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taw comments on A potentially great improvement to minimum wage laws to handle both economic efficiency as well as poverty concerns - Less Wrong
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Comments (74)
Don't talk about politics on lesswrong ever. This is just painful.
That's a bit harsh. I think the problem is just that Vijay hadn't heard of Friedman's negative income tax proposal, and is reinventing the wheel. Also, it's not polished enough for the Main section.
Thanks, orthonormal! Yes I had not heard of it and the idea seems very similar.
And politics is a mind killer.
And OP seems to have little idea about economics.
And more specifically this is 50% marginal tax rate and great incentive for illegal employment.
The original formulation of "Politics is the mind killer", intuitively seems not as good as yours here. It seems that there are probably other mind-killers.
Can we think of specific one's that aren't well described as "politics" and have a mind-killing effect of a commensurate order of magnitude?
Is "mind-killing" somehow a better description of what politics does than, say, beginning deliberation by writing one's bottom line first?
Anything that people incorporate as part of their identity tends to generate the cluster of biases that we collectively label "mind-killer". Many of these (body image; musical taste; Kirk or Picard) aren't political issues in the mainstream, but almost all of them become political issues among interested parties; in fact, I'd say that a colloquial sense of "politics" is defined partly in terms of which issues invoke that sort of identification.
That seems right.
I spent a bit of time looking at the details of Negative income tax. It is possible that I am not understanding the subtleties of Negative income tax but it appears that what I proposed is different and better than Negative Income tax. The reason for this is the following. In my scheme if a person is making wage y which is less than some threshold wage x, the state pays him (y-x)/2 which satisfied two objectives (1) People who are poorer get more state aid (2) People are still incentivized to work harder and make more money since their total payout (wages + government aid) is an increasing function of their wage. Let's take a negative tax rate of say -100%. Here a person making $1/hour gets another $1 from the government and a person making $4 per hour gets another $4 per hour from the government. This satisfies objective (2) above but not objective (1). Of course, one would argue that there would be tax slabs and consequently even different negative tax rates at different levels, but this problem exists within each tax slab. One could make each tax slab infinitesimally small and achieve the same effect as my proposal but that would be much like saying a function is linear, when it is really exponential and you are approximating it piecewise linear with really small pieces.
My bad. Friedman's NIT implementation seems to be the exact same thing I wrote. NIT seems like a really lousy name for it though, given that it naturally lends itself to the interpretation in my previous comment ; as a fixed percentage bonus added to your salary by the government within some wage band.
I half agree. If you are going to, it had better be good. It's similar to how, if you're going to tell a racist joke, it had better be funny.
One thing that should have been noticed is the specificity of the proposal: (x-y)/2. The more specific the proposal, the more likely it is to be sub-optimal, "2" should have been a variable. The less the numbers are bouncing around as variables in your mind, the less likely it is you are thinking about it on a sufficiently general level for it to be fit for LW.
This is part of "hold off on proposing solutions until you have discussed the problem thoroughly".
I am amused at this comment more than anything else. Of course it should have been (x-y)/r where 1<r<infinity. And of course correspondingly there is no reason to set x to exactly current minimum_wage* 1.5. Your preferred method of writing and talking reminds me a lot of what I tended to do as a Computer Science undergraduate who studied discrete mathematics and formal logic and liked to make statements unambiguously in first order logic. This was all the more because I was doing a bunch of courses that involved mathematical proofs which obviously lended themselves to that format.
The reason why this kind of writing is sub-optimal is the following:
That kind of precise writing is needlessly hard to parse.
Even after people parse it, to see the intuition behind it, people necessarily have to ground it in some typical/decent instantiations of values. It is therefore much better and you transfer more bits of information from mind to mind per unit time if you directly give people the specific example and allow them to generalize the idea behind the theory in their minds.
Admittedly I could have written what I did above and still given you the generalized thing stating the different knobs that could be tweaked in the example. I however thought that at least the knobs above were perfectly obvious to any person intelligent enough to understand my example. I saw no point to treat my reader with kid gloves here.
