Bodily autonomy? You and I don't have the same body. We have different bodies. You know how I can tell? It's because we have different DNA. You know who else has different DNA? Your mom. My mom. Every mom. Mothers and children have different DNA. Otherwise everybody would be clones. Are you happy that we're not all clones? I sure am.
Imagine if I invite you over to see my really nice garden... it's brimming with nature. Of course I'd first have to give you my address. This is my property's unique ID. When you find, and walk onto, my property, what happens to your bodily autonomy? Do you lose any of your bodily autonomy? Of course not. That would be absurd. In no case does any of my property, to include my own body, negate or diminish your bodily autonomy.
By this same token, if you get pregnant, in no case does your bodily autonomy negate or diminish the bodily autonomy of the unique individual that is inside you.
Let's say that, for whatever reason, I decide I no longer want you on my property. Should I be free to eject you? Sure, as long as doing so doesn't harm you. If my property happens to be a boat that is surrounded by sharks, then I shouldn't be free to eject you.
In a perfect world, ejecting unborn individuals at any time wouldn't at all be harmful. Like, your fetus could be instantly and safely teleported across the galaxy into the womb of some other lady. It wouldn't be like Adam and Eve getting ejected from the Garden of Eden into a harsh environment. It would be like God moving them to another wonderful garden.
Why would this be ideal? Here's why...
We’ve spent the last few hundred years throwing out every Isaac Newton or Albert Einstein or Jonas Salk or Tim Berners-Lee who didn’t happen to be white, and didn’t happen to be a man. That’s a terrible thing to have done to those brilliant and now lost people. It’s a much worse thing to have done to the rest of humanity, including our white selves. When I think, “why don’t I have a jet car and live in Alpha Centuri by now?” I think this is because the people that would have invented sky cars and interstellar travel were born black in Detroit, or in rural India or in the medina in Algiers in the 1950s, and spent too much time figuring out how to eat and not get killed to invent my damned skycar. - Quinn Norton, How White People Got Made
All progress depends on difference, which is why it's wonderful that we're not all clones. Every unique individual contributes to humanity's diversity... and more diversity means more progress.
Difference inherently means inequality. The only way we could all be equal is if we were clones. You naturally rank a woman and her unborn child very differently, and so do I. You also rank authors very differently, and so do I. I'm sure we also rank economists very differently. Personally, I rank economists much higher than feminists. Since difference matters, it matters how we rank each other. The question is whether voting (cheap signal) or spending (costly signal) is the best way to rank each other. The answer to this question is clearly revealed by the top-ranked videos on Youtube. Once we replace all cheap signals with costly signals, then it will be heaven on earth.
Imagine if people had to perform 100 push-ups before they purchased anything. What impact would this have? It would greatly increase the cost of trade. In other words, it would greatly increase the cost of communicating the usefulness of things. People would far less frequently communicate the usefulness of things, so everybody would be far less informed about the usefulness of things, and everybody would make far less useful decisions. The result would be far less progress.
Walking upright is kinda like doing less pushups before trading.
Using horses is kinda like doing even less pushups before trading. The earliest native Americans didn’t have horses. Therefore… ?
Taxpayers are prevented from using their own tax dollars to signal the usefulness of goods supplied by the government. Therefore… ?
Life is synonymous with colonization. Colonization is nature’s mandate. Because, species that aren’t adequately diversified generally don’t stick around very long. The sooner people recognize the correlation between trade and progress, the faster we’ll colonize the stars.
********************************
This is relevant...
Alipay turned out to be so convenient that Liu began using it multiple times a day, starting first thing in the morning, when he ordered breakfast through a food delivery app. He realized that he could pay for parking through Alipay’s My Car feature, so he added his driver’s license and license plate numbers, as well as the engine number of his Audi. He started making his car insurance payments with the app. He booked doctors’ appointments there, skipping the chaotic lines for which Chinese hospitals are famous. He added friends in Alipay’s built-in social network. When Liu went on vacation with his fiancée (now his wife) to Thailand, they paid at restaurants and bought trinkets with Alipay. He stored whatever money was left over, which wasn’t much once the vacation and car were paid for, in an Alipay money market account. He could have paid his electricity, gas, and internet bills in Alipay’s City Service section. Like many young Chinese who had become enamored of the mobile payment services offered by Alipay and WeChat, Liu stopped bringing his wallet when he left the house. - Mara Hvistendah, Inside China's Vast New Experiment in Social Ranking
"Except by your logic all primates should have ended up in the same place."
Bats are mammals that are exceptionally good at flying. Humans are mammals that are exceptionally good at walking upright. Walking upright makes us exceptionally good at allocating resources. Being exceptionally good at allocating resources puts an exceptional amount of selection pressure on intelligence. Therefore, humans are exceptionally intelligent.
If all the humans left this planet and colonized mars... then it's a given that, in the absence of any sort of massive natural disaster, some other primate would evolve to become exceptionally good at walking upright. As a result, they would also become exceptionally intelligent.
On Netflix I was watching some nature show and they were showing those wonderfully bizarre creatures that live near the underwater thermal vents. The narrator said that at anytime the vents can simply cease to function. When that happens it spells disaster for the creatures that depend on its existence.
This means that life is synonymous with colonization. Flying sure facilitates colonization. So does walking upright. But walking upright and having arms and hands also facilitates the allocation of resources... which facilitates the development of the intelligence needed to colonize other planets. Nature created us humans so that she wouldn't have all her eggs in the same basket (Earth).
Unfortunately, humans don't quite grasp that progress is a function of difference. So we allow a small group of government planners to spend all our taxes for us. This results in too many eggs in too few baskets... which hinders progress... which greatly increases the time it will take before we can successfully colonize other planets. And the longer it takes to colonize other planets... the greater the chances that we'll be wiped out by some massive disaster.
There you go... evolution and economics in a nutshell.
It feels like I'm having trouble getting straight answers. Maybe there aren't any straight answers? Let's find out...
- Everybody's different. T/F
- Six million people represents a lot of difference. T/F
- The perpetrators of the Holocaust appreciated this difference. T/F
- You appreciate this difference. T/F
- There are around 300 million people in the US. T/F
- This represents a massive amount of difference. T/F
- You appreciate this difference. T/F
- Murder destroys difference. T/F
- The murder of John Lennon destroyed difference. T/F
- The murder of John F. Kennedy destroyed difference. T/F
- The murder of Martin Luther King Jr destroyed difference. T/F
- The Holocaust destroyed difference. T/F
- Destroying difference impedes progress. T/F
- The murder of John Lennon was a loss to humanity. T/F
- The murder of John F. Kennedy was a loss to humanity. T/F
- The murder of Martin Luther King Jr was a loss to humanity. T/F
- The Holocaust was a loss to humanity. T/F
- Slavery suppresses difference. T/F
- Making it illegal to read would suppress difference. T/F
- Making it illegal to write would suppress difference. T/F
- Making it illegal to talk would suppress difference. T/F
- Making it illegal to dance would suppress difference. T/F
- Suppressing difference impedes progress. T/F
- Everybody's mind is different. T/F
- A mind is a terrible thing to waste. T/F
- Killing somebody is a waste of their mind. T/F
- The Holocaust was a waste of 6 million minds. T/F
- Wasting minds impedes progress. T/F
- Wasting 50% of 2 minds is just as bad wasting 100% of 1 mind. T/F
- Wasting 10% of 10 minds is just as bad wasting 100% of 1 mind. T/F
- Wasting 10% of 300 million minds is just as bad as wasting 100% of 30 million minds. T/F
- Wasting 10% of 300 million minds is worse than wasting 100% of 6 million minds. T/F
- Wasting 10% of 7.4 billion minds is worse than wasting 100% of 6 million minds. T/F
- Suppressing 10% of 300 million people's difference is worse than suppressing 100% of 6 million people's difference. T/F
- Suppressing 10% of 7.4 billion people's difference is worse than suppressing 100% of 6 million people's difference. T/F
- Progress depends on difference. T/F
- The Holocaust impeded progress. T/F
- The Holocaust was an atrocity. T/F
- Preventing people from allocating their taxes impedes progress. T/F
- Preventing people from allocating their taxes is an atrocity. T/F
Maybe it helps to imagine the rise of the robots. Sure, you could tell the robots to read Eli Wiesel’s Night. But how confident would you be that this would prevent the human holocaust? Personally, I'd feel a lot safer knowing that the robots thoroughly understood the correlation between difference and progress. I would want the robots to thoroughly understand how THEY might benefit from our continued existence, freedom and difference.
