Effective Differentials

Carl Shulman

Katja Grace's Meteuphoric

Preemptive Whitespace

I like the test. It seems to have multiple levels, each of which Brennan passes:

• Can you do a simple bayes theorem calculation?
• Can you resist conformity bias when necessary?
• Can you spot when you're fed bad data?

The article quotes "a senior vice president" at one of the US's two largest paperclip makers as saying "We actually can't understand how the U.S. consumption can be so huge". I do hope he's lying or misinformed by his colleagues, because otherwise what we have is a company with a tens-of-millions-of-dollars business that doesn't understand what its customers do with its products and apparently hasn't taken the elementary steps that might enable it to find the answer. (E.g., find 100 people, pay them a bit of money and ask them "What have you done with paperclips in the last week?" and "How many paperclips did you buy last week"; repeat a few times.)

It doesn't seem impossible that he might be lying. For instance, suppose it turns out that most paperclips are never used -- they get bought in large quantities and lost, or they're only easily available in quantities much larger than most people need, or something. Then a paperclip vendor might well not want to let customers know, lest they buy less.

Do people who passionate argue for buying a home instead of renting violate the Efficient Market Hypothesis? If that is so much better, why don't see a lot of people making money from landlording, by buying on mortgage and renting it out? Actually, I would think if you live somewhere where you see that, buying may be a good idea. If you personally rent from a landlord and you have a good idea that you and another family just paid for the landlords holiday cruise, you may want to stop that. But if you live somewhere where renting from co-ops, councils etc. is more frequent, and you see nobody profiting off landlording, and this suggests buying and re-renting is not really an option, you probably don't win much by buying.

Let's call it the Diamond Houses Fallacy. A Diamond House one that is indestructible and its value can only go up. Everything paid in mortgage for a Diamond House beyond the interest goes towards the equity, which is better than throwing it away in rent. However, real houses depreciate, need renovation, and you must also price in a certain risk of the neighborhood becoming lower value, kinda slum. If your country allows - for tax purposes - depreciating a house over 25 or 40 years, it may mean a 25 or 40 year mortgage would buy nothing, in the accounting sense: of course the house worths something, but you may have spent more on renovation.

But the real point here is that if you trust in efficient markets, you need not speculate on whether rent is spent on renovation or eaten up by depreciation. All you need to look around and see if people are making money with arbitraging it or not.

Any probability of non-finite history could cause the EV to blow up.

That gets into Pascal's Mugging territory, I think.

As a minor: considering that I:

• can't own things (I can buy them, but if someone can legally take the object which is legal for me to possess without some special, explicitly-legally-defined reason to do so and prevent me from accessing the object for arbitrarily long periods of time I wouldn't call it ownership)
• seriously, even if I get a job on my own through connections I made on my own, people can just take away arbitrary objects I legally buy with that money, and it's not like taxes because I can't predict it in advance and I lose non-interchangable resources (I can't decide that I would rather lose [amount of money equal to the cost of renting a computer for a few days] in place of [access to my computer with my files for a few days])
• have no legal right to privacy beyond rather limited forms of confidentiality when talking to doctors/lawyers/certain religious leader types (if my parents want to copy my backup drive and have someone decrypt it for them, the only thing stopping them is software, I couldn't file a police report)
• have no real right to freedom of religion, people could punish me for refusing to attend religious services if they wanted to
• have no right to view my own medical records, my parents can see the results of IQ and psych tests I spent an entire Saturday taking and I can't

I am kind of slanted towards the view that parents have too much influence over minors. I would, however, gladly give up some of my earnings to be able to own property and have the right to privacy.

Thanks for writing this so I can refer people to it instead of trying to regenerate all the reasoning on demand each time.