The biggest surrogate indicator of them all

A headline from the current Economist: 

Do vaccine mandates actually work? The Canadian and European experiences suggest they do

How does the Economist define 'work'? In its view, the mandates work in that more people are or 'nudged' or coerced into being jabbed. It's unfortunate, then, that the link between proportion of the population jabbed and health of that population is tenuous. (See for instance here, here and here.)

My approach is different. I think that, for a health intervention to 'work', it must improve people's health, as shown by measurable, meaningful, objectively verifiable health improvements. Definitely not surrogate indicators, such as cholesterol levels or numbers of people receiving jabs. 

My starting point would be to define and reward the achievement of society's health goal, so that the structures and activities of the sectors that support that goal would be entirely subordinated to that goal rather than, as now, the other way round. On a national level, physical health could be defined as a range of long-term targets, all of which would have to be reached and sustained before we can say we have achieved our goal, at which point Social Policy Bonds targeting health could be redeemed. My suggestion is that our goal would include such targets as: longevity, Quality Adjusted Life Years, and infant mortality. There would be others, to be decided by experts in consultation with ordinary citizens.

That would be the first step. The second would be to put in place a system whereby people are rewarded for bringing about such improvements in health. Not for  jabbing, screening, or curing or treating disease, nor for selling drugs or health insurance. Those are indirect means to an end, rather than ends in themselves and the results are lamentable: pills that are no better than placebo (see here and here). Or incentives to over-diagnose and over-treat. Or to falsify or otherwise manipulate the results of drug trials.

Applying the Social Policy Bond concept to health would change all that. All the activity they stimulate and reward would be entirely subordinate to society's long-term health goal. There would be a market for the bonds, but it would be society's servant, not its master. The Social Policy Bond principle uses the market as a means to society's goals. It doesn't view the market as an end in itself. Under a Health Bond regime, the the end that the market serves under a bond regime will be society's health, as defined and targeted by society itself. The goals of those working in any field impinging on society's health would be exactly congruent with those of ordinary citizens: to improve society's health as quickly and efficiently as possible. I have described how applying the Social Policy Bond idea to health would work here, or in a lot more detail here.

Cutting out the middlepersons

Charles Hugh Smith writes: 

Maybe it's time to eliminate the politicians who soak up hundreds of millions of dollars in campaign contributions from corporations and the super-wealthy and just elect Pfizer, Merck, Amazon, General Dynamics, etc. directly. Since corporate lobbyists write most of the legislation anyway, why not cut out the intermediaries in the process?

The super-wealthy buy political power via Political Action Committees (PACs and Super-PACs), think tanks and philanthro-capitalist foundations (Gates Foundation, et al.). Now that it takes tens of millions of dollars to buy the conventional "winning campaign," the political class spends much of its time fund-raising, i.e. lavishing kisses on the derrieres of corporations and the super-wealthy, implicitly promising to do their bidding better than the alternative candidates that the corporations and super-wealthy could buy. 

There are several plausible explanations for why this has happened. Mostly, I think, it's because society does not have clear, verifiable broad goals on which our politicians and public servants are judged. Society has become so complex that the relationships between government activity and outcomes are difficult to identify, and it would actually be unfair to judge an administration according to whether broad, long-term social and environmental goals have been achieved. But what governments can do, and should be doing, is articulating society's goals, and raising the revenue for their achievement. Democratic governments can do these quite well, while actually achieving complex, long-term goals is often beyond them.

As this summary of At What Cost by Nicholas Freudenberg has described:

[G]lobalization, financial speculation, monopolies, and control of science and technology have enhanced the ability of corporations and their allies to overwhelm influences of government, family, community, and faith. As corporations manipulate demand through skillful marketing and veto the choices that undermine their bottom line, free consumer choice has all but disappeared, and with it, the personal protections guarding our collective health. At What Cost argues that the world created by 21st-century capitalism is simply not fit to solve our most serious public health problems, from climate change to opioid addiction.

 So much for the diagnosis. What can be done? My suggestion is two-fold: 

• Articulate society's broad goals, and
• Supply market incentives into the achievement of these goals. 

Explicit, verifiable goals that are meaningful to ordinary people rarely feature in today's politics, but they should. Rather than let the activities of large organisations be dictated by those organisations, we ought to embed these bodies in a system that rewards the achievement of society's goals. In a Social Policy Bond regime, such goals need not be achievable within the time horizons of governments, political parties or even the lifespan of any individual. So, for instance, we could target long-term improvements in the health of a country's population in a way that rewards every initiative that helps achieve that goal. 