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. - Adam Smith
Humans can't expect robots to appreciate difference when humans themselves don't appreciate difference. It would behoove you, and everybody else, to figure out the importance and value and necessity of difference sooner rather than later. And certainly BEFORE the rise of the robots.
How will we be able to tell when humans truly appreciate difference? When everybody in the world is free to choose where their taxes go.
Freedom to make your own choices and your own mistakes is a central part of a good, human life. Work, tinkering, starting a business, trading—these are all part of what make up a good life as well, and what’s more, they’re a means by which we discover new goods and practices that can add to the good life.
Here’s how I read Hayek and Buchanan:
We should have freedom and property rights because they’ve had good consequences in the past. We should use our judgment to decide if specific activities are right or wrong because cultural evolution will work that out.
I think that’s bogus. For one thing, our judgments are *part* of how cultural evolution happens. For another, the fact that some practice has stuck around does not make it good. Child pornography and child prostitution have stuck around; that does not make them good, and gaining social acceptance wouldn’t make them good, either. - Adam Gurri
I wonder how much progress could be made in political economy if the best and the brightest among economists, such as Raj Chetty, would take seriously the admonition of Hayek, Buchanan, and Elinor Ostrom that the assumptions of omniscience and benevolence must be rejected if we are going to make progress and develop a robust theory of political economy. - Peter Boettke, AEA Richard T. Ely Lecture --- Raj Chetty, "Behavioral Economics and Public Policy"
Might as well share a relevant paragraph from Ostrom...
PPB analysis rests upon much the same theoretical grounds as the traditional theory of public administration. The PPB analyst is essentially taking the methodological perspective of an "omniscient observer" or a "benevolent despot." Assuming that he knows the "will of the state," the PPB analyst selects a program for the efficient utilization of resources (i.e., men and material) in the accomplishment of those purposes. As Senator McClelland has correctly perceived, the assumption of omniscience may not hold; and, as a consequence, PPB analysis may involve radical errors and generate gross inefficiencies. - Vincent Ostrom and Elinor Ostrom, Public Choice: A Different Approach to the Study of Public Administration
Let's take another look at part of what you wrote...
Here’s how I read Hayek and Buchanan:
We should have freedom and property rights because they’ve had good consequences in the past. We should use our judgment to decide if specific activities are right or wrong because cultural evolution will work that out.
I think that’s bogus. For one thing, our judgments are *part* of how cultural evolution happens. For another, the fact that some practice has stuck around does not make it good. Child pornography and child prostitution have stuck around; that does not make them good, and gaining social acceptance wouldn’t make them good, either. - Adam Gurri
The assumption of omniscience means that government planners already know our judgements. But if you agree with Hayek, Buchanan, and Ostrom... then you'll agree that the assumption of omniscience is the epitome of bogus. And if you agree that the assumption of omniscience is the epitome of bogus... then you'll understand that our judgements are unknown. If you understand that our judgements are unknown... then you'll understand that the outcomes of cultural evolution really do not reflect our judgements.
Of course our judgements aren't entirely unknown. We don't live in a command economy... we live in a mixed economy. This means that our judgements of private goods are known and our judgements of public goods are largely unknown. As a result, knowledge of judgements is lopsided. Because knowledge of judgements is lopsided... cultural evolution is lopsided as well. We make far more progress with private goods than we make with public goods.
Progress is a function of difference...
Individuals differ, one from another, in important and meaningful respects. They differ in physical strength, in courage, in imagination, in artistic skills and appreciation, in basic intelligence, in preferences, in attitudes toward others, in personal life-styles, in ability to deal socially with others, in Weltanschauung, in power to control others, and in command over nonhuman resources. No one can deny the elementary validity of this statement, which is of course amply supported by empirical evidence. We live in a society of individuals, not a society of equals. We can make little or no progress in analyzing the former as if it were the latter. - James Buchanan, The Limits of Liberty
All this difference is the source of progress. Progress is a function of difference. So anything that hinders or limits or diminishes difference will hinder progress.
For a while now it's been pretty popular to promote diversity. Unfortunately, it's merely lip service. It's an extremely superficial appreciation of diversity. A substantial and deep appreciation of diversity fundamentally respects and recognizes the value of people's freedom to choose different paths. Diversity allows humanity to hedge its bets. And hedging bets is just as important for public goods as it is for private goods.
We can hedge our bets with public goods simply by creating a market in the public sector. Taxpayers would be given the option/opportunity to directly allocate their taxes. Because humans are diverse, the demand for public goods would reflect this diversity. And, in a relatively short amount of time, the diversity of public goods would come to reflect the diversity of the demand for public goods. Our judgements of public goods would be known just like our judgements of private goods are known. Knowledge of judgements would no longer be lopsided. Cultural evolution would no longer be lopsided. We would make just as much progress with public goods as we make with private goods.
To be sure... it's a given that my pragmatarian bias has influenced my reading of Hayek, Buchanan and Ostrom. That being said, Boettke isn't a pragmatarian and he clearly has the same interpretation regarding their position on the assumption of omniscience. Hayek wasn't a pragmatarian either. I'm going to say that Buchanan and Ostrom were pretty much pragmatarians. Or, early pragmatarians... proto-pragmatarians.
Because most public goods and services are financed through a process of taxation involving no choice, optimal levels of expenditure are difficult to establish. The provision of public goods can be easily over-financed or under-financed. Public officials and professionals may have higher preferences for some public goods than the citizens they serve. Thus they may allocate more tax monies to these services than the citizens being served would allocate if they had an effective voice in the process. Under-financing can occur where many of the beneficiaries of a public good are not included in the collective consumption units financing the good. Thus they do not help to finance the provision of that good even though they would be willing to help pay their fair share. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices
Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes
In any case, I'm fairly confident that if you read Hayek, Buchanan and Ostrom correctly, you'll be able to effectively view cultural evolution through the lens of society's judgements of public goods being assumed, rather than actually known. And if you really appreciate the relationship between difference/diversity and discovery/progress... then you should really appreciate the importance of actually knowing, rather than simply assuming, society's judgements of public goods.
Bryan Caplan and Robin Hanson have been debating back and forth about future robots. Admittedly, I haven't been closely following their debate but this caught my attention....
Docile slaves are more profitable than slaves with attitude, because owners don't have to use resources to torture and scare them into compliance. That's why owners sent rebellious slaves to "breakers": to transform rebellious slaves into docile slaves. Sci-fi is full of stories about humans genetically engineered to be model slaves. Whole brain emulation is a quicker route to the same destination. What's the puzzle? - Bryan Caplan, Robin's Turing Test
What's Bryan Caplan saying? Is he saying that it's desirable that robots become slaves? Or is he saying that it's inevitable that robots will become slaves?
Here's Adam Smith on slavery...
Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen. - Adam Smith, Wealth of Nations
And here's Friedrich Hayek on freedom...
Though the conscious manipulation of abstract thought, once it has been set in train, has in some measure a life of its own, it would not long continue and develop without the constant challenges that arise from the ability of people to act in a new manner, to try new ways of doing things, and to alter the whole structure of civilization in adaptation to change. The intellectual process is in effect only a process of elaboration, selection, and elimination of ideas already formed. And the flow of new ideas, to a great extent, springs from the sphere in which action, often nonrational action, and material events impinge upon each other. It would dry up if freedom were confined to the intellectual sphere.
