Needed: World Suggestion Box

Yoshimune Tokugawa, a shōgun who ruled Japan as part of the Tokugawa shogunate during the 18th century … is often credited as the first person to implement a suggestion box system, called meyasubako, around 1721, placing them outside of Edo Castle. (More)

In many complex workplaces, like stores or factories, if you have an idea for how the whole place could be run more efficiently, there is a standard “suggestion box” where you can put your suggestion. It is someone’s job to consider such suggestions, and if any look promising, pass them to the powers able to test or implement them. Such powers would at least feel a need to give excuses if they rejected such suggestions. And you might even be rewarded for successful suggestions. Which makes sense; maybe most ideas are bad, but gains from the few good can more than pay for the effort.

However, if your idea is far more valuable, being an idea instead for how to make the whole world run more efficiently, there is no standard place to make your suggestion! Nor is it anyone’s job to consider such suggestions, or to pass them on to appropriate powers if they looks promising. Its not just that we have bad underly-inventive overly-officious organizations sitting in this role, in need of reform. Instead, no one has ever been assigned to this role. Or even assigned themselves to the role. Which seems pretty crazy.

To make my complaint concrete, consider the big idea of tax career agents, an idea that is very simple, and seems to offer only big gains, with negligible losses. How big are the gains? Let’s do a quick conservative calculation.

Consider that many kinds of workers today actually have career agents who get paid ~10% of worker wages. Most of this agent fee can be seen as compensation for particular work done, where the agent would be dropped if they didn’t do such work. But agents seem to perceive that a substantial fraction, say ~15%, of their compensation comes via the less-visible-to-clients channel of increasing client wages over the long run. Which implies that in these jobs agent see their efforts as raising client wages by 15%, from which they get 1.5% as 15% of their 10% wage compensation.

As governments take ~20% of income in taxes, a tax career agent created by diverting income tax revenue could plausibly have twice the incentive of a 10% agent to increase wages. So if tax career agent abilities stayed the same, they would plausibly increase wages by ~30%.

But maybe we should discount this estimate by a factor of three, to account for the following factors. First, we now only have career agents for some jobs, and maybe we now have career agents for jobs where agents are unusually able to increase wages, or where workers are unusually wiling to listen to agent advice. Second, maybe the total social welfare gain from higher wages is only half of client wage gains, because maybe work becomes less pleasant to the client, or maybe agent or worker efforts become more socially predatory.

This leaves me with an estimate that tax career agents could increase worker welfare by ~10% of wages. As world product is $85T/yr, about half of which pays for wages, then ~10% of wages amounts to ~$4T/yr. (For a US GDP of $21T that amounts to ~$1T/yr). At a long term real interest rate of 2%, this has a present value of ~$200T. Which is a pretty big amount.

Yes, such gains would only be realized after an initial delay to test the method, and then for people to get used to the change.

And yet even with a simple easy-to-explain idea apparently worth ~$4T/yr to the world, I find it hard to generate any interest in the idea, No one sees it as their job to consider such proposals. Not even academic journals specializing in jobs and labor. Sure some think tanks might see it as their job to create ideas for improving the world. But not to consider ideas not-invented-here.

Added 12Nov: I’d previously miscalculated 15% of a 10% agent’s compensation due to raising wages as suggesting a 1.5% wage rise due to having such an agent. It’s really 15%, and I’ve just corrected the post to reflect that.