Category Archives: Economics

There seems to be a market failure in cultivating children's agency.

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Watching this monkey eating a banana has me thinking about the market for nondestructive education:

Video 1

Video 2

My son is learning to orient in space by manipulating the banana. There's a natural reward involved in figuring out how to rotate the banana correctly, distinguishing between the sides in an internal model rather than gradient-descending towards one end (which may or may not yield the sweet flesh inside), figuring out the difference between bringing the peel to his mouth and bringing the inside.

The biggest thing that distinguishes this from how I mostly see people treating babies is patience - I had to sit through him getting confused and a little frustrated multiple times, and distinguish between challenges big enough for him to process, and the point where he was about to spiral into helpless sadness, and only intervene in the latter case. And of course I had to make other active choices as well, like giving him a banana, and not "baby food."

For some particular skills or fields that a child expresses an interest in, it may make sense to employ domain experts, but - especially at the beginning - it seems to me like what's most needed is someone to arrange an enriched environment in the first place, and give the child both the stimulation and the room to investigate freely the sorts of things that would be valuable for them to investigate.

More recently, he responded to me playing a few simple songs for him on the ukulele at first by bucking his hips in a simple "dance," but soon afterwards by deciding he'd rather figure out how to pluck the strings himself.

Another example - at early ages, the "language program" that would make most sense, would be to hire native speakers of the target languages, chosen on the basis of how valuable the target language is and the availability of suitable native speakers, just like my partner and I choose his foods and toys based on suitability. These native speakers wouldn't mainly have the job "language teacher," but "playmate" - around and willing to play with the children exclusively or primarily in their native language. Depending on the scale of the overall program, children could to some extent choose how much to engage with this, just like my son chooses to play with some objects more than others.

At present, I don't know how to pay for that kind of curation and facilitation oriented child care at any scale that would free up my time. I keep hearing good things in the abstract about things like Montessori schools, but in practice, it doesn't seem like the people I know have access to this sort of thing, no matter how much money they're willing to throw at the problem, no matter how well-connected they are - to the contrary, the success rate in having one's child accepted by any school as worthy of attention seems surprisingly low. People tend to talk around the problem, using language around developmental disability or autism - but they do so in cases where their child is very obviously not autistic, just very slightly rambunctious and uncowed. The majority of the families I'd have regarded as most promising seem to only barely have access to schooling at all.

Which would suggest offering to sell it instead - but my impression is that there's no market for it either at a price that would satisfy the Law of Iron Wages, i.e. be adequate to pay for the reproduction of my skilled labor.

Related but not the same thing: https://www.takingchildrenseriously.com/

Oppression and production are competing explanations for wealth inequality.

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You would like to go to the beach tomorrow if it's sunny, but aren't sure whether it will rain; if it rains, you'd rather go to the movies. So you resolve to put on a swimsuit and a raincoat, and thus attired, attend the beach in the morning and the movies in the afternoon, regardless of the weather. Something is wrong with that decision process,* and it's also wrong with the decisions made by many supposedly systemic approaches to philanthropy: it does not engage with real and potentially resolvable uncertainty about decision-relevant facts.

Different popular philanthropic programs correspond to very different hypotheses about why people are doing wealth inequality, much like swim trunks and a trip to the movies represent different hypotheses about the weather. Instead of working backwards from the proposals to the hypotheses, I will lay out what I think are the two main hypotheses worth considering, and reason about what someone might want to do if that hypothesis were true. This is not because I want to tell you what to do, but to clarify that any time you think that something in particular is a good idea to do, you are acting on a hypothesis about what's going on.

The ideas of charity and philanthropy depend on the recognition of inequality; otherwise it would just be called "being helpful." The persistence of wealth inequality, in turn, depends on many people working together to recognize and enforce individual claims on private property.

If the mechanism of private property tends to allocate capital to its most productive uses, then incentives are being aligned to put many people to work for common benefit. But if wealth does not correspond to productive capacity - i.e. the people with the most are not those best able to use it - then, assuming diminishing marginal returns to wealth, coordination towards persistent wealth inequality comes from a self-sustaining misalignment of incentives, i.e. conflict.

