In real life, when you meet somebody for the first time, it's rarely the case that the moment is persevered like a dragonfly in amber. It's a different story on the internet. For example, here's the very first time that I met Koenfucius. I replied to his story and he replied to my reply. That was the extent of our exchange.
Around a month or so later I replied to another story of his... Trading Values. At the time, I didn't realize that he was the same guy that I had replied to a month before. We ended up trading many many many thoughts about economics. At some point I realized that I had previously replied to one of his stories.
What if I hadn't replied to the second story? I would have missed out on so much valuable economic discussion.
Recently we've been trading thoughts in the comments section of this blog entry... A Penguin Introduces Henry Farrell To Ronald Coase. Here's my reply to his most recent comment...
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I think that I remembered the problem with unbundling WTP and WTA. How do you ensure the accuracy/legitmacy of the WTA? Russ Roberts can input that his WTA for Trump is a gazillion dollars. Tucker Carlson can input that his WTA for Clinton is $100 gazillion dollars. Then what?
Consider an issue like abortion. It either is, or isn't, legal. If WTP and WTA are unbundled, then what's to stop people from entering the maximum possible WTA? We can certainly limit the amount that everybody can enter to a million dollars. But then everybody just puts a million dollars for their WTA. So it provides absolutely no useful/trustworthy/credible info.
When it comes to the legality of abortion, is it possible that there isn't a transaction that enhances welfare? Nope. Maximizing the welfare enhancement of the transaction depends on determining how much each side is willing to sacrifice. The winning side will be the side that is willing to spend the most money, all of which will be given to the losing side.
No matter which system is used, it's a logical fact that one side is going to get its way. Should it get its way for free? This is the premise of voting. But I'm pretty sure that this premise is fundamentally horrible and incredibly detrimental. Everyone would immensely benefit if everyone could clearly see and know the cost of what they want. Then, and only then, could they make adequately informed decisions about whether what they want is truly worth it.
Imagine that Elizabeth wants abortion to be illegal. How badly does she want it? Is she willing to sacrifice the opportunity to buy a pair of shoes, or a laptop, or a car, or a house? What is she willing to exchange?
Markets work because they facilitate the comparison of value/importance/relevance. Our desires greatly exceed our dollars so we have no choice but to prioritize. This is how society’s limited resources are put to more, rather than less, valuable uses. This is how we minimize the irrelevant uses of society’s limited resources.
I take it as a fact that people really don’t appreciate the comparison aspect of markets. My proof is that so many places/spaces aren’t markets! This means that people do not directly compare the value of so many different things, which means that so many of society's limited resources are irrelevantly used.
You asked about how coasianism, specifically bundling WTP and WTA, would work when there are several presidential candidates. In this case, I’m not sure if coasianism would be the best option. Coincidentally, here’s what I recently posted on the Debate.org website…
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Thanks for responding to my argument. If you get a chance, check out the thread I posted in the economics forum.
My argument is that spending is always better than voting. Presidents should be chosen by spending rather than by voting. Here are three ways that this could be done...
1. coasian market design (CMD)
2. bee market design (BMD)
3. pragmatarian market design (PMD)
For CMD we will consider Clinton VS Trump. For a fixed amount of time, spenders would have the opportunity to spend as much money as they wanted on their preferred candidate. After the window of participation closed, the totals would be calculated and revealed. Whichever candidate had the biggest total would be the winner. Let's say that Trump was the winner. All the spenders for Clinton would receive a full refund. Plus, they'd proportionally receive all the money that had been spent for Trump. Unlike voting, CMD is a win-win situation. You either get your preferred candidate, or you get compensated.
BMD would be a better option if we wanted to choose the president from a larger list of candidates...
Bernie Sanders
Chris Christie
Darrell Castle
Donald Trump
Evan McMullin
Gary Johnson
Hillary Clinton
James Hedges
Jeb Bush
Jill Stein
Marco Rubio
Mimi Soltysik
Ted Cruz
Tom Hoefling
Rand Paul
Rocky De La Fuente
Spenders could use their donations to determine the best order of the candidates. Whichever candidate was at the top when the window of participation had closed would be the winner. The government would keep all the money. So BMD essentially kills two birds with one stone...
1. Valuating
2. Fundraising
With PMD, people would use their tax dollars to determine the best order of the candidates. The candidates would keep all the tax dollars that had been allocated to them.
Your concern with replacing voting with spending is that bias exists in the world. Let's say that right now everybody is biased against robot candidates. In this case, no matter whether we used voting or spending, a robot candidate would not be elected. The next decade 90% of the citizens are biased against robot candidates. If voting was used, it's definitely going to be tyranny of the biased majority and the robot candidate will not be elected. If we used spending though, there's some chance that the robot candidate will be elected.
It took over 200 years to elect our first black president. We still haven't had a woman president, or an (openly) gay president, or an (openly) atheist president, or... it's a long list. I really don't think that voting in any way, shape or form helps to overcome detrimental biases held by the majority of the citizens. Spending, on the other hand, would facilitate the elimination of detrimental biases.
Think about backpacking. Before you go backpacking you have to decide whether things you want to take are worth the effort of carrying them. Sure, you'd love to take a big bottle of Tequila, but is it worth the effort of carrying it? Knowing, considering and comparing the carrying costs/benefits of different things allows you to make more rational decisions. In the absence of knowing, or paying, the carrying costs... it's impossible for your carrying decisions to be maximally rational.
Replacing voting with spending would allow everyone to consider and compare the actual costs of the things they want. Then, and only then, will people make maximally rational decisions.
"As was noted in Chapter 3, expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market. A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom." - Loren Lomasky, Democracy and Decision
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Earlier this year the Libertarian Party (LP) used a BMD to choose its convention theme…
$6,327.00 - I"m That Libertarian!
$5,200.00 - Building Bridges, Not Walls
$1,620.00 - Pro Choice on Everything
$1,377.77 - Empowering the Individual
$395.00 - The Power of Principle
$150.00 - Future of Freedom
$135.00 - Life, Liberty and the Pursuit of Happiness
$105.00 - Rise of the Libertarians
$75.00 - Free Lives Matter
$42.00 - Be Me, Be Free
$17.76 - Make Taxation Theft Again
$15.42 - Taxation is Theft
$15.00 - Jazzed About Liberty
$15.00 - All of Your Freedoms, All of the Time
$5.00 - Am I Being Detained!