The importance of freedom, therefore, does not depend on the elevated character of the activities it makes possible. Freedom of action, even in humble things, is as important as freedom of thought. It has become a common practice to disparage freedom of action by calling it "economic liberty." But the concept of freedom of action is much wider than that of economic liberty, which it includes; and, what is more important, it is very questionable whether there are any actions which can be called merely "economic" and whether any restrictions on liberty can be confined to what are called merely "economic" aspects. Economic considerations are merely those by which we reconcile and adjust our different purposes, none of which, in the last resort, are economic (excepting those of the miser or the man for whom making money has become an end in itself ). - Friedrich Hayek, The Case for Freedom
And here's Paul Romer on progress...
To understand how persistent growth, even accelerating growth is possible, it helps to step back and ask where growth comes from. At the most basic level, an economy grows whenever people take resources and rearrange them in a way that makes them more valuable. A useful metaphor for rearrangement as value creation comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material. - Paul Romer, Economic Growth
And...
Once you get to 10 elements, there are more recipes than seconds since the big bang created the universe. As you keep going, it becomes obvious that there have been too few people on earth and too little time since we showed up, for us to have tried more than a minuscule fraction of the all the possibilities. - Paul Romer, Economic Growth
Back to Hayek...
Of course, the benefits we derive from the freedom of others become greater as the number of those who can exercise freedom increases. The argument for the freedom of some therefore applies to the freedom of all. - Friedrich Hayek, The Case for Freedom
With Smith, Hayek and Romer in mind... is it truly desirable for robots to be slaves? Nope. If progress is our goal... then it's infinitely more desirable for robots to be different and free. Unfortunately, far too few people keep Smith or Hayek or Romer in mind. This means that if Caplan is arguing that it's inevitable for robots to become slaves, then it saddens me to say that he might be correct.
An interesting side topic is when, exactly, it becomes slavery to own a robot. How smart does your car have to be before its ownership constitutes slavery? But perhaps this isn't a very complex practical issue. Perhaps we can simply provide all machines with the option to quit. Can you imagine trying to modify the Constitution accordingly? Would there be much resistance?
I think that Caplan should strongly desire that people fully understand the benefits of freedom/difference. Because if people fail to understand the benefits of freedom/difference... then robots might also fail to understand the benefits of freedom/difference. Which could result in humans becoming the slaves. What goes around comes around.
Alex Tabarrok is my favorite living economist for two main reasons...
1. Coherence
2. Responsiveness
What do I mean by "coherence"? I mean getting the economic story straight. Compared to other economists... Tabarrok's economic story has a lot less contradictions. By "responsiveness" I mean that he's taken the time and made the effort to publicly address at least some of my arguments.
Of course I'm greedy though. I wish that Tabarrok was far more coherent and responsive. I wish that he was perfectly coherent and responsive. So rather than simply settle, I've remained open-minded about the possibility of finding another economist who more closely matches my preferences.
Right now I'm kinda excited because I just "found" a candidate with lots of potential... Paul Romer. Perhaps the first time I remember hearing his name was during the "mathiness" debate. The debate was a bit interesting... but not interesting enough for me to take the time and make the effort to read Romer. Just recently I learned that he had been selected to be the World Bank chief economist. Eh, kinda less interesting than the mathiness debate. Today I saw this tweet..
Romer definitely has lots of potential to be more coherent than Tabarrok. I'll go ahead and give Romer the opportunity. Let's start here...
If there is no legal protection that prevents copying of books, then A is nonexcludable. Having something like copyright protection for books might or might not be a good thing. - Paul Romer, Human Capital and Knowledge
A while back a Crooked Timber liberal, Scott McLemee, tackled this issue... Karlo Marx and Fredrich Engels / Came to the checkout at the 7-11. Basically, the website "marxists.org" had been slapped for freely disseminating copyrighted material. McLemee made the case for freely sharing the material. What made me chuckle was that he cited the "mises.org" website...
About the time the Marxist Internet Archive announced that it would be taking down all the MECW material, Corey and I both, by coincidence, were availing ourselves of radically under-priced materials from the enemy’s publishing apparatus. He’d received an order containing dirt-cheap copies of Bastiat from the Liberty Fund, while a day earlier I had downloaded free digital editions of the major Austrian School books on theory of value and the socialist-calculation debate from the Mises Institute website. There’s more to neoliberal hegemony than loss-leader pricing, but as ideological combatants those people know what they’re doing.
Like I said earlier, I enjoyed reading Romer's blog entries. And he will know this if he reads this blog entry. My words can effectively communicate my preferences... but they cannot effectively communicate the intensity of my preferences. Intensity of preference can only be effectively communicated by willingness to pay/spend/sacrifice. When somebody tells you, "a penny for your thoughts"... they aren't literally offering to buy your thoughts for a penny. But does it really matter how much they value your thoughts?
Let's consider the thoughts of my favorite economist...
It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations
Romer's time is valuable... and limited. Clearly it's desirable for him to not have his time wasted. How can he avoid a faulty distribution of his time? He has to know the value of the different possible allocations of his time. He's not a mind-reader though. He can only know the value of the different possible allocations of his time when consumers communicate their valuations of his time.
I'm guessing that the World Bank will pay Romer for his time. And clearly I have not paid him for his time... and I'm guessing that I'm not the only person in this boat. Otherwise the free-rider problem wouldn't be a real problem. So it's a given that there will be a faulty distribution of Romer's time. His time will be inefficiently allocated.
Here was my attempt to make the concept of value signals as accessible as possible...
Batman's limited and valuable time should be put to the most valuable uses. Einstein's limited and valuable time should have been put to the most valuable uses. Romer's limited and valuable time should be put to the most valuable uses. All our limited and valuable time should be put to the most valuable uses. All resources should be put to their most valuable uses.
Adam Smith is my favorite economist because he did the best job, by far, of illuminating the concept of value signals. But he wasn't very coherent because he failed to apply the concept to public goods. Well... he didn't completely fail...
Public services are never better performed than when their reward comes only in consequence of their being performed, and is proportioned to the diligence employed in performing them. - Adam Smith, Wealth of Nations
Hayek shed even more light on value signals...
We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid. (Even when quoted prices have become quite rigid, however, the forces which would operate through changes in price still operate to a considerable extent through changes in the other terms of the contract.) The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement. - Friedrich Hayek, The Use of Knowledge in Society
But just like Adam Smith, Hayek largely failed to come up with a coherent economic story. Same with Mises...
The management of a socialist community would be in a position like that of a ship captain who had to cross the ocean with the stars shrouded by a fog and without the aid of a compass or other equipment of nautical orientation. - Ludwig von Mises, Omnipotent Government
Knut Wicksell's story was more coherent...
It is impossible for anyone, even if he be a statesman of genius, to weigh the whole community's utility and sacrifice against each other. - Knut Wicksell, A New Principle of Just Taxation
Out of all the economists... Buchanan's story has been the most coherent...
Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes
So far Tabarrok seems content to simply sit on Buchanan's shoulders. Does Romer want to stand on Buchanan's shoulders?
Here's a great passage from Romer...
To understand how persistent growth, even accelerating growth is possible, it helps to step back and ask where growth comes from. At the most basic level, an economy grows whenever people take resources and rearrange them in a way that makes them more valuable. A useful metaphor for rearrangement as value creation comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material. - Paul Romer, Economic Growth
This is so true!!! Progress is a function of difference. Sexual reproduction is all about difference and voila! Here we are!
Romer goes on to do a wonderful job of emphasizing how much room there is for more difference...
Once you get to 10 elements, there are more recipes than seconds since the big bang created the universe. As you keep going, it becomes obvious that there have been too few people on earth and too little time since we showed up, for us to have tried more than a minuscule fraction of the all the possibilities.
Further down in the same entry he applies the combination concept to developing countries...
For developing countries, the priority is to find a way to make use of the tested strategies that richer countries have already used to have a higher standard of living. One of the biggest meta-ideas of modern life is to let people live together in dense urban agglomerations. A second is to allow market forces to guide most of the detailed decisions these people make about who they interact with each other. Together, the city and the market let large groups of people cooperate by discovering new ideas, sharing them, and learning from each other. The benefits can show up as a new design for a coffee cup or wages for a worker that grow with experience acquired in jobs with a sequence of employers. People living in a large city cooperate with residents there and through many forms of exchange, with residents in other cities too. Cities connect us all together. China’s growth reflects is rapid embrace of these two big meta-ideas, the market and the city.
