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moridinamael comments on What would you do with a financial safety net? - Less Wrong
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Comments (28)
Thanks for posting this.
Peter Thiel's 20 under 20 contest pays 20 exceptional young people a $100,000 each. This is a good starting place for thinking about this type of thing, but I don't know if I agree with how he implemented it.
My reasoning underlying the original suggestion was this: "Self-made" highly wealthy individuals are often risk-seeking. Speaking for myself, I feel that I would be more risk-seeking if I had a guaranteed financial safety net. Without such a net, each individual spends most of their own life establishing financial security and never taking the kinds of risks that could lead to significant wealth. Thus, there's a tremendous amount of duplication of effort, in the sense that we're all making our own careers and yet we all agree that there are specific "more important things."
Even one ultra-wealthy* Less Wrong-style rationalist could do tremendous good through calculated donations and funding of projects.
*There is some ambiguity here obviously. Let's just say this means having enough personal discretionary wealth to fully fund one or more focused and effective long-term research projects.
I think you have the causality reversed there.
Not necessarily; one way to become more successful than normal is to take risks that have a chance of a big payoff, even if they have a negative expected value, and then get lucky.
See also "Lucky Fools and Cautious Businessmen", a paper that I can't seem to find on the internet, which argues that entrepreneurship, in general, is a negative expected value proposition for the individual.
That was my point, that being risk-seeking causes one to be wealthy, rather then that being wealthy causes one to be risk-seeking.
I think that we are agreeing? Those who become wealthy are often individuals who have exhibited risk-seeking behavior in the past, which has paid off.
Part of the point of the safety net is to provide a means for dedicated individuals to try out entrepreneurship without having to worry that their lives will be ruined if the fail. In fact, my optimal design would permit chosen individuals to try over and over again without penalty, encouraging them to take risky opportunities, provided there is at least a straight-face possibility of correspondingly high reward.
In practice, these kind of situations tend to lead to things like the dot-com bubble.
I'm not sure I understand the leap in logic there. If people have a reasonably comfortable minimum income regardless of what they do, how does that induce runaway speculation? Would venture capital firms not be as hesitant to hand out money to people who consistently failed to return on investment? Granted, VC firms could still get caught up in fads like in the dot-com bubble, but I don't foresee a minimum income really driving (very rich, well above the minimum income level) VCs into higher risk taking behavior.
Moridinamael was talking about permitting individuals "to try over and over again without penalty", what you describe is an example of a penalty.
Yeah, what if instead of enough money for a year, you were provided a "reasonably comfortable minimum income" indefinitely? In other words, imagine if somehow magically (or with technology :-) ) most of the basic things needed in life were provided to you. What would you do? Have you been taught to deal with lots of free time? No probably not. We have only been taught to work work work!!
Now imagine if most of society had lots of free time? As a teacher, I think we could do so much more if there was less emphasis on having a job and more emphasis on doing/learning cool stuff just for fun. Of course this would have to be reinforced at home and in society. It would be easy to fall into the "entertainment" trap but I think that given proper training and good social programs, people would actually spend more time on being creative, discussing and solving problems than watching TV and playing video games.
I dream of the day when no one has to work more than 2 hours/day. With 7 billion it shouldn't be that difficult right?
I suspect that you don't actually need to be ultra-rich to do this. $100,000 is certainly a sufficient amount of money, but I suspect that a tenth of that would be a good enough safety net for most people.