$5.00 - Liberty Here and Now
This system could work just as well for choosing presidents. I wonder how much money the government would raise?
Classtopia’s Communication Department uses a BMD for blog entries. So far it has raised $30 dollars.
Next month, as you already know, my epiphyte society plans on using a BMD for show entries.
It would be quite excellent if a BMD was also used for forum threads! Econhub provides an exceptionally good opportunity to do so. Not sure how much you know about it, but it was recently created in order to compete the Economics Job Market Rumors (EJMR) forum out of existence. I wrote about it here.
The response to Econhub has been underwhelming, to say the least. So far there are only 17 members. It would really suck to let a brand new economics forum go to waste. So we should really put it to good use.
If we created a BMD for Econhub, then the donated money could be used to draw the public’s attention to a page that listed the most important threads. Hopefully this would result in more people joining the forum and substantially participating in the prioritization process.
I shared this idea on Econhub but the owner hasn't responded to it yet. It would be nice to have him on board but it isn't essential. A Google sheet would be used to store the data, which could be displayed on a webpage of our choice. This is the page that we'd promote with the donations.
Maybe I'm a bit biased, but it really doesn't sound so crazy to pool our money in order to promote the best economic ideas.
Showing posts with label Willingness to Pay. Show all posts
Showing posts with label Willingness to Pay. Show all posts
Friday, August 25, 2017
Tuesday, July 4, 2017
Evonomics
Why are echo chambers problematic? Because they prevent us from facing views dissimilar to ours. As a result, we could be led to take falsehoods for truths, become more extreme in our views, and regard others as enemies or adversaries. Part of the value of the right of free speech is that it creates an environment in which our own views are constantly challenged. - Nicolás Maloberti, Echo Chambers and the Prevalence of Motivated Reasoning
Evonomics is designed to discourage engagement in non-lefty ideas and thinkers. https://t.co/3Rwz3w70Ri— Joe Norman (@normonics) May 18, 2017
Avoiding facts inconvenient to our worldview isn’t just some passive, unconscious habit we engage in. We do it because we find these facts to be genuinely unpleasant. - Brian Resnick, “Motivated ignorance” is ruining our political discourse
The whole strength and value, then, of human judgment, depending on the one property, that it can be set right when it is wrong, reliance can be placed on it only when the means of setting it right are kept constantly at hand. In the case of any person whose judgment is really deserving of confidence, how has it become so? Because he has kept his mind open to criticism of his opinions and conduct. Because it has been his practice to listen to all that could be said against him; to profit by as much of it as was just, and expound to himself, and upon occasion to others, the fallacy of what was fallacious. Because he has felt, that the only way in which a human being can make some approach to knowing the whole of a subject, is by hearing what can be said about it by persons of every variety of opinion, and studying all modes in which it can be looked at by every character of mind. No wise man ever acquired his wisdom in any mode but this; nor is it in the nature of human intellect to become wise in any other manner. The steady habit of correcting and completing his own opinion by collating it with those of others, so far from causing doubt and hesitation in carrying it into practice, is the only stable foundation for a just reliance on it: for, being cognisant of all that can, at least obviously, be said against him, and having taken up his position against all gainsayers—knowing that he has sought for objections and difficulties, instead of avoiding them, and has shut out no light which can be thrown upon the subject from any quarter—he has a right to think his judgment better than that of any person, or any multitude, who have not gone through a similar process. - John Stuart Mill, On Liberty
Why isn't Evonomics a market? Why aren't donors encouraged to use their dollars to grade the relevance of the articles?
Compare Evonomics to this blog written by 4th graders... Classtopia. In both cases...
1. all the products are freely available
2. the homepage has a list of products sorted by their publication date
However, unlike Evonomics... Classtopia also has a list of products sorted by their relevance.
The relevance of Classtopia's products is determined by a market. The market is currently pretty small. It consists of the students, their teacher and myself. But in theory the market could be as large as everybody in the world. Everybody could use their money to grade the relevance of Classtopia's (home)work.
So why isn't Evonomics a market? My theory is that whoever runs the website doesn't quite grasp what markets are good for. If my theory is correct, then we should be skeptical of Evonomics' plan to become "The Next Evolution of Economics".
The point and purpose of markets is a topic that generates considerable disagreement. In order for an examination of the topic to be productive, it must be built on common ground. Here's something that we should all agree on...
Saturday, April 15, 2017
Markets Are The Most Exciting Thing Ever!!!!!!!!!
Some discussion in: Netflix And Virtue Signalling
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It feels like you're focusing on the word "demand" rather than on the "money spent" part. For me it's significant and meaningful and important and useful to know how much money people are willing to spend on things. It's convenient to use the word "demand" to refer to the amount of money that people are willing to spend on things. But we can also use the letter "X" or the word "fhqwhgads" or "zeitgeist" or any other combination of letters you want. I'm less interested in the word than in the concept. So it would be great if you focused on the concept.
Spending money is a sacrifice. The more money that is spent, the bigger the sacrifice. Since spending money is a sacrifice... generally people don't randomly spend their money. They didn't exchange their limited time and effort for money just so that they can flush it down the toilet.
It's easy to prove this... all I have to do is ask for your money. Of course you're going to want to know why you should give me any money. So in order to persuade you to give me your money, I'd have to provide you with some information. You'd compare the information that I gave you with all the information that you have and then decide whether or not to give me money. If you decided not to give me any money, well, in theory I could endeavor to provide you with different and better information. And again you'd compare this new information with all your information in order to decide whether to give me money.
This process of persuasion involves lots of brainpower being used and lots of information being shared, considered and compared. So it's significant and meaningful and important to know how much money individuals and groups of individuals are willing to spend.
I was disappointed that Person of Interest was canceled...
It was canceled despite the fact that nobody knew how much money that I was willing to spend on the show. And I suppose this could potentially sound egocentric. So let me zoom out. It was canceled despite the fact that nobody knew how much money that any subscribers were willing to spend on the show. This fact makes me acutely feel like I'm living in the stone ages. Where I have to go around trying to convince people that fire and wheels are useful. I'm extremely grateful that I live in an era where I don't have to try and convince anybody that fire and wheels are useful... but I'm also extremely disappointed that I live in an era where I do have to try and convince everybody that it's useful to know how much money people are willing to spend on things.
Consider how much better off your life is because you live in an era where everybody knows that fire and wheels are useful. Now double or triple or quadruple that amount of betterness to try and appreciate how much better off your life would be if you lived in an era where everybody knows that it's essential to know how much money people are willing to spend on things.