Again, I wasn't proposing a final solution that should be implemented tomorrow! And unless you are among a weird rare set of people incapable of reading anything other than bullet proof first order logic I find it hard to believe that you can ever read such a thing into this. In fact I would argue that there is no easy way to tell the optimal parameters above and possibly even in additional generalizations without any real empirical data regarding the utility functions of different people, how they respond to incentives, what is the histogram of people at different levels of wage in a world with no prevailing wage floor in different places etc. You would also need to evaluate if any fresh perverse incentives get created if this is implemented in some places and not others. All these go for any idea that is economics related and it is foolish to not put an idea up for discussion until you have collected data from all over the world and analyzed it thoroughly to get the optimal set of parameters, have guarded for perverse incentives thoroughly etc.
I am now an internet entrepreneur and have realized that the main objective with communication in most settings (writing research papers, pitching VCs, pitching other companies for partnerships etc.) is to transfer maximum bits of information in the shortest possible time. It is not necessary to get verbose and guard yourself against any possibly misinterpretation in the world. Such language is best used only in the context of an adversarial scenario such as a debate or a legal battle where the other party has every incentive in the world to misrepresent any of your statements, throw red-herring arguments your way etc. This is exactly why legal language is so tedious and annoying - to avoid adversarial parties at any point coming up with responses such as yours. In most normal non-adversarial scenarios, this approach is extremely sub-optimal for communication.
For what it's worth, I didn't find lessdazed's comment harder to parse or "worse" than yours. Plus, it was shorter!
I communicated my thoughts poorly.
To some extent, I assumed you wrote it as you thought it, considering how the other things were variables and just as a general sense I had. The sign that it's not abstract and that you are likely not holding off on proposing solutions is in how one thinks about it regardless of how one ultimately writes it.
I'm not primarily arguing that writing abstractly is always optimal (it admittedly may not have been here), but that thinking concretised is suboptimal, and writing concretised is correlated with concretized thinking. It's like Solomon's Problem.
So I have no large beef with how you wrote it, and I think you wrote the idea you had in a more than adequate way, but I and many others see it as not on topic. I think that that is because it is too specific. If this (ideal?) way of writing was a reflection of your thoughts, that should have been a hint that the thoughts weren't general enough.
My judgement is very susceptible to being wrong insofar as you may have thought about it totally abstractly and been good at avoiding too abstract writing; perhaps you have the good habit of translating the general thoughts in your mind into exemplary exemplary (sic) words, in which case you wouldn't have had this specific hint that this post was fairly off topic by its narrowness.
This confused me for a while. In my opinion, it is more specific ideas that are better prepared to be implemented, i.e. the applications of more general forms. I hadn't expected as a defense against a charge of being too practical and not theoretical enough an emphasis of the distance between the idea and its implementation. In general, one isn't concerned with perfection in the initial presentation of any idea, that makes sense, and one brings up the distance from implementation to show critics (that's me) are nitpicking (me?) and misguided (could be me) when they treat a floated idea inappropriately by subjecting it to a standard suited for smoothing a refined idea by removing the tiniest flaws.
As in this particular instance, I was arguing for generality as against practicality, I was truly confused when you spoke to the idea of differing standards being appropriate at different stages of an idea's life by using the language of distance to implementation. Eventually, I got it ;)
| perhaps you have the good habit of translating the general thoughts in your mind into |exemplary exemplary (sic) words,
Yes I do and it has served me very well with regard to being a clearer communicator. It's all the more helpful when communicating with people less used to talking abstractly. I strongly suggest you try it. You'll save time and be more clear 95% of the time unless the people you are communicating with are some really biased sample.
| in which case you wouldn't have had this specific hint that this post was fairly off topic by its narrowness.
narrow/specific/concrete<----------------------------------------------------------------->broad/abstract
raise the gas tax 3 cents........................tax energy use............................internalize externalities
Other people have downvoted your post/said it should be taken from the main page/criticized it and given general criticisms. I believe that I am being more specific than they and agreeing with them. The problem with this post is that it is narrow, specific, too close to an implementation that "should be implemented tomorrow!" It is not general enough, abstract enough, to fit here. I am articulating why I think it doesn't fit, and I think I am explaining why the others think so.
