenting (page 84)
Many of the world's problems, in my view, can be attributed to the difference between accountancy and human wellbeing. One is about ticking boxes and measuring that which can be measured. The other is about leaving people to find their own ways of fulfilling themselves. Even economics - the allocation of scarce resources to best meet prescribed ends - doesn't see quantification and management as ends in themselves. The ends in economics can be broad and, if well chosen, can correlate strongly with wellbeing. But so much of policy is no longer about wellbeing; it's about process and covering yourself; implementing procedures that have been tried, tested and (often) failed. It's about concentrating on those things that can be easily measured, while ignoring the broader concerns.

That approach worked when numbers correlated strongly with what we actually want to achieve. And for much of the world today many numbers still do: improvements in Gross Domestic Product, nutritional intake, basic literacy and numeracy, or something like the Human Development Index, for instance.

But that approach, which serves developing economies quite well, is failing us in so many areas. Rich countries still pursue economic growth as if it's a solution to all our problems. Major challenges, such as nuclear proliferation or climate change, go unmet. Surveillance powers combine maximum intrusion to minimum effect. Schooling is an opportunity for social engineering. The disconnect between politicians and the people they are supposed to represent grows wider and wider. And as Mr Furedi indicates, the same tendency to manage everything and achieve numerically impressive results at the expense of everything else, has moved into childcare or 'parenting' in western countries.

20 August 2009

Doing something, achieving nothing

Regardless of what you might think of Richard Courtney's suggested solution, his summary of our response to the possibility of catastrophic climate change is accurate:
Developing countries say they will not limit their emissions, and industrialised countries have problems reducing theirs. China releases more of the emissions than any other country, is industrialising, and says it is entitled to the same emissions per head of population as the US. So, China says it intends to increase its emissions more than four fold. India says the same. The US is having problems adopting a ‘Cap and Trade’ policy that would harm American industries and force industries from America to China. The EU adopted a ‘Cap and Trade’ policy that collapsed and has not affected the EU’s rising emissions. The Australian Parliament has recently rejected a similar policy.

Politicians have been responding to the failure of the Kyoto Protocol by showing they are ‘doing something’. They have adopted pointless and expensive impositions on energy industries, energy supplies and transportation. And the public is paying the large costs of this in their energy bills.

The Copenhagen Conference will provide a decision because it has to, but that decision will have no more effect than the Kyoto Protocol. And this will put more pressure on the politicians to be seen to be ‘doing something’ with further cost and harm to peoples and to industry. Richard S. Courtney, 17 August
As with climate change, so with nuclear proliferation or any number of other possible disasters. We shall never know for certain, until it's too late, whether threats are potential or actual. Our default position then, is as described by Mr Courtney: to do nothing. There's something to be said for that: it costs very little. In particular, it avoids the payment of large upfront costs for uncertain future gains.

But the threats might turn out to be real, in which case today's inaction is criminally negligent. What is a genuinely concerned individual - politician or not - to do?

I can't think of a better solution than Social Policy Bonds. Governments or groups of concerned people could issue bonds that would reward the avoidance of anything they don't want to see: from a rise in regional unemployment to a global catastrophe. They wouldn't have to decide how likely is the disaster they wish to avoid; nor would they need to know how best to avoid it. Those decisions would be taken collectively, by investors in the bonds. These investors would have powerful incentives to explore, research and implement the most efficient ways of avoiding calamity. Importantly, they would also have incentives to terminate failed experiments. They would also bear the risks of failure.

Social Policy Bonds with the aim of avoiding disasters might not forestall all calamities. But they would be much, much better than our current efforts.

17 August 2009

Complexity and catastrophe

With time lags and great complexity, it's all too easy for people to game a system, consciously or not, so that they benefit in the short term by either spreading the costs of their activities to society in general (socialising them) or by postponing them to future generations. In a sense, mankind has been doing that since the time of Malthus; and our existence as well as our very high material standard of living are the happy outcome of unforeseeable technologies arising that do much more than solve old problems. But I wonder whether we can still afford to do this when we bump up against finite limits. Dissemination of successful technologies has, so far, and with a couple of close shaves, outpaced our destructive tendencies. But there is no inevitability about that it will continue to do so.

We don't know what are the biggest threats to our existence: nuclear proliferation? Climate change? Impact with an asteroid? What the credit crunch and climate change appear to tell us is that disaster are probably unfolding now, but we have no idea what forms they will take. Still less do we have a political system capable of defusing enormous threats before they become perilously close to reality.

This is perhaps where Social Policy Bonds score heavily over the current way of doing things , which is essentially a passive approach, characterised by too much or too little action when it's too late. Under a bond regime we can prescribe an outcome and contract out its achievement to a number of investors, who will have incentives to cooperate to bring about this outcome. Social Policy Bonds could function as an insurance policy against specified or unspecified catastrophe. Backers of Disaster Prevention Bonds, whether they be government or private sector philanthropists, could choose to reward the continuing absence of major human catastrophe without specifying the nature of the catastrophe, and without themselves having to pick out potential solutions. In that way, the complexity that allows us to ignore unfolding disasters can work in humanity's favour, by selecting efficient, effective solutions.

