Thursday, December 31, 2009

Commentary: Incentives for a Better Decade

KENNEWICK, WASHINGTON - There's supposed to be a certain significance to this, my last blog entry of a decade. That might mean something had I been actively blogging for a decade, but while I have a history of commentary material dating back more than twenty years, this blog has existed for not much more than a single year. And, considering that the way we count decades today the first decade must have only had nine years (1 CE to 9 CE--CE is "common era," the secular term for AD or Anno Domini which had been used for most of two millennia), it seems to me that it could be argued that next year is really the time to present a retrospective anyway. Some things just aren't worth fighting; I like the metric system but I'm never going to convince even Canadian railways to convert their mileposts to kilometer posts.

More importantly, my philosophy in this blog has been to not do "me too" commentaries making points widely made elsewhere. Most commentaries out there capture my thoughts about the decade quite well--about the only good things that happened the whole ten years were related to the Internet and the election of a African-American as President of the United States. Pretty much everything else has been awful, broadly speaking. Just think back to what it was like to fly on a commercial airline in 1999, to listen to commercial radio, or even use the postal service.

Where I diverge from the majority of the commentaries is in their belief that the new decade will usher in substantial improvements. Just as defining the end of the decade as today is entirely arbitrary, this belief that things will almost certainly improve strikes me as extremely arbitrary. In order for macro, societal-level things to change permanently, incentive structures that help shape human behavior have to be changed.

Has the financial system in North America changed to favor longer-term thinking in business? No. Has the banking system in North America changed to encourage more loans to small business or individual entrepreneurs? Perhaps temporarily, but not in any fundamental way. Have business that are "too big to fail" been broken up or restructured so that they are no longer in that category? No. Has anything been done to encourage local media instead of ever-centralized media control? No. Have the world's nations agreed to provide incentives for sustainability? No. Have governments done anything to encourage more sustainable living by individuals? Only in a handful of municipalities in North America, not at any broad level. I could go on, but probably few people are even still reading this paragraph.

The coming decade could well be a excellent era that people will look upon as a mini-renaissance. For that to happen, though, there has to be fundamental change, not just hope for improvement. Health care reform in the United States might be a start, changing some of the incentives in the health industry, though that is far from clear at present. It will take many more changes in incentive structure to make it happen, and until the answers to some of the questions in the previous paragraph (and others) start to become "yes," it seems a better use of energy to try to change some of those incentive structures, rather than naively hoping for the best.

1 comment:

Metrication matters said...

You say:

Some things just aren't worth fighting; I like the metric system but I'm never going to convince even Canadian railways to convert their mileposts to kilometer posts.

Have you considered the cost of your decision?

To find out the costs of non-metrication in the USA go here

And to find out about the personal implications go here


Pat Naughtin

Geelong, Australia