So, if when considering whether or not to post something on the LW main page, part of what I am considering is an economic proposal with a big fat "3 cents" with the number three rather than something I am thinking of in variables, that should be a big flashing warning sign that I am making the mistake of suggesting something too removed from its abstract, generalizable framework, I am possibly summoning politics, the mind killer, as a side effect, and I probably committed the error of not thinking through a problem before being fixated on a specific, narrow solution. "Tax energy use" would be better, "internalize externalities" better still.
Not as painful as when you pull the hipster "communism was actually successful" contrarian routine.
That was when were discussing things which are true on balance of evidence which are universally tribally disbelieved, so you can use them as a litmus test.
And all data says that communist countries were economically just as successful as non-communist countries on average in terms of growth and convergence. I even linked to data showing exactly that.
I no longer believe it's a particularly good rationality litmus test, people just compartmentalize way too much for there to be any good rationality litmus tests as far as I can tell.
I'd be really curious to see these data, if you don't mind posting these links again.
However, I will be very disappointed if these data boil down to measures of economic growth based on "real" GDP statistics, for at least two good reasons. First, the official communist statistics are known to have been doctored to an extreme degree. (Occasionally, as in e.g. the 1937 Soviet census, people who dared to submit truthful but bad-looking statistics were denounced as wreckers and shot. Admittedly, the repression after Stalin was much milder, but it's still naive to think that numbers weren't fudged or even faked outright at every level.) Second, for obvious reasons, meaningful comparisons of purchasing power between planned and market economies are impossible, and any attempt to do so is likely to favor the former.
Here's the paper which many people cannot even get themselves to read.
This is actually totally unproblematic, because GDP was not one of the ways communist countries measured their economies. They used primarily industrial production statistics, and GDP was the competing Western system of measurement they didn't like because it wasn't exactly putting them in the best light (with their economies being relatively more industry-focused and Western economies being more services-focused).
And the paper uses OECD data, not any official data.
And you get the same result with GDP proxy studies like life expectancy as with GDP.
So the data is solid no matter how you look at it. There's no way to tweak the data to make communist China grow more slowly than non-communist India, or communist Poland to grow more slowly than non-communist Peru.
Thanks for the link. I skimmed Kenny's paper, and it uses "income" statistics, which are certainly problematic for the reasons I mentioned. The industrial output numbers it cites are also problematic for the same reasons: if reporting unfavorable census figures was enough to get you shot, do you think it was much better when it came to production statistics? (Also, a lot of Kenny's figures are of that comically absurd nonsense-on-stilts variety where "real" GDP statistic for countries from a century ago are calculated to four and more significant digits.)
I don't know what exactly you mean by "OECD data," but as false as the official statistic were, it's naive to think that anyone outside the communist countries had an accurate idea on what the real numbers were. (And again, it should be obvious that comparing income based on purchasing power between a market and a command economy is inherently meaningless.) It's also naive to think that respectable Western economists didn't have strong pro-Soviet biases. A good example is the almost comical story about Samuelson's Orwellian revisions of his Soviet growth predictions in consecutive editions of his textbook.
As for comparisons with non-Western countries, I'll certainly agree that various Third World regimes often messed things up even worse than the Soviet Bloc. After all, many of them were equally ruthless and violent, and most were explicitly socialist to at least some degree. (By the way, it seems like both you and Kenny underestimate the intensity of both socialism and violence in the 20th century Third World.) I'll also agree that communist countries did make some advances in public health and education, as reflected in life expectancy, literacy, and other statistics, though it's also pretty clear that similar, if not greater advances would have been achieved by their realistic historical alternatives. On the other hand, it's also important to understand how much they were free-riding on global public goods produced by Western countries.
On the whole, the paper isn't really making much more than a trivial point that communist countries didn't look so bad in comparison with the Third World.
Calling Peru or India during the relevant period non-communist is certainly debatable.
All data? That would amaze me if true.
All the data shows that communist countries were as good at producing carboard imitations of cars, as capitalist countries were at producing actual cars.