The other essential element of a bond regime is the injection of market incentives into the achievement of social goals. In economic theory, and in actual practice, all the evidence shows that markets are the most efficient way of allocating society's scarce resources. For obvious reasons markets have a sullied reputation currently; too often they've been invoked to justify behaviour that has, in fact, undermined free, competitive markets, leading to the extreme industry concentration that Mr Freudenberg and others have described. That would not happen in a Social Policy Bond regime, unless such concentration were the most efficient way of achieving our goals. More likely, we should see a protean coalition of bodies, all co-operating with the aim of achieving our social and environmental goals as cost-effectively as possible: this would represent a new type of organsation, one whose every activity would be subordinated to society's wishes.

Regulatory capture: the perversion of our public bodies

 James Lyons-Weiler writes about regulatory capture in the US:

When the airline industry has a disaster, it goes under review by the National Transportation Safety Board. When corporations dump a toxic brew of chemicals into ground surface waters, they are supposed to answer to the EPA. When drug companies’ products - drugs and vaccines - cause more health problems than they prevent or cure, they are supposed to be subject to recall by the FDA.

When regulatory agencies become dominated by the corporations they are supposed to control, that agency has been captured by the industry. The public interest becomes a lower priority than the bidding of the will of the industry, and the industry flourishes - most of the time at the cost of human health. Regulatory capture is killing us, and we are two steps away from the totalitarian fascist Regulatory States of America, James Lyons-Weiler, 24 December

Of course, this is not just a US phenomenon, and perhaps there is an inevitabililty about it, even in the absence of some coherent conspiracy influencing each or all regulatory agencies. People are paid to turn up at the office, and at some point, perhaps years or decades after the founding of the organisation for which they work, the aggregated individual incentives of employees to keep their job and to expand or at least maintain their remit, supplant the stated objectives of the organisation. Then conflict arises between - and within - the employees. Do they stay faithful to the ideals that drove them to take on the job and the stated goals of the organisation? Or do they take the safer option, put their own priorities and those of their family first? Unfortunately, as organisations, be they public- or private-sector, the conflict grows worse with time. In the private sector and in theory, competition should see older, scelerotic corporations die, to be replaced by more nimble upstarts. But regulatory capture means larger corporations have more in common with larger public agencies: neither wishes to rock the boat. The result is a slew of regulations that stifle competition and cement in place the bigger companies and their outdated and anti-competitive ways of doing business. The losers are the public.

There might be ways in the current enviroinment to prevent regulatory capture, but if so they are piecemeal and ineffectual. We are seeing the results everywhere: extreme polarisation in politics, in the academic world; an extreme reluctance by salaried professionals - who owe their livelhioods to the ossified regulatory framework within which they work - to question the prevailing narrative, whether it concerns public health measures, identity politics, climate change or just about anything else. Too many people have a vested interest in avoiding necessary reform. 

Short of revolution, which usually doesn't lead to improved social or environmental well-being, what can be done? Even western-style democratic elections change nothing. The identity of the politicians might change, but their commitment to a scelerotic system doesn't. 

I propose two major steps: 

First: we refine the mission statements and objectives of existing government agencies. We should aim to express their goals in verifiable, quantifiable terms that are meaningful to ordinary people. 

Second: we should inject incentives into the achievement of such goals. My suggestion is that we issue Social Policy Bonds. These bonds would reward the achievement of each organisation's stated goals, regardless of who achieves them and regardless of how they are achieved. 

These are both radical suggestions. If implemented they are likely to bring about a new sort of organisation: one of protean structure and composition, whose every activity would be devoted to achieving its targeted goals as quickly and efficiently as possible. The immediate replacement of our current, corrupted public bodies with those solely aimed at improving people's well-being is highly unlikely to happen. But if Social Policy Bonds were to be issued, whether by groups of interested persons or government, then a transition from the current system to a bond regime is feasible. I outline how that might occur in chapter 4 of my book.

