Book extract #2
A ballot paper is supposed to send a message to the government, telling it how it should behave. There are plenty of signalling mechanisms that would do the job a lot better, and it’s a mystery why the vote has been allowed to be fetishised as it has.
There are so many different ways of making decisions. Academics decide what they know using the peer review system, or by conducting clinical trials. Judges use a jury to decide what happened so that the law can be applied. Market mechanisms are used to make decisions about production and prices.
Bookmakers, actuaries and stock markets help to decide whether something is likely to happen, so everyone can allocate their risk accordingly. Artificial intelligence makes decisions that affect everyone, and it is beginning to transform the way that professions work, and to influence the decisions that are made.[i]
Even the word “decision” is complicated. Good businesses prosper when they can work out the difference between what people say, and what they really want. Customers are likely to keep coming back if there isn’t much difference between what they think they want and what businesses hear when they say what they want. The sum of human happiness is likely to improve if people that supply things get better at understanding what people really mean when they say they want something.
Good businesses can thrive if they can come up with patented solutions to this problem.
On a prosaic level, I could offer my own neighbourhood as an example. A few years ago, the parade of shops 50 yards from my house had one small corner shop on it. The selection of goods on sale was OK in an emergency. I stopped trusting their frozen foods when I found the freezer had accidentally been turned off one day.
Then, as part of the trend towards smaller neighbourhood spin-offs, one of the major supermarkets opened a store in the same parade. It offered fresh baking, a good selection of ready-meals and some of the beers weren’t targeted at the high-strength end of the market. This was done at prices not very different from the out-of-town stores where we did our big shop at the weekend. The number of people using the new supermarket has meant an increasing footfall for the corner shop and I still get my tinned beans and a few other groceries from it.
I am now closer to getting the neighbourhood that I want. Bacon and egg on freshly baked bread rolls has made my Saturday mornings a lot better than they were. As it happens, the supermarket is a Co-Op store, so in theory, I can even get involved in its governance to a certain extent.
Either way, without ever being asked, they know what kind of shop I want because supermarkets are able to invest in better feedback loops, and are better at co-ordinating themselves than family-owned corner shops.
No one should read this as an argument to run everything like a supermarket. Being a consumer and being a citizen are different things. The way that government is told what citizens want is the big question here. Markets may be good at giving consumers what they want, but they could be a great deal better.
[i] For a comprehensive survey, see Richard Susskind and Daniel Susskind, The Future of the Professions (OUP, 2015).