Category Archives: Economics

Towards optimal play as Villager in a mixed game

On Twitter, Freyja wrote:

Things capitalism is trash at:

  • Valuing preferences of anything other than adults who earn money (i.e. future people, non-humans)
  • Pricing non-standardisable goods (i.e. information)
  • Playing nicely with non-quantifiable values + objectives (i.e. love, ritual)

Things capitalism is good at:

  • Incentivising the production of novel goods and services
  • Coordinating large groups of people to produce complex bundles of goods
  • The obvious: making value fungible

Anyone know of work on -

a) integrating the former into existing economic systems, or
b) developing new systems to provide those things while including capitalism's existing benefits?

This intersected well enough with my current interests and those of the people I've been discoursing with most closely that I figured I'd try my hand at a quick explanation of what we're doing, which I've lightly edited into blog post form below. This is only a loose sketch, I think it does reasonably precisely outline the argument, but many readers may find that there are substantial inferential leaps. Questions in the comments are strongly encouraged.

Any serious attempt at (b) will first have to unwind the disinformation that claims that the thing we have now is capitalism, or remotely efficient.

The short version of the project: learning to talk honestly within a small group about how power works, both systemically and as it applies to us, without trying to hold onto information asymmetries. (There's pervasive temptation to withhold political information as part of a zero-sum privilege game, like Plato's philosopher-kings.) Continue reading

Hierarchy and wings

There are a few points I didn't make in my post on blame games because they seemed extraneous to the core point, which are still important enough to write down.


The Hierarchy game is a zero-sum game in which people closer to the center expropriate from people farther from the center, and use some of those resources to perpetuate the power imbalances that enable the expropriation. Players that fail to submit to expropriation by higher-level players are punished by those more-powerful players, often through intermediaries. Players that fail to help members of their class expropriate from those beneath them are excluded from their class, and often coordinated against more overtly.

This game isn't inherently majoritarian, - instead, it allows smaller groups to stably expropriate from larger ones, because every player has a short-run incentive to go along with the arrangement. Feudalism is a simple example of the hierarchy game. Modern states almost always have some hierarchical arrangements, such as the police and military, and (less formally) economic class.  Continue reading

Should Effective Altruism be at war with North Korea?

Summary: Political constraints cause supposedly objective technocratic deliberations to adopt frames that any reasonable third party would interpret as picking a side. I explore the case of North Korea in the context of nuclear disarmament rhetoric as an illustrative example of the general trend, and claim that people and institutions can make better choices and generate better options by modeling this dynamic explicitly. In particular, Effective Altruism and academic Utilitarianism can plausibly claim to be the British Empire's central decisionmaking mechanism, and as such, has more options than its current story can consider.


I wrote to my friend Georgia in response to this Tumblr post.

Asymmetric disarmament rhetoric

Ben: It feels increasingly sketchy to me to call tiny countries surrounded by hostile regimes "threatening" for developing nuclear capacity, when US official policy for decades has been to threaten the world with nuclear genocide.

Strong recommendation to read Daniel Ellsberg's The Doomsday Machine.

Georgia: Book review: The Doomsday Machine

So I get that the US' nuclear policy was and probably is a nightmare that's repeatedly skirted apocalypse. That doesn't make North Korea's program better.

Ben [feeling pretty sheepish, having just strongly recommended a book my friend just reviewed on her blog]: "Threatening" just seems like a really weird word for it. This isn't about whether things cause local harm in expectation - it's about the frame in which agents trying to organize to defend themselves are the aggressors, rather than the agent insisting on global domination.  Continue reading

Financial investment is just a symbolic representation of investment projected onto a low-dimensional space inside a control system run by the US government

Nassim Nicholas Taleb recommends that instead of the balanced portfolio of investments recommended by portfolio theory, we follow a "barbell" strategy of putting most of our assets in a maximally safe, stable investment, and making small, sustainable bets with very high potential upside. If taken literally, this can't work because no such safe asset class exists. Continue reading

There is a war.