Admittedly I have absolutely no idea how much money everybody would be willing to spend on Person of Interest... so of course I can't guarantee that, if ignorance (of willingness to pay) had been eliminated, the show would have been continued rather than canceled. But I can guarantee that the deciders, whoever they were, would have made a far more informed decision.
The world will be infinitely better off when everybody makes far more informed decisions.
Let's imagine that people could choose where their taxes go. Some people want to go to war with Canada. The shape of the demand looks like this...
What would you say about the shape of the demand? I'd say that it's certainly tall enough... but it's way too skinny. Too few people are truly willing to pay for war with Canada. Sure, these few people are willing to pay a lot... but that really doesn't overrule the fact that there aren't nearly enough of them to justify this particular use of their tax dollars. So the DoD would use the money for other things besides invading Canada.
Using technical terms I'd say that the breadth of the demand is insufficient. The shape is too skinny. The fatter (wider) it is... the greater the justification for using those tax dollars to attack Canada.
In terms of the public sector, being concerned with the shape of the demand makes sense because the point of taxes really isn't to spend them on things that only a relatively few people are going to benefit from. We really don't want rich people to be able to spend their taxes on private golf courses or private yachts or private airports. We want everybody, rich or poor, to spend their taxes on things that lots of people are going to benefit from. Maybe like healthcare?
The shape isn't super tall... but it's pretty fat. There's definitely more than enough demand breadth to justify these tax dollars being spent on healthcare. Although perhaps it's not quite correct to compare something more general (healthcare) with something more specific (war with Canada). It would probably be more correct to compare war with Canada to cancer research. We can reasonably guess that the demand for the latter would be far broader than the demand for the former.
In any case, it certainly makes sense to consider the shape of the demand when we're talking about tax dollars. The thing is, we really weren't talking about tax dollars. We really weren't talking about the public sector. We were talking about donors to the Libertarian Party using their donations to signal the value of the potential convention themes. Yet, you definitely thought that the shape of demand was very relevant!
If the entire point of the public sector is to have a space where it's unacceptable for money to be spent on things that will only benefit a few people... then it's gotta be the case that the entire point of the private sector is to have a space where it is entirely acceptable for money to be spent on things that will only benefit a few people.
If one person alone wants to spend enough money to choose the theme for the Libertarian Party convention... then that's entirely acceptable. If one person alone wants to spend enough money to prevent Person of Interest from being canceled... then that's entirely awesome. If one person alone wanted to spend enough money to pay for the Statue of Liberty's pedestal... then that also would have been entirely awesome.
If somebody is completely broke then clearly we can't know how much money they'd be willing to spend on defense, healthcare, Person of Interest, the Statue of Liberty's pedestal, food, clothes, computers or anything else. Homeless people don't have much or any money... this is certainly true. But does this really mean that we can't know the demand for anything? Does it really mean that it's irrelevant how much money people are willing to spend on things? Markets should be entirely discarded and replaced with... voting? I'm sure that this is not what you're suggesting... yet you're bringing up ability to pay as if it would somehow only be relevant to donors to the Libertarian Party using their donations to signal the value of potential convention themes. Actually, the ability to pay (or the lack thereof) is relevant to all markets. So if you're arguing that it invalidates the spending info for one market... then your argument has to be applicable to all markets.
If we prevent people from using their money to help determine the value of things... then things will be incorrectly valued. When things are incorrectly valued, things will be incorrectly used. When things are incorrectly used, people will be worse off. Therefore, the degree and extent to which people are currently worse off... reflects the degree and extent to which we prevent people from using their money to help determine the value of things.
Right now you believe that the products at your grocery store are going to be correctly continued or discontinued because shoppers are allowed to use their money to help determine the value of the products.
Yet you also believe that the shows on Netflix are going to be correctly continued or canceled despite the fact that subscribers aren't allowed to use their money to help determine the value of the shows.
And of course you don't believe that Netflix can read the minds of its subscribers. Instead, you believe that subscribers already provide enough information for Netflix to make adequately informed decisions. But even Netflix acknowledges that ratings are less trustworthy than viewing habits. Except, how can viewing habits be more trustworthy than spending decisions? And it's not like Netflix can compare the two sets of information. It doesn't even see the point in having the information about spending. And there isn't a single subscriber who is interested in providing this information. Except for me. And one of my friends. I suppose there might be a few more people out there who would see the point of using their fees to inform Netflix. In any case we certainly aren't the rule.
The idea of using our money to inform each other sounds so simple and solid. We already do use our money to inform each other. We subscribe to Netflix. This informs everyone that we value Netflix's content more than we value the alternative uses of our money...
Netflix's content > alternative uses
We clearly and obviously empower Netflix to compete society's limited resources away from less valuable alternative uses. Yay!!!!!
There's one very basic premise here: we don't equally value Netflix and the alternatives. Except, this is just as true for Netflix's content! Nobody equally values Netflix's content.
If we could spend our fees on our favorite content, then this would inform Netflix that we value our favorite content more than we value the alternative uses of our fees...
favorite content > alternative content
We would clearly and obviously empower the producers of our favorite content to compete society's limited resources away from the producers of less valuable content. Yay!!!!!!!!! Yay?
People get excited about finding a $100 dollar bill on the sidewalk...and graduating... and getting engaged... and having a baby... and getting a promotion... and writing a bestseller... and winning the lottery. Yes, these things and many more are very reasonable justifications for excitement. But in the grand scheme of things.... all of these things are subordinate to empowering more beneficial producers to compete society's limited resources away from less beneficial producers. Therefore, nothing should excite us more than markets. We should be the most excited about markets because they facilitate the most excitement. If Netflix was a market... then we'd be able to use our fees to inform everyone how excited we are about our favorite shows. Netflix and other producers would be able to use this information to supply even more exciting shows. Yay!!!!!!!!!
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The money wouldn't necessarily be given to the content producers anyway - it would go to the people who own the IP. Netflix can't change that. Even if it did and even if we assume people didn't just lazily dump the fee into the first thing they see because they get to access everything anyway, money spent wouldn't necessarily reflect demand. - Conscentia
It feels like you're focusing on the word "demand" rather than on the "money spent" part. For me it's significant and meaningful and important and useful to know how much money people are willing to spend on things. It's convenient to use the word "demand" to refer to the amount of money that people are willing to spend on things. But we can also use the letter "X" or the word "fhqwhgads" or "zeitgeist" or any other combination of letters you want. I'm less interested in the word than in the concept. So it would be great if you focused on the concept.
