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Lumifer comments on Publishing my initial model for hypercapitalism - Less Wrong
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Comments (78)
That is not correct. If there are no profits, there are no incentives for sellers to stay in business.
Sure. I walk into a grocery store and buy an apple. I paid more than the cost of the apple to the store -- where is my "disadvantage" that the seller exploited to get rent? To forestall the location rent argument, let me point out that there is another grocery store selling the same apples down the block.
The economic rent is in the fact that there wasn't an apple tree on your the walk to the store.
Economic rent isn't always bad. Otherwise we'd have an apple tree infestation problem.
And we come full circle to me pointing out again that this is NOT the meaning in which mainstream economics uses the word "rent".
You do want to popularize your theory, right? That means explaining things using terminology that your target audience knows and understands. Unless you have a very good reason, changing the meaning of pretty standard terms leads to much confusion.
Hmm...I'll have to look into this more. There certainly is a difference between 'rent' and 'economic rent'. I'm really don't think I'm misusing economic rent.
You can call it profit if you want. In the model, some nodes have a better ability to extract profit than others. Or we can call it 'make moneyness'.
"Moneyness" is a term in finance :-)
Do you mean "better extract profit" or do you mean "generate value with higher productivity"?
And my initial question still stands: what is your aim and what problems do you want to solve?
See my answer below:
http://lesswrong.com/r/discussion/lw/m38/publishing_my_initial_model_for_hypercapitalism/ca33
I mean that some of us are better at generating some kinds value than others. (Division of Labor)
A wine maker who has been in the business for 25 years can make a better bottle of wine than I can. If he wanted to make the same bottle of wine that I can, he could do it more easily.
A competent wine maker is already rewarded for being able to produce a good bottle of wine under normal capitalism -- he can sell this bottle for, say, $50 and you can't do this with your homebrew.
As to you goals, I don't see why low velocity of money is a problem (yes, I'm familiar with Keynes). It's a symptom of the sluggishness of the underlying economic activity, not its cause. Having bank deposits or bonds pay negative interest is also a solved problem (see contemporary Europe), and if you want all store-of-value to be subject to negative interest rates you have to outlaw cash and equivalents to start with.
I don't know what is "good" value. I also don't know what is "dignity of labour".
And I don't think you're serious about robots :-P
The wine buyer is not rewarded for buying from a wine maker that will make a better wine bottle tomorrow though. Think for a bit on if she was.
I'm not sure if the velocity of money is a result or a cause of economic activity, but my reason tells me that if it is flowing faster, 'I' have a better chance at having some flow to me. P(making 100k at mv 6) < P(making 100k at mv 12)
Can you name a form of non artificial capital that is a cash equivalent? Maybe gold? Any non elements that aren't subject to entropy? Ultimately, yes, I think all artificial forms of 'store of value' should have an artificial form of entropy added to them because that is the way the world works.
I bet if you don't know what good value is that you at least know bad value when you see it.
I talk more about the full output of labour in this paper: https://www.dropbox.com/s/k97dzssxc58ux1s/hypercapitalismwpv1.1.pdf?dl=0
...as for the robots. I'm a little serious. If agi emerges into a world where economic nodes are dependent upon each other and it has more to gain from cooperation than dominating, it might buy us a few years to find a balance.
If she were rewarded for buying from someone who'd get better tomorrow, she will also get punished for buying from someone who'd get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don't see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.
As a buyer I don't want to have a little bit of risky investment forced into every purchase I make.
Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket.
What's "non-artificial capital"? Money itself is "artificial" to start with, the current fiat currencies for certain.
"Cash" is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid.
You can think of inflation as "entropy" for cash.
Not in your sense, I don't. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example.
Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.
Some risk, yes. But in the models I've run, the risk is fairly small and is mitigated by the fact that shitty wine maker spends some of your cash with awesome barrel maker and awesome seed provider. The recursiveness of the system time shifts out some of your risk.
If shitty wine maker goes out of business, because we have a public ledger we can 'fold the blockchain' and connect where the money went to where the money came from and fill in a void that, in the current economy, causes all kinds of volatility.
I think you do, you just don't know it yet :) Your choice would be between more than what you get now or way more than you get now. If I told you that your risk was between getting back 3% or 300% of what you spent over the next 50 years, even in the worst case you've gained 3%. You could of course choose to keep using your old money.
If you buy a lottery ticket that is good for all future drawings, and they double the number of drawings, you do have a better chance of winning. Your economic potential isn't a lottery ticket that expires. If people have more to gain by holding their cash than spending/investing it, the chance that they will invest/spend with you goes down. If they there is a cost for holding cash they will seek ways to at least break even. Maybe you break even today, but with your experience, you turn a profit tomorrow.
A bulldozer is natural capital(non-artificial). A tree is natural. You are natural. A computer is natural. All those things are subject to entropy and have a natural carrying cost. Items whose value derive from law, psychology, math, or ideas are artificial. Money is artificial, but if you don't make the map the territory something is going to go wonky and you're going to have a 'correction'.