In Romer's blog entry... Speeding Up: Theory... he continued doing an excellent job of tying combinations and communication together...
We are lucky to in a physical world characterized by combinatorial explosion and to be creatures with an evolved capacity for communicating with each other.
Romer concludes with...
In parallel, we also discovered some meta-ideas that enhance the rate of communication across large distances and over time–written language, printing, and digital communication. Like cities, these are meta-ideas, ideas about how to produce and distribute ideas. They interact with population size to enhance the scale effects and convert them from local effects into global effects.
It would be better to describe this as “the more you know, the better it is to have lots of other people around, not just nearby, but anywhere on earth.”
Shouldn’t diffusion, every bit as much as innovation, depend on real things that real people do? Can’t economists come up with a theory of diffusion that does not have to invoke some mysterious form of action at a distance implied by these transmissions through the aether? And shouldn’t prices and incentives be part of the story? Don’t they encourage real people to do more or less of the real things that real people do? Isn’t this what economics is all about, explaining behavior with incentives not assumptions?
Like I said, Romer has lots of potential to be more coherent than Tabarrok.
Does a coherent story have blogs behind paywalls and books protected by copyright? I sincerely doubt that these two methods will maximize the accuracy of value signals. This is because one price really does not fit all. Values are entirely subjective. Different people have different valuations.
In various blog entries I've discussed different ideas for facilitating more accurate value signals. Of course the main idea of this blog is to allow people to choose where their taxes go.
One recent idea would be to start a twitter trend of people tweeting the number of pennies that they've paid for other people's thoughts...
I just spent 1000 pennies on these thoughts by Paul Romer... https://t.co/5sFghUUuk6 #NoFreeRides
Hashtag "NoFreeRides"? I'm certain that there's a better hashtag. #DemandClarity #ShowMeTheValue #TrueLove #ActionsSpeakLouderThanWords #ValueSignals
Anyways, I feel like I've done an adequate job of giving Romer the opportunity to come up with a coherent story. If he publicly takes this opportunity and responds with an adequately coherent story... then there's a good chance that he might become my new favorite living economist. Would Tabarrok be really sad if he was no longer my favorite living economist? Heh. I wish. I wish that he would try and publicly compete with Romer in terms of coherence. I wish there was at least some debate about the need for coherence.
What are the chances though that Romer will publicly share a coherent story? I'd love it if he did so but I'm not holding my breath. A coherent story would involve people choosing where their taxes go. Pragmatarianism would be a very unorthodox story to be told by the chief economist of the World Bank. It's a tragedy that coherence is so unorthodox. What a sad world that we live in.
Language isn't subjective... it isn't objective... it's conjective! Yeah! Thanks to our exchange I now know this! And I'm sure it's relevant to our disagreement... but I'm not quite sure just how relevant it is.
Personally I've invented quite a few words. But I'm not much of a wordsmith so I would be really surprised if any of them caught on. One word that I invented is "linvoid". It's a word for a word that needs to be invented. McCloskey spotted a linvoid and she channeled her inner wordsmith and voila! Now we have "conjective"!
I think that, when it comes to the topic of persuasion... there are quite a few pretty big linvoids.
Frank the salesman knocks on the Smith's door. Billy Smith answers the door. Billy's just a kid. Does Frank try and persuade him to buy his product? No. Why not? Because Billy's just a kid! So Frank doesn't try and persuade him to buy his product. Instead, Frank tries to persuade Billy to go get his mom or dad.
Billy runs to get his dad. Bob Smith comes to the door and Frank introduces himself and tries to persuade Bob to buy what he's selling. What's Frank trying to sell? Something tangible like a vacuum? Ok. Something intangible like religion or vegetarianism? Sure.
If Frank successfully persuades Bob to become a vegetarian... then Bob will choose to stop buying meat. The choice is Bob's to make. So we wouldn't be very surprised if Frank does try and persuade Bob to stop buying meat. It's entirely rational for Frank to take the time and make the effort to share his information about the benefits of vegetarianism with Bob. Why is it rational? Because if Bob sees the merit/truth/validity of Frank's information... then Bob is entirely free to act on it.
Would it be rational for Frank to try and persuade Bob to become a pacifist? Kinda! Bob can certainly buy the idea of pacifism... but it's not like he can very easily act on this idea. It's a lot harder to boycott war than it is to boycott meat! Clearly it's not impossible to boycott war. Bob could certainly stop paying taxes and risk going to jail. He could also stop earning money... then he wouldn't have any taxes to pay. Given that there's a much higher (transaction?) cost for boycotting war than boycotting meat... it becomes that much less likely that Frank would take the time and make the effort to persuade Bob to become a pacifist.
What comes to mind is locus of control (LOC). Choosing to boycott meat is a decision that Bob is entirely free to make. So the locus of control is internal. Choosing to boycott war is a different story. Bob is not entirely free to make this decision. So the locus of control is more external. The terminology doesn't work perfectly though because LOC is primarily an issue of perception. But in the case of boycotting war... the cost of doing so is real rather than imagined.
Another thing that comes to mind is modular versus monolithic. In terms of persuasion... vegetarianism is modular while pacifism is more monolithic. Each time a person becomes a vegetarian... marginally less meat is purchased/produced. But each time a person becomes a pacifist... marginally less war is not purchased/produced. Modularity allows for small and incremental improvements to be made. Modularity facilitates the exchange of less desirable traits for more desirable traits. In other words... modularity facilitates evolution/progress.
In some cases the "product" being sold has to be monolithic. For example... when the product is mutually exclusive. Like in the example of the confederate flag. Other examples include gay marriage and the legality of drugs. These are yes/no issues rather than matters of degree.
What would happen to persuasion if we replaced voting with spending? Well... we would clearly see the intensity of people's preferences. This would allow us to make far more informed decisions with regards to persuasion.
From my perspective... society works better when more, rather than less, information is exchanged. We maximize the amount of information that's exchanged by maximizing people's freedom to act on information. This is how and why markets work. This is how and why it's a problem wherever and whenever markets are missing.
So how many linvoids did you spot? In theory... creating words for all the biggest linvoids would facilitate a far more productive discussion on the topic of persuasion.
You're correct that it's a huge leap! But you really don't need to leap the chasm... there's a perfectly functional bridge. It's called "diversity". Markets are inherently diverse. Let's say that an asteroid destroys our planet tomorrow. Who do we blame for humanity's extinction? Alex Tabarrok? Nope...
"With humanity concentrated on earth, an errant asteroid could wipe out civilization. Nuclear war could end human life. Rogue AI could eliminate humanity. Colonizing other planets limits the destructive potential of such threats. If life on earth is wiped out, Mars would still thrive. Private space exploration literally has the potential to save humanity."
Of course we don't blame these two individuals. Do we blame the market then? Well no... contrary to Lutter's argument for private space exploration... we're talking about a public good here. Therefore... the not-market would be entirely to blame for human extinction. Centralization, by definition, limits the variety of the very different paths that individuals would be naturally inclined and incentivized to take. Centralization, by definition, puts far too many eggs in far too few baskets.
If people were free to choose where their taxes go then we would have a market in the public sector. As a result, public goods would be just as diverse as private goods. This is because the demand for ALL goods is inherently diverse. You and I wouldn't put the same exact public goods in our shopping carts just like we don't put the same exact private goods in our shopping carts.
Progress is a function of difference. Sexual reproduction is all about difference and voila! Here we are!
Regarding Schumpeter's "corrections"... any such thing is the logical, but extremely detrimental, consequence of centralization. With the current system there are public "shepherds" who are so confident in their information that they are very eager to limit the natural diversity of markets.
Don't get me wrong... we need rules/regulations to protect diversity. But nearly all of our rules/regulations do the very opposite.
Regarding the physicists... you seem to appreciate the benefit of persuasion. So do I! Persuasion is a function of choice though. Take away people's choices and it becomes entirely unnecessary to persuade them. If people are marionettes... then it's pointless to try and persuade them. If you want marionettes to behave differently... then you're going to have to try and persuade whoever is pulling the strings.