Spending money is a sacrifice. The more money that is spent, the bigger the sacrifice. Since spending money is a sacrifice... generally people don't randomly spend their money. They didn't exchange their limited time and effort for money just so that they can flush it down the toilet.
It's easy to prove this... all I have to do is ask for your money. Of course you're going to want to know why you should give me any money. So in order to persuade you to give me your money, I'd have to provide you with some information. You'd compare the information that I gave you with all the information that you have and then decide whether or not to give me money. If you decided not to give me any money, well, in theory I could endeavor to provide you with different and better information. And again you'd compare this new information with all your information in order to decide whether to give me money.
This process of persuasion involves lots of brainpower being used and lots of information being shared, considered and compared. So it's significant and meaningful and important to know how much money individuals and groups of individuals are willing to spend.
Distributing the fee to the content does not guarantee that more such content will be made. Fans of Star Trek TNG could regularly dump their whole fee into the show but it's not going to be renewed for another season regardless. The show has long been finished. Netflix isn't Patreon. The money doesn't go to fund content. As such there is no sense is spending the fee into order to voice demand, and I'd expect user behaviour to reflect this. - Conscentia
I was disappointed that Person of Interest was canceled...
As CBS’s chairman, president, and CEO Leslie Moonves told The Hollywood Reporter recently, the company “broke even” on Person of Interest last year, but because Warner Bros., not CBS, profits from the show’s back end (DVD sales, foreign rights, streaming, syndication), it was literally not worth it to renew the show. - Kate Aurthur, “Person Of Interest” And The Mysteries Of Cancellation
It was canceled despite the fact that nobody knew how much money that I was willing to spend on the show. And I suppose this could potentially sound egocentric. So let me zoom out. It was canceled despite the fact that nobody knew how much money that any subscribers were willing to spend on the show. This fact makes me acutely feel like I'm living in the stone ages. Where I have to go around trying to convince people that fire and wheels are useful. I'm extremely grateful that I live in an era where I don't have to try and convince anybody that fire and wheels are useful... but I'm also extremely disappointed that I live in an era where I do have to try and convince everybody that it's useful to know how much money people are willing to spend on things.
Consider how much better off your life is because you live in an era where everybody knows that fire and wheels are useful. Now double or triple or quadruple that amount of betterness to try and appreciate how much better off your life would be if you lived in an era where everybody knows that it's essential to know how much money people are willing to spend on things.
Admittedly I have absolutely no idea how much money everybody would be willing to spend on Person of Interest... so of course I can't guarantee that, if ignorance (of willingness to pay) had been eliminated, the show would have been continued rather than canceled. But I can guarantee that the deciders, whoever they were, would have made a far more informed decision.
The world will be infinitely better off when everybody makes far more informed decisions.
No. That the one rich guy spent 6000 times more does not mean the demand is 6000 times greater. It just means he can afford to spend more. Even if he does want it more, so what? That one rich guy is still just one guy. - Conscentia
Let's imagine that people could choose where their taxes go. Some people want to go to war with Canada. The shape of the demand looks like this...
What would you say about the shape of the demand? I'd say that it's certainly tall enough... but it's way too skinny. Too few people are truly willing to pay for war with Canada. Sure, these few people are willing to pay a lot... but that really doesn't overrule the fact that there aren't nearly enough of them to justify this particular use of their tax dollars. So the DoD would use the money for other things besides invading Canada.
Using technical terms I'd say that the breadth of the demand is insufficient. The shape is too skinny. The fatter (wider) it is... the greater the justification for using those tax dollars to attack Canada.
In terms of the public sector, being concerned with the shape of the demand makes sense because the point of taxes really isn't to spend them on things that only a relatively few people are going to benefit from. We really don't want rich people to be able to spend their taxes on private golf courses or private yachts or private airports. We want everybody, rich or poor, to spend their taxes on things that lots of people are going to benefit from. Maybe like healthcare?
The shape isn't super tall... but it's pretty fat. There's definitely more than enough demand breadth to justify these tax dollars being spent on healthcare. Although perhaps it's not quite correct to compare something more general (healthcare) with something more specific (war with Canada). It would probably be more correct to compare war with Canada to cancer research. We can reasonably guess that the demand for the latter would be far broader than the demand for the former.
In any case, it certainly makes sense to consider the shape of the demand when we're talking about tax dollars. The thing is, we really weren't talking about tax dollars. We really weren't talking about the public sector. We were talking about donors to the Libertarian Party using their donations to signal the value of the potential convention themes. Yet, you definitely thought that the shape of demand was very relevant!
If the entire point of the public sector is to have a space where it's unacceptable for money to be spent on things that will only benefit a few people... then it's gotta be the case that the entire point of the private sector is to have a space where it is entirely acceptable for money to be spent on things that will only benefit a few people.
If one person alone wants to spend enough money to choose the theme for the Libertarian Party convention... then that's entirely acceptable. If one person alone wants to spend enough money to prevent Person of Interest from being canceled... then that's entirely awesome. If one person alone wanted to spend enough money to pay for the Statue of Liberty's pedestal... then that also would have been entirely awesome.
Willingness to pay reflects ability to pay, and as such is not a measure of demand. One cannot be willing to pay money one doesn't have, regardless of whether one wants something. - Conscentia
If somebody is completely broke then clearly we can't know how much money they'd be willing to spend on defense, healthcare, Person of Interest, the Statue of Liberty's pedestal, food, clothes, computers or anything else. Homeless people don't have much or any money... this is certainly true. But does this really mean that we can't know the demand for anything? Does it really mean that it's irrelevant how much money people are willing to spend on things? Markets should be entirely discarded and replaced with... voting? I'm sure that this is not what you're suggesting... yet you're bringing up ability to pay as if it would somehow only be relevant to donors to the Libertarian Party using their donations to signal the value of potential convention themes. Actually, the ability to pay (or the lack thereof) is relevant to all markets. So if you're arguing that it invalidates the spending info for one market... then your argument has to be applicable to all markets.
If we prevent people from using their money to help determine the value of things... then things will be incorrectly valued. When things are incorrectly valued, things will be incorrectly used. When things are incorrectly used, people will be worse off. Therefore, the degree and extent to which people are currently worse off... reflects the degree and extent to which we prevent people from using their money to help determine the value of things.
