Category Archives: Economics

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.

Context

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

Talents

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:

https://vimeo.com/13750360

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

Why I am not a Quaker (even though it often seems as though I should be)

In the past year, I have noticed that the Society of Friends (also known as the Quakers) has come to the right answer long before I or most people did, on a surprising number of things, in a surprising range of domains. And yet, I do not feel inclined to become one of them. Giving credit where credit is due is a basic part of good discourse, so I feel that I owe an explanation.

The virtues of the Society of Friends are the virtues of liberalism: they cultivate honest discourse and right action, by taking care not to engage in practices that destroy individual discernment. The failings of the Society of Friends are the failings of liberalism: they do not seem to have the organizational capacity to recognize predatory systems and construct alternatives.

Fundamentally, Quaker protocols seem like a good start, but more articulated structures are necessary, especially more closed systems of production. Continue reading