Incentives and health

The first step is to give up the illusion that the primary purpose of modern medical research is to improve Americans’ health most effectively and efficiently. In our opinion, the primary purpose of commercially funded clinical research is to maximize financial return on investment, not health. John Abramson, Harvard Medical School, quoted by Robert F Kennedy Jr in The Real Anthony Fauci, November 2021

Government funding for health innovation is subsidising drug industry profits while providing little public health benefit, a report from leading health economists says. Most new drugs are not meeting public needs while economic and regulatory incentives have created a “highly inefficient pharmaceutical sector” which spends more on marketing than research and development, and focuses the research it does do on profits, the report explains. Drug companies are incentivised to profit not to improve health, says report, Melanie Newman, summarising this paper published 16 October 2018

Incentives are crucial. If people have incentives to improve the health of the population, then that is what they will work towards. If they have incentives to increase the short-term profits or revenues or funding of the organisations for which they work, public- or private-sector, then all their activities will be in pursuit of that goal. The dysfunctionality of our healthcare systems begins at the top. There may be vague goals in the form of soundbites or mission statements, but there is no link between them and the incentives on offer.

The Social Policy Bond concept, applied to health, would change that. I have described how they would work here, or in a lot more detail here. Essentially, they would give a coalition of investors incentives to look for and exploit the most efficient approaches to dealing with society's long-term health problems - on a continuing basis. Health would be defined broadly, using some index of which one component could be Quality Adjusted Life Years. And the goal would be long term. The coalition of investors would be a new type of organisation; one whose structure and composition could change over time, but who could profit with the long (perhaps 50-year) lifetime of the bonds by buying bonds, doing whatever they can to advance toward the targeted goal, then selling their bonds at a higher price.

Is organic farming better?

Dan Conable writes, in a letter published in the New Yorker, about his organic grain farming operation:

[T]hough my practices may have a relatively benign impact on my surroundings as compared with conventional farming, their larger environmental impact is not so clear. Controlling weeds without herbicides generally requires more tillage. Turning the soil more frequently means using more diesel fuel per ton of grain, as well as freeing more of the carbon stored in the soil. More important from a climate-change perspective, organic farmers’ reliance on manure as the critical nitrogen source for crops in the grass family (corn, wheat, oats, barley) makes us utterly dependent on animal agriculture. If the world were to feed itself wholly by organic methods, an increase in cattle, pig, and poultry production would be needed to provide the necessary fertilizer—at least until scientists can genetically modify grasses to capture their own nitrogen. But, then, G.M.O.s aren’t organic. Letter from Dan Conable, 'New Yorker', dated 20 December

The sort of life-cycle analyses (LCAs) required to establish the environmental benefits or otherwise of shifts in our behaviour are bedevilled by boundary issues, measurement difficulties and the difficulty of weighting one type of environmental impact against another. They might be better than going on the gut feeling that organic agriculture is 'better' than the conventional kind, or that vegan clothes are better than animal fabrics, rail is better than air travel, solar power is better than coal-fired power stations, etc, but for the making of robust policy LCAs would need to be continually reassessed in the light of our ever-expanding knowledge of the environment, our ever-changing environmental priorities, and our every-changing technological endowment. 

Government policy cannot ever be so responsive nor, probably, can any single organisation - at least not as currently structured. If government were to use life-cycle analysis with the aim of altering our behaviour, it would necessarily do so on the basis of a one-time, limited, and possibly subjective assessment of environmental costs and benefits. It’s not good enough, but even worse would be what we largely have now: environmental policy based on corporate interests, 'what feels right', media stories and the launching of visually appealing initiatives that attract air time but are otherwise useless. These often focus on trendiest problems, of which the current one is climate change, which tends to crowd out other, possibly more urgent crises.

The Social Policy Bond concept as applied to the environment would take a different approach. It would first clarify what environmental goals, national or global, we wish to achieve. Say, for instance, that we wish to preserve the Earth's marine environment. A Social Policy Bond issue that rewarded the sustained achievement of such a goal would generate incentives for bondholders to bring it about at least cost. They might well carry out life-cycle analyses in their attempt to do so. But there is an important difference between the way do they would conduct their research and the way government, or any supra-government body would do so: bondholders have continuous long-term incentives to achieve our goals efficiently. This is likely to mean responding to and stimulating increased knowledge of scientific relationships, and technical advances. Investors might conduct LCAs, but they would do so in ways that optimise the benefit to the marine environment per dollar spent.

Effective environmental policy must take a long-term view and for national or global goals, will need to encourage diverse, adaptive approaches. The environment and our knowledge about it are just too complex for the simplistic 'it feels good', command-and-control approach that, for instance, brands 'organic farming' as good, or plastic shopping bags as bad. Diverse, adaptive approaches to addressing complex problems are precisely the sort of responses that government does very badly. However, government does have crucial roles in articulating society’s environmental goals and in raising the revenue to pay for their achievement: in the democratic countries government performs these functions quite well. But actually achieving society's social and environmental goals is a different matter. Such achievement requires continuous, well-informed and impartial decisions to be made about the allocation of scarce resources. For that purpose, Social Policy Bonds, with their incentives to achieve targeted outcomes efficiently would, I believe, be far better than the current ways in which environmental policy is formulated.
 