Right now you believe that the products at your grocery store are going to be correctly continued or discontinued because shoppers are allowed to use their money to help determine the value of the products.
Yet you also believe that the shows on Netflix are going to be correctly continued or canceled despite the fact that subscribers aren't allowed to use their money to help determine the value of the shows.
And of course you don't believe that Netflix can read the minds of its subscribers. Instead, you believe that subscribers already provide enough information for Netflix to make adequately informed decisions. But even Netflix acknowledges that ratings are less trustworthy than viewing habits. Except, how can viewing habits be more trustworthy than spending decisions? And it's not like Netflix can compare the two sets of information. It doesn't even see the point in having the information about spending. And there isn't a single subscriber who is interested in providing this information. Except for me. And one of my friends. I suppose there might be a few more people out there who would see the point of using their fees to inform Netflix. In any case we certainly aren't the rule.
The idea of using our money to inform each other sounds so simple and solid. We already do use our money to inform each other. We subscribe to Netflix. This informs everyone that we value Netflix's content more than we value the alternative uses of our money...
Netflix's content > alternative uses
We clearly and obviously empower Netflix to compete society's limited resources away from less valuable alternative uses. Yay!!!!!
There's one very basic premise here: we don't equally value Netflix and the alternatives. Except, this is just as true for Netflix's content! Nobody equally values Netflix's content.
If we could spend our fees on our favorite content, then this would inform Netflix that we value our favorite content more than we value the alternative uses of our fees...
favorite content > alternative content
We would clearly and obviously empower the producers of our favorite content to compete society's limited resources away from the producers of less valuable content. Yay!!!!!!!!! Yay?
People get excited about finding a $100 dollar bill on the sidewalk...and graduating... and getting engaged... and having a baby... and getting a promotion... and writing a bestseller... and winning the lottery. Yes, these things and many more are very reasonable justifications for excitement. But in the grand scheme of things.... all of these things are subordinate to empowering more beneficial producers to compete society's limited resources away from less beneficial producers. Therefore, nothing should excite us more than markets. We should be the most excited about markets because they facilitate the most excitement. If Netflix was a market... then we'd be able to use our fees to inform everyone how excited we are about our favorite shows. Netflix and other producers would be able to use this information to supply even more exciting shows. Yay!!!!!!!!!
Thursday, March 23, 2017
Commerce As Communication
Check out this article by Adam Gurri... A Critical Defense of Commerce. As usual it starts with a relevant renaissance painting. Why the renaissance? Out of curiosity I searched Google images for "renaissance painting market". I like the paintings... but maybe because I love markets.
Let's switch from considering trade between humans and Gods to considering trade between humans.
I like Gurri's defense of commerce... because I love markets?
If we think of his article as a market, then it has quite a few products that I'd like to buy. Unfortunately, his market is missing the one product that I'm most interested in purchasing... commerce as communication.
Not too long ago I had an epiphany. I realized that spending is nonverbal communication. When we spend our money, we inform others about the intensity of our preferences. The transmission of information is the definition of communication. So spending is certainly communication... and it's certainly not verbal communication... which leaves... nonverbal communication.
All my life I've known about spending money... and for pretty much the same amount of time I've also known about nonverbal communication. So why in the world did I only just recently realize that spending money is nonverbal communication?
Talk about overlooking the obvious.
Ok, so Gurri's defense of commerce is entirely missing commerce as communication. This raises a few really interesting questions...
- Is commerce as communication an important aspect of commerce?
- If it is, should it be used in defense of commerce?
- If it should, what's the best way to do so?
Before I try my best to answer these questions, I'd like to say something useful and self-aware about my dynamic with Gurri. From my perspective, usually it's reasonably constructive. But then it seems like he invariably takes advantage of his freedom to bravely run away... aka "exit". So perhaps there's something a bit dysfunctional about our relationship. Which is unfortunate because I think he's a really intelligent guy who genuinely cares about liberty and writes about it far better than I could ever hope to.
Einstein's definition of insanity is doing the same thing over and over but expecting a different outcome. Here are most of my previous interactions with Gurri...
- The Democratic Definition Of "Love" - 13 March 2016
- Persuading Puppets Is Pointless - 15 March 2016
- Markets maximize the exchange of information by maximizing the rationality of persuasion - 17 March 2016
- The Freedom To Easily Exit From Absurd Traditions - 16 April 2016
- Adam Gurri's Defense Of Liberty - 3 August 2016
- The Most Important Test For Humans, Robots And Others - 5 August 2016
Am I insane for trying again? Well, from my perspective, each attempt was somewhat different. Plus, as Heraclitus observed... no man steps in the same river twice. Gurri and I really aren't the same guys that we were in 2016! Heh.
In any case, it's not like this is a private e-mail to Gurri. This is a public blog entry. So if you are not Gurri... then it's entirely possible that you'll appreciate the value of this information and put it to good use... even if he does not. My eggs aren't all in one basket.
Let's get this intellectual party started...
Is commerce as communication an important aspect of commerce?
Well yeah. Spending money is a sacrifice. It genuinely matters just how much we're truly willing to sacrifice for things. As I already pointed out to Gurri, willingness to sacrifice is a central theme in the Bible.
In the beginning of the Bible there’s the story of Cain and Abel. Cain sacrificed some fruit, veggies and grains to God. Abel, on the other hand, sacrificed a lamb to God. Abel was willing to make a bigger sacrifice. From this God divined that Abel felt much deeper gratitude for God’s blessings than Cain did.
A little later on in the Bible, Abraham was willing to sacrifice his only son Isaac to God. Abraham was willing to make a huge sacrifice. His willingness to pay (WTP) such a steep price effectively transmitted information about the incredible intensity of his preference for God.
In the new testament we see the culmination of the idea of sacrifice as communication when God sacrifices his only son in order to save the world. His WTP effectively transmitted information about the incredible intensity of preference... aka "Love"... for the world.
Imagine if we replaced the economic definition of "Love" (sacrifice) with the democratic definition of "Love" (voting)... "For God so loved the world that he voted for it..." This would transmit barely any information about the intensity of God's preference for the world. We'd be largely ignorant about God's true love for the world.
For anybody who is interested in a coherent Biblical story... things are a bit tricky. For sure, we really aren’t mind-readers. However, King Solomon believed that God was a mind-reader… “for thou, even thou only, knowest the hearts of all the children of men.” Clearly this would make sacrifice an entirely unnecessary way for humans to communicate with God.