When I visited Cuba in 1992, it looked like nothing had been replaced, built, repaired, painted, or maintained, since the 1950s. There was this big corral of ancient farm equipment.
FWIW, I got a similar impression visiting England in 2007. Not to mention the lack of free public wifi and toilets that you have to physically touch in order to flush!
Just read the paper.
Are you expecting Sam's reading of the paper to modernize all the stuff he saw in Cuba or something?
Then the data were wrong. Sorry, enormous net exodous rates trump Goodharted metrics. When you use a metric, you have to know the extent of its applicability. When "high growth" coincides with people risking death to get the hell out, you don't say, wow what amazing growth!
Would you say Latin American capitalism also failed by that metric? (Mostly) Capitalist Latin America and the Soviet Union performed about equally well, from about equal starting points, and Latin America didn't have the damage from two world wars and the need to compete in military spending with the richest nation in the word as a excuses.
Latin American countries are generally much closer to the communist/capitalist border (edited to fix dropped word) than Western Europe over that time period, and they generally did suffer a higher (though not as striking) net emigration rate (see the US/Mexico border).
I can't decipher this. You don't seem to have answered the question, either.
I was disputing that Latin Americans were capitalist in the sense that US/Canada/Western Europe are, and saying that on a scale they were closer to the middle and had net migration rates consistent with this. What did I not answer?
I thought you were saying something about closeness to geographical borders or the like. You did not answer whether you consider Latin American capitalism to have failed by your metric. Half way between communism and "real" capitalism (which would seem to include e. g. France, Italy and Sweden)? That sounds like a post hoc justification. (I'm assuming you are not talking about soviet aligned governments, which controlled only a small fraction of the total Latin American economy over the time frame in question)
I couldn't find anything for 1989, but check the economic freedom ratings of the Heritage Foundation for 1995: The variation among Western European and Latin American nations is much greater than the difference between their averages and most Latin American nations are within the Western European range. The reason the Latin American nations score a bit lower on average is mostly corruption and they score "better" on government spending.
I don't know much about the specifics of Latin American countries, just that has a lot of revolutions that involve socialist governments taking power, which justifies not labeling them as capitalist to the extent that the canonical cases are.
The "if data disagrees with my view so the data is wrong" reaction is exactly what I thought makes it a good litmus test.
The test was not for agreement or disagreement, it was for absence or presence of kneejerk reaction that rejects all data without even bothering to look at it.
But as far as I know, you might still be perfectly rational as long as it doesn't involve economics or politics, just as the Pope can be perfectly rational as long as it doesn't involve religion. People just have their weird compartments.
What Eugine said. See I defy the data, which I summarize as:
Your models of the world must be consilient. If you find "growth" coinciding with "nothing new being built since before communists took over", then yes, you should "defy" the supposed growth data. If growth means anything, it means, "people don't risk death trying to float away because of poor opportunities". If you try to reinterpret the world so that such a circumstance "really" counts as growth, then you've fundamentally forgotten why you came up with that metric in the first place.
It is far more a case of "compartmentalization" to say that "except with respect to every on-the-ground observable, this country has high growth, because that's what their economic numbers say, and don't tell me about what you saw there, that's a separate, non-overlapping magisterium".
No, this is a case of "the data fails to agree with observation and furthermore is in a field notorious for data manipulation and sometimes outright falsification, therefore the data is wrong with high probability".
Relying on "data" even when it blatantly contradicts direct observation, as you seem to insist on doing, is precisely the kind of straw rationality gives rationality in general a bad name and more importantly causes many rationalists to fail.
Umeshism: If nobody is willing to risk death to leave your country, you're trying too hard to please everybody.
Alternate interpretation: People leave capitalist, socialist, and anarchist countries regularly. Do all of them have a marginal benefit for leaving below an [x]% risk of death?
Note that I was using the net exodus rate as a metric. For countries that are about equally good, you will find people leaving one for the other, but they won't be strongly biased in favor of leaving any particular one of them.
OTOH, if one of them has a huge net emigration rate, and everyone tells you they left, "because we could"...