Misaligned incentives

Tadeusz Patzek writes: 

Humans did not unknowingly create climate breakdown; they proceeded with eyes open, repeatedly prioritizing immediate growth over long-term habitability. The subsequent failure to restrain fossil-fuel use was therefore not a failure of science, measurement, or foresight; it was a failure of political economy. Decision-makers understood that the benefits of fossil-fuel expansion were immediate, concentrated, and readily monetized, while the damages were delayed, diffuse, probabilistic, and politically externalizable, and that institutional power flowed toward those who maximized short-term growth. Thermal Power and Climate Change: A Data-Driven Analysis of Cause and Effect, 1800-2100, Tadeusz W Patzek, February 2026 (This is a preprint available for free download from here. My ellipses indicate citations.)

The last sentence sums up much of the human predicament. Most of us, including policymakers, are offered incentives that reward short-term thinking. There are few financial incentives that would reward such crucial goals such as the survival of humanity. Too much human ingenuity is channelled into activities that, given the urgency of our challenges, are trivial or worse. 

Social Policy Bonds are an attempt to re-orientate the incentives, to encourage solutions to our urgent, long-term problems. They aim to inject the market's incentives and efficiencies into the achievement of such outcomes as disaster prevention, conflict reduction, nuclear peace or climate stability. Historically, at the national level, such outcomes have been neglected, or have been the subject of ad hoc arrangements. At the global level, the resources available to the dedicated staff of NGOs working for peace, for example, are orders of magnitude lower than those that would adequately reflect the diffuse wishes of humanity. A bond regime would divert funds into the most efficient of these organisations, allowing them not just to raise the salaries of their employees, but to attract more expertise and more resources. 

Foreign billionaires: the real beneficiaries of agricultural policy

Government's involvement in agriculture in the rich countries has a long history. Its subsidies, originally well intentioned and (to some extent) rational, have created powerful interests that resist change. They've led to farming at an intensity that degrades the soil, water, and animal welfare. One of their - stated - aims was to preserve the family farm, which they haven't done. They are capitalised into farmland values, making entry into agriculture almost impossible for those who don't inherit. They raise food prices, while barriers to food imports stifle the prospects of food-rich developing countries and transfer money from taxpayers and consumers to the wealthy: 

UAE’s ruling royal family benefits from more than €71m in EU farming subsidies

The United Arab Emirates’ ruling royal family is benefiting from tens of millions in EU subsidies to grow crops destined for the Gulf, it can be revealed. A cross-border investigation by DeSmog and shared with the Guardian found subsidiaries controlled by the Al Nahyans collected more than €71m (£61m) in six years for farmland it controls in Romania, Italy and Spain. The Al Nahyan family is the second richest in the world, with an estimated wealth of more than $320bn (£235bn), mostly derived from the Emirates’ vast oil reserves. Subsidies under the common agricultural policy (Cap) make up a third of the EU’s entire budget, paying out about €54bn each year to farmers and rural areas across the bloc. UAE’s ruling royal family benefits from more than €71m in EU farming subsidies, Clare Carlile, 'The Guardian', 7 May 2026

These subsidies have been widely challenged for decades (I wrote about them in 2001), but still they continue....

All of which points to the need to be very clear about what are the actual intentions of government policy. If, for instance, it's to achieve self-sufficiency in food production, then we need to look beyond outputs to inputs - especially oil. If it's to help smaller farmers, then target the incomes of small farmers, rather than subsidise land ownership. If it's to raise the cost of food so as enrich billionaires, then come clean and tell us that that is your intention. 

A Social Policy Bond regime would oblige policymakers to be clear about the outcomes they wish to see. This should be a starting point for all policies, in contrast to today, where stated intentions are vague, incoherent, uncosted and deceptive. Politicians can get away with such obfuscation because we are used to policies being framed in terms of funding arrangements, legalisms and institutional structures. The connections between what politicians say, what they do, and outcomes are too obscure to be identified. A bond regime, though, would have explicit, verifiable goals, which the public could help prioritise and with which ordinary citizens could engage - necessary to generate buy-in to policies that invariably create losers as well as winners. Transparency, efficiency and buy-in are just some of the advantages of a Social Policy Bond regime, about which there is much more on SocialGoals.com. 

