Peace in the Middle East

Who wants it? Ordinary people, mostly. It's difficult, though, for them to express that preference. We're all susceptible to anger and impulse, to propaganda and, especially, emotional television pictures of conflict. It doesn't help, though, that the financial and status incentives are overwhelmingly on the side of conflict. The arms sellers, the men of (so-called) religion, the state and non-state militias: all have their own reasons for keeping conflict going, some of them perfectly logical. What's missing are countervailing incentives, and that's where Middle East Peace Bonds could enter the picture. Ordinary people, perhaps following initial contributions from philanthropists, could set up a fund to be used for the redemption of the bonds. The bonds could aim to achieve a sustained period of peace, defined and verified objectively. It would be up to bondholders to devise and investigate the multitude of possible ways in which conflict can be avoided. They would have incentives to deploy only the most efficient of such ways.

People often write about 'intractable' ethnic, religious, or territorial conflicts. But these conflicts do fizzle out and, on reflection, the conflicts were not so intractable after all. Historical grievances, and notions of fairness or justice, loom large and play a part in perpetuating conflict. But not inevitably. People get tired, deals are done, compromises made, other events assume greater importance or time heals. Middle East Peace Bonds could accelerate all these processes. They could channel the wishes of the majority of ordinary people in the Middle East and beyond into the attainment of peace in the region. Incentives do matter.

The Empathic Civilization

Jeremy Rifkin writes:

The Empathic Civilization is emerging. A younger generation is fast extending its empathic embrace beyond religious affiliations and national identification to include the whole of humanity and the vast project of life that envelops the Earth. But our rush to universal empathic connectivity is running up against a rapidly accelerating entropic juggernaut in the form of climate change. Can we reach biosphere consciousness and global empathy in time to avert planetary collapse? 'The Empathic Civilization': Rethinking Human Nature in the Biosphere Era, Jeremy Rifkin, 11 January

There's much to agree with here. But there is a fraction, however small, of the human population that does not, and might never be able to, feel empathy. The mayhem that even a few such people can cause when they go against the hopes and instincts of the rest of humanity is well known and well documented, in for instance, the history of the 20th century and the lives of Stalin, Hitler and Mao. We can hope that our 'empathic connectivity' can prevail against this fraction of humanity and against climate change (and other challenges). But we can also assist the process: by providing monetary incentives to encourage human survival and well-being.

Social Policy Bonds could do this. It might go against notions of fairness or justice, for instance, but paying influential psychopaths to take indefinite golfing holidays on the atoll of their choice would be a bargain for the rest of humanity. That's one example of a way in which Social Policy Bonds rewarding the avoidance of catastrophe could operate. Another would be to look at the relationship between empathy and welfare: I suspect empathy comes into play only when our basic survival needs have been met and secured. Satisfying those needs for all humanity could be a most effective way of removing threats to the empathic civilization. The point is that incentives of the sort that Social Policy Bonds would supply, which do not prejudge how to achieve a specified goal, can encourage the exploration of a wide array of approaches to bring about empathy and to ensure our survival and prosperity.

Target ends, stimulate diverse, efficient means

From Washington to Athens, the economic crisis is producing consolidation rather than revolution, the entrenchment of authority rather than its diffusion, and the concentration of power in the hands of the same elite that presided over the disasters in the first place. Ross Douthat, The Great Consolidation, 'New York Times', 16 May

When the only tool you've got is a hammer, you're likely to see every problem as a nail. Our policymakers' hammer is control. Unable to relinquish it, they accumulate more and more, creating a policymaking monocultre. And, as in agriculture, a monoculture raises the stakes: a shock can become a catastrophe.

One answer might be for government to realize that, while its stated goals may be laudable and almost universally approved of, there are many different ways of achieving them. Regulations, for example, are means rather than ends. Why not target ends rather than means? Clarity about ends would mean clarity about the costs of achieving them: something which our current system doesn't achieve. Fiscal deficits have accumulated to dangerous levels, simply because the obvious fact that you cannot spend more than you earn indefinitely has been obscured by a policymaking system that prefers vague, uncosted, mutually conflicting goals, to one that offers transparency, stability and public participation and buy-in.

That's where Social Policy Bonds can enter the picture. They explicitly targeting ends, rather than means. Their ends are costed and minimised by a competitive market. The bonds generate a cascade of incentives for all involved in achieving social and environmental goals to be efficient. One way they do this is by stimulating the exploration, investigation and implementation of diverse, adaptive approaches to our social problems, rather than the top-down, one-size-fits-all, centrally planned, uniform approach so favoured by our current policymaking system. That system, as we see, is extremely fragile. Unfortunately, it might take us all down with it.

