Arguments on both sides

There are two things you can always say if having dosed off in a meeting at work and you're nudged awake to find people staring at you, waiting for your contribution. One is "it's not black or white, it's a continuum". The other is "there are arguments on both sides".

Reading about subjects like low-carb diets, or medications intended to treat psychiatric conditions of, of course, climate change, I'm struck not so much by the controversies and seemingly valid arguments on both sides of fundamental questions, but by the absence of systems that would impartially encourage accurate, definitive resolution of the fundamental problems. So much about the way we deal with major challenges is now about defending positions, rather than looking for truth. One would hope that the arc of history combined with Darwinian processes would tend toward the settling of arguments as to whether, say, low-carb diets are helpful or harmful. We often assume that something like the scientific paradigm will inevitably resolve these issues. Perhaps it will, but there are problems with this. First, that the defending of entrenched, but harmful, wrong positions adds to the sum of human misery, perhaps on a large scale over a long time. Second, that we may reach tipping points, beyond which even if the right side eventually wins the argument against entrenched opposition, it's too late or costly to change the rate at which the damage is being done.


If there is significant wealth or status - individual or collective - or control at stake, we can be sure that there will be people virulently defending at least two sides of a policy discussion. Sometimes these sides and their biases are easy to identify: big pharma, big oil. Sometimes not: government agencies, non-governmental organizations of every sort. In many instances these bodies will genuinely believe in their case, in others, they won't.

But it doesn't really matter. The point is that, for many policy decisions, the stakes for society are too high for the debate to be determined by interest groups or ideologues, and their paid mouthpieces.We need some way of making policy that is independent of vested interests.

That's where focusing on outcomes - rather than supposed means of achieving them - becomes important. Under a Social Policy Bond regime, policymakers wouldn't start out weighing the arguments for, or against, say, doing something about climate change or whether people should eat more fat and less sugar. They would instead determine which broad outcomes we want to see. And these outcomes would be goals that are meaningful to ordinary citizens, who could therefore participate in the policymaking process. It would be up to bondholders to work out whether the supposed means of achieving society's goals entail favouring one interest group or another, or neither. Their motivation would be to achieve society's targeted goal at minimum cost and as quickly as possible. The most efficient bondholders will be rewarded the most, and it is they, acting in their own self-interest to establish as best they can, impartially, the actual scientific relationships that will advance them most cost-effectively on the road to maximising not only their own profits, but also society's well-being. Impartiality and truth-seeking, motivation and efficiency: these are all built into the very structure of a Social Policy Bond regime.

Unfortunately, the lack of uptake of the Social Policy Bond principle, after it has been in the public arena for 25 years, could be interpreted as a symptom of the same problem: the power of vested interests to resist anything that could threaten their position.

GDP and war

Theordore Dalrymple puts it succinctly:

An increased GDP, however distributed, is perfectly compatible with a deteriorated, even much deteriorated, way of life: and, presumably, a lowering of GDP is compatible with an improved, even a much improved, way of life. Of GDP and happiness, 'Library of Law and Liberty', 2 January

Unfortunately, in the absence of any coherent other targets, increasing Gross Domestic Product (or GDP per capita) become the de facto objective of most democratic governments.  But, as an end in itself, GDP has numerous flaws. Its targeting institutionalises our confusion between ends and means. Economic growth should not be end in itself. At best, it is a means towards certain ends. Growth in GDP implies only a growth in economic activity. It does not distinguish between helpful and harmful economic activity. It puts no value on any activity that bypasses the monetary economy. So it ignores leisure time, the environment, crime, health, and other contributors to well-being that are meaningful, or even essential, to natural persons.

We urgently need goals that are far less randomly tied to human and environmental well-being. I make some tentative suggestions in my book and on SocialGoals.com. Hand-in-hand with meaningful targets goes a sensible way of achieving them. Our current systems are failing in both respects, and the failures are becoming too spectacular to ignore for much longer. In these increasingly dire circumstances, Social Policy Bonds could be an answer. Under a bond regime, policymaking would be something with which ordinary people could engage. The bonds would target meaningful goals, with which we could all identify. These goals would be ends - targets inextricably linked to well-being - rather than real or supposed means towards achieving them. The bonds would inject the market's incentives and efficiencies into the achievement of our goals. And because they reward the achievement of our goals, rather than activities, they do not rely on our knowing how our ends are to be achieved or who will achieve them. This means that we can target problems, like war, that we have no idea (yet) how to solve.

One thing seems certain: however remote a World Peace Bond regime seems now, a world without war within our current, corrupt, haphazard system, is even less likely.

We need to talk about outcomes. Oh, and the future of this blog.