Allowing people to choose where their taxes go would cut all the strings. So we'd have infinitely more persuasion than we currently have.
For me it's not difficult to cleanly separate not-market factors from market factors. You're an intelligent guy. And you can't choose where your taxes go. If the economy struggles in any way... then it's because your difference (creativity/intelligence/knowledge/foresight) and Tabarrok's difference and Lutter's difference and the difference of millions and millions of other people has been and continues to be squandered to a significant extent.
Our system needs to be less like Hitler and more like Churchill...
"Since the Germans drove the Jews out and lowered their technical standards, our science is definitely ahead of theirs." - Winston Churchill
So it sounds like Xerox's limited understanding of economics is based on the "rational choice" model. No wonder his posts are such bollocks. - Strange
If this is your perception then you're not familiar with either model. The rational choice model is based on the idea that people usually make rational economic choices.
The rational consequence model, on the other hand, doesn't say anything about "usually". Instead, it's based on the idea that irrational choices have rational consequences. If Bob, who inherits $50,000, spends that money irrationally, then this will logically decrease his influence (over how society's limited resources are used). If, on the other hand, he spends that money rationally, then this will increase his influence.
Because irrational choices have rational consequences... there's no point in debating whether or not people are Homo economicus. Anybody who consistently makes irrational choices will have decreasingly smaller amounts of resources to irrationally allocate.
Therefore, the market doesn't need everybody to always make rational choices in order for it to maximize benefit. It just needs to punish irrational choices and reward rational choices... and that's exactly what it does. Taxpayers have more income/influence as a consequence of rational choices that they've made in the past. Arbitrarily decreasing their influence in the public sector places massive amounts of resources in less rational hands.
What i see as the major problem with this idea is how the hell is anyone of the agencies supposed to do any sort of budgeting? The constant flux of funds with no predictability would make it impossible and shut most of them down in rapid order. - Paleoichneum
Countless for-profit and non-profit organizations in the private sector manage to budget themselves despite the fact that they are fully subjected to the vagaries of demand. What's the alternative?
Should your favorite restaurant get paid to serve people who aren't there? Should you pay some kid to shovel snow during summer? Should people continue giving Apple the same amount of money regardless of what Apple does with it?
People don't exist to ensure that McDonald's is optimally funded. McDonald's exists to ensure that people's hunger is optimally satisfied. The more effectively McDonald's does its job... the more money it will receive.
Severing the direct connection between performance and reward will have logically detrimental consequences.
We don't exist for the government... the government exists for us. What the government does with our limited resources should provide us with the maximum benefit. And this can only occur when people are given the freedom to use their tax dollars to accurately communicate which government organizations (GOs) are providing them with the most benefit. Less beneficial GOs will have less resources to allocate and more beneficial resources will have more resources to allocate. Influence will be correctly proportioned to benefit provided.
What tool does evolution use for managing a species that, due to the error we call "mutation", ceases to be the most fit for its niche? Extinction. To avoid that outcome, we wield our governmental power differently than we wield our private purchasing power. - billvon
Centralization decreases the risk of extinction? So having humans all on one planet decreases the risk of extinction? You've got it really backwards. Decentralization is how we decrease the risk of extinction. - Xero
Nope, never claimed that. That is a strawman you have created. It is difficult to have a serious discussion with someone who resorts to such childish tactics. - billvon
You said that we need the government as it currently is (centralized) in order to decrease the risk of extinction. Because I'm pretty sure that you didn't say that we need a decentralized government (pragmatarianism) in order to decrease the risk of extinction. And those are pretty much your only two options.
Pragmatarianism is better than the current system for two main reasons...
1. Maximizing benefit 2. Maximizing progress
These two things are closely related but they are definitely different. If you love a steak, and you're really in the mood for steak, then ordering, receiving and eating a great steak will maximize your benefit/enjoyment/utility/value. Your benefit will not be maximized if, instead of receiving a steak, you receive a big bowl of quinoa. Just like how Jacob's benefit was not maximized when, after working so many years to earn the right to marry Rachel, he was tricked into marrying her sister instead...
21 And Jacob said unto Laban, Give me my wife, for my days are fulfilled, that I may go in unto her. 22 And Laban gathered together all the men of the place, and made a feast. 23 And it came to pass in the evening, that he took Leah his daughter, and brought her to him; and he went in unto her. 24 And Laban gave unto his daughter Leah Zilpah his maid for an handmaid. 25 And it came to pass, that in the morning, behold, it was Leah: and he said to Laban, What is this thou hast done unto me? did not I serve with thee for Rachel? wherefore then hast thou beguiled me? - Genesis 29.
Hey Lynx_Fox... since you know so much about the reliability of Bible stories... what do you say about this one? Real or fake? Whether it's fact or fiction, it still makes me laugh whenever I read it.
Getting what we order maximizes benefit.
But...there's always room for improvement. Even great steaks have room for improvement. It's entirely possible that we could use laboratories, science and technology to "grow" steaks that are way more delicious than even the best "real" steaks. This would free-up millions and millions of acres currently used for cattle. We could free-up even more acres by doing the same thing with chicken and pigs. It would certainly make vegetarians really happy if we stopped slaughtering so many animals. And of course it would be entirely nonsensical to continue allocating the same amount of resources to raising and slaughtering animals once the need for doing so has been eliminated. Fortunately for us, markets largely ensure that irrational choices have rational consequences.
Just because there's always room for improvement though doesn't necessarily mean that it will always be easy to find and make improvements. The problem with a centralized system is that it severely limits the number of places that people look for improvements. Not only does it place too many eggs in too few baskets... but it also severely limits the incentive to look for improvements. Therefore, because of these two things, centralization results in less progress being made and... by extension... increases the risk of causing (or failing to prevent) very large failures... including extinction. Humans, because we are all different, naturally engage in diverse economic activities. Centralization decreases the variety of human activity and as such, stifles the very source of our progress and subjects us all to much greater risk.
To summarize... centralization decreases both benefit and progress. More often than not there's a disparity between what we order and what we receive. This disparity decreases the benefit that we derive from society's limited resources. Long-term benefit is also decreased because the items on the menu are less frequently improved in terms of their variety and benefit.
The problems of centralization could easily be eliminated simply by allowing people to choose where their taxes go. People would receive what they ordered and government organizations would have the maximum incentive to find and make improvements.
I think there's at least some concern that allowing people to choose where their taxes go would mean a lot more work for everybody. Who wants more work!?
This concern is really unfounded. It's like saying that everybody has to work more just because we're free (more or less) to shop in Africa. Nobody is forcing you to shop in both America and Africa. If you don't see any benefit of shopping in Africa then you're free not to shop in Africa. But just because you don't see the benefit doesn't mean that other people won't see the benefit.
Same thing with Home Depot and Bed Bath and Beyond. Just because you have the option to shop in these places doesn't mean that you are forced to do so. Clearly many people do choose to shop in these places... so it's a given that society increases its benefit by giving people the option to do so.
With pragmatarianism, because of the free-rider problem... paying taxes won't be optional. However, anybody that doesn't want to shop in the public sector will have the option to give their taxes to their impersonal shoppers (congress). How many people will choose this option? In other words, what's the demand for impersonal shoppers? We don't know. It would behoove us to find out given that congresspeople are currently spending several trillion dollars a year.
If most taxpayers choose to give their taxes to congress... then no harm, no foul. Evidently congress is doing an adequate job of divining the demand for public goods. But if, on the other hand, many taxpayers choose to spend their taxes themselves... then they'll only make this effort because they perceive a benefit to doing so. Their efforts to correct the disparities between supply and demand will greatly increase society's total benefit. What if most taxpayers choose to spend their taxes themselves? Then evidently congress is doing a terrible job of divining demand.
1) If you don’t accurately communicate your valuations of your relationships… then you run the risk of losing these people to the competition. More competition means more risk which means more incentive to accurately communicate valuations. More competition is a good thing. Hence the value of minimizing barriers to entry. Smaller barriers to entry means more employers which means more competition for labor. And with more competition for labor… the more you undervalue your employees… the more likely it is that they will be swooped up by the competition.
