Less Wrong is a community blog devoted to refining the art of human rationality. Please visit our About page for more information.

Comment author: bogus 22 May 2017 05:36:02PM *  0 points [-]

Pensioners have paid into the system, though. Yes, it's a Ponzi scheme that no one sane would want to enter into in the first place, but they're still entitled to get something out.

Comment author: satt 23 May 2017 10:29:17PM *  0 points [-]

I agree with the normative statement that pensioners who pay in are "entitled to get something out", but it's a new claim. My comment, like the bit of entirelyuseless's comment to which it responded, was about an empirical claim.

Pensioners have paid into the system, though.

The fact remains that there is a big group of people in Europe who can, in fact, claim government cash even if they declare that they have worked, and could work, but just don't want to work. Insofar as entirelyuseless's general point was that someone has to work to keep an economy going, that point is well taken, but the empirical claim about Europe is materially false.

(And, regarding the more general argument, if there were a basic income, the vast majority of people claiming it would likewise have paid into the system, through general taxation. So the fact of paying in doesn't do a very good job of distinguishing a BI from a pension scheme.)

Yes, it's a Ponzi scheme

How so? To my mind, a defining property of a Ponzi scheme is that it's fraudulent, deceptive (or at least opaque) about where it finds the money that it disburses. But — in my European country, anyway — the government publishes annual accounts for its pension fund, which are, as far as I know, uncooked books. Check 'em out.

Comment author: ChristianKl 21 May 2017 08:12:42PM 0 points [-]

I didn't want to argue that the lack of zoning regulations produced economic growth but that rent is stable despite grows.

Comment author: satt 21 May 2017 08:18:04PM 0 points [-]

Ah, OK, I read your "political decision [...] is quite clearly responsible" as referring to your previous sentence, not your previous comment.

Comment author: entirelyuseless 19 May 2017 02:01:17PM 0 points [-]

I disagree with your first comment about the $100 and the loaves, as I said, because you are overly simplifying. For example, even aside from the things I already mentioned, you also ignore the fact that the person needs to spend money or goods in order to produce the loaves.

That said, you might be able to refine that example or come up with another; I certainly do not think that markets infallibly have the result of rewarding value creation. I agree that free markets leads to that kind of inequality and that this is a not particularly great aspect of it. However, it is not reasonable to say "this is a horrible process" if you cannot propose a better alternative. And I am not even saying there is not a better alternative. I am just saying that no one has found one yet.

The fact that the Soviets used the St. Paul quote is revealing in regard to what usually happens if you attempt to replace free markets with something else. The problem e.g. with a guaranteed basic income is this: either people have to work, or they don't. If they don't have to work, then there is the implicit assumption that wealth does not depend on work, which in our world is false. So if enough people decide not to work, the system will necessarily collapse. This does not of course prove that a basic income is impossible, since you could simply keep reducing the amount of the income until enough people are working to keep it going. But it does show a serious issue. And on the other hand, if they do have to work, then they are slaves. And so the way the Soviets were using the slogan, they were making people slaves.

The only alternative (to the the impossible option of wealth not depending on work or to slavery) is to admit that if people choose to do so, they do not have to work, but they will suffer the consequences. Europe has a better unemployment system than the USA, for example, but even in Europe (at least in general and if I understand it correctly, and obviously the details differ in various places), there needs to be at least a bit of ambiguity about why you are unemployed. If you openly say, "I am perfectly competent and well qualified for many jobs, and I know from experience that I could get one next week if I wanted. In fact I just received an offer, which I rejected. I do not WANT to work, and I won't," even Europe will not continue offering you support.

Comment author: satt 21 May 2017 06:51:50PM *  0 points [-]

Europe has a better unemployment system than the USA, for example, but even in Europe (at least in general and if I understand it correctly, and obviously the details differ in various places), there needs to be at least a bit of ambiguity about why you are unemployed. If you openly say, "I am perfectly competent and well qualified for many jobs, and I know from experience that I could get one next week if I wanted. In fact I just received an offer, which I rejected. I do not WANT to work, and I won't," even Europe will not continue offering you support.

