The economy would be healthier if everyone got 1/3 of their compensation as a year-end bonus. This would help people understand the risks inherent in the economy and improve their financial planning.

As a teenager, I stood in the doorway of the barn on a stormy summer day with my father as the ground turned white with hail. That year's crop was severely damaged, and my father's income was wiped out.

His business didn't fail because he had hay and grain from the previous year, and he had savings in the bank with which to make it through the winter and plant and cultivate the next year's crop. This reflected the widely held view that farming was an inherently risky business; crops could fail, and herds could die of sickness. Farther west of us, it was even riskier. Dry-land wheat farmers probably got two good crops in the seven biblical years, so-so crops in three years, and failures in two. A farmer had to have enough capital to make it through the bad years. Going to the bank for a loan often meant that the banker soon owned the farm.

The farmer's attitude also probably reflected a centuries-old memory of hard times for European peasants. There had been the famines of the 1840s, which were not just in Ireland, and which were recent enough for stories to have been handed down.

Even today, peasants are tied to the variability of the land. When the rains fail in the Sahel, peasants die of starvation. They are only loosely tied to the stability of the global economic system through meager relief efforts.

The economic systems of cities and nations have been developed during the last century or so to reduce variability ad achieve stability. They have done so to a great extent -- so much so that a decrease of a few percent in GDP is now regarded as a highly unusual and really bad thing, rather than a normal year-to-year variation. Employment contracts specify steady, slowly increasing pay. Managerial and professional employees also expect the same. Businessmen expect a steady supply of credit with which to fund inventories and factor receivables. Investors expect steady, if not spectacular, increases in the values of stocks, bonds and real estate. Everyone expects income to flow constantly. Lulled to complacency, people refinance to put in that new stainless kitchen with granite countertops.

But the stability is an illusion. Policy makers and businessmen confronted with disappointment attempt to stave it off with temporary fixes and accounting sleight of hand. Confronted with emergencies they adopt measures to cope which alleviate and postpone the pain.

Although modern urban, national, and global economic systems have as their objective the reduction in short term economic variability, they do so at the cost of pushing problems off to the future, until they snowball into the inevitable catastrophe.

It would help if the true economic risks were kept in people's mind so that they would plan their financial future more prudently.

One way to do this would be to put everyone's compensation at risk with a bonus system, both public and private employees. Suppose someone is making $60,000 per year. Their monthly salary would be reduced from $5,000 to $3333. The other $20,000 would be put in a bonus pool. The actual end of year payment for each person would be adjusted up or down based on the performance of their employer, the performance of the organization within the employer they work for, and their individual performance as assessed by their managers.

This would reduce imprudent consumption during the year, and when the year-end bonus arrived, it could either be spent on buying the big-ticket items, saved for things like a down payment on a house or an education, or saved to provide a cushion against the possiblity that next year's bonus would be a lot smaller.

This would encourage people to think a lot harder about their financial future and plan prudently for the ups and downs in the economy.