For more about applying the Social Policy Bond principle to the environment see here. (For a personal policy paper on organic agriculture, see here.)

Cascading incentives

Dr David Healy, towards the end of a long article entitled The Eclipse of Medical Care, summarises how medical science has been eclipsed: 

1. Clinicians do not have access to clinical trial data on medicines or vaccines.
2. Close to all of the medical literature reporting trial results for on-patent drugs and vaccines is ghostwritten, hyping the benefits and hiding the harms.
3. Clinical trials of these treatments that are negative on their primary or their most common outcomes are often published in prestigious journals as positive.
4. Clinical trials have their harms airbrushed out of ghostwritten publications.
5. Regulators (FDA, Health Canada, MHRA, EMA) do not get to see the full trial data.
6. Regulators approve treatments as working even when more people die on active treatment than on placebo.
7. Regulators approve medicines on the basis of negative studies and agree not to let the wider world know about this.
8. Regulators say nothing when companies publish negative studies as positive and make adverse effects of treatment, including death, vanish.
9. For many trials there are more deaths on active treatment than on placebo, but this does not lead regulators to warn about hazards as to do so would in their stated view deter people from seeking a benefit (even when the benefit is better characterized as a commercial benefit to a company rather than a benefit to the individual in terms of a live saved or a restoration of function).
10. Regulators do not have pharmacovigilance expertise and a variety of factors inhibit them from linking a treatment to a hazard after that treatment comes on the market. 

The Eclipse of Health Care, David Healy, 29 November

This is typical of the sort of corruption that blights so many of our public- and private-sector bodies. How does this happen? Often cited is regulatory capture which occurs when a regulatory agency that is created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate an industry or sector the agency is charged with regulating. But why does that happen? 

I do think that there's been an erosion of trust is western societies, but that is subjective and does not point toward an actionable solution. So I'd like to suggest that, rather than rely on nebulous mission statements to guide our public-sector agencies (or an apparently weak moral compass), we instead focus on the outcomes that society as a whole wishes to achieve. In this example, then, medical care would be subordinate not to the goals of the organisations supposed to supply it, but to the broader and more meaningful goal of the health of society's health. 

Doing so using the Social Policy Bond concept would replace organisations' goals (essentially that of self perpetuation) with those of society. Incentives to improve society's health would cascade downwards from that over-arching goal.These incentives, as under the current system, would largely be financial, but that does not mean that the people responding to them be entirely motivated by greed. Rather, it means that they would find a way of making a living compatible with society's goals, the goals of the bodies for which they work, and ethical behaviour. 

For a short piece on how the Social Policy Bond concept can be applied to health, see here. For a longer treatment, see here.

Complexity provides cover for inefficiency and corruption

Robert Bryce testifies on electric vehicles before the US Congress, House Select Committee on the Climate Crisis. Two brief points from his testimony of 30 June (pdf):

• The average household income for EV [electric vehicle] buyers is about $140,000. That’s roughly two times the U.S. average. And yet, federal EV tax credits force low- and middle-income taxpayers to subsidize the Benz and Beemer crowd.

• Lower-income Americans are facing huge electric rate increases for grid upgrades to accommodate EVs even though they will probably never own one. 

It's a familiar story. Government sees a problem (climate change) and thinks it knows best how to solve it (emission controls, electric vehicles) - or perhaps that's not cynical enough. Maybe the reasoning goes: government identifies a possible problem, then is told how to appear to be solving it by vested interests (big corporations) in exchange for favours (directorships, cash). The problem isn't solved, but the rich do get richer. 

Here's another idea. If the problem is, say, climate change, let's reward people who prevent climate change. If the problem is too much crime let's reward the people who reduce crime. Government doesn't have to take a view on how to solve these problems, or which people are best placed to do so. When it does take such views government adds to the confusion, creating a cover behind which favours can be disbursed without public scrutiny. 

I am suggesting that society's complexity can be, and is, used to disguise inefficiency at best and corruption at worst. The explicit targeting of verifiable outcomes that are meaningful to ordinary people, in the way that Social Policy Bonds do, would be one way in which we could ensure that taxpayer funds are used to benefit everyone, not just an already wealthy elite. When it comes to climate change we need to be very clear what we want to achieve. Most importantly, are we more concerned about the climate, or about the impacts of climate change on human, animal and plant life? Once we are clear about our goals, we can issue Climate Stability Bonds, that reward the achievement of our explicit, verifiable goals. 

