Accounting for stock options

Social problems often grow to uncomfortable proportions before democratic societies can muster the consensus needed to deal with them. Then the steps taken are often sudden and ill-considered. David Rowe argues that this common pattern is playing itself out relative to accounting for stock options, and suggests an alternative to the current ‘expensing’ approach

In 1975, Allen Kneese and Charles Schultze wrote a wise and prophetic book entitled Pollution, Prices, and Public Policy.1 In it they argue for using market-based approaches to achieve environmental goals. In passing, they discuss why such structurally sensible approaches often have difficulty gaining political support. Their answer, in part, is that the political process tends to concentrate too much on what is to be accomplished and not enough on how to accomplish it.

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