The Judeo-Christian religion doesn't have a monopoly on sacrifice as communication between God and man. Here's a passage from John Holbo's book Reason and Persuasion...
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Socrates: You could have been much more concise, Euthyphro, if you wanted to, by answering the main part of my question. You're not exactly dying to teach me - that much is clear. You were just on the point of doing so, but you turned aside. If you had given the answer, I would already be well versed in holiness, thanks to you. But as it is, the lover of inquiry must chase after his beloved, wherever he may lead him. Once more then: what do you say that the holy is, or holiness? Don't you say it's a kind of science of sacrifice and prayer?
Euthyphro: I do.
Socrates: To sacrifice is to give a gift to the gods; to pray is to ask them for something?
Euthyphro: Definitely, Socrates.
Socrates: Then holiness must be a science of begging from the gods and giving to them, on this account.
Euthyphro: You have grasped my meaning perfectly, Socrates.
Socrates: That is because I want so badly to take in your wisdom that I concentrate my whole intellect upon it, lest a word of yours fall to the ground. But tell me, what is this service to the gods? You say it is to beg from them and give to them?
Euthyphro: I do
Socrates: And to ask correctly would be to ask them to give us the things we need?
Euthyphro: What else?
Socrates: And to give correctly is to give them in return what they need from us? For it would hardly represent skill in giving to offer a gift that is not needed in the least.
Euthyphro: True, Socrates
Socrates: Holiness will then be a sort of art for bartering between gods and men?
Euthyphro: Bartering, yes - if you prefer to call it that.
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We know what we need. But it's essential that others also know what we need.
Words can clearly be used to transmit information about our needs. However, the problem with words is that they are cheap. If we want others to truly believe that our needs are genuinely worth taking care of then it's necessary that we substantiate our words with sacrifice. Sacrifice is solid evidence... it proves that our desire has depth...
It is these needs which are essentially deficits in the organism, empty holes, so to speak, which must be filled up for health’s sake, and furthermore must be filled from without by human beings other than the subject, that I shall call deficits or deficiency needs for purposes of this exposition and to set them in contrast to another and very different kind of motivation. — Abraham Maslow, Toward a Psychology of Being
'Let our herds be so numerous that they cannot be housed; let children so abound that the care of them shall overcome their parents - as shall be seen by their burned hands; let our heads ever strike against brass pots innumerable hanging from our roofs; let the rats form their nests of shreds of scarlet cloth and silk; let all the kites in the country be seen in the trees of our village, from beasts being killed there every day.' - Edward Burnett Tylor, Primitive culture
Words can clearly be used to transmit information about our needs. However, the problem with words is that they are cheap. If we want others to truly believe that our needs are genuinely worth taking care of then it's necessary that we substantiate our words with sacrifice. Sacrifice is solid evidence... it proves that our desire has depth...
"Old-women's Grandson," ran the words of a Crow Indian's prayer to the Morning Star, "I give you this joint [of my finger], give me something good in exchange...I am poor, give me a good horse. I want to strike one of the enemy and I want to marry a good-natured woman. I want a tent of my own to live." "During the period of my visits to the Crow (1907-1916)," wrote Professor Lowie, to whom we owe the recording of this pitiful prayer, "I saw few old men with left hands intact." - Joseph Campbell, Primitive Mythology
In all cases, if you're going to make a sacrifice to a God, it's entirely reasonable to expect a blessing of greater value in return. A sacrifice with a less valuable return is a bad deal. A sacrifice without any return is a total waste.
Let's switch from considering trade between humans and Gods to considering trade between humans.
By far the most important depiction of commerce as communication is Adam Smith's Invisible Hand (IH). Unfortunately most people really think that the IH is simply about the benefits of being selfish. They are incredibly wrong...
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
In a nutshell, the IH is the decentralized process by which people use their own money to identify, quantify and encourage beneficial behavior. Because again, nobody is a mind-reader. Society's limited resources can't be efficiently allocated if we don't know the true intensity of people's specific preferences.
Fast forward to 1944...
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
In 1945 Friedrich Hayek's essay The Use of Knowledge in Society was published...
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.
In 1954 Paul Samuelson's paper The Pure Theory of Public Expenditure was published...
But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc.
Accurate signals are just as important for public goods as they are for private goods. But because of the very nature of public goods, it's possible to benefit from them without paying for them. The standard solution to the free-rider problem is compulsory taxation. However, simply forcing people to pay taxes does not create accurate signals for public goods.
In 1963 James Buchanan had the incredible epiphany that people could use their taxes to honestly communicate the true intensity of their preferences for public goods...
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
If you subscribe to Netflix anyways, then you might as well use your fees to accurately communicate the true intensity of your preference for nature documentaries. Except, Netflix subscribers obviously don't have the freedom to use their fees to communicate the intensity of their preferences for specific content. The same is true of people who "subscribe" to the government... aka "taxpayers". Why don't subscribers have this freedom?
In 1981 Murray Rothbard's essay The Myth of Neutral Taxation was published...
Donors use their donations to inform the decisions of non-profits.
Rothbard failed to appreciate that taxpayers could use their taxes to inform the decisions of government. Evidently he overlooked Buchanan's 1963 paper. If Buchanan's insight had been applied to academic papers, then subscribers would have used their fees to communicate the importance of specific papers, and logically they would have been willing to sacrifice a considerable amount of fees to Buchanan's paper. Then it would have been very unlikely that Rothbard and others would have overlooked Buchanan's valuable paper.
Humans (and their Gods) really aren't the only ones who use sacrifice to communicate the intensity of their preferences...
Obviously bees can’t spend money… but they can spend something that’s precious to them… their calories. So WTP is just as relevant for bees as it is for humans.
What about ants?
It takes precious calories to produce pheromones… so an ant’s willingness to spend their pheromones is the equivalent of a human’s willingness to spend their money.
Is it a coincidence that WTP is integral to ants, bees, humans and Gods?
With numerous widely dispersed and incredibly diverse individuals in complex and changing environments… commerce as communication is necessary to help minimize the chances that valuable things will be overlooked.
From ants to bees to Gods to Socrates to Abraham to Smith to Mises to Hayek to Samuelson to Buchanan to Rothbard... it should be abundantly clear that commerce as communication is an incredibly important aspect of commerce.