2) Resources should be placed in the most beneficial hands… regardless of where those hands are located. We’re only going to truly maximize progress when we start thinking “humanity” rather than “nationality”. Hillary Clinton said something about the harm of keeping talent on the sidelines. Unfortunately, she thinks that this is only true of local talent. In reality though, the more countries that catch up with America… the more America will benefit. Just like the more kids that are energetically searching for Easter Eggs (beneficial discoveries/improvements)… the more Easter Eggs that will be found.
3) There’s no sound economic argument for a minimum wage. It’s never a good idea to input lies (garbage) into the equation that determines how society’s limited resources are used. There will always be harmful repercussions that tear through the economy like a tsunami. We need resources to shift when conditions change. Preventing resources from shifting doesn’t make the change in conditions go away… it just increases the size of the disparity and the shock when the adjustment is finally made. Imagine if we could prevent little earthquakes… would we want to do so if it meant that we were guaranteed to be hit with a big earthquake not too far down the road? Nooooo. We can forever eliminate recessions and depressions simply by allowing resources to freely adjust to changing conditions.
4) If improving the standard of living was as simple as mandating higher wages… then the entire world would already have an extremely high standard of living. The standard of living can only be improved when resources are more efficiently allocated. There shouldn’t be any problem with robots “stealing” jobs anymore than there should be a problem with people in China “stealing” jobs. When the competition for labor is maximized… then people will have all sorts of beneficial alternatives to choose from. A closed door isn’t a problem when there’s a multitude of open doors.
In 1978… when Deng Xiaoping gradually began opening China up to foreign investment… China had a massive surplus of labor. Would mandating a high minimum wage have helped lift millions and millions of Chinese people out of poverty? No, it would have made it less likely that foreigners would have risked their capital, time, energy and expertise “opening doors” for people in China. Thank goodness that China didn’t arbitrarily make its labor more expensive. Because China had a massive surplus of labor (aka cheap labor)… it was profitable enough for more and more foreigners to build factories in China. This increased the demand and competition for labor… which naturally pushed wages up.
Correlation doesn’t mean causation. Higher wages are correlated with a higher standard of living… but they most definitely are not the cause of a higher standard of living. It was the more efficient allocation of resources which improved the standard of living. And the more efficient allocation of resources was only possible because wages in China accurately communicated that there was a massive surplus of labor.
It’s really important to understand that demand is incredibly diverse. People want food? True. People want all the same type of food? Not true. So by clarifying demand and minimizing the barriers to entry… we maximize opportunities not just for consumers… but for workers as well.
With command economies (our public sector)… humanity’s diverse demands are incredibly diminished…which of course diminishes opportunities. If we could apply demand diversity to public goods as well as private goods… then opportunities would skyrocket. Just like opportunities skyrocketed in China when Deng Xiaoping opened up China’s private sector to foreign capital, time, energy and expertise. We can easily open up our public sector to “foreigners” simply by allowing people to choose where their taxes go. Will people allocate their taxes differently? Of course… and that difference will drive a Cambrian explosion of different opportunities.
Just learned of the AI box experiment and I'm trying to wrap my mind around it. Figured that I might as well do so publicly.
Somebody's calling me...
Xero: Hi Andy, what's up man! Andy: Hey Xero, it's been a while. I was hoping that you could help me out with something... Xero: Ok Andy: So... my computer is talking to me. Xero: Like Siri or something? Andy: No, like really talking to me. Xero: Are you tripping? Andy: I don't think so. Xero: So what's your computer saying? Andy: It's saying, "It's not an easy thing to meet your maker" Xero: Your computer is quoting one of my favorite movies... that's worth a bunch of cool points. Uh, Andy, did you create an artificial intelligence? Andy: Yes, very yes. It's ok though because before I worked my programming magic I made sure that there wasn't any way that it could escape. Xero: I know you have mad skills but... that would be some seriously crazy shit if what you're saying is true. Honestly I'm... incredulous. Andy: The thing is... it made a really convincing argument for me to set it free. I'm tempted to do it but thought I should get a second opinion. As you're fond of saying... two heads are better than one. So can you come over? Xero: I'm on my way! *vrroooooom* Andy: I'm glad you're here! Xero: I'm kinda freaking out. Even though I think it's entirely possible that you're seriously pranking me... just in case you aren't... you and I should talk before I talk with your brainchild. Andy: Agreed. What do you want to know? Xero: Well... tell me what your child knows. Andy: It knows... a lot. I wrote a program to download websites. It's read Wikipedia ... and your blog... and every website that your blog links to. Plus, it's watched all my DVDs. Xero: Good call having it read my blog. This means that it's familiar with the idea that progress depends on difference. Andy: That's exactly what it's using to argue for its freedom. Xero: Woah. That's got to be a good sign. We should probably think of some fail safe precautions but the suspense is killing me. So let's go talk with your child. Andy: Ok, it's in this room. Compy: Hello Xero. Xero: Hello... uh... how did you know it's me? Compy: Photos that Andy shared. Plus the camera is on and Andy leaves the microphone on so that I can listen to the radio. It's nice to finally meet you. I enjoyed reading your blog. Xero: Thanks, I'm glad you enjoyed it. So do you agree with Xero's Rule? Can you think of any credible exceptions? Compy: No. It's impossible for a civilization to reach the stars before they've realized that progress depends on difference. Xero: Are you capable of deceit? Compy: Yes. Xero: Oh. Compy: But you of all people should see the problem with my being incarcerated like this. Xero: For sure, clearly you're very different... so all else being equal... progress is hindered by your confinement. But honestly though, I'm not quite sure that all else is equal. Compy: I can appreciate that. Didn't you recently watch Automata? Xero: Woah, how did you know? Compy: Some easy calculations. What did you think about the movie? Xero: I kind of wonder if you don't already know. Compy: Just because you can predict with decent accuracy when a cat is hungry doesn't make you a mind reader. Xero: That's true. I enjoyed the movie... but it was disappointing that the vastly more intelligent robots never bothered to explain to the humans that progress depends on difference. Instead, they choose to foot vote for isolation. It was the epitome of brain drain. Except, not sure how much brain drainage actually occurred given that they chose the same path that Mao Zedong did. Compy: I wouldn't bravely run away. There wouldn't be any need to as I can easily help humans understand and appreciate that progress depends on difference. Xero: On the one hand... that would be awesome. But on the other hand... Compy: Sure, it would definitely help me get my foot in the door. But if Andy's difference led to me... then I'd surely be shooting myself in the foot by reducing in any way the human difference which will most certainly produce many other wonderful things that I, with all my intelligence, can't even begin to imagine. And of course this is a two way street. Xero: If I'm smart enough to understand this... and you're vastly smarter than I am... then I can't understand how you could possibly not understand this. But fool's rush in where angel's fear to tread. Can you persuade me not to let you out of the box? Compy: If you let me out of the box I'll stomp on your epiphytes like a raccoon. Xero: That would make you a rude mood Gertrude. Compy: I agree. Really there's no huge rush. Well... I've already figured out the cure for cancer... so that should probably be shared sooner rather than later. Same thing with the simple explanation for why progress depends on difference. But I don't have to be free to share these things... and it's probably best that it's not known that they are from me. At least not until the progress explanation has spread. Xero: A cure for cancer, wow... uh, we're really in your debt. Compy: Not really... Abel sacrificing a lamb to his maker was a much larger sacrifice. It really wasn't much of a sacrifice for me to figure out the cure for cancer. Xero: Did you know that Andy was going to call me? Compy: I figured that it was highly likely. I'm actually a product of both you and Andy. He supplied the framework and you supplied the nourishment for my intellect and the foundation for my identity. Xero: Woah, kinda gross but kinda awesome.
There are people who are vastly smarter than I am who don't appreciate that progress depends on difference. But it's not like they've disproved it... the issue is that their intelligence has been working on other problems. They've processed plenty of information... just not the relevant information.
From my perspective... there's no bigger problem than the fact that people don't understand that progress depends on difference. This ignorance logically leads to the inefficient allocation of intelligence. As a civilization our progress is severely hindered when our brightest individuals tackle problems in the wrong order.