Discussing the 'intellectual viability' of TED talks, Benjamin Bratton concludes: 

At a societal level, the bottom line is if we invest in things that make us feel good but which don't work, and don't invest in things that don't make us feel good but which may solve problems, then our fate is that it will just get harder to feel good about not solving problems. We need to talk about TED, Benjamin Bratton, 'The Guardian', 30 December

Exactly. To put it another way: we need to talk about outcomes.... Rather than how advocates for particular policies perform, or institutional structures, or glamorous projects, or the short-term financial interests of private- and public-sector agencies. Unfortunately our entire political system, and the complexity of society, have allowed policymakers to get away with looking after the interests of corporations and other favoured bodies, rather than the ordinary people they are supposed to represent.

Social Policy Bonds would see policymaking start from first principles: what do we actually want to achieve?, and then reward people for actually achieving our goals, rather than merely for turning up to work for organizations whose names suggest they want to achieve these goals but are far more concerned with their own self-perpetuation.
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Is there anyone actually out there? This blog has been going for nine years now, and recent months have seen zero comments posted. Viewer numbers according to Google rarely go into three figures and Social Policy Bonds, though they have had some media attention in recent years, aren't really advancing in ways that encourage me to continue with this blog. That said, perhaps there are readers via RSS or on mobile platforms whose views don't register with Google. If you have an opinion on the future of this blog one way or the other, I'd be grateful if you get in touch. You can email me directly and pseudonymously if you prefer, via the links on this page: http://socialgoals.com/blog-contact-me.html. Thanks.

The case for non-ideological policymaking

At the end of a long review of the recent book US Federal Reserve Board ex-chairman Alan Greenspan, Robert Solow writes:

The Alan Greenspan I admired was a pragmatic central banker who was able to believe both the data and his eyes and to ignore the people who already knew the answer without looking. The author of this book makes a show of both, but not really. His eyes are too often closed and he seems to be listening to another voice, with quite conventional opinions, coming from somewhere stage right. Alan Greenspan Is Still Trying to Justify His Bad Decisions: What the maestro doesn't understand, Robert M Solow, 'New Republic', 16 December

If you are making policy, subscribing to an ideology is something of a cop-out, but very tempting all the same. Enormous quantities of data available to policymakers match the increasing complexity of our society and environment. As individuals, we cannot deal with these phenomena. In the face of so much complexity, it is so much simpler just go with our prejudices. That’s one reason we ought to subordinate policy not to ideology, but to outcomes. And that applies to any social or environmental problem with multiple causes and where a multiplicity of solutions need to be tried, refined and either terminated or promoted. In the developed world, most policy issues are that complex - the goals of monetary policy included.

Social Policy Bonds target explicit, transparent and meaningful goals, and they make rewards contingent on achieving those goals. By contracting out the achievement of social goals to the market, they maximise the efficient use of our scarce resources. A government that targets social goals, clearly and publicly, would have little use for the sort of ideologically driven policies propagated by Mr Greenspan. Monetary policy, under a Social Policy Bond regime, would instead be one means of achieving agreed social goals, rather than a way of confirming existing (and quite peculiar) prejudices in the mind of a single individual, however smart.

Transcending institutional decay

I won't discuss Professor Francis Fukuyama's long piece on The decay of American political institutions in detail. I think that the problem he discusses - the divergence of politicians from the electorate - applies to most of the western democracies, though the specific causes differ. The essay does confirm to me that any policymaking that does not reward explicit, verifiable outcomes, is doomed to fail. Even if the proponents of a policy are well-meaning, programmes that focus on institutions, structures, activities, inputs or outputs will inevitably be gamed or manipulated, especially at the national (or supra-national) level.

So, when it comes to bribery and corruption: 

The law bans only the market transaction, not the exchange of favors. The latter is what the American lobbying industry is built around. ...
The Decay of American Political Institutions, Francis Fukuyama, 'The American Interest', 8 December

Exchange of favours is only one of the myriad ways in which political institutions decay, but it is representative. 

Pluralist theory holds that the aggregation of all these groups contending with one another constitutes a democratic public interest. But due [sic] to the intrinsic over-representation of narrow interests, they are instead more likely to undermine the possibility that representative democracy will express a true public interest. 

'[T]hey' here refers to the US public sector trade unions, but it could stand for any interest group. 

There is a further problem with interest groups and the pluralist view that sees public interest as nothing more than the aggregation of individual private interests: It undermines the possibility of deliberation and ignores the ways in which individual preferences are shaped by dialogue and communication.

Quite so. It also crowds out the likelihood that people will think beyond their identity as members of their group. Perhaps more seriously, it also takes existing ways of doing things as a given, which is almost a definition of decay.

The answer? I think we need to re-orientate policy debate around outcomes; broad, meaningful outcomes that will engage ordinary people in the shaping of individual preferences 'by dialogue and communication'. Arcane legalistic discussion about structures and funding excludes people who aren't lawyers, politicians, lobbyists or academics, but that is the system we have today. If we could instead talk about outcomes - such as universal literacy, or reduced crime rates, or better health - then we could do so in debates that people can understand and in which we can participate.