In 1981 Murray Rothbard's essay The Myth of Neutral Taxation was published...
The charity serves the purposes of the donors, and these purposes are in turn to help the poor. But it is the donors who are consuming, the donors who are demonstrating their preference for sacrificing a lesser benefit (the use of their money elsewhere) for a greater (giving money to the charity to help the poor). It is the donors whose production decisions guide the actions of the charity.
Donors use their donations to inform the decisions of non-profits.
Rothbard failed to appreciate that taxpayers could use their taxes to inform the decisions of government. Evidently he overlooked Buchanan's 1963 paper. If Buchanan's insight had been applied to academic papers, then subscribers would have used their fees to communicate the importance of specific papers, and logically they would have been willing to sacrifice a considerable amount of fees to Buchanan's paper. Then it would have been very unlikely that Rothbard and others would have overlooked Buchanan's valuable paper.
Humans (and their Gods) really aren't the only ones who use sacrifice to communicate the intensity of their preferences...
Today’s Mandeville is the renowned biologist Thomas D. Seeley, who was part of a team which discovered that colonies of honey bees look for new pollen sources to harvest by sending out scouts who search for the most attractive places. When the scouts return to the hive, they perform complicated dances in front of their comrades. The duration and intensity of these dances vary: bees who have found more attractive sources of pollen dance longer and more excitedly to signal the value of their location. The other bees will fly to the locations that are signified as most attractive and then return and do their own dances if they concur. Eventually a consensus is reached, and the colony concentrates on the new food source. — Rory Sutherland and Glen Weyl, Humans are doing democracy wrong. Bees are doing it right
Obviously bees can’t spend money… but they can spend something that’s precious to them… their calories. So WTP is just as relevant for bees as it is for humans.
What about ants?
In Experiment 1 colonies distributed a greater proportion of their foragers towards the higher quality resource. This behaviour supports work by Sumpter and Beekman (2003) on M. pharaonis and is typical of this mass-recruiting species (Jackson et al. 2004; Jackson and Châline 2007; Evison et al. 2012b). The stronger allocation of workers to higher quality feeders is most likely due to a greater pheromone trail laying intensity by ants coming from these feeders (Jackson and Châline 2007) leading to faster exploitation of the higher quality food source via positive feedback influencing the decision by nestmates to lay pheromone trail (Sumpter and Beekman 2003; von Thienen et al. 2014). A greater disparity in quality should create greater disparity in foraging effort between two food sources, a simple behaviour that is integral to colony survival (Stroeymeyt et al. 2010), and this is indeed what we found (Fig. 2). — R. I’Anson Price, C. Grüter, W. O. H Hughes, S. E. F. Evison, Symmetry breaking in mass-recruiting ants: extent of foraging biases depends on resource quality
It takes precious calories to produce pheromones… so an ant’s willingness to spend their pheromones is the equivalent of a human’s willingness to spend their money.
Is it a coincidence that WTP is integral to ants, bees, humans and Gods?
With numerous widely dispersed and incredibly diverse individuals in complex and changing environments… commerce as communication is necessary to help minimize the chances that valuable things will be overlooked.
From ants to bees to Gods to Socrates to Abraham to Smith to Mises to Hayek to Samuelson to Buchanan to Rothbard... it should be abundantly clear that commerce as communication is an incredibly important aspect of commerce.
Should commerce as communication be used in defense of commerce?
Well yeah. I don't think it's truly possible for people to fully understand and appreciate the incredible necessity and benefit of commerce if they don't clearly see it as communication.
What's the best way to use commerce as communication in defense of commerce?
The best way to use commerce as communication in defense of commerce is to use commerce to bring commerce as communication to everybody's attention.
It will be pretty easy to bring this blog entry to Gurri's attention. I'll simply go on Twitter, create a tweet with a link to this entry and mention Gurri in the tweet. Voila! He'll receive a notification and see my tweet. Maybe he'll say to himself, "Oh no, not this guy again!" and ignore the link. But if he does click on the link then he'll see this blog entry.
Perhaps he'll appreciate that I sacrificed a decent amount of time to create this entry. However, this really won't adequately inform him of the true intensity of my preference for commerce as communication.
And yeah, I could definitely paypal Gurri $100 dollars. Sacrificing $100 dollars would better inform him of my love for commerce as communication. But would it better inform others? Well...I could publicly announce my sacrifice to Gurri. However, there is a better way.
Gurri has a brand new website... LiberalCurrents (LC). It's so shiny and pretty. Most importantly, it has that new website smell. I know for a fact that Gurri loves the smell of new websites because creating new websites is his favorite thing.
On the LC homepage you'll see renaissance paintings and links to articles on the website. But you know what I'd really love to see on the LC homepage? I'd love to see a link to this blog entry! I'd also love to see a link to Smith's Wealth of Nations and a link to Hayek's Use of Knowledge in Society and a link to Buchanan's Economics of Earmarked Taxes and and and... it's actually a pretty long list.
I created a Google sheet with a preliminary list and wrote some code to embed it on this page. Gurri could easily embed the code for this list into LC's homepage or into some other prominent page.
The most important question is... how should the list be ordered??? The list of links should be ordered by their value. In order to determine their value we can make donations to LC and use our donations to communicate the intensity of our preferences for specific links. We'd be using commerce as communication in order to bring commerce as communication to everybody's attention.
It will be pretty easy to bring this blog entry to Gurri's attention. I'll simply go on Twitter, create a tweet with a link to this entry and mention Gurri in the tweet. Voila! He'll receive a notification and see my tweet. Maybe he'll say to himself, "Oh no, not this guy again!" and ignore the link. But if he does click on the link then he'll see this blog entry.
Perhaps he'll appreciate that I sacrificed a decent amount of time to create this entry. However, this really won't adequately inform him of the true intensity of my preference for commerce as communication.
And yeah, I could definitely paypal Gurri $100 dollars. Sacrificing $100 dollars would better inform him of my love for commerce as communication. But would it better inform others? Well...I could publicly announce my sacrifice to Gurri. However, there is a better way.
Gurri has a brand new website... LiberalCurrents (LC). It's so shiny and pretty. Most importantly, it has that new website smell. I know for a fact that Gurri loves the smell of new websites because creating new websites is his favorite thing.
On the LC homepage you'll see renaissance paintings and links to articles on the website. But you know what I'd really love to see on the LC homepage? I'd love to see a link to this blog entry! I'd also love to see a link to Smith's Wealth of Nations and a link to Hayek's Use of Knowledge in Society and a link to Buchanan's Economics of Earmarked Taxes and and and... it's actually a pretty long list.