Counterexample: pensioners. (And yes, I can be quite sure that some of them are both able & qualified to work, because a non-negligible number of them do work.)

Comment author: cousin_it 16 May 2017 05:17:51PM *  1 point [-]

You're right that rich people can create value for themselves, I'm not arguing against that. But I often see claims that rich people must've given a lot to others, and poor people must've not given enough. That's what I'm arguing against. It's possible that many rich people are rich because they're giving mostly to themselves, and many poor people are poor because they give more than they receive. That strikes against the idea that the market is fair.

Comment author: satt 21 May 2017 05:43:20PM 0 points [-]

For example, if you're a single mother minding a child, you're providing value, but your child is unlikely to pay you for that! (You reminded me of the feminists' observation that women disproportionately do work, like childcare, which is often left uncounted or under-counted in conventional economic accounts.)

Comment author: strangepoop 18 May 2017 11:40:32PM 1 point [-]

Incidentally, Gary Drescher makes the same (citation free) statement in a footnote in Chapter 7 - Deriving Ought from Is:

Utilitarian bases for capitalism—arguments that market forces promote the greatest good—are another matter, best suited for other books. For here, suffice it to note that even in theory, an unconstrained market does not promote the greatest good overall, but rather the greatest good weighted by the participants’ relative wealth.

I remember asking for a reference about a year ago on LWIRC, but that didn't help much.

Comment author: satt 21 May 2017 05:06:52PM *  1 point [-]

Brad DeLong wrote in 2003 that "the market system's social welfare function gives each individual a weight inversely proportional to his or her marginal utility of wealth", which he found "a completely trivial result"! Here is his algebra. Last year he pointed to Takashi Negishi as someone who published the result in 1960.

Edit: though to get the result that the weights are proportional to relative wealth you have to add the assumption that utility goes as log wealth.

Comment author: ChristianKl 21 May 2017 01:49:45PM 2 points [-]

Tokyo's population and economy are growing even when that's not true for Japan on the whole. The political decision to get rid of zoning regulations is quite clearly responsible.

Of course, there are resources that are scarce and then the market puts a high price on it but there's no way around scarcity. If the resource is really scarce you can't give it to everybody.

Comment author: satt 21 May 2017 04:16:08PM 0 points [-]

Tokyo's population has grown and is growing, but that seems to account for most of Tokyo's economic growth, not zoning regulations, since Tokyo's GDP per capita shows fairly anaemic growth from 2001 to 2012 (can't immediately find a longer time series).

Comment author: strangepoop 18 May 2017 09:18:21PM 1 point [-]

Is there some nice game-theoretic solution that deals with the 'free rider problem', in the sense of making everyone pay in proportion to their honest valuation? Like how Vickery Auctions reveal honest prices, or Sperner's lemma can help with envy-free rent division?

Comment author: satt 21 May 2017 03:47:31PM 0 points [-]

I suspect the answer is "not in general, unless you're willing to pump extra money into the payment-extracting mechanism". Depending on how generally you define "free rider problem", at least some examples of the problem are likely to be captured by Holmström's theorem: a system which pays each member of a team to to provide inputs to produce output can't balance its budget (exactly split the output's value among the team members), be self-enforcing, and Pareto efficient.

I think your fresh paint example is susceptible to Holmströmean logic. Suppose you've found a painter who's willing to do an amount of painting proportional to the money they're given; you're willing to pay for $40 worth of painting but your two housemates would only pay for $20 worth of painting. If you propose to either housemate that you pay $20 to the painter while the housemates pay $10 each, the housemate will (assuming they act as homo economicus spherical cows) notice that if they don't pay anything, $30 of painting will still get done, more than the $20 they wanted in the first place. So they won't pay anything, as you expected.

Comment author: RomeoStevens 03 May 2017 06:19:01PM *  11 points [-]

Having spent years thinking about this and having the opportunity to talk with open minded, intelligent, successful people in social groups, extended family etc. I concluded that most explicit discussion of the value of inquiring into values and methods (scope sensitivity and epistemological rigor being two of the major threads of what applied rationality looks like) just works incredibly rarely, and only then if there is strong existing interest.