Households vs markets

The first symptom was the clutter on the kitchen counter. One cutting board, two pans, one knife. My colleagues had arrived at the rented house the day before, so they'd had plenty of time to arrange things to their liking. I was sure the clutter was not to their liking, if they noticed it at all.

A teachable moment. Instead of tidying the counter myself, and accreting a small amount of resentment, I suggested to one of them that she think of the things on the counter as things that were in her power to arrange however she liked, to suit her taste, selfishly. (“Just as you might optimize your text editor to suit your workflow,” my other colleague chimed in.) She took this suggestion, and spent a few minutes arranging and rearranging the items on the counter. She put away the knife in the knife block.

A puzzle. She noted that she doesn’t usually think of the items in her home this way. Instead, household chores feel as though they are impositions from an abstract, outside authority. She was capable of accessing this other, more pleasant way of working on the things around her. Why wasn’t it natural for her to feel that way in her own home?

An hypothesis. In our usual mode of life, there is a separation between a job - which is done for someone else, to satisfy someone else’s standards, outside the home - and consumption, which is at least ostensibly done to suit one’s own taste. One of the goods you can buy with an income from a job is a nice place to live, and you can also buy services to keep the place clean and tidy. For the most part, you maintain the place you live by leaving it, and entering the domain of an outside authority. Household chores are the remainder that cannot efficiently be outsourced, or an echo of a previous era in which such outsourcing was less common. Continue reading


For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.
- The Gospel according to Matthew

r > g
-Thomas Piketty, Capital in the Twenty-First Century

From Jesus to Piketty, it is a commonplace that wealth is a positive feedback loop.

Under one model, differential ability to steward capital, plus compounding gains, implies that perfectly benevolent people with more money than most should keep it more often than a naive expected utility maximization would suggest. On the other hand, conquering empires also experience compounding gains; the ability to leverage force into more force implies that this is a harmful positive feedback loop.  Continue reading

Kidneys, trade, sacredness, and space travel

To the trader mindset, sacred values are nothing but a confusion; if you don’t like the deal, you just haven’t been offered a high enough price.

There’s something important the trader mindset can’t see. Its modus operandi is to take two different representations of value and profits from resolving discrepancies. It is agnostic as to the validity of those representations. Thus, the trade orientation tends to collapse the map-territory distinction, and in particular confuse exchange rates (i.e. prices) and stores of value.

Consider this music video:

The protagonist is fixated on an image that's been marketed to her by someone wealthy enough to control a planet. The image isn't very detailed, and she's willing to undertake a dangerous and arduous journey, which implies that things aren't very good back home.

She's in a world where travel is expensive. Somehow, improbably, in outer space, she has to pay a toll. This should clue us in that something sketchy is going on. Continue reading

Cash transfers are not necessarily wealth transfers

Here’s a common argument:

The problem with the poor is that they haven’t got enough money. There’s ample empirical evidence backing this up. Therefore, the obviously-correct poverty intervention is to simply give the poor cash. You might be able to do better than this, but it’s a solid baseline and you should often expect to find that interventions are worse than cash.

There are technical reasons to be skeptical of cash transfers - which is why it is so important that the cash transfer charity GiveDirectly is carefully researching what actually happens when they give people cash - but until fairly recently, these objections seemed to me like abstruse nitpicks about an intervention that was almost analytically certain to be strongly beneficial.

But they’re not just nitpicks. Cash isn’t actually the same thing as human well-being, and the assumption that it can be simply exchanged into pretty much anything else is not obviously true.

Of course, saying “X is possibly wrong” isn’t very helpful unless we have a sense of how it’s likely to be wrong, under what circumstances. It’s no good to treat cash transfers just the same as before, but be more gloomy about it.

I’m going to try to communicate an underlying model that generates the appropriate kind of skepticism about interventions like cash transfers, in a way that’s intuitive and not narrowly technical. I’ll begin with a parable, and then talk about how it relates to real-world cases. Continue reading