Aim for nuclear peace first

PANews reports: 

In April 2026, a hair dryer was used to heat a meteorological sensor at Paris Charles de Gaulle Airport, causing abnormal temperature spikes. The attacker exploited rule vulnerabilities in Polymarket's prediction market, winning $34,000 in prizes. Polymarket relies on a single data source and does not revise data after settlement, making physical intervention possible. After the incident was exposed, Polymarket quietly changed the data source without publicly acknowledging the vulnerability. This is known as a 'physical oracle attack,' with low cost but high returns. A hair dryer "blew" $34,000 away from Polymarket, PANews, 23 April 2026

Campbell's Law states that as soon as you use a specific number to judge people's success, people will start "gaming the system" to make that number look good, even if it ruins the actual quality of the work. The hairdryer is a relatively trivial example; a more serious one is 'teaching to the test'. It's a problem that afflicts current policymakers and could, potentially, derail a Social Policy Bond regime, which depends entirely on the definition and targeting of quantitative variables. A solution would be to target goals that are, or are inextricably lined to, what we actually want to achieve. This could be made to work well for bonds that target broad goals at a highly aggregated level and in the long term. Take literacy: if we want to see improvements in the literacy of, say, 7-year old children in a country over the next decade, we could sample children of that age over a wide area, waiting until the end of the decade to take the sample. Nobody would know in advance the identity of those children, so only a genuine improvement in the national literacy level of 7-year olds would signify that the goal had been achieved. 

A current preoccupation of mine is the urgent need for conflict reduction. Coming up with a range of indicators that we could target for world peace, or even regional (such as the Middle East) peace could be done: I envisage an array of indicators, including: numbers of people killed directly by conflict; people seriously maimed; people made homeless; expenditure on weaponry; numbers in armed forces; numbers of schoolbooks inciting hatred; and many others. All these indicators could be debated, then rigorously defined for targeting purposes. This would take time, but would be worth doing, given the payoffs that we would target, such as peace in the world (or region) sustained for at least thirty years. But simpler, and only slightly less ambitious, would be to target nuclear peace: detection of a nuclear explosion is a relatively simple matter: from Wikipedia:

There are many different ways to detect a nuclear detonation, these include seismic, hydroacoustic, and infrasound detection, air sampling, and satellites. They have their own weaknesses and strengths, as well as different utilities. Each has been used separately, but at present the best results occur when data is used in tandem, since the energy caused by an explosion will transfer over to different mediums. Source

I've written about Nuclear Peace Bonds here. I'd hope that, once nuclear peace were targeted, we could then begin the more arduous work on defining exactly what we'd want World Peace Bonds or, say, Middle East Peace Bonds to target. 

Documenting conflict isn't helping

Author and Middle East correspondent, Charles Glass, writes about the current conflict in Lebanon:  

I hear and sometimes see this war, but I’m not covering it. What good would it do? You, dear reader, don’t give a damn. Nor do the Israeli invaders, their American enablers or Hizbullah’s aspiring martyrs. ...Would anything I write compel the arms dealers and ultra-high-tech digital warfare providers to deprive their managers and shareholders of the profits accruing from their wizard new methods of taking human life? Like the rest of Lebanon, I wake in the night at the sound of every loud bang, unsure whether it is thunder, an Israeli naval shell, a drone explosion or a jet dropping a two-thousand-pound bomb to destroy an entire city block. Diary: Beirut, now and then, Charles Glass, 'London Review of Books', 23 April 2026

It's a sad fact that writing about conflicts, and even showing gruesome videos, does little to stop them. Such documentation cannot oppose the formidable coalition of 'warfare providers' on the other side: the arms merchants, the ideologues, the religious zealots and all their corrupt or gullible hangers-on. Most of us don't want any of that. But the politicians' relentless focus on the short term means that ceasefires and truces are merely pauses in the action that allow parties to stoke resentments and re-arm. A lasting peace is more likely to be a just peace, and we need to create a constituency that is rewarded for achieving it. 

World Peace Bonds, or a variant of more modest focus, could be the solution. They would reward a sustained absence of conflict: I suggest a minimum period of thirty years. This long-term focus would encourage investors in the bonds to research, experiment and refine approaches to ending conflict. Such activities would probably include sparing the next generation the neuroses and resentments of their parents - something that good people are doing nowadays (see here, for example), but with a pitifully limited  command of resources. A bond regime would channel funding and expertise into the most promising of these activities. If financed by philanthropists, with contributions from NGOs and the public, it could bypass politicians whose narrow short-termism does much to keep conflict going. 

World peace is an ambitious goal, about which I have written here, with my book on the subject available here (downloads are free of charge). More modest goals about which I have also written include Middle East Peace Bonds and Nuclear Peace Bonds.