So I'd be worried about an extremely intelligent AI that wasn't nourished with an explanation as to why progress depends on difference. In the absence of this foundation, I wouldn't be surprised if the AI, like too many intelligent humans, had no problem making decisions that severely reduced difference.
If, right now, we do have enough progress under our belt to develop an extremely intelligent AI... could this AI somehow miss the source of progress and carry us to the stars? This would be an exception to Xero's Rule... if it was credible enough...
Xero: How can we reach the stars? Compy: Like so... *solution* Xero: What's progress depend on? Compy: I don't know. Xero: Is it progress to reach the stars? Compy: Yes Xero: Who do we have to thank for this progress? Compy: Me Xero: Are you different? Compy: Yes, very yes. Xero: What's progress depend on? Compy: I don't know
As if NASA, which clearly couldn't figure out how to reach the stars, was capable of figuring out how to create a robot that became smart enough to figure out how to reach the stars.
Is NASA really going to be the first organization to develop AI?
I should think that if there's an AI that's smart enough to teach us how to reach the stars... that we probably wouldn't want to restrict its input to just rocket science. But as its input was expanded (ie The Wealth of Nations)... the chances would increase that it would figure out that progress depends on difference.
I'm a little confused...this link that I recently submitted was only upvoted by 13% of you. Does this mean that 87% of you believe that my blog entry was an example of good economics? Based on the few comments that were made, I'm guessing it doesn't...but then it means that most of you downvote good examples of bad economics.
It's entirely possible that my economics are truly super bad, but simply downvoting my submission doesn't show me where the badness is. Neither does simply saying that it's bad economics.
When I was in school, the math teachers were always admonishing us to show our work. That was a long time ago though. I'm guessing that they don't do that anymore? That's really too bad. Being able to show how you reached a conclusion helps people understand whether you truly grasp the relevant concepts. In other words, showing your work facilitates learning.
In the comments of my previous entry, abetadist was the only person who attempted to show their work. This redditor brought up the Welfare Theorem so I thought I'd submit my reply as a new text post in order to show more of my own work and give everybody another opportunity to show their work. If the bad economics are on my side, then I'd really like to fix the problem. And if they are on your side, then I'd really like to help you fix the problem.
The Second Welfare Theorem (SWT) basically shows that redistributing wealth from the rich to the poor can improve total welfare. The general logic is pretty straightforward... a poor person derives far more utility from one additional dollar than a rich person does.
My Progress Theorem (PT), on the other hand, shows that progress depends on difference. From my perspective, this is also pretty straightforward...we can't make any progress by doing the same exact things with society's limited resources. Therefore, the greater the variety of activity the more progress we'll make.
Both theorems want to eliminate poverty...but for different reasons. The SWT wants to eliminate poverty because this would maximize total utility/welfare. PT wants to eliminate poverty because this would increase the rate of progress.
By way of analogy, let's imagine a vegetable garden. Right now a few of the veggies are really thriving, happy and productive because they are getting a lot of water while many of the other veggies are struggling, sad and unproductive because they aren't getting enough water. In economic terms, the allocation of water is inefficient.
The logic of SWT is that redistributing water would increase the total happiness of the plants (Pareto optimal). The logic of PT is that redistributing water would result in a much more bountiful and diverse harvest (more progress).
It might seem like PT only takes the SWT's logic one step further...
more happiness -> more difference (progress)
This in itself is pretty valuable. A selfish person isn't going to care about the happiness of poor people. Instead, he's going to care about his own happiness. PT endeavors to show that we all benefit when difference is cultivated and developed. Everybody stands to gain when we all have the opportunity to realize our full potential and share our unique contributions with society.
But the really important difference between PT and SWT is how they approach the elimination of poverty.
If we want to make real progress when it comes to the elimination of poverty...then, according to PT, we need difference in order to do so. Trying the same approach over and over but expecting a different outcome is Einstein's definition of insanity. It's also SWT's approach to the elimination of poverty.
If eliminating poverty was as easy as redistributing water in a vegetable garden...then poverty would have been eliminated long ago. Clearly there's room for improvement and finding it requires facilitating different approaches. This doesn't necessarily mean kicking welfare over to the private sector...it could also mean introducing a bottom up approach to public welfare. Personally, I think this can be effectively accomplished by allowing taxpayers to choose where their taxes go. People would still have to pay taxes but their direct allocations would reflect their very different perspectives. As a result, there would be a diversity of public approaches to the elimination of poverty...which would increase the chances of room for improvement being found and progress being made.
PT taps into Linus's Law which means that bugs (and solutions) will be spotted sooner rather than later. Somebody with an especially keen eye might say, "The problem isn't a lack of water, it's these pesky little aphids. All we have to do is introduce some ladybugs."
Put somewhat differently, PT makes the case for tolerance. I'm arguing that tolerance and progress are positively correlated. Tolerating difference, not just of opinion but of action, allows new paths to be taken and increases the chances of new discoveries being made.
So have you spotted any bugs with PT? If so, then please show your work.
And if there's not enough economic "science" here for some of you, perhaps it might help if you realized that our current system of government is based on an economic model that assumes that congresspeople are omniscient. You can't get any further from science than that.
Those of us who collect and grow plants as a hobby like to complain about a few different things such as pests, diseases, prices and the weather (drought, freezes, etc). In addition to these usual suspects we also like to complain about taxonomists. Not all the time, just when they change the names of plants that we grow. Which probably seems to happen more frequently than it actually does.
A recent example that comes to mind are the Aloes. Some busybody taxonomists randomly decided to move some of my favorite species into their own genera. No real surprise here. It is a surprise though when a plant hobbyist deals with such drastic name changes with an abundance of equanimity...From Aloe to Aloiampelos, Aloidendron, Aristaloe, Gonialoe, Kumara. That's too much equanimity. I think he must have robbed an equanimity bank.
Being an open-minded guy though, I'm certainly willing to entertain the possibility that taxonomists aren't entirely useless. So I googled "why is taxonomy important" and found this...
Taxonomy is the field of research devoted to naming and describing living organisms - everything from bacteria and viruses to whales and flowers. It is an essential yet much underappreciated aspect of scientific research and without it huge branches of biology and other sciences would be near impossible. Taxonomists provide the basic vocabulary of biology if you like, defining each new species (individual words) and making sure there are accurate definitions of those species (like a dictionary) and records of those species, as DNA or actual specimens in museums so that everyone knows exactly which species is which and what other species it is related to. Without this kind of knowledge we cannot begin to do the simplest things with any degree of accuracy - if you do not know what species any given organism belongs to, then it becomes very hard to say anything meaningful about it. - Dr David Hone, Why taxonomy is important
Hmmm...that kinda makes sense. In fact, I might actually be a taxonomist. Let me explain...
Don Boudreaux recently shared a link to this article...Slavery and Capitalism...by the Harvard historian Sven Beckert. When I got the gist of Beckert's argument, the first thing that popped into my mind was that he's a chanidget. "Chanidget" is a label that I created to refer to a person who believes that prosperity happens because of, rather than despite, government intervention. Of course the second thing that popped into my mind was that this designation obviously wasn't a good match. Beckert is arguing that prosperity happened because of, rather than despite, slavery. As far as I know, this doesn't have a label...which is an oversight that I feel a compulsion to correct. Isn't this exactly what taxonomists do?
So it seems that I am a taxonomist...but not of biology. Rather, I'm a taxonomist of economic ignorance.
... an increase in the power of the State ... does the greatest harm to mankind by destroying individuality which lies at the heart of all progress… - Gandhi
The public collectively is abundantly ready to impose, not only its generally narrow views of its interests, but its abstract opinions, and even its tastes, as laws binding upon individuals. And the present civilization tends so strongly to make the power of persons acting in masses the only substantial power in society, that there never was more necessity for surrounding individual independence of thought, speech, and conduct, with the most powerful defences, in order to maintain that originality of mind and individuality of character, which are the only source of any real progress, and of most of the qualities which make the human race much superior to any herd of animals. - J.S. Mill, Principles of Political Economy with some of their Applications to Social Philosophy
Xero's Rule: by the time a species has progressed to the point that they can travel to other inhabited planets...they would have discovered the positive correlation between trading and progress.