Taking ideas seriously and trusting your own reasoning methods as a filter is a dangerous, high variance move that most people are correct to shy away from. My impression of the appeal of LW retrospectively is that it (on average) attracted people who were or are under performing relative to g (this applies to myself). When you are losing you increase variance. When you are winning you decrease it.

I eventually realized that what I was really communicating to people's system 1 was something like "Hey, you know those methods of judgment like proxy measures of legitimacy and mimesis that have granted you a life you like and that you want to remain stable? Those are bullshit, throw them away and start using these new methods of judgment advocated by a bunch of people who aren't leading lives resembling the one you are optimizing for."

This has not resulted in many sales. It is unrealistic to expect to convert a significant fraction of the tribe to shamanism.

Comment author: satt 08 May 2017 07:59:17PM 1 point [-]

Maybe a side note, but it's not obvious to me that

When you are losing you increase variance. When you are winning you decrease it.

is in general true, whether normatively or empirically.

Comment author: tristanm 20 March 2017 10:54:00PM 5 points [-]

Should we expect more anti-rationalism in the future? I believe that we should, but let me outline what actual observations I think we will make.

Firstly, what do I mean by 'anti-rationality'? I don't mean that in particular people will criticize LessWrong. I mean it in the general sense of skepticism towards science / logical reasoning, skepticism towards technology, and a hostility to rationalistic methods applied to things like policy, politics, economics, education, and things like that.

And there are a few things I think we will observe first (some of which we are already observing) that will act as a catalyst for this. Number one, if economic inequality increases, I think a lot of the blame for this will be placed on the elite (as it always is), but in particular the cognitive elite (which makes up an ever-increasing share of the elite). Whatever the views of the cognitive elite are will become the philosophy of evil from the perspective of the masses. Because the elite are increasingly made up of very high intelligence people, many of whom with a connection to technology or Silicon Valley, we should expect that the dominant worldview of that environment will increasingly contrast with the worldview of those who haven't benefited or at least do not perceive themselves to benefit from the increasing growth and wealth driven by those people. What's worse, it seems that even if economic gains benefit those at the very bottom too, if inequality still increases, that is the only thing that will get noticed.

The second issue is that as technology improves, our powers of inference increase, and privacy defenses become weaker. It's already the case that we can predict a person's behavior to some degree and use that knowledge to our advantage (if you're trying to sell something to them, give them / deny them a loan, judge whether they would be a good employee, or predict whether or not they will commit a crime). There's already a push-back against this, in the sense that certain variables correlate with things we don't want them to, like race. This implies that the standard definition of privacy, in the sense of simply not having access to specific variables, isn't strong enough. What's desired is not being able to infer the values of certain variables, either, which is a much, much stronger condition. This is a deep, non-trivial problem that is unlikely to be solved quickly - and it runs into the same issues as all problems concerning discrimination do, which is how to define 'bias'. Is reducing bias at the expense of truth even a worthy goal? This shifts the debate towards programmers, statisticians and data scientists who are left with the burden of never making a mistake in this area. "Weapons of Math Destruction" is a good example of the way this issue gets treated.

We will also continue to observe a lot ideas from postmodernism being adopted as part of political ideology of the left. Postmodernism is basically the antithesis of rationalism, and is particularly worrying because it is a very adaptable and robust meme. And an ideology that essentially claims that rationality and truth are not even possible to define, let alone discover, is particularly dangerous if it is adopted as the mainstream mode of thought. So if a lot of the above problems get worse, I think there is a chance that rationalism will get blamed as it has been in the framework of postmodernism.

The summary of this is: As politics becomes warfare between worldviews rather than arguments for and against various beliefs, populist hostility gets directed towards what is perceived to be the worldview of the elite. The elite tend to be more rationalist, and so that hostility may get directed towards rationalism itself.

