Wednesday, October 19, 2011

Occupy protest alternative: A public economic/political simulation everybody can use

I am all in favour of protesting when the objectives are clear, but the current 'occupy' protests will get nowhere, since their objectives are too fuzzy. Later in this post I will propose an alternative.

Essentially the protesters are saying:  "the world economy is in trouble and it's all because of evil corporate greed and evil lobbyist influence on politicians". But what concrete action could be taken to address these grievances? By not stating clear objectives they are saying "politicians (who we don't really trust), delver us from evil". They are protesting on a whim and a prayer.

The protesters are passing the buck to the politicians (and central bankers). But it is absolutely clear that 1) those politicians want to solve the problems so they can get re-elected; and 2) they either have no idea what to do, or vehemently disagree about what to do; and 3) the reality is ultra-complex, and any given solution will have adverse consequences that the politicians and the protesters alike either have no idea about or disagree about.

Let's look at what the protesters consider evil:

  • Corporate greed: What is this exactly? Paying too much money to executives? Solutions would be a) to cap salaries (consequence – the executives might leave for jurisdictions that didn't have caps, or might earn lots of money in other ways such as trading stocks, distracting them from focusing on running their companies); b) to punitively tax corporations that pay excess salaries (consequence – this would just drastically cut profits and crash the stock market, ruining pension plans, increasing unemployment and cutting government revenue); c) to tax the executives a lot more (consequence – they might move corporate headquarters to lower-tax jurisdictions).
  • Lobbyists: Most jurisdictions have already severely constrained corporate donations to politicians, so what further actions could be taken? Ban people representing business from discussing their opinions with politicians? (consequences – it would be ruled invalid by the courts as an infringement on freedom of speech, and would mean that politicians could not be informed of legitimate points of view)

In my opinion, the real problem that we are facing is a dysfunctional political system that favours a) short-term pandering to the electorate with goodies over scientifically analyzed solutions, b) rhetoric over education, and c) protest and ideology over sensible discourse.

This has led to unsustainable deficits, unsustainable energy policy, unsustainable environmental policy, and unsustainable increases in certain kinds of costs such as in health care. The unsustainable deficits are what are wreaking havoc in Europe and the US right now. The other unsustainabilities are waiting in the wings to wreak different kinds of havoc.

Here's my idea that could help lead to a solution:

Create a web tool with a comprehensive model of the world political system, economy and environment. It would have the following features:

  1. Everybody could specify the policies they prefer and see the short-term consequences of these policies on such factors as unemployment, inflation, levels of government service, poverty, crime, standard-of-living, environment, etc. Tea-partiers could chop taxes. Occupy protesters could apply any of the policies I discussed above. The results in the model would be graphically visible.
  2. The assumptions could be varied: Economists, sociologists, scientists and ideologists could all come up with sets of assumptions: To what extent would executives quit if they were taxed much more? To what extent would a carbon tax influence people to reduce their  carbon consumption, and to what extent would more expensive fuel shift investment? To what extent would people who find they have more money due to lower taxes put it into savings, or spend it? To what extent would reducing corporate taxes shift business from one jurisdiction to another, or result in corporations hiring people, raising salaries, or paying dividends? Essentially, the tool would allow members of the public to pick different sets of assumptions, posited by different think tanks, and see the consequences straight-forwardly. The sets of assumptions would be equations, hopefully with some research to back them up; those who wanted to could link to the research to see how believable they think it is. My hunch is that the simulator would give very similar results for most evidence-based sets of assumptions.
  3. The system would have a world-wide perspective. Policies could be adjusted just in one's home jurisdiction, or on a global scale, so people could see whether international agreements could help or not.
  4. The user interface would be very simple, akin to the Three Ontario Votes site or the Vote Compass site, although there would be an ability to turn on more complex capabilities for people with more background. For example, the equations of the assumptions would not be immediately visible, because most people would not understand them.
  5. People could, after exploring various sets of policies, settle on a set they are comfortable with. Perhaps they could even do this for different sets of assumptions (as in point 2 above). The accumulated preferences of people (and the consequences of those preferences) would be visible.

Such a tool would have the following benefits:

  • The tool would serve as a massively distributed way to creatively evolve policy alternatives that might actually work
  • People would see the folly of certain policies (e.g. why cutting taxes all-round is unlikely to have the benefit right-wingers expect); this might tone down the rhetoric of the right and the left a little, and result in more sensible, less dogmatic discourse
  • Ordinary people would learn about the real consequences of different policies and might be inclined to vote for politicians who propose the more sensible alternatives
  • People could protest for concrete policies that the simulator shows would give benefits they are interested in.
  • Lobbying could become part of the public discourse, with the lobbyists promoting certain sets of assumptions in the tool.
  • People might tend to tone down their expectations. They might realize that they can't have a cadillac health care system, and might be willing to settle for lower levels of certain kinds of services or higher taxes.

Those with axes to grind might  claim the simulator is nonsense when it doesn't give the results they wish. But since the simulator would be open, they could enter their own 'set of assumptions'. My expectation is that vacuous evidence-less assumptions would be clearly visible as such; in time people would gravitate to assumptions that are more reasonable. Furthermore, the performance of different sets of assumptions could be tracked over time.

Creating a good simulator would be complicated, but I think it could be done by an open-source consortium funded by a few philanthropists and with government funding through charitable tax deductions.

1 comment:

  1. I'm in. I want to do the same for climate policy. Something similar already exists:
    but the user interface still needs some work, and the modeling (and assumptions embedded in the modeling) aren't open to crowdsourced development. Yet.