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.
Tolls are one of the classic modes of rent extraction, second only to land rents in their centrality as an image. There's a plausible excuse for tolls on improvements like bridges, but you don't need bridges in space - you can only collect the toll by preventing people from going around you. This should inform how we interpret the subsequent interactions where she pays for fuel, repair to her spaceship, and repair to her body; it's not obvious how much of the price is needed to pay for the cost of the service, and how much is a rent extracted by a predatory monopolist.
At each stage, the protagonist sacrifices capacity (in the form of mobility affordances, maybe the most concrete and central instance of capacity, from the Latin capere, meaning to take hold of something - she trades away her hand, then her leg, then her remaining limbs, then her spaceship (albeit getting a fully functioning body back as far as we know)) for some progress towards her destination. Then, once she gets there, she finds that she's traded away her ability to move, for relocation to a place that's no longer providing the service it advertised. It's true at each point that you wouldn't be helping her by preventing her from making the trade, but focusing on that aspect of the situation makes one a price-taker1 in a case where that attitude doesn't actually unlock any value.
Each trade had to leave her with hope, but it didn't have to be an accurate hope.
The resort planet owner likely never colluded with the toll collector, the fueling station, the repair station, or the rescue team. They just did their thing, and the harmful side effects were complementary. The resort planet owner doesn't pay the price of disappointed customers who arrive after the resort shuts down, so they simply don't bother pulling their ads. The other actors don't need to know why people want to go from point A to point B, they just know that they can interpose themselves in the middle and take resources they want.
It's important to bear in mind that no one overtly cheats anyone else in this scenario - all the parties are operating as honest traders, at least when considered within the bounds of the specific transaction they're executing. And yet, the whole situation is horrible in a way that the trades don't actually alleviate.
From the perspective of trade, sacredness intuitions are always a mistake. If I desperately need a new kidney, and you're desperately poor, why shouldn't I be allowed to solve your problem in exchange for you solving mine?
Sacredness intuitions say that this is morally abhorrent. The trader says that this is simply refusing to acknowledge tradeoffs. That whenever the sacredness intuition is correct, a proper weighing of tradeoffs would get the right answer.
The trader is missing something important.
There's offering a trade, and there's extortion. Sometimes people are honestly uncertain or mistaken about which one is happening, or correctly believe that something described as the former is in fact the latter.
When you're proposing a trade that gives the poor a fungible resource, you should wonder whether rent extraction will, in the long run, keep pace with their ability to pay. Except now they've all been through an elective surgery and have less kidney. Trading a kidney for a kidney does not suffer from this problem, so people are less worried about it. This is the sort of thing it's hard to see inside the trade intuition, but easier to see if you think about the systems involved.
There is also an attention economy consideration. If you foreground the details of a particular transaction, taking prices as a given, you're relegating the context to the background. But that context is where the prices come from - it's necessary if you want to understand why people are willing to pay. It's necessary if you care about anything that's not already priced.
Sometimes the most important thing is that background.
(This post is based on my comments here.)
Related: Categories of Sacredness, Sacred Cash, Eternal, and Hearthstone Economy versus Magic Economy, Cash transfers are not necessarily wealth transfers, Eliezer Yudkowsky's Facebook post about Basic Income
|↑1||Some economic models assume you’re negligible in size compared to the market, and can basically only buy and sell things, so you can treat prices as constants. This is being a price-taker, you take prices as you find them. (By contrast, in monopoly situations, your decisions are one whole side of the supply-demand balance.)
In a price-taker situation, the goods offered for sale and the prices they're offered at are taken as givens, even if there's imperfect information. Things that aren't considered include negotiation with counterparties, interfacing directly with physical (or social) reality to configure it into states you like that aren't well-approximated by anything currently for sale, or coordinating with other agents in your position to change the overall dynamic.
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(I'm using your description of the video rather than the video)
The resort owner is making an unreliable, unenforceable promise here. Taking the journey is certainly a risk on many levels, and even if it works out, the resort might be closed for any number of reasons. It is her responsibility, in the universe described, to discount the benefits based on the chance it won't be there, along with the other risks, when deciding whether to go. Presumably, the potential rewards entice sufficiently that she thinks the risk is worth it. If she's right, it's a good risk/trade that didn't work out (e.g. if she is giving up a life worth X utility for a 10% chance at 20*X utility, after risk aversion and decreasing marginal utility and so on, we shouldn't feel too bad if she ends up in the 90%, or even if it's 90/10 the other way for a 1.5*X shot and she draws the whammy). Certainly, if the resort owner is committing fraud, that's bad, in a combination of burn-the-trust-commons and doing-actual-harm ways.
So one could argue that either the resort owner DID overly cheat her, via fraud slash false advertising, and should be held accountable, or she took a risk (calculated or otherwise) that didn't work out.
Compare to a pioneer who moves to Deadwood to take part in the gold rush. Chances are this won't work out. He'll be shot in a saloon or by a native, or he won't find any gold and end up working at some crappy job in a town with a terrible gender ratio and nothing to do, or what not. He's willing to take those risks to try and strike it rich and that seems fine. If someone has flyers that say "Come to Deadwood, gold in them hills, strike it rich" and gives them out in Chicago, it's bad/good based on detail considerations, I'd think?
None of that takes away from the sacredness points made later, which I mostly agree with and plan to keep expanding on. The concept of free energy slash rent extraction intuition is crucial. If someone is not in a position where they can defend their slack, then transforming non-slack assets into slack assets via availability of trade does great harm. I've thought a lot about the question of things like status signaling and real estate being slack sinks that effectively do this to everyone. The extreme version of this is where Malthusian conditions apply but anything considered sufficiently 'required for life' gets added to the poor's compensation basket essentially for free.
