Madness

Who benefits from the Common Agricultural Policy, which consumes 43 percent of the European Union's budget and costs households $296 per annum? Well:

The Duke of Devonshire gets £390,000, the Duke of Buccleuch £405,000, the Earl of Plymouth £560,000, the Earl of Moray £770,000, the Duke of Westminster £820,000. The Vestey family takes £1.2m. You'll be pleased to hear that the previous owner of their Thurlow estate – Edmund Vestey, who died in 2008 – managed his tax affairs so efficiently that in one year his businesses paid just £10. We're all paying for Europe's gift to our aristocrats and utility companies, George Monbiot, 28 November

This insanity has been documented, qualified and widely promulgated continuously for thirty years. It is not the transfers from the poor to the rich that are inexcusable; it is their persistence over three decades and many administrations. Their persistence underlines the inadequacy of the current policymaking approach: there is no self-correcting mechanism for policies that are self-evidently absurd. Current policymaking is so arcane, so inaccessible to ordinary human beings, that only the powerful - individuals, corporations, government agencies or trade unions - have the resources to negotiate it and make it serve their purposes. And their purposes not only differ from those of most people; they conflict with them.

Complex societies don't need to have a complex policymaking process. Government could, as under a Social Policy Bond regime, target a few broad, widely agreed goals, such as better health, universal literacy, lower crime rates and a cleaner environment. Rather than try to achieve these goals itself and distract itself with easily gamed legislation and regulation, government could concentrate on articulating society's goals and raising the revenue for their achievement. Things that government, in fact, can do very well, and which, indeed, only government can do. The actual achievement of our social and environmental goals would best be contracted out to a motivated private sector, where incentives, diverse approaches and adaptiveness could all serve social purposes.

The Common Agricultural Policy, and the persistence of its lunatic subsidies to the rich at the expense of the poor, is the logical endpoint of the contrary approach, which only the powerful have the time and resources to subvert.

Targeting outcomes: there's no alternative

When it comes to climate change, the uselessness of the current policy approach is plain. The way we do things now is: get the government or some bureaucracy to identify some activity that has an effect, then try to encourage or discourage that activity. In our complex society, that way of doing things is increasingly futile. Take climate change. Current reasoning has it that (1) climate change is caused by man's greenhouse gas emissions and that (2) cutting back those emissions will stabilise the climate. There are huge scientific uncertainties here, but let's move on to step (3) we need to cut back those emissions. So we end up with the Kyoto process, whereby some, but not all, countries say they will cut their emissions. And in the unlikely event that those countries do actually cut their emissions what do we find?

[A] significant and growing share of global emissions are from the production of internationally traded goods and services. Although this finding may follow directly from increases in international trade itself, it could have unintended consequences for climate policy, as it leads to a spatial disconnect between the point of consumption and the emissions in production. Source

or, as Naomi Klein puts it:

the rise in emissions from goods produced in developing countries but consumed in industrialized ones was six times greater than the emissions savings of industrialized countries. Capitalism vs the climate, 'The Nation', 28 November

We're going nowhere on climate change, because we refuse to accept that, if we want to stop the climate changing, we have to target climate change. We have to reward the achievement of climate stability. What we shouldn't do is exactly what we are doing: using fossilised science to prejudge how we shall achieve climate stability, and building all our hopes and a huge bureaucracy on top of that science only to find that: the science is faulty or outdated and the bureaucracy is failing anyway. In short, cutting back emissions may or may not be helpful but, either way, we're not even doing that.

I really don't think there's a better way of tackling climate change and its consequences than Climate Stability Bonds. Nothing, in the years since my paper was published, has changed my view.

Consult on ends, rather than means

From a letter to the editor of the London Times:

Sir, Your endorsement of the Greek referendum so that the Greek people can determine their own future surprised me. Personally, I will endorse referendums on economic policy once we also put the question of what medicine doctors should use to cure certain illnesses to a public vote. Jacob Williamson, 'The Times', 4 November

Mr Williamson has a point: economic policymaking is now so complex and specialised that consultation with the public might well be a bad idea. On the other hand, harsh austerity measures need quite a lot of buy-in if they are to be successful; the sort of buy-in that might only be possible with public approval.

The answer could be to consult the public on meaningful outcomes, rather than on policies that may or may not achieve them. We understand the ends more readily than the means. When we buy a plane ticket, we are concerned more with the destination than the identity of the pilot or the detailed operation of the plane. Social Policy Bonds are a means by which the public can articulate the goals and priorities of policy. Under a bond regime, social and environmental outcomes would not only be identified and targeted, but also continually costed via the market for the bonds. Referendums about policy goals then would be a meaningful exercise, one that encourage broad engagement with the policymaking process, and the buy-in that's necessary for difficult decisions.