Adaptation is smarter than we are

I haven't, yet, read John Kay's new book, Obliquity: why our goals are best achieved indirectly, but I have heard his podcast on the subject in which he says "Adaptation is smarter than we are". One of the great advantages of Social Policy Bonds over the usual way that policymakers try to achieve goals, is their inherent capacity to stimulate adaptive approaches to social problems. Under a bond regime, people are rewarded for achieving targeted social and environmental goals, however they do so. Long-term, broad, goals, such as the elimination of war, become feasible, because government (or whoever eventually pays for the goal's achievement) does not have to specify who shall achieve it or how they are to go about it. That would be left to investors in the bonds, who can be expected to have diverse views about how best to eliminate war, and to adapt their views both with time and according to each conflict (or potential conflict).

If we were prepared to accept adaptation as a policy instrument, then we could not only achieve our goals more efficiently than under the current, top-down, one-size-fits-all centrally planned government-directed way of doing things. We could, as I say, target much broader goals such as the elimination of war, the ending of poverty, and universal literacy. Adaptation is indeed smarter than we are. We ought to recognise that fact, and deploy it to the advantage of all mankind.

Voting for outcomes rather than slogans

Discussing Venezuelan President, Hugo Chavez, the Economist says:

His fans salute him as a saviour for the downtrodden of the planet.... But to many others...he has come to embody a new, post-cold-war model of authoritarian rule which combines a democratic mandate, populist socialism and anti-Americanism, as well as resource nationalism and carefully calibrated repression. This model has proved surprisingly successful across the world. Versions are to be found in countries as disparate and distinct as Iran, Russia, Zimbabwe and Sudan. In one way or another, these regimes claim to have created a viable alternative to liberal democracy. The wrecking of Venezuela (subscription), 'the Economist', 13 May

What I take from this is that democracy, as currently practised, no longer means buy-in. People vote for a party, a party leader, or for a collection of policies or attitudes. We are very rarely given the chance to vote for a single policy. We vote, indirectly, for people or parties that may or may not deliver certain collections of outcomes. There is so little correlation between a party's manifesto and those outcomes that, inevitably, other factors come into play, of which image, slogans, poses and rhetoric are prominent. This sort of politics has all sorts of disadvantages, of which one is that it tends not to be practised by people with integrity, with results that the Economist, rightly, laments. The politicians play off one group of people, or special interests, against another. They have little interest in maintaining social cohesion. The consequences are likely to be destructive or even tragic.

Rather than emphasise party and personality, as do current democratic systems, we could consider focusing on outcomes. We face urgent social and environmental challenges that need buy-in and cohesion, which the current system is not delivering. Social Policy Bonds could help in this. We could target outcomes that, when not advocated by polarising figures, most people would agree with: the avoidance of nuclear catastrophe, or any major disaster, for example; or the attainment of universal literacy. (For more examples see here.) Even people who disagree with such goals are less likely to oppose them when the process for targeting them is more robust and direct than under the current system.

For all sorts for reasons (see my book) Social Policy Bonds would be more cost-effective than the current system. But in focusing attention on outcomes rather than party or personality, they would also, I believe, generate more buy-in to the entire policymaking process. Social cohesion could only benefit.

Voting for politicians is an outmoded concept

The three major parties in the recent UK General Election could persuade only 57 percent of the electorate to vote for them. Proponents of Proportional Representation claim that:

...political debate and engagement will be improved if we overhaul the system. This makes their campaigning a displacement activity of epic proportions. They have mistaken a serious political crisis – involving collapsing ideologies, a dearth of big and inspiring ideas, and a gaping chasm between the public and the political parties – as simply a technical problem of how we vote. Their campaign is the equivalent of fiddling while politics burns. The delusions of the electoral reform lobby, Brendan O’Neill, 10 May

I agree with Mr O'Neill. Politics is something of a fiction these days. It's driven by personalities, sound bites, and trivia. At the same time we are failing to address huge, urgent social and environmental challenges. Just as with the world's economic system, politicians and bureaucrats have little incentive to tackle these challenges until they become emergencies. Structural weaknesses are papered over until it's too late. It makes little difference who's in power, and ordinary people know that.

Here's another idea: instead of voting for political party, or for the politician who looks best on tv, or for the ones that avoid real issues in the most convincing manner, how about letting us vote for outcomes? Not for the politicians who say they'll deliver outcomes, or for the political party that, way back in history, did once deliver outcomes, but directly for outcomes. Take, for instance, the goal of avoiding catastrophic climate change. That option was not offered by any of the British political parties. It's not on offer, in fact, anywhere, as a policy for which people can vote. What is on offer are promises made by members of a political caste to do something that might do something to reduce greenhouse gas emissions, which in turn might, but probably will not, do anything significantly to stabilise the climate. Then these promises, however nugatory, are broken anyway.

