Nuclear Peace Bonds - Social Policy Bonds

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Nuclear Peace Bonds

Applications... > Conflict reduction

The Economist of 28 May 2016 writes about North Korea's nuclear capability. Amidst many worrying facts cited are these:

  • North Korea is thought to have a stockpile of around 20 devices. Every six weeks or so it adds another. Source

  • Two engines from Soviet-era R-27 submarine-launched ballistic missiles were coupled together to provide the propulsive power and range for a warhead carried by a KN-08 to hit the east coast of the United States. It is not known how many R-27s North Korea has, but up to 150 went missing from Russia in the post-Soviet 1990s. Source

The R-27, a submarine-launched ballistic missile, has the explosive power of 1 Megaton, or about 50 times that of the bomb that was dropped on Hiroshima.

I have no solution to the problem of nuclear proliferation and its attendant risks of catastrophe. I don't think anyone has, despite valiant efforts by well-meaning people working for governments or international organizations. But what I can offer is a means by which we channel more of our human ingenuity into solving that problem, rather than expending time and energy on activities of very little social value (see here for instance, or here). In other words, a way of motivating more people to put more high-quality effort into reducing the risks of a nuclear catastrophe.

That way entails issuing Social Policy Bonds that target for reduction either man-made conflict, or disasters of any kind. Bonds could be specially issued to target the risk of a nuclear explosion. How would this work? First, funds would be raised from any source - public- or private-sector or both - to back bonds that would be redeemable for a fixed sum only when there has been nuclear peace for a sustained period of, say 30 years. These bonds would  be issued on the open market for whatever price they fetch. The goal, being long-term, could mean that the bonds would sell for very little when they are first offered to the market. So any movement to increase the likelihood of sustained nuclear peace would see an improvement in the bonds' value. The bonds would be tradeable, so holders (or their agents) could benefit in the short term by doing things that, in the eyes of the market, bring us closer to our long-term goal. The effect would be to reward people for helping achieving the goal efficiently. Nuclear Peace Bonds would create a protean coalition of people who have a powerful incentive to explore, investigate and implement the most effective (at any given time) array of measures that bring us closer to our goal. With such a big, remote objective, no single approach will work. A bond regime would stimulate diverse, adaptive solutions to the problem of nuclear proliferation.

The current policymaking system can work well when the relationships between cause and effect are readily identifiable. But for problems like the risk of nuclear catastrophe, which are large-scale and have multiple causes, the Social Policy Bond idea offers a better solution. Our nuclear peace goal fulfils other key criteria that point to the advantages of a bond regime :

  • Current approaches are either ineffectual or inefficient;


  • A robust and verifiable metric. I suggest 'a nuclear detonation that kills 500 or more people within 24 hours'; and


  • Financial rewards to those involved in achieving objectives are currently uncorrelated to their effectiveness or efficiency in doing so.

Currently, there's a jarring mismatch between the fears of, and risks to, almost everyone on the planet and the resources devoted to mitigated them. A shift in resources away from ingenious ways of manipulating financial markets, or brilliant commercials for dog-food, would undoubtedly (in my view) be a worthwhile public good. But our current policymaking system doesn't encourage such a re-orientation of priorities. Instead, we have people, many of whom are dedicated and hard working, working through outdated bureaucratic channels to achieve bureaucratic goals in ways that do not reward directly and immediately reward success or deter failure. Nuclear Peace Bonds would be change all that, to the long-term benefit of all of us, including generations yet unborn.

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