Principle 2

So often, individuals, organisations, and governments depend on one approach—one ideology, one method, or one solution—to solve an ongoing or intractable problem.  For example, to diminish the costs of public services, many governments, whether conservative or progressive, are more inclined to transfer these services to the private sector rather than vice versa.  Yet, this approach may not be suitable in all circumstances.  For example

• in Australia, the US, and many other nations, the costs to administer private health is appreciably more than twice the cost to administer public health,
• in the UK, privatisation of water increased the fees that consumers paid significantly—rising 40% above inflation,
• because of their dependence on the private sector, successive Australian governments have watched helplessly as regional air services wane, unprepared to purchase a stake to prevent this decline.

Similarly, governments and other sectors often depend on one approach to solve problems in other sectors as well:

• for example, to diminish mental illness in children, many advocates have proposed age limits to social media,
• however, many other measures could be considered, such as algorithms that limit exposure to offensive posts,
• likewise, many governments primarily depend on one approach to limit carbon emissions,
• for instance, some governments have invested heavily in carbon capture and storage—a technology that could limit the emissions in specific industries, such as the production and steel and concrete, but is not as likely to limit the emissions in oil and gas production at scale.

More interestingly, researchers have uncovered several reasons that people, organisations, and governments tend to depend unduly on one approach, method, or solution.  First, people like to ascribe many of their problems and challenges to one cause or source.  That is, humans inflate the degree to which one cause—an incompetent political party, a specific ideology, or a pervasive virus, for example—can explain a variety of concerns.  In one study,

• people greatly overestimated the degree to which Al Qaeda, the most notorious terrorist organisation at the time, was responsible for many of the problems they were experiencing,
• indeed, after they ascribed these problems to Al Qaeda, the participants actually felt buoyed,
• they felt they only needed to manage one rival—this clandestine terrorist organisation—to solve all their concerns.

Because of this tendency to ascribe multiple problems to one cause, people overlook the multifaceted nature of problems.  Consequently, they overestimate the likely benefits of their purported solutions, manifesting as narcissism rather than humility.  However, another tendency exacerbates this tendency to overlook the multifaceted nature of problems.  Specifically, people overestimate the likelihood that one success, in a confined setting, will scale or extend to other settings. To illustrate

• Suppose some education program—such as a mindfulness intervention—diminishes the incidence of substance abuse in one high school.
• The likelihood this program will be successful in other high schools will tend to dissipate over time.
• That is, many features of the high school—such as the pride of teachers who had committed to this program or the sense of hope that was brewing in the researchers—will tend to subside as the program continues.

In short, individuals, organisations, and governments should seldom, if ever, depend on one approach, solution, ideology, or method to solve a problem. They should continue to invest their time, efforts, or funds on multiple approaches in parallel.

To enhance the wellbeing and productivity of individuals, governments offer many financial schemes.  For example, in Australia, the government offer rent assistance, the family tax benefit, the disability support pension, the pharmaceutical allowance, Austudy, a carer allowance, and many other schemes. 

To accommodate inflation, the government increase many of these payments over time.  For many of these schemes, such as rent assistance, the government will utilise the consumer price index to calculate these adjustments.  To illustrate, if the consumer price index is 2%, the maximum rent assistance or comparable schemes may increase by 2% as well.  But this reliance on consumer price index provokes a range of complications.  For example, as Coates et al. (2025) revealed in a report that was commissioned by the Grattan Institute

• from 2005 to 2020, the maximum rent assistance for single people increased from almost $50 to almost $80,
• however, during the same period, the average rent these individuals paid increased by a significantly larger proportion—from around $100 to over $220,
• consequently, almost 50% of retirees who rent their residence experienced financial stress in 2019 to 2020,
• indeed, in 2021, around 9000 people in Australia, aged over 65, were homeless—and these rates have risen since the pandemic.

One cause of this problem is that governments utilise a single index to adjust payments over time: the consumer price index.  This index is not suitable in all instances.  The surge in rents has greatly surpassed the consumer price index, especially for the cheapest 25% of rentals in capital cities: the only apartments or houses that retirees who need to rent can usually afford.  Thus, in the future, as Coates et al. (2025) recommend, rental assistance should be indexed to align with increases in these cheapest 25% of rentals.