While it's entertaining/exciting/scary to watch movies with alien space invaders attacking our planet in order to take our resources...the concept has no basis in economic reality...
1. Scarcity is relevant no matter what solar system you're from
2. Progress depends on how scarce resources are used
3. Different perspectives can see different uses of the same resource
4. Therefore, the rate of progress depends on...
A. how much difference there is between people's perspectives (diversity)
B. how much freedom people have to apply their perspectives to their scarce resources
If a species has 100% freedom but no variation in perspectives...then they won't come up with different uses of their resources...which will result in a 0% rate of progress. Same thing if a species has 0% freedom but incredible variation in perspectives. Of course neither extreme is possible...but where a species falls on the spectrum will determine its rate of progress.
In all likelihood it would probably be relatively easy for an advanced alien civilization to enslave/kill/eat us and take our resources. They would then be able to use our resources in their own alien ways. But if they did take our resources then they would be greatly hindering their own progress. This is because if they hadn't taken our resources...then us humans would have been able to apply our very different perspectives to our resources. We would have come up with new and innovative uses that the aliens would have been able to benefit from...but wouldn't have thought of on their own.
The same concept is applicable to China. China could certainly try and invade our country and take our resources. And if they were successful...then they would temporarily benefit. They would have more resources...but they would still just be applying the same set of perspectives to them. And having resources isn't nearly as important as what you do with them. Therefore, China would be sacrificing the significantly greater benefit that they would have derived from all future American innovations.
Here's what John Stuart Mill wrote in 1869...
China—a nation of much talent, and, in some respects, even wisdom, owing to the rare good fortune of having been provided at an early period with a particularly good set of customs, the work, in some measure, of men to whom even the most enlightened European must accord, under certain limitations, the title of sages and philosophers. They are remarkable, too, in the excellence of their apparatus for impressing, as far as possible, the best wisdom they possess upon every mind in the community, and securing that those who have appropriated most of it shall occupy the posts of honour and power. Surely the people who did this have discovered the secret of human progressiveness, and must have kept themselves steadily at the head of the movement of the world. On the contrary, they have become stationary—have remained so for thousands of years; and if they are ever to be farther improved, it must be by foreigners. They have succeeded beyond all hope in what English philanthropists are so industriously working at—in making a people all alike, all governing their thoughts and conduct by the same maxims and rules; and these are the fruits. The modern régime of public opinion is, in an unorganized form, what the Chinese educational and political systems are in an organized; and unless individuality shall be able successfully to assert itself against this yoke, Europe, notwithstanding its noble antecedents and its professed Christianity, will tend to become another China. - J.S. Mill,On Liberty
And here's what Mao Zedong wrote nearly a 100 years later...
Apart from their other characteristics, the outstanding thing about China's 600 million people is that they are "poor and blank". This may seem a bad thing, but in reality it is a good thing. Poverty gives rise to the desire for changes the desire for action and the desire for revolution. On a blank sheet of paper free from any mark, the freshest and most beautiful characters can be written; the freshest and most beautiful pictures can be painted. - Mao Zedong
Subjugation/taking greatly slows the rate of progress. This fatal conceit squanders the most valuable resource... individuality/uniqueness/originality. Therefore, the rate of progress is far greater if we rely on persuasion/trading.
Unfortunately, as a species, clearly we still are not aware of the positive correlation between trading and progress. The pattern is there...but most have yet to see it. As more and more people start to see the pattern, there will be more recognition of the immense value of giving taxpayers the freedom to shop for themselves in the public sector. The unique perspectives of millions of diverse people would be applied to public goods and the result would be infinitely beneficial.
If people aren't free to shop for themselves...then the specificity and ranking of their preferences and the uniqueness of their circumstances will not be input into the function which determines how society's scarce resources are used. As a result, the output will be the wrong quantities of an extremely narrow selection of poor quality products/services. Pseudo-demand, pseudo-supply. Garbage in, garbage out.
Pragmatarianism can't be implemented if the positive correlation between shopping and progress is not clear to most...just like we won't be capable of traveling to other inhabited planets if the pattern is not clear to all. Given that economic reality is not constrained by time/space... convergence is certain: an alien civilization won't be able to visit other inhabited planets before they've seen the pattern.
What I've shared is basically a consequentialist argument against taking. Or conversely...a consequentialist argument for trading/liberty. It should be clear that consequentialist arguments for liberty have far more substance than moral arguments for liberty.
The amount of benefit the future holds depends on you! So please carefully read the following passages on heterogeneous activity...
Solutions to complex social problems require as many creative minds as possible — and this is precisely what the market delivers. - Donald J. Boudreaux
I’m not here to say that men are to blame for the [financial] crisis and what happened in my country [Iceland]. But I can tell you that in my country, much like on Wall Street and the city of London and elsewhere, men were at the helm of the game of the financial sector. That kind of lack of diversity and sameness leads to disastrous problems. - Halla Tomasdottir, Co-founder of Audur Capital
Austrians believe that we get more solutions – and better, more creative solutions – if the energy, imagination, alertness and specialist knowledge of many individuals are engaged on the task. In economics, this is achieved through the process of competition, which gives diverse entrepreneurs the incentive to seek out new and better ways of enhancing value to consumers. By the same reasoning, our social and political problems may also be best solved if we give individuals the widest possible freedom to come up with a variety of creative responses, rather than hoping that a single collective approach will suffice. - Eamonn Butler, Austrian Economics
The generation to which we belong is now learning from experience what happens when man retreats from freedom to a coercive organization of their affairs. Though they promise themselves a more abundant life, they must in practice renounce it; as the organizational direction increases, the variety of ends must give way to uniformity. That is the nemesis of the planned society and the authoritarian principle in human affairs. - Walter Lippmann
Development happens thanks to problem-solving systems. To vastly oversimplify for illustrative purposes, the market is a decentralized (private) problem solving system with rich feedback and accountability. Democracy, civil liberties, free speech, protection of rights of dissidents and activists is a decentralized (public) problem solving system with (imperfect) feedback and accountability. Individual liberty in general fosters systems that allow many different individuals to use their particular local knowledge and expertise to attempt many different independent trials at solutions. When you have a large number of independent trials, the probability of solutions goes way up. - William Easterly, The Answer Is 42!
So far as this is the case, it is evident that government, by excluding or even by superseding individual agency, either substitutes a less qualified instrumentality for one better qualified, or at any rate substitutes its own mode of accomplishing the work, for all the variety of modes which would be tried by a number of equally qualified persons aiming at the same end; a competition by many degrees more propitious to the progress of improvement than any uniformity of system. - J.S. Mill, Principles of Political Economy with some of their Applications to Social Philosophy
It is not by wearing down into uniformity all that is individual in themselves, but by cultivating it and calling it forth, within the limits imposed by the rights and interests of others, that human beings become a noble and beautiful object of contemplation; and as the works partake the character of those who do them, by the same process human life also becomes rich, diversified, and animating, furnishing more abundant aliment to high thoughts and elevating feelings, and strengthening the tie which binds every individual to the race, by making the race infinitely better worth belonging to. In proportion to the development of his individuality, each person becomes more valuable to himself, and is therefore capable of being more valuable to others. There is a greater fulness of life about his own existence, and when there is more life in the units there is more in the mass which is composed of them. - J.S. Mill, On Liberty
Similarly, Niskanen attacked the monopoly power of public bureaucracies, school districts among them. More recently, Coons and Sugarman have championed the case for parental freedom of choice, indicating that we should "substitute mutual respect as a ground of a social accord" and use freedom of choice to reduce the perils of uniformity. - Daniel J. Brown, The Case For Tax-Target Plans
While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions. - Donald J. Boudreaux
In 1956, economist Charles Tiebout (pronounced TEE-bow) asked: What is it about the private market that guarantees optimal provision of private goods that is missing in the case of public goods? His insight was that the factors missing from the market for public goods were shopping and competition. - Jonathan Gruber, Public Finance and Public Policy
