Ideally we should remove the incentive all together. Limit it so Politicians can only buy index funds that don’t target any specific industry.
Fundamentally you can classify modern society into two groups: government and commercial citizenry.
The incentives of these two groups are misaligned and that is essentially the origin of all corruption.
The commercial citizen, his goal is to make money, compete and to do so by bending the rules and using any means possible.
The government, his goal is to be fair, to enforce and follow the rules, and to guard citizens.
When you combine these two groups the incentives collide. You get government officials who are supposed to be fair but instead they are incentivized by commercial interests so they make biased laws, take bribes and do all that shit.
To reduce corruption you really need to create societies made up of two different groups with two different sets of incentives.
Dictators are more immune to this effect because all of their commercial incentives are pretty much completely fulfilled as they own the whole country.
In a democracy the closest sort of thing I’ve seen to this is priesthood. Buddhism or becoming a monk is similar but these are not elevated leadership positions like priests.
Basically when you become a government official it should be like becoming a priest. You are removing yourself from commercial society. It changes everything. Your incentives are different and it even filters out all the bad actors.
Such a society can realistically exist. I think the unrealistic part is converting our current society into something like this.
The primary challenge I see is that at least in the US, government positions are often elected and termed, meaning there is no guarantee your cash flow from your government job will continue long-term. This is why you must continue to operate as a private citizen, with a government job.
The second potential issue is one of pay - the best of society can make far more in a commercial setting than in a government setting - barring corruption, of course.
For your second potential issue, I’m saying that’s the point. Nobody becomes a priest for money.
These people who become priests do so for other reasons and they largely want to exit the commercial economy. That’s the type of people government should be made of. Under this system pretty much 100 percent of politicians wouldn’t have even become a politician.
Since we are talking about political leadership at the highest levels (not pastoral local municipalities), a good comparison with priesthood would be the Vatican. Even in priesthood, when there is concentrated power over vulnerable populations, we can find: wealth hoarding, money laundering, collaboration with organized crime, and protection of rampant sexual abuse. For hundreds of years. This suggests to me that the issue is hierarchy more than it is quality of those who reign over us.
Here's my hot take: politicians should be paid a lot of money, and in return they should be subject to limits on how they can invest, if they can invest at all. Remove the incentives that cause corruption and attract talent. I think it's a bit naive to say that public servants need to be earning a meager salary. Underpaid people don't stay in their roles very long.
The first point is true of most employment, unless you're one of the ~10% of US employees with a union contract. Your paycheck is always subject to the whims of your employer.
I don't have a great solution for the 2nd issue you pose though. Raising the pay of elected officials is often politically unpopular, but you're certainly right that one makes more in the private sector than as a junior congressperson.
Yes and no - if you lose your job at Apple, you can go down the street to Microsoft. If you lose your elected government job, you can't run again for years. Meaning, you have to switch from being a government employee back to being a commercial employee.
Problem: politicians have families. Unless becoming a "government citizen" propagates recursively to cover one's extended family, and perhaps their extended families as well, i.e. potentially hundreds of people in total, there's no way to isolate the new member of government from having incentive to help their loved ones, who are still "commercial citizens".
Conversely, if you somehow solve that, it brings forth a new problem: the "govenrment citizens" are now an alien society, with little understanding of lives of people they serve. To borrow your priest analogy, it's like Catholic priests giving marital advice to couples - it tends to be wildly off mark, as celibacy gives the priest neither experience nor stake in happy marriages.
The goal should be to not produce homo economicus in the first place, not to figure out how to build a society out of them in the same way you build a trustless smart contract.
You can still play the market with index funds. For example if someone knew that Trump was about to announce new tariffs they would sell to dodge the brief market panic.
> The commercial citizen, his goal is to make money, compete and to do so by bending the rules and using any means possible.
This conception of "citizen" is even more depressing to me than Homo Economicus. There are values aside from wealth, and not everyone is a money grubbing sociopath.
Fundamentally you can classify modern society into two groups: government and commercial citizenry.
The incentives of these two groups are misaligned and that is essentially the origin of all corruption.
The commercial citizen, his goal is to make money, compete and to do so by bending the rules and using any means possible.
The government, his goal is to be fair, to enforce and follow the rules, and to guard citizens.
When you combine these two groups the incentives collide. You get government officials who are supposed to be fair but instead they are incentivized by commercial interests so they make biased laws, take bribes and do all that shit.
To reduce corruption you really need to create societies made up of two different groups with two different sets of incentives.
Dictators are more immune to this effect because all of their commercial incentives are pretty much completely fulfilled as they own the whole country.
In a democracy the closest sort of thing I’ve seen to this is priesthood. Buddhism or becoming a monk is similar but these are not elevated leadership positions like priests.
Basically when you become a government official it should be like becoming a priest. You are removing yourself from commercial society. It changes everything. Your incentives are different and it even filters out all the bad actors.
Such a society can realistically exist. I think the unrealistic part is converting our current society into something like this.