The economic ideology taught in introductory microeconomics courses, which is assumed by many formal analyses of how to do good at scale, including much of Effective Altruist discourse, tends to make assumptions consistent with the means of production hypothesis, so if we are considering making decisions on the basis of that analysis, we want to understand which observations would falsify that hypothesis, and which beliefs are incompatible with it.

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Parkinson's Law and the Ideology of Statistics

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The anonymous review of The Anti-Politics Machine published on Astral Codex X focuses on a case study of a World Bank intervention in Lesotho, and tells a story about it:

The World Bank staff drew reasonable-seeming conclusions from sparse data, and made well-intentioned recommendations on that basis. However, the recommended programs failed, due to factors that would have been revealed by a careful historical and ethnographic investigation of the area in question. Therefore, we should spend more resources engaging in such investigations in order to make better-informed World Bank style resource allocation decisions. So goes the story.

It seems to me that the World Bank recommendations were not the natural ones an honest well-intentioned person would have made with the information at hand. Instead they are heavily biased towards top-down authoritarian schemes, due to a combination of perverse incentives, procedures that separate data-gathering from implementation, and an ideology that makes this seem like the natural and normal thing to do.

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The Debtors' Revolt

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Dear Evan,

You asked whether I had anything in writing to point you to about the history of the great international debtors' revolt of the 20th century, more commonly called the World Wars. I didn't, and I have had some trouble figuring out what the best approach is, in part because it's not clear who my audience is or which feedback if any is trying to learn something new rather than condition me to say more familiar things. Without an idea of someone who might understand me, there is no such thing as an attempt to communicate. The epistolary format has worked well for me recently, so I am going to try to explain what I know to you, personally, and publish at least my original email, and any back-and-forth you're willing to share.

I want to start by explaining the importance of this history. If I tell you that the old world has been overthrown by a class of debtor-aristocrats, and society converted en masse into a debtor aristocracy, you might think of exemplary cavaliers such as Thomas Jefferson and get the wrong idea. Instead, I'll start with an anecdote about the sort of person I mean, so you can see the relationship between membership in a debtor class, shame, class privilege (including "racial" privilege), and opposition to language. Next I will talk a little bit about the mechanism by which the debtor aristocracy propagates itself. Then I'll go into the chronology of the Money Wars. Along the way I will try to clearly signpost standard search terms, related bodies of recorded knowledge, and particular books or essays that might be relevant, but there are a lot, and I will try to write this in a way that at least potentially stands alone - please do err on the side of asking me questions (or trying to restate things in your own words to check whether you understand) rather than assuming you should do your own research first, because that will help me create a canonical summary I can point others to, and I expect that you are better informed than the typical person I need to explain this to.

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When to Reverse Quarantine and Other COVID-19 Considerations

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A lot of people in my social network have been trying to track news about the new coronavirus, COVID-19, which seems like a global pandemic that's going to kill a lot of people. I've found some of this overwhelming and difficult to figure out how to use, until I sat down with a few friends, over the phone, and worked out a simple analytic framework for thinking about some basic decisions.  Continue reading →

Approval Extraction Advertised as Production

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Paul Graham has a new essay out, The Lesson to Unlearn, on the desire to pass tests. It covers the basic points made in Hotel Concierge's The Stanford Marshmallow Prison Experiment. But something must be missing from the theory, because what Paul Graham did with his life was start Y Combinator, the apex predator of the real-life Stanford Marshmallow Prison Experiment. Or it's just false advertising.  Continue reading →

Towards optimal play as Villager in a mixed game

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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 →

Pecking Order and wings

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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.

Pecking Order

The Pecking Order 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 in the middle has a short-run incentive to go along with the arrangement.

When pecking orders are overt and common knowledge, there can be an element of delegation that allows the pecking order to process some limited amount of information centrally, as a hierarchy. 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 →