I think a lot more can be said about this, but maybe that's best left to a full post, I'm not sure. Let me know if this was too long / short or poorly worded.

Comment author: satt 24 March 2017 02:18:56AM 1 point [-]

I think a lot more can be said about this, but maybe that's best left to a full post, I'm not sure. Let me know if this was too long / short or poorly worded.

Writing style looks fine. My quibbles would be with the empirical claims/predictions/speculations.

Is the elite really more of a cognitive elite than in the past?

Strenze's 2007 meta-analysis (previously) analyzed how the correlations between IQ and education, IQ and occupational level, and IQ and income changed over time. The first two correlations decreased and the third held level at a modest 0.2.

Will elite worldviews increasingly diverge from the worldviews of those left behind economically?

Maybe, although just as there are forces for divergence, there are forces for convergence. The media can, and do, transmit elite-aligned worldviews just as they transmit elite-opposed worldviews, while elites fund political activity, and even the occasional political movement.

Would increasing inequality really prevent people from noticing economic gains for the poorest?

That notion sounds like hyperbole to me. The media and people's social networks are large, and can discuss many economic issues at once. Even people who spend a good chunk of time discussing inequality discuss gains (or losses) of those with low income or wealth.

For instance, Branko Milanović, whose standing in economics comes from his studies of inequality, is probably best known for his elephant chart, which presents income gains across the global income distribution, down to the 5th percentile. (Which percentile, incidentally, did not see an increase in real income between 1988 and 2008, according to the chart.)

Also, while the Anglosphere's discussed inequality a great deal in the 2010s, that seems to me a vogue produced by the one-two-three punch of the Great Recession, the Occupy movement, and the economist feeding frenzy around Thomas Piketty's book. Before then, I reckon most of the non-economists who drew special attention to economic inequality were left-leaning activists and pundits in particular. That could become the norm once again, and if so, concerns about poverty would likely become more salient to normal people than concerns about inequality.

Will the left continue adopting lots of ideas from postmodernism?

This is going to depend on how we define postmodernism, which is a vexed enough question that I won't dive deeply into it (at least TheAncientGeek and bogus have taken it up). If we just define (however dodgily) postmodernism to be a synonym for anti-rationalism, I'm not sure the left (in the Anglosphere, since that's the place we're presumably really talking about) is discernibly more postmodernist/anti-rationalist than it was during the campus/culture wars of the 1980s/1990s. People tend to point to specific incidents when they talk about this question, rather than try to systematically estimate change over time.

Granted, even if the left isn't adopting any new postmodern/anti-rationalist ideas, the ideas already bouncing around in that political wing might percolate further out and trigger a reaction against rationalism. Compounding the risk of such a reaction is the fact that the right wing can also operate as a conduit for those ideas — look at yer Alex Jones and Jason Reza Jorjani types.

Is politics becoming more a war of worldviews than arguments for & against various beliefs?

Maybe, but evidence is needed to answer the question. (And the dichotomy isn't a hard and fast one; wars of worldviews are, at least in part, made up of skirmishes where arguments are lobbed at specific beliefs.)

Comment author: Lumifer 21 March 2017 06:22:03PM *  0 points [-]

capital is a rather vacuous word. It basically means "stuff that might be useful for something"

Um. Not in economics where it is well-defined. Capital is resources needed for production of value. Your stack of decade-old manga might be useful for something, but it's not capital. The $20 bill in your wallet isn't capital either.

Comment author: satt 24 March 2017 12:55:43AM 0 points [-]

Um. Not in economics where it is well-defined. Capital is resources needed for production of value.

While capital is resources needed for production of value, it's a bit misleading to imply that that's how it's "well-defined" "in economics", since the reader is likely to come away with the impression that capital = resources needed to produce value, even though not all resources needed for production of value are capital. Economics also defines labour & land* as resources needed for production of value.

* And sometimes "entrepreneurship", but that's always struck me as a pretty bogus "factor of production" — as economists tacitly admit by omitting it as a variable from their production functions, even though it's as free to vary as labour.

View more: Next