Category Archives: Economics

Levels of Republicanism

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On Profitable Partial Exit from Perverse Regimes Through the Exercise of One's Formal Rights as a Citizen

Enough criticism and analysis for the moment; here's a constructive program!

Whole systems become richer through exchange and division of labor, which affords people more leisure to explore and investigate the environment, and add to the total knowledge and capacities of the community. Local subsystems that are part of a larger economic community that is fundamentally extractive may decide to temporarily become less wealthy in nominal terms in order to become more self-governing through import replacement. For a more detailed well fleshed out theory with many examples on the level of the municipal or state economy, see the published work of Jane Jacobs, especially Systems of Survival, Cities and the Wealth of Nations, The Economy of Cities, The Nature of Economies, and The Question of Separatism.

At each stage of the process, the import substitution has to pay off fast enough for the community to be able to reproduce itself, which limits the extent of possible import substitution; we do not want to become North Korea. The Amish represent a more appealing prospect along the efficient frontier; they abstain from television, which we permit, but retain the capacity to build enough new housing in desirable locations to meet new needs, which our civilization has lost.

I would like to increase the scope of trade for a community of people whose minds are increasingly integrated, fully endorsed parts of their survival and reproductive strategies, and who constitute a language community that can describe itself and whose members can increasingly honestly describe themselves. For now, comfortable survival as an individual in our society requires adapting to mores that are perverse, anti-intellectual, and promote self-hatred, which makes it much more expensive to retain a nonperverse and prointellectual internal attitude. (See On commitments to anti-normativity, Guilt, Shame, and Depravity, The Order of the Soul, Calvinism as a Theory of Recovered High-Trust Agency, and Can crimes be discussed literally?.)

Here are some ways I can imagine forming various small republics within the current American system. I am less familiar with foreign regimes but I imagine some elements of this generalize well.

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Systems of Bullshit Work

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David Graeber introduced the idea of "Bullshit Jobs" as a primary focus of inquiry to public discourse in On the Phenomenon of Bullshit Jobs: A Work Rant, and the book Bullshit Jobs, but unfortunately with a tendency to make strong categorical statements even when his categories were not very good.1 Even more unfortunately, he's dead now, so I can't write to him and persuade him to fix this problem in his own name.

In The Debtors' Revolt I explained some of the structural reasons to expect such jobs to exist, but thought it might be a good idea to simply enumerate some of the categories, after which it should be easier to see that quite a lot of jobs are in aggregate intentionally economically wasted effort, even when they locally benefit some counterparty.

Examples follow.

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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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ETA: Per kave's comment on LessWrong, this project may not actually have happened as described.

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 →