29 October 2011

Matt Taibbi gets it

Matt Taibbi writes:
Our world isn't about ideology anymore. It's about complexity. We live in a complex bureaucratic state with complex laws and complex business practices, and the few organizations with the corporate willpower to master these complexities will inevitably own the political power. Griftopia
This is something I have been saying for years (here, here, here and here, for examples). Complexity has had the effect of excluding ordinary people from the policymaking process. My suggestion is to reformulate policy in terms of outcomes that are meaningful to ordinary people - as distinct from corporations, government bodies or billionaires. Social Policy Bonds would do that, and they would channel market forces into the achievement of these outcomes.

The logical end-point of the alternative - policy made by the rich for the rich - is being played out before us. But even if the political process weren't being subverted by the powerful, our society is so complex that the effects of even well-intentioned policy measures can rarely be identified. Typically, if such identification is attempted at all (which it hardly ever is) there are too many variables, linkages, unquantifiables and time lags to get a handle on cause and effect. As well, there are very few incentives to get policy right. A policy's impact horizon usually extends beyond politicians' time in office, and few bureaucrats work within a system that rewards achievement rather than activity.

A Social Policy Bond regime could change all that. It would create a coalition of people and organizations whose interests were exactly congruent with those of ordinary people, and who would be motivated to monitor continuously how efficient and effective were their initiatives.

17 October 2011

Social Policy Bonds: absurd (at first sight)

Mark Schmitt, reviewing The Submerged State: How Invisible Government Policies Undermine American Democracy by Suzanne Mettler, writes:
We often hope that citizens will be able to deliberate thoughtfully about policy choices, but that is impossible if the policies are shrouded in complexity and in blurred responsibility. ... It is time for a new era of reinventing government, in which the goal is to establish certain clear, unambiguous public functions, and put energy and resources behind them — to row, and not merely to steer. Row! Row!, Mark Schmitt, 'The New Republic', 4 October
Exactly. This has been my theme for two decades now. Even if you do not think Social Policy Bonds are worth trying, you must surely agree with Mr Schmitt and myself that we, the public, cannot engage with current policymaking because of its complexity, and that it is time for reinventing government in such a way as to "establish certain clear, unambiguous" outcomes. Ok, I have substituted 'outcomes' for Mr Schmitt's "functions" because to me it is outcomes rather than processes that are important, and I think Mr Schmitt would agree with me.

So what about Social Policy Bonds? At first sight, I will admit that they do seem radical. They are likely to mean that the private sector tries to perform broad functions currently undertaken by government: the achievement of health, law and order, or environmental goals, for example. There are dangers in that, some of which I address in my book, others of which might not be anticipated. So I actually don't advocate that Social Policy Bonds be deployed widely. Not immediately, anyway. I do advocate that they be discussed, tried, refined, tried again, and then, perhaps, issued to solve our most urgent national and global problems.

The current system is failing us. Social Policy Bonds would represent a discontinuity in the way we approach policy. They are untried and untested. They use right-wing methods to achieve goals usually articulated by the so-called left. Yes, at first sight, they do seem absurd. But in defence of the Social Policy Bond concept, I call Albert Einstein, who said: “If at first, an idea isn't absurd, then there is no hope for it”.

07 October 2011

Government by distraction

Brendan O'Neill writes:
The otherworldly nature of [UK] party conferences is a consequence of some huge political shifts in recent years. It is the hollowing-out of the mainstream parties, their speedy and profound jettisoning of members and grassroots supporters and their subsequent disconnection from the public, which creates today’s strange and alien political culture. Meet the PC oligarchy that now rules Britain, 'Spiked', 6 October
Exactly so. At a time when we need maximum public participation and buy-in to policymaking, we have a system that is guaranteed to alienate ordinary people. Much can be explained by our politicians' relentless focus on things that are irrelevant to normal citizens: gestures, sound-bites, institutional structures, prestige projects, quirks of personality, Mickey-Mouse micro-targets, and many other distractions. We lose sight of the big issues: facts like unsustainable levels of government borrowing or the proliferation of nuclear weapons. Who benefits from government by smoke-and-mirrors? Those who can afford to pay think-tanks, lawyers and lobbyists to follow and influence the policymaking process. That means billionaires, big corporations, trade unions and other interest groups - including government agencies. It doesn't mean ordinary people.

Recasting policy in terms of outcomes could close the ever-widening gap between politicians and the people they are supposed to represent. Social Policy Bonds would refocus policy onto outcomes that are meaningful to ordinary people, who would be better able to understand and participate in policymaking. A bond regime would reward only those who help achieve our social and environmental goals. All government-financed initiatives would be undertaken with the aim of achieving these goals as efficiently as possible. And, in stark contrast to the current system, 'creative destruction' would operate: failed projects would be terminated.

06 October 2011

Five jumbo jet disasters a year in the UK

Despite clear improvements in road safety, the annual cost to the UK economy of all [road] deaths and injuries remains significant at around £13 billion (i.e. around 1% of GDP), with damage-only accidents estimated to cost a further £5 billion. Source (pdf), quoted on Man's Greatest Mistake
A shark attack anywhere in the world means instant headlines, as does a plane crash or a terrorist atrocity that kills a few dozen civilians. Rightly so, perhaps, but then we - or rather, policymakers - should make a lot more of the everyday killing that occurs on our roads. By some measures, the UK has the safest roads in Europe but even so, 1850 people were killed in 2010. Road accidents are so routine, or so difficult to film for televistion, they don't merit much in the way of media attention. Policymakers should do better. The most cost-effective way of saving lives would be to allocate funds across all life-threatening causes, however mundane and unspectacular.

Social Policy Bonds have amongst their advantages that of being able to target such broad goals as longevity. They reward outcomes, not activities. Under the current system, funding for activities that are supposed to improve longevity is allocated according to a range of often spurious criteria, such as media attention, past levels of funding, or the identity of likely victims. A Social Policy Bond regime would allow policymakers to target all threats to longevity (however defined) impartially. This cannot be done under the current system, as funding is allocated to bodies that have little interest and incentive to consider the overall health of the nation. Funding goes to bodies according to criteria that may have little to do with outcomes. It's funding as if outcomes - real outcomes that are meaningful to ordinary people - don't matter.