13 August 2009

Policy by interest group

Patrick Basham describes how tobacco policy in the UK is being shaped by anti-tobacco groups:
So just who, then, in the DoH [Department of Health was responsible for conducting a wide-ranging, objective, and transparent review of the evidence about tobacco advertising and tobacco displays and their supposed effect on young people? It certainly wasn’t regular civil servants with expertise on tobacco issues who approached the issue without a vested interest. Instead ...the review was a product of Cancer Research UK, a charity that has also acted as an advocacy group consistently calling for bans on tobacco displays. Displaying the truth about policymaking, Spiked, 13 August
In this blog I've often criticised wealthy corporate bodies, as well as government agencies, for their influnece over policymaking. They take advantage of the difficulty of non-initiates in comprehending the often arcane and always complex, long-winded process of law-making. Mr Basham's article is a reminder that it is not only large corporations who can hijack policy, but also well-intentioned lobby groups:
In effect, the government’s policy about tobacco displays is not the result of wide-ranging research, evaluated objectively and transparently, but rather was based on a single report produced by an advocacy group campaigning for a display ban, and helped along by a senior official from that group working inside the DoH. What’s objective, evidence-based, comprehensive, or transparent about that?

11 August 2009

Who's in charge?

Europe’s dairymen are so obsessed by the need for regulation that the worst economic slump in more than 70 years barely enters their consciousness.The European Commission will spend €600m this year on export subsidies and buying unwanted dairy goods which will then moulder in cold storage (the EU is not recreating mountains, insists one Eurocrat, “more a butter hillock”). Economist, 6 August
Who are these people, channeling your savings and the next generation's income into subsidised overproduction of butter? Who makes these decisions? It's been known for at least thirty years that these subsidies do very little except bolster the market value of farmland and transfer funds from ordinary people to the very rich. As with the bonuses for cynical bankers, our political system seems incapable of behaving rationally.

The truth is that, without any guiding principle other than expediency, our politicians are lost. There's no relationship between the policies they enact and the outcomes the people they represent want to see. Society, economics, the law; they and the way the interact are far, far too complex for anyone fully to understand. So short-term considerations are king.

A Social Policy Bond regime would be different. It would subordinate all activity to targeted outcomes. There can't be many who'd want to see the corrupt, insane systems of agricultural support of the west, which apart from enriching aristocrats are environmental and economic disastrous. People or governments would instead concentrate on defining the outcomes that we do actually want to see, and let the market decide how best to achieve them.

06 August 2009

Violence and farm subsidies

More from Alice Miller:
National leaders intent on war do not want to believe that the destructive forces from which they constantly attempt to free themselves at other people's expense are in themselves revenge feelings for old, very personal wounds. in the face of even the possibility of nuclear war, we simply cannot afford to go on ignoring this fact. But that is exactly what we do: numerous civil servants and government specialists deal with the results of child abuse, without being able to see and know its origins.
Breaking down the wall of silence (page 94)
If Alice Miller is correct, violence against children is self-entrenching. The more it's done, the more it will happen in the future. In this it's similar to other destructive policies: farm subsidies for example, which enrich a tiny minority at great cost to everyone else and the environment, and enable this minority to oppose their removal. The corrupt madness of agricultural subsidies in the west has been known about for decades, but last year they totalled $265 billion. And in both areas, it's going to take a long, wearisome wait, for better policies to arrive. Darwinism selects only for a fairly narrow definition of fitness; it does not select for 'optimal from the point of view of human wellbeing'. Even then, I don't think we could rely on evolution to work, even after many generations, unless perhaps we are considering large numbers of planets and are indifferent to what happens on our own.

Agricultural subsidies, for all their many faults, don't threaten entire populations, but nuclear warfare does. We might well be inhabiting a planet where violence against children has irredeemably taken hold, and the 'fittest' in that paradigm are fit only to destroy human life on it. Rather than hope for the best, or wait eons for evolution to work in our favour, we could instead let a basic targeted outcome drive policy: absence of nuclear war. We could do this by issuing Conflict Reduction Bonds. It's true that, given numerous planets, the ultimate survivors may be those on the planet that, for some random reason, did not succumb to self-entrenching destructive madness. But for our planet and in our time, I think we need explicitly to target human survival, and to reward the people who help maintain it.

02 August 2009

Magical solutions

[T]he British government has enacted a law ...requiring emissions reductions of 34 percent below 1990 levels by 2022, which would be upped to 42 percent if the world reaches a global climate agreement in Copenhagen in December. What is missing from the debate over targets and timetables is any conception of the realism of such proposals. If a proposal is not realistic, it is not really a policy proposal but an exercise in symbolism, a “magical solution.” Symbolism is of course an essential part of politics, but when it becomes detached from reality — or even worse, used to exclude consideration of realistic proposals — the inevitable outcome is that policies will likely fail to achieve the promised ends. This outcome is highly problematic for those who actually care about the substance of climate policy proposals. Roger A Pielke, Jr
Professor Pielke goes on to point out that if Britain is going to achieve its stated reduction goal it would have to deploy about 30 new nuclear power plants in the next six years. 'One does not need a degree in nuclear physics to conclude that is just not going to happen.'

What's going on? It's part of a broader problem: conventional policymaking is too complex for ordinary people. There are just too many diversionary opportunities for powerful interests to exploit. We cannot safely not evaluate policies or politicians in terms of outcome: there are too many variables involved, and too many time lags. Cause and effect are obscured and political debate centres around soundbites and personality as portrayed on tv.

Or symbolic statements that have no meaning. As Professor Pielke says:
[C]limate policy has become about demonstrating one’s strong feelings about the reality and urgency of climate change and not so much about implementing policies that can actually work.
We could, of course, let outcomes drive policy. If we are serious about climate change, even allowing for the massive uncertainties over what's going on and what's causing it, we'd issue Climate Stability Bonds, which would reward people for taking measures to stabilise the climate (or reduce the impact of an adverse climate). But that would be an efficient, effective solution, rather than a magical one.