'Complexity is fraud'

The late P.J. O’Rourke once wrote, in The Atlantic in April 2002, that: 'Beyond a certain point complexity is fraud…. when someone creates a system in which you can’t tell whether or not you’re being fooled, you’re being fooled.'

When people's wishes clash with vested interests it's the vested interests (the political class and those groups that can afford expensive lobbyists) that win every time. Our political systems are too complex, arcane or corrupt for ordinary people to stand a chance. The result is clear: an ever-rising gap between politicians and the people they are supposed to represent. 

Voting makes little difference. And, while we don't really know the intentions of the people in power, I suspect that whoever they are doesn't make much difference either. The vested interests are too powerful. They have perpetuated a policymaking process that effectively excludes influence from people outside their exalted circle. They have weaponised the complexity and obscurity of our systems of government for selfish ends.

They can get away with this because our political discourse centres on sound-bites, personality, and image. Actual policymaking is an entirely distinct process: much of it focuses on the structures and funding of government bodies, law and regulation; all of which are opaque to non-professionals - which is to say, ordinary people. The only people who now really understand policymaking are those who are paid to do so, and the only people who influence it are those who have the millions of dollars necessary to pay them.You might even think the system has been specifically designed to keep ordinary citizens out of it.

Bernardo Mueller's 2019, Why public policies fail, is perhaps less cynical: 

The failure of public policies is ubiquitous.This paper ascribes this failure to the complex system nature of public policies. A key characteristic of complex systems is that they cannot be closely controlled or predicted. Yet the traditional approach to public policy is fundamentally based on both control and prediction, as it proceeds by comparing the expected costs and benefits of a postulated set of alternatives. In this paper I provide five pathologies of complex systems and show how they cause the failure of the traditional approach. If a public policy is recognized as taking place within a complex system, it is necessary to use instruments that can work within those informational and epistemological constraints. I provide several examples of the types of policies that meet these demands. But when dealing with complex systems, even with appropriate instruments it is nevertheless necessary to adjust the expectations of what can realistically be achieved. Why public policies fail: Policymaking under complexity, Bernardo Mueller, September 2019

I believe that we can set up a system that solves our long-term problems by bypassing government decision-making and rewarding solutions however they are achieved and whoever achieves them. Social Policy Bonds would work by giving incentives to people to try many different approaches to problems, such as crime, conflict, climate change, and pursue only those that are most promising. Such a system would resemble biological evolution, in that there would be constant pressure, in the form of incentives, to select only the most successful approaches to achieving our social and environmental goals.

A bond regime would require that policymaking focus on outcomes, rather than the alleged means of achieving them. Outcomes are more meaningful to ordinary people than the current policymaking emphasis on legal pathways, funding arrangements, institutional structures and composition, and other arcana.

Meaningful outcomes are one essential element of the Social Policy Bond idea. The other is the injection of market incentives into their achievement: rewarding those who achieve our goals according to their efficiency in actually achieving them. The idea might sound outlandish at first hearing: handing over the solution of our social and environmental problems to investors. But government would still articulate our goals and raise the revenue for their achievemnt - things that democratic governments can actually do quite well. Only their achievement would be subject to the market, which economic theory and all the evidence suggest is the most efficient way of allocating society's scarce resources. No doubt the Social Policy Bond idea could do with some discussion and refinement. But the real question is: what is the alternative? To continue as we are doing, where the gap between vested interests and ordinary people grows ever wider, risks, in my view, social collapse.

The widening gap between politics and people

Unlike many economists I have no view on the size of government. Government is a means to various societal ends and those should be decided by people. I don't believe that taxation is theft, nor that economic freedom is the most important consideration. It is the large and widening gap between government and people that I believe needs to be addressed. 

The gap would narrow if more people participated in policymaking. One reason, I believe, why we're not very interested is that policy is formulated in terms that are difficult to relate to outcomes that are meaningful to us as natural persons, as distinct from corporate bodies. Policymakers seem to concern themselves with decisions about funding for different government agencies, dispensing patronage to big business and other lobbies, presenting themselves in the best light ... almost anything, in fact, except outcomes that mean something to real people.

A government that issued Social Policy Bonds would, from the outset, have to think clearly about social and environmental outcomes, rather than the supposed means of achieving them. Its main roles would be to articulate society's wishes regarding social and environmental outcomes, and to raise the revenue that would fund these outcomes. Unlike most of the current determinants of policy, the language of outcomes and the necessary trade-offs between them is comprehensible to people other than politicians, bureaucrats, lawyers and public relations experts. For that reason, more people would be drawn into policymaking - an end in itself, as well as a means toward getting greater public buy-in to the resulting policies.

Expressing policy in terms of outcomes, and the consequent closing of the gap between public and policymakers would be one valuable benefit arising from a Social Policy Bond regime. The other would be the much greater efficiency in achieving social and environmental goals once the market, rather than a handful of government employees, decides who shall achieve these goals, and how they shall be achieved.

World Peace

Targeting long-term goals means that we can greatly extend the realm of achievable oucomes compared to those available to today's policymakers. 

For example: world peace. Today that simply means an absence of war or civil war - violent political conflict. So the current definition of peace can (and does) allow for: piling up of all sorts of weaponry; including weapons of mass destruction; and hateful and provocative propaganda in the media, schools, and religious institutions. These increase the probability of deadly conflict in the long run, but would still technically be defined as 'peace' today. Rewards under this short-term vision accrue to arms merchants and others intent on fomenting conflict to take place some time beyond the horizons of today's politicians. Today's incentives then do little to prevent conflict. 

World Peace Bonds would be different. They would be issued with a very long time horizon: perhaps five decades. Any outbreak of large-scale violence would see investors in the bonds the prospect of losing money. But if they are effective in ensuring world peace, then they stand to benefit - as does everyone else on Earth. World Peace Bonds, with sufficient backing, would outweigh today's incentives. With such a long-term view, it would be in the interests of bondholders to eliminate the hateful indoctrination of schoolchildren and everyone else, and to control the sales and lethality of armaments. Bondholders would have incentives also to research, experiment and implement new approaches to conflict reduction, concentrating on those that are most promising and efficient. 

The goal of 'world peace' is readily categorised as unrealistic, utopian, idealistic and, of course, impossible. That's partly because we have only to look at human history in confirmation. But incentives have unleashed such human ingenuity that the quantity (population and longevity) and quality (standard of living) of billions of our species have risen spectacularly in recent decades. Long-term challenges threaten our achievements. We urgently need to supply incentives commensurate with the magnitude and long-term nature of those threats.