That's where Social Policy Bonds can play a part. Under a bond regime, the currency of debate would be outcomes rather than political parties or well-meaning but hollow promises. Outcomes are inherently more amenable to the sort of consensus and buy-in that are essential if we are to avoid serious economic, social or environmental problems. And Social Policy Bonds, as well as increasing transparency and stability of targeted goals, would minimise the cost of achieving them. More could be done with society's scarce resources than under the current system. Efficiency, transparency and buy-in: exactly what are lacking in today's system. No wonder, then, that participation in a general election is so low.

Et tu, Amnesty?

Innumerable government agencies, churches, universities, trade unions, and now the - formerly - very best-intentioned non-governmental organisations: all are susceptible to sacrificing their ideals on the altar of self-perpetuation. Theodore Dalrymple discusses Amnesty International, originally formed to support prisoners of conscious. It has recently taken on two further causes: a reduction in the disparity of maternal mortality rates in the US, and the elimination of the death penalty, where it is applied. Of the first, Dr Dalrymple comments

This is a tragedy for all concerned. In other words, while the disparity is indicative of a problem, it is not itself the problem. The infringement of human rights has nothing to do with it. Mission Creep Causes Amnesty International to Lose Focus, Theodore Dalrymple, 3 May

And of the second:

Now there are, of course, strong arguments for the abolition of the death penalty (the strongest of which, in my opinion, is the occurrence of judicial error even in the most scrupulous of jurisdictions). But there are also arguments in favor of the death penalty, and it is possible, and perhaps even likely, that the majority of the human race accept these arguments. Be that as it may, a murderer awaiting execution in the United States is hardly to be equated with a prisoner of conscience, even if it is cruel and unusual punishment to keep such a murderer on death row for years.

It's hardly surprising. Organizations do a lot of good work, but as they grow they become less focused on their original aims and more on the survival and growth of the organization itself. When these organizations become too influential, as big business and government have, then we are in trouble. The difference between the ideals and aspirations of the individuals who work in them, and the direction the organization actually takes, is often stark.

Social Policy Bonds would bring about a new type of organization: one whose existence, funding, structure and activities would all be aimed at achieving society's objectives. The organization would, in other words, be subordinate to social and environmental goals. People's loyalty would be to the goals, rather than the institution.

And Amnesty?

It is as if Amnesty grew bored with its original purpose and now seems to suffer from what one might call the not-a-sparrow-falls-but-it-is-our-moral-concern syndrome, itself a result of believing that virtue is proportionate to the number of good causes that one espouses. Therefore, one must spread one’s moral wings and fly off into the ethical stratosphere.

In this sort of mission creep, it's no better or worse than most of the other organizations supposedly aimed at achieving social and environmental goals.

The curse of narrowly defined objectives

Teachers and doctors strongly resist the introduction of a bonus culture: not just because they resent measurement of performance and accountability for their activities – although they do, and with little justification – but because they oppose importing the culture of assembly lines. They fear an environment in which they would be encouraged to focus on narrowly quantifiable objectives at the expense of the underlying needs of clients. Even if many teachers and doctors are incompetent and lazy, many others are seriously committed to the organisations for which they work, the subjects and specialisations to which they are devoted, and to a broader sense of professional ethics: and it is only people like these who establish the kinds of schools and hospitals we want as parents or patients. In education and medicine, both employees and customers sense that the disadvantages of the systemic consequences of large personalised incentives on values in organisations are likely to outweigh the benefits of such incentives for individual motivation. John Kay, When a bonus culture is just a poor joke, 'Financial Times', 28 April

Sadly, perhaps, in our complex, highly aggregated societies, we might have to accept the targeting of quantifiable objectives, for all their faults. In the western world, as in the former centrally planned economies, indicators are for the most part, narrow, unsystematic and unsophisticated; they are seldom strongly correlated with what their designers actually want to achieve, and still less so with societal well-being. The key is to use broad indicators, with which the best teachers and doctors would have no quibble and could indeed, help design: universal literacy and numeracy, for example, or longevity, perhaps adjusted to take account of quality of life. Such, of course, is the Social Policy Bond principle.

Even when following that approach policymakers will need to be guided by the limitations inherent in quantifiable indicators. The policy implication would be that government could usefully concentrate on those policy areas where numbers are unequivocally helpful. It is generally at low levels of health, educational level, housing, income, caloric intake etc, that increases are strongly correlated with an individual’s welfare. Beyond basic levels, individuals’ ultimate objectives are for the most part inescapably subjective. They cannot be measured, nor can the societal counterpart of social welfare, and government should recognise this limitation. It can never know as much about people’s well-being as other people: Lord Kelvin’s remark, that 'everything exists in some quantity, and can therefore be measured' is, of course, nonsense. A better guiding principle is that attributed to Albert Einstein: ‘Not everything that counts can be counted, and not everything that can be counted counts.’