Bonuses for MPs

But how do we attract abler MPs? Pay them less and reduce their perks is Cameron's answer – I can't wait until he gets his hands on Afghanistan. Steve Punt did a bit of salary research for Radio 4's The Now Show and takes a different view: "Another way of looking at it is that they do a rather thankless and time-consuming job under relentless public criticism and yet they're paid less than the head of estate capacity procurement at the Ministry of Justice or the head of consumer services at Calderdale Council."

The problem, as David Mitchell points out, is not that MPs are exceptionally greedy, or even exceptionally stupid, it is that they are incentivised to appear frugal when they have no desire (and who would?) to engage in frugality.

So: a solution? Performance-linked bonuses. This would mean that how much an MP is paid is reflected in how well that MP is seen to do their job by their constituents.

So: pay MPs a base salary of something somewhat less than they are paid now (say: £50 000/year) then pay them a bonus on top of that.

The bonus is determined by the electorate. So if a voter thinks an MP has done a good job then they can tick the box saying "I wish to contribute £20 to the incumbent's bonus."

If the MP had done a really good job and 15000 of their constituents ticked the box then they'd get a payout of £300 000 on top of their £50 000 salary. This would work out to a salary of around £110 000/year.

One of the good things about this system is it would allow people like me to express personal support for our MP, despite the fact I would never consider voting for his party. It also means that MPs wouldn't have to be childless millionaires in order to get by.

This brilliant idea of performance-linked bonuses for MPs brilliant idea (c) the inestimable Daniel Davies

Update: thanks to @PaulGrahamRaven for this video of Dan Pink talking at TED on why financial incentivisation might actually harm and disrupt creative faculties.

In the speech Pink argues that the kind of non-mechanistic, creative industries of the 21st century will actually suffer under a traditional Taylorist regime of incentivisation. Pink highlights results of the candle-problem as evidence that the prospects of true creativity and innovation are damaged by gross financial incentive.

People, Pink argues, respond better when they are given autonomy: freedom to persue our own projects in our own time and in our own way.

It's a good point.

The question to ask then is: what kind of work are MPs supposed to be doing? Are they performing the (relatively) mechanistic tasks that a good constituency MP is supposed to be doing, like sorting out parking tickets, solving planning issues, and trying to help their constituents with their problems?

Or are MPs supposed to be doing the more abstract, creative job of crafting excellent pieces of legislation?

Considering how royally (no pun intended) screwed-up our political system is the effect (either positive or negative) of any kind of incentive structure would not show up against the huge systemic institutional failure of the safe-seats/marginal-constituency problem.

Dan Pink identifies what is wrong with managerialism in much the same way as Dillow does, with recourse to scientific fact, and offers much the same solutions: more freedom, less hierarchy, no meaningless targets and greater worker power.

Managerialists believe in hierarchy and manipulating symbols, they believe that people must be coralled and controlled and inventivised to work well and be productive.

The truth, as Dan Pink describes, is that people work better when they are simply given a task that they believe is important, and are given as much freedom to persue it as possible.

MPs obviously know what they do is important, so this is an argument for greater independence amongst MPs from the party machine, a weakening of the parliamentary whips, and a rebalancing of power away from the Crown towards parliament, and more independently-minded MPs in general.

Mystic double D

Reading a post on D-squared by David Davies is amazingly prophetic:

This is the doctrine of the "wealth effect", and if you can dig up a few factoids and linear regressions to illustrate it and avoid using the word "shit", you can make a quite decent living as a pundit by repeating the paragraph above. On the other hand, if you had been placing bets on a US double-dip recession so far, you'd have lost them, because Alan Greenspan and his merry gang at the Fed have a solution to this problem. Basically, the solution's pretty simple and it involves screwing interest rates down to the floor until mortgage rates follow them down to Low Low Prices levels, and pointing out to the Great American Consumer that it's "Bye-Bye, Magic Stock Market Bubble Money!" but "Hello, Magic Housing Market Bubble Money!". Marvellous.

This is pretty impressive.

Blessed are the engineers

For a long time I've been struggling to articulate something that ought to have been obvious to me all along.

I am not an engineer.

I respect engineers. A key component of human existence is concerned with shaping matter and the physical world in ways that suit our purposes. As the arbiters of this process engineers, inventors, hackers, and designers are owed a special place in our collective consciousness. It is sad that (in the UK at least) they are not afforded the level of respect of lawyers, doctors, accountants, teachers, and even businessmen.

I am fascinated by engineering, but it is a vicarious fascination. I would rather bask in the warm glow of effective, efficient design than actually attempt to design anything myself.

So where do my interests and proclivities lie?

I have always had a hunger for understanding, knowledge too, but specifically comprehension of the world and the way it works.

So what route am I to take in order to sate my thirst for understanding?

In the somewhat crude terms of conventional academic subjects my search will probably take me through some basic science, psychology, economics, politics, and philosophy.

Because computers are are key component of the universe I occupy some appreciation for them and their functioning must also be taken into account.

These are all areas I am interested in - but how will I go about the task of comprehension?

There is another element, beyond merely identifying academic subjects, that I believe to be necessary to attaining a comprehension of the world and how it works. In fact two elements.

Time and money.

Best. Resignation Letter. Ever.

This has been floating around for a few days. Andrew Lahde, a Californian hedge fund manager who has made a Lot of Money betting on the sub prime debacle has decided to quit fund managing and live the High Life:

Dear Investor:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, “What I have learned about the hedge fund business is that I hate it.” I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don’t worry about my employees, they were always employed by Mr. Springer’s company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life — where I had to compete for spaces in universities and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man’s interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft’s near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won’t see it included in BP’s, “Feel good. We are working on sustainable solutions,” television commercials, nor is it mentioned in ADM’s similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let’s stop the rhetoric and start thinking about how we can truly become self-sufficient.

With that I say good-bye and good luck.

All the best,

Andrew Lahde”

Quoted in full because it's pretty good.

[from The Biog Picture, via the FT, Futurismic, Slashdot, Jon Taplin et al][images from striatic pink n girly gadl dawnzy58 The Consumerist dustpuppy wili_hydrid aforero on flickr]