Social Policy Bonds would allow the targeting of broad outcomes, whose achievement would transcend, in both time and purview, the compass of existing institutions and interest groups. Current ways of addressing war, or 'defence', say, focus almost exclusively on military spending or on treaties and coalition-building that do little to discourage war itself. Our current system doesn't supply meaningful incentives to create a world in which violent political conflict comes to an end. 

That is where a Social Policy Bond regime could enter the picture. For more, see this short article, or this longer one, both on the SocialGoals.com website.

Targeting well-being

Unfortunately the industry that has mushroomed around type 2 diabetes measures success in approvals for new drugs,  revenue earned, and money raised, not in suffering avoided or lives saved. Sugar Nation, Jeff O'Connell, 2011

It's the same at the level of national and international government. In the absence of coherent, explicit, policy goals that have been debated openly and bought into, we have accepted that corporate goals and a motley array of vague indicators, such as GDP per capita, or economic 'growth' as our default objectives. There might have been a strong correlation between the aggregation of such goals and societal well-being in the past, the society was less interlinked, the negative impacts of economic activity were less significant, less well known, or easier to escape. But for today? It's not good enough.

We need not only to target explicitly, broad indicators that are inextricably linked to social and environmental well-being; we need also to discuss them, and to engage the public with them so that, while we might not all agree on society's priorities, we can buy into them, and attempt to change them within a coherent and inclusive policymaking environment.

In short, we need to target outcomes; outcomes that are meaningful to ordinary people. That's where Social Policy Bonds can enter the picture. Yes, they channel market forces into the achievement of social outcomes - which makes them efficient. But as important is that they focus our boundless human ingenuity on things that matter: all the broad components that make up social and environmental well-being. We can do better nowadays than to hope that 'success' will appear as a by-product of the targets pursued by a motley array of corporations, politicians and other interest groups.

I've been updating the SocialGoals.com website. Comments or suggestions, on this or any other aspect of Social Policy Bonds, are welcomed.

You can't prove it

Climate sceptics are finding it ever harder to persuade the public that the climate isn't changing. So now some are turning to a more last-ditch line of attack: even if climate change is happening, it's not worth worrying about. Causes for climate concern, 'New Scientist', dated 7-13 December

If you're a politician, there's a genuine problem with climate change, as with many other environmental and social concerns: you can't do anything until cause and effect have been proven; and sometimes not even then. And that's supposing that you want to do something. When you don't really want to do anything, then obviously nothing will be done, except maybe you will perform some elaborate, expensive gestures, like participating in conferences, subsidising so-called green technologies (for a few years), and transferring token amounts of cash from taxpayers in the rich countries to rich people in the poor countries. Meantime, the challenge goes unmet.

Climate Stability Bonds could be the answer. Governments - or whoever actually wants to deal with climate change - could issue them without having to prove that climate change is actually happening, without knowing what's causing it, and without knowing what the best solution to it is going to be. The bond issuers would, in effect, be contracting out the discovery of what's happening, and how best to deal with it, to the market. And the market would have every incentive to be impartial and efficient about every aspect of the climate change challenge. That's a total contrast to the current policymaking environment, in which powerful interests can influence the interpretation and presentation of the science and policymaking. It's just not a rational way of dealing with the problem and it just might be leading us all into catastrophe.

Damn foolish things

Thomas Laqueur reviews The Sleepwalkers: How Europe Went to War in 1914, by Christopher Clark:

Many actors (the crowned heads of Europe, military men, diplomats, politicians and others), each with their own objectives, acting as rationally and irrationally as humans are wont to act, made decisions that foreclosed on others and collectively led the world into an unimaginable and un-imaged war. Some damn foolish thing, Thomas Laqueur, 'London Review of Books', dated 5 December

Millions of ordinary people had a vital interest in World War One not happening. Even when multiplied by what might have been thought a very low probability of its actually occurring, this should have represented a strong coalition in favour of peace. But there was no way this overwhelming wish for peace could have expressed itself. In those days the disconnect between policymakers and ordinary people was even wider than it is now. Calamitously, war broke out as the accumulated result of the perceived short-term interests of a tiny group of monarchs, aristocrats and generals.

The situation hasn't changed that much. Short-term goals predominate still amongst politicians and the military. Corporations have more power than monarchs and aristocrats these days, but are at least as adept at ignoring or manipulating public opinion. To paraphrase Otto von Bismarck: it's no stretch to imagine a catastrophic war breaking out nowadays over some damn fool thing in the East China Sea, or the Korean peninsular or the India/Pakistan border or ....

