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polymathwannabe comments on What are your contrarian views? - Less Wrong Discussion
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Dollars and utilons are not meaningfully comparable.
Edited to restate: Dollars (or any physical, countable object) cannot stand in for utilons.
Utilons do not exist. They are abstractions defined out of idealized, coherent preferences. To the extent that they are meaningful, though, their whole point is that anything one might have a preference over can be quantified in utilons--including dollars.
Can you explain what is wrong with the following comparison?
The value of a dollar in utilons is equal to the increase in expected utilons brought by being given another dollar.
The problem is the law of diminishing marginal utility. Translating from dollars to utilons is not straightforward at all; how much utility that dollar gives you depends on factors like how many dollars you already have, how much you owe, what services you can sell, and how much you know about what to do with money. For that same reason, utilons do not add up linearly by giving you a second, third, etc., dollar.
Right; assuming (falsely of course) that humans have coherent preferences satisfying the VNM axioms, what can be measured in utilons are not "amount of dollars" in the abstract, but "amount of dollars obtained in such-and-such way in such-and-such situation". But I wouldn't call this "not being meaningfully comparable". And there is nothing special about dollars here, any other object, event or experience is subject to the same.
Every time there's an argument that goes like, "Would you pay a penny to avoid scenario X?", which in real life means actually "Would you sacrifice a utilon to avoid scenario X?" and therefore requires us to presuppose that dollars can stand in for utilons, something special is being assumed about dollars.
But "Would you pay a penny to avoid scenario X?" in no way means "Would you sacrifice a utilon to avoid scenario X?" (the latter is meaningless, since utilons are abstractions subject to arbitrary rescaling). The meaningful rephrasing of the penny question in terms of utilons is "Ceteris paribus, would you get more utilons if X happens, or if you lose a penny and X doesn't happen?" (which is just roundabout way of asking which you prefer). And this is unobjectionable as a way of testing whether you have really a preference and getting a vague handle on how strong it is.
I would prefer if people avoided the word "utilon" altogether (and also "utility" outside of formal decision theory contexts) because there is an inevitable tendency to reify these terms and start using them in meaningless ways. But again, nothing special about money here.
Seconded. But then we would also need to avoid using language that sneaks disguised utilons into the conversation.
If you had another dollar, then the value of the next dollar in utilons would decrease. Unless you're both an egoist and terrible with money, it will only be a slight decrease. After all, a dollar isn't much compared to all of the money you will make over your life.
I do not think that the fact that utilons do not add up linearly means that the conversion is not useful. For one thing, it allows you to express the law of diminishing marginal utility.