Gold mining is a pretty interesting example, given that on the margin it's responsible for basically no additional production of things people want, or net increased leisure. It's pretty much just a cool hack where you can dig a hole in the Earth and find the raw material used to create tokens that serve as claims on scarce resources.
Considered systematically, gold rushes are pathological. This might be a little easier to see if we don't use heavy shiny stuff with a long rich history being fetishized as a store of value as the example. North Korea's dollar-counterfeiting operation seems more like a sign that they're kind of pathetic, than an emblem of their enterprising spirit.
Your first three full paragraphs feel like a great example of the sort of focus problem I'm trying to describe. You're not factually mistaken or misrepresenting anything or incoherent. But, there's something about this perspective that makes it hard to see important systemic features.
I like the phrase "If someone is not in a position where they can defend their slack, then transforming non-slack assets into slack assets via availability of trade does great harm."
It seems to me that the trader mindset assumes the robustness of the substrate underneath trade, e.g. property rights and certain levels of trust. Universal trader values which enable open bribery of judges and juries are self refuting. Allowing the sale of votes or slaves may be similar. Possibly also the dynamics of lending at interest, bankruptcy, incorporation, etc.
There may be two trader mindsets actually, one for imminent trade without the assumption of property rights, which cannot be a substitute for sacred values at all, and another different type of trader mindset which can be built on top of a sacred value for honesty, sanity, justice and who knows what else.
Quakers, Puritans, & Dutch Calvinists all seem like they had the social technology for the latter.
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Thank vaia for your tutrorial.
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To possibly-incorrectly summarize, anyone subject to extraction has reason to keep their assets illegible,
and monetization is a very important form of legibility, so monetizing their wealth enables more extraction.
> subsistence farmers are generally powerless before state extraction too: money can be taxed – often extortionately so. In short, the very portability of money is a potential detriment here.
To anyone subject to extraction, monetization/legibility/efficiency is a dangerous double-edged sword. Efficiency is good, but legibility is bad, and they almost always go hand-in-hand, especially when speaking of monetization. If the gains from efficiency exceed the increased extraction due to legibility, then they'll end up better off. But the increased extraction from legibility can easily exceed the gains from efficiency, leaving them worse off.
> But if you want to collect taxes in money, you need the small farmers to have money. Which means you need markets for them to sell their grain for money and then those merchants need to be able to sell that grain themselves for money, which means you need urban bread-eaters who are buying bread with money, which means those urban workers need to be paid in money. We refer to that entire process as monetization – when I talk about economies being ‘monetized’ or ‘incompletely monetized’ that’s what I mean: how completely has the use of money penetrated through this society.
> The irony of all of this extraction is that while it is often nasty and predatory, it can have some positive long-term effects, because the extra food that the farmers are being effectively forced to produce moves through either state-redistribution or market mechanisms to an increasing population of specialist non-farmers who in turn provide benefits for the broader society, sometimes including the farmers.
> Metal tools, improved plows, large mills and bakeries would all be impossible without specialist smiths, wood-workers, architects, millers and bakers, for instance. And those merchants, moving food around from where it is common to where it is scarce can – if there are enough of them and trade is sufficiently unrestricted by things like wars – serve a valuable stabilizing role on the otherwise wildly destructive volatility of prices for things like food and other essentials.
> The great advantage of coinage is that it tremendously reduces transaction costs and allows for more complex business arrangements, which in turn enhance the overall efficiency of the underlying economy.
> What we see are agricultural systems capable of operating at multiple equilibria.
> You can imagine a low-equilibrium society, where trade and monetization are minimal. In this environment, it is very hard for small farmers to get access to productive capital (plow-teams, manure, mills) and so agricultural productivity is low. Because agricultural productivity is low, it is hard for the society to support many specialists, which in turn means fewer tools, plow-teams, manure and mills. The system is in a stable equilibrium, but at a relatively low level.
> But take the same society and increase trade and monetization. Access to capital gets easier through monetary means and increased trade means increased agricultural specialization, which increases overall out; the trade compensates for the added risk of pushing closer to mono-cropping in each region by evening out prices. Because agricultural productivity is high, the society supports many specialists. Some of those are freeloading aristocrats and large landholders who do little but extract rents and live lavish lifestyles, but many are productive specialists who produce the capital necessary to improve yields, or maintain the trade systems that support everything. This society is operating at a higher, stable equilibrium.
> Without changing any farming technology – that is, we haven’t invented anything, although existing technologies are more available in our high-equilibrium society – or the amount of land available, or the quality of the land, the second society is going to support far more people, potentially at a significantly higher standard of health.
> economic activity increased significantly in the Mediterranean from the second century BCE to the first century CE, before holding steady at a relatively high level into the second and possibly even third centuries. Population expands, urbanism increases, evidence suggests that diets, even among the poor, seem to improve. And then the fragile systems of trade and monetization that created that prosperity begin to break down as the Empire collapses. Bryan Ward-Perkins documents the archaeological evidence for real decline in living standards (which, by the by, runs counter to what was often supposed – that regular people did better once their imperial masters were out of the picture; in this case, it turns out they did not, though in other cases they may have). Population contracts and the loss of specialist non-farmers leads in some cases to the loss of key productive technologies, perhaps most famously, ceramics – that is, the making of pots (I struggle to communicate how important a technology this is, or how fundamental) – becomes a lost technology in post-Roman Britain, when the cities where the professional potters lived faded away as the trade which sustained them broke down.