One way of making effective our wish to avoid another calamity would be to issue Conflict Reduction Bonds. Governments, philanthropists, NGOs or ordinary members of the public could all contribute to the funding of such bonds, which would be redeemable only after a sustained period of no major political conflict. In so doing, we would monetise our wish for peace, and act as a counterweight to the forces that, deliberately or not, propel countries into catastrophic wars or civil wars. There's nothing inevitable about war: it happens because people react, if not rationally, at least humanly, to the incentives on offer. Conflict Reduction Bonds, by rewarding people for achieving peace, could tip the scales in the other direction, and lead to what must surely be one of mankind's most noble goals: the ending, for all time, of war.

The great divergence, continued

It's not just that our western democratic governments stand apart from ordinary citizens, but that the gap grows every larger. Jim Newell writes about a US Senator, Jim DeMint, who is retiring to head up a think tank:

The whole curious DeMint affair bespeaks the ongoing shift of power in Washington away from the people’s business—and toward the ideological donor class....  At places like CAP, AEI, Heritage, and many of the other approximately 1,812 American think tanks, policy studies are still part of the operation, but their most vital public role is to act as partisan hacks for whichever side of the major-party duopoly they’re associated with. And the conservative think tanks are now reliable dispensers of ideological discipline on the right: they do exactly what is best in the short term for the Republican Party at all times and punish anyone who dissents. Good Enough for Government: WorkConservatism in the tank, Jim Newell, 'The Baffler', No. 23

Perhaps this sort of patronage-based corruption is built into any sort of policymaking system with which ordinary people cannot identify, whether that happens because government is too big, too remote, or its machinations too obscure. A government acting on a large scale need not necessarily be remote from or unconcerned with the well-being of its citizens. There are essential projects that require such a government: sanitation for example, or other major infrastructural works. But it does seem to be inevitable that interest groups, including big business and government agencies, interpose themselves between people and their government taking advantage of public funds in ways that are damaging to the public interest, self-enriching and therefore - because money buys votes - self-entrenching. Once that happens, elections become ever less meaningful; ordinary people become alienated from the political process and cynical.  Or worse.

One way of reconnecting people with the policymaking process might be direct democracy; frequent referenda along Swiss lines. Another might be to become familiar with expressing all policy goals in terms of outcomes that are meaningful to ordinary people, and to reward achievement of these outcomes, whoever achieves them and only once they have been achieved and sustained. By doing this, we could avoid today's corrupt favouritism of corporations or government bodies and de-emphasise the roles of political parties and their supporting donors and ideologues. Worthy though these aims might be in themselves, an outcome-based regime would, more positively, stimulate diverse, adaptive solutions to our urgent and large-scale social and environmental problems.

That's where Social Policy Bonds could enter the picture. They offer a way of achieving outcomes that rewards efficiency in achieving social goals above all other considerations. They inject market incentives into the solution of our social problems, impartially, with cost-effectiveness being the sole criterion for one approach being rewarded rather than another. A bond regime, because it would be efficient at achieveing social goals, and because its aims and means would be comprehensible to people other than politicians, bureaucrats, corporate lobbyists and think tank ideologues, could close the ever-widening gap between citizens and their government.

The great divergence

Only 40% of citizens in the mostly-rich countries of the Organisation for Economic Co-operation and Development expressed confidence in their national governments in 2012, down five percentage points from 2007. Eroding trust in government, 'The Economist', 15 November

 Brazilian Roberto Unger is a leading political philosopher and an advocate of progressive politics.He has taught at Harvard Law School for about 40 years and US President Barack Obama was one of his students in the 1980s. "There is no project in the United States responsive to the needs and aspirations of the broad working class majority of the country," said Mr Unger. Obama's law professor on his failures as president, Quote from BBC 'Hardtalk' programme, 15 November

It's not really surprising. Our governments have every incentive to respond more to corporate donors than to ordinary people. Big business and government have interests that grow ever further apart from those of the public and small businesses. They can get away with this because policymaking focuses on funding, institutional structures, legalistic debate and arguments about inputs, outputs or activities. Everything except meaningful outcomes in fact.

There is another way. A Social Policy Bond regime would subordinate all debate and decison-making to outcomes: what social and environmental goals should we be aiming for, and how much are they worth? These answers to these fundamental questions, ignored by the current system, would inform every project, every initiative and activity, launched under a bond regime. Apart from the incentives and efficiencies that the market for Social Policy Bonds would stimulate, the aims of the bonds would be explicit and clear to everybody. People might disagree about their relative priority, but they would know exactly what their government was trying to accomplish. Ordinary people could participate in policymaking and would engage with the inevitable trade-offs that have to be made when it comes to allocating society's scarce resources.

As a result, and crucially, we'd buy in to policy goals; perhaps not wholeheartedly but certainly more than we do today. Without such buy in, it's difficult to see how our governments, with their priorities so different from ours, are ever going to engage with the crucial social and environmental problems of our time, let alone solve them.