As well as clarifying and targeting society's actual goals, rather than the supposed means of achieving them, the Social Policy Bond concept injects the market's incentives into every stage of the processes necessary for their achievement, meaning that more can be done with society's scarce resources.

Self-interest can help the environment

Patrick J. Buchanan points out the similarity of the current COP26 talks, supposedly aimed at addressing climate change, to the Kellogg-Briand Pact of 1928:

On Aug. 27, 1928, 15 High Contracting Parties signed on to renounce war as an instrument of national policy. The signatories that day were the United States, Britain, Germany, Italy, Japan, France, Poland, Belgium, Czechoslovakia, Canada, South Africa, Australia, New Zealand, Ireland and India. Within 15 years, all 15 nations, Ireland alone excepted, were ensnared in the greatest war in history. Like the pledges at the climate summit, the Kellogg-Briand Pact provided for no means of enforcement or sanctions against nations that failed to live up to their commitment.

'No means of enforcement' - true - and no incentives either. It is unfortunate to some degree that money is such a critical driver of behaviour but, if we recognise that climate change and other environmental problems are largely caused by financial incentives, then we can make efforts to withdraw those incentives or, if that's too difficult, offer countervailing incentives that would help offset our environmental depredations. We can do this only when there is an over-arching, inextricable link between the financial incentives we offer and the outcomes we wish to see. It is not simply a case of rewarding behaviour that directly improves the environment. Environmental Policy Bonds, globally backed, would reward such indirect approaches as lobbying governments or paying bad actors to cease their destructive activities. Just as big corporations can manipulate regulations to achieve their ends (including stifling competition), so could bondholders encourage government to strengthen environmental legislation. The alternative - the current approach, frankly - is to say nice things in the full knowledge that our destruction of the environment will continue unimpeded.

An alternative to the blah, blah, blah approach

The current Spectator using figures from Our World in Data, tells us how much 'carbon' the world was emitting at the time of previous climate summits:

1992, Rio  22.44 bn tonnes 

1997, Kyoto  24.19 bn tonnes 

2002, Johannesburg  25.91 bn tonnes 

2009, Copenhagen  31.46 bn tonnes 

2015, Paris  35.21 bn tonnes 

2021, Glasgow  (2019) 36.44 bn tonnes 

Taking greenhouse gases (ghgs) as a whole, more figures from Our World in Data confirm this trend: according to that source global emissions totalled 35.0 bn tonnes in 1990, rising to 49.4 bn tonnes in 2016.

The current Economist tells us that in 1992: 

78% of the world’s primary energy—the stuff used to produce electricity, drive movement and provide heat both for industrial purposes and to warm buildings—came from fossil fuels. By 2019 the total amount of primary energy used had risen by 60%. And the proportion provided by fossil fuels was now 79%. What the Paris agreement of 2015 meant, The Economist, 30 October

The same publication tells us that 1002 coal-fired electricity generating plants are planned or under construction around the world. 

I have been skeptical about ghg emission targets for many years. My thinking is that we need, first of all, to be clear about whether we are more concerned about climate change, or about the impacts of climate change on human, animal and plant life. We should then define exactly what we want to achieve and reward the people who help achieve it, whoever they are and however they do so. We should not assume that cutting back on ghg emissions is either necessary or sufficient to bring about the solution to whatever combination of depredations we deem to be the climate change problem. That is what these summits purport to do. They don't actually do it, as shown by the statisitics above. Nor do they do anything else. In the words of another, more prominent, summit skeptic, they are just so much blah, blah, blah. 

My suggestions for addressing climate change are conceptually quite simple:

• define the problem, and
• reward people for solving it.

Climate Stability Bonds use the market's incentives and efficiencies to channel our limited resources into where they will do most to solve the problem. Were they to be issued with the appropriate backing they would stimulate exploration of diverse, adaptive initiatives with the clear goal of solving the climate change problem as efficiently as possible.

Crypto, Social Policy Bonds, and the climate

My recent post about Decentralized Impact Organizations mentioned Olli Tiainen's proposed pilot DIO to to test the Social Policy Bond concept as applied to climate change. Mr Tiainen's proposal has now been officially published and is available here. The twitter thread on the topic is here.