And I'd contend that the store of value part is convenient, but ultimately misguided. It was a shortcut we needed to use to get from horse drawn carriages to databases. But we don't need to completely preserve the 'store of value' anymore. We can let it decay just like the world around it.
Yes, but I'll contend that controlled inflation(demurrage) is better than the random inflation we deal with now.
As good a value as a $1 shirt made by a robot down the block? No fossil fuels burned in shipping, no slave labor. Surely there are better and worse ways of doing things.
I don't contend it will solve the problem, just that it might buy us some time if it can get some decent utility out of humans providing the atoms and energy while it ramps up to do it itself. Maybe it is just second. It is just a theory.
Would an intelligence not subject to the availability bias ever choose to not use a form of exchange where it benefited from all uses of the exchanged material in the future vs. exchanging resources for only the perceived present value? I think it is a question worth asking.
From what I gathered if two sellers would sell the exact same product but another seller could sell it at double the price it would become a favoured node. If they were not interchangeable products you could try to argue that the difference must be between the quality of the products. However if the same product has the same use value the measure is more about better extracting profits. There is the effect that given choice of equal product at cheaper or higher price a consumer ought to go with the lower cost. Competetive effects are supposed to kill off overpriced products but giving a bonus to seller for having a big mark up dulls their teeth.
This is a tough one because most of the readily available literature on competition and market take a specific approach. Specific in the sense of time. Of course at the instant we don't want people favoring more expensive things...unless there is a damn good reason to. If you add in time though things get very interesting. This system alters the proposition to current market decision + future potential. You wouldn't pay more just to pay more, but you might buy a Tesla instead of a Honda accord because you think that Tesla had better long term earning potential and you are getting in on the ground floor.
Most of the things we buy aren't commodities. There is some trade off on features vs cost. This system does tip the scales toward things that may be more expensive, but only if there is a long term advancement that can be leveraged.
In the instance where we actually deal with a commodity, more emphasis will be placed on the long term repetitive production of that commodity. If the commodity can't be renewed it will be less favored. Thus I'd expect a vector away from depletable goods and toward renewable alternatives.
These assumptions are harder to work into a model.
You could offer the Tesla at a high price or a lower price. If the price is higher individual sells will move the company quicker to ground floor. That is Tesla + 1 stock will probably cost less than Tesla + 10 stock. But what is that prevents from offering the option of Tesla + 0 stock or the minimum amount of stock allowed?
There is also the issue that if you think you can afford Tesla + 5 stock but could not afford Tesla + 0 stock you might end up with Tesla that bombs harder than just taking a unpaybackable loan for Tesla + 0 stock. That is when the future component factors in to everyday products future speculation will impact the price of milk. People might have a bigger resistance to buy into things because it doesn't need to only work in the moment but it needs to work for the future as well. You can't look at your accout balance and know how well of you are as you are expecting uncertain returns, returns you might need to stay on the positives.
Thanks for the feedback. I'm not quite sure I understand your concerns. Are you concerned that people will offer different levels of stock to different people? That is not exactly how I imagined things working. $1 spent = 1 unit of stock(point/air line mile/smoods/call them what you will it is a unit of account).
In general I think we should be more forward looking. I don't see much of a negative in causing people to consider the future implication of their actions. We are limiting anyone's freedom. You can still buy from the less attractive vendor if you want.
Even if the amount of "stock" is the same constant for everybody there is still a decision how big a portion it should represent. In the extreme the only stocks are from the $1 in 1 stock out principle. But in a way the enterpreneur should also have stock in it. If the enterpreneur reserves 1000 stocks for himself that would be the equivalent of a 100 stock person giving out 10 stocks per $. If the starter doesn't have any stock he doesn't own it he just operates it for the customer-owners.
Wikipedia has an article on "economic rent", so it probably is an existing term, although I have never heard it before.
Seems like "rent" is an income from a (generally) limited resource, while "economic rent" is an extra income from a resource that (locally, temporarily) acts like a limited resource.
Just like apples are generally not a limited resource, but if you need an apple, and your time is limited, and there is only one shop on your way, and it contains a limited amount of apples... then those apples here and now behave like a limited resource.
Yes, exactly. Most economic theory assumes 'in the moment' and a bit of God like reach. In the real world we have to deal with time and space.
For most of us working stiffs, when we go to the store to buy milk we are charged an large amount of economic rent to buy it cold, in a container, near our home. Despite the fact that you really need to drive an hour or more to find a cow. Given infinite time and teleportation, we'd hit the farm and get it for much, much less. You only have to look to digital assets to see how this plays out. This isn't a bad thing. We want the farmer, the pasteurizer, the delivery man and the grocery store to stay in business, but we also want them to do it better, faster, cheaper next time. General market dynamics cause this to happen a rate. I want it to happen at a faster rate.