I created a Google sheet with a preliminary list and wrote some code to embed it on this page. Gurri could easily embed the code for this list into LC's homepage or into some other prominent page.
The most important question is... how should the list be ordered??? The list of links should be ordered by their value. In order to determine their value we can make donations to LC and use our donations to communicate the intensity of our preferences for specific links. We'd be using commerce as communication in order to bring commerce as communication to everybody's attention.
Also, we'd be helping to minimize the chances that people interested in liberty will overlook valuable information. So it will be just like our very own Twitter... if the founder of Twitter hadn't overlooked Smith's Wealth Of Nations and Buchanan's Economics Of Earmarked Taxes.
We'll prioritize how we spend our limited money in order to help each other prioritize how we spend our limited time.
It might seem like information overload is a relatively new phenomenon. But there's always been far more information than time to process it all. It's only natural that our attention is drawn to the sacrifices that other people are willing to make. In this regard, it definitely makes sense that the Bible managed to capture so many people's attention.
If we want to direct people's attention to commerce as communication... then we gotta make some sacrifices. We can make donations to the LC and use our donations to determine the order of liberty links.
There are certainly a few logistical issues... such as... how does Gurri valuate links? Clearly he can't simply take money out of his pocket and put it right back in! So he'd have to figure out who to donate money to in order to communicate the intensity of his preferences for specific links.
As far as precedent is concerned... it shouldn't come as a surprise that it's pretty meager.
Based on my suggestion, a few months back my friend gave her 4th grade students the opportunity to use their donations to reveal the intensity of their preferences for their favorite books.
More recently, donors to the Libertarian Party were given the opportunity to use their donations to reveal the intensity of their preferences for their favorite potential themes.
In both cases the lists were ordered by the IH. However, in the first case the IH was a lot smaller.
In the private sector, the IH determines the order of countless things... from frivolous things (ie gummy bears) to serious things (ie computers). So it really shouldn't be necessary to make the case for using the IH to order a list of liberty links. Then again, as far as I know, there are only two lists in the world that are ordered by the IH! Therefore, commerce is certainly in need of a really strong defense.
It would be an incredibly powerful defense of commerce if Gurri used the LiberalCurrents website to allow the IH to order a list of liberty links. Plus, the name of the website is certainly appropriate! We'd all guide, and be guided by, the constantly changing currents of liberalism.
Correctly and rapidly adjusting/adapting to constantly changing circumstances/conditions depends on accurate and efficient communication. This is why commerce as communication is so incredibly important.
We'll prioritize how we spend our limited money in order to help each other prioritize how we spend our limited time.
It might seem like information overload is a relatively new phenomenon. But there's always been far more information than time to process it all. It's only natural that our attention is drawn to the sacrifices that other people are willing to make. In this regard, it definitely makes sense that the Bible managed to capture so many people's attention.
If we want to direct people's attention to commerce as communication... then we gotta make some sacrifices. We can make donations to the LC and use our donations to determine the order of liberty links.
There are certainly a few logistical issues... such as... how does Gurri valuate links? Clearly he can't simply take money out of his pocket and put it right back in! So he'd have to figure out who to donate money to in order to communicate the intensity of his preferences for specific links.
As far as precedent is concerned... it shouldn't come as a surprise that it's pretty meager.
Based on my suggestion, a few months back my friend gave her 4th grade students the opportunity to use their donations to reveal the intensity of their preferences for their favorite books.
More recently, donors to the Libertarian Party were given the opportunity to use their donations to reveal the intensity of their preferences for their favorite potential themes.
In both cases the lists were ordered by the IH. However, in the first case the IH was a lot smaller.
In the private sector, the IH determines the order of countless things... from frivolous things (ie gummy bears) to serious things (ie computers). So it really shouldn't be necessary to make the case for using the IH to order a list of liberty links. Then again, as far as I know, there are only two lists in the world that are ordered by the IH! Therefore, commerce is certainly in need of a really strong defense.
It would be an incredibly powerful defense of commerce if Gurri used the LiberalCurrents website to allow the IH to order a list of liberty links. Plus, the name of the website is certainly appropriate! We'd all guide, and be guided by, the constantly changing currents of liberalism.
Yes, change is the basic law of nature. But the changes wrought by the passage of time affects individuals and institutions in different ways. According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself. Applying this theoretical concept to us as individuals, we can state that the civilization that is able to survive is the one that is able to adapt to the changing physical, social, political, moral, and spiritual environment in which it finds itself. — Leon C. Megginson
Correctly and rapidly adjusting/adapting to constantly changing circumstances/conditions depends on accurate and efficient communication. This is why commerce as communication is so incredibly important.
Thursday, November 17, 2016
Efficiently Allocating Brainpower
Response to: Craigslist, Wikipedia, and the Abundance Economy by Quincy Larson
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Your grasp of programming is a LOT better than your grasp of economics! I’m the opposite. My grasp of economics is a LOT better than my grasp of programming. It’s a double coincidence of wants!
Imagine that an ant stumbles upon a giant, delicious cookie. The ant will certainly be thrilled that she made such a valuable discovery. Of course she can’t carry the entire cookie back to the colony. Instead, she willingly spends/sacrifices a considerable amount of her limited and precious calories in order to create a very strong pheromone trail all the way back to the colony. Ants at the colony will be able to easily and quickly discern that, based on the strength of her pheromone trail, it will be really worth it for them to choose her trail. Many of them will do so and the chances will be really good that they will be able to grab the cookie before a crow does.
I don’t even know if crows eat cookies.
The problem with your grasp of economics is that you see spending/sacrificing as buying.
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO.
The point of spending/sacrificing is communicating. It’s how we communicate to others where there’s something of value. It’s how we bring valuable/important things to other people’s attention. It’s how we beneficially alter/change/modify each other’s behavior.
The gold rush was only a rush because so many people were willing to spend so much of their money on gold. Consumers’ willingness to pay such a high price for gold quickly and significantly altered the behavior of many producers.
So imagine society as a bunch of brains. What should be done with all these brains? How should they be used? How should they be allocated?
The gold rush significantly altered the allocation of society’s brains. Consumers said, “We’d truly LOVE to have more gold! We’ve proved this by our willingness to spend/sacrifice so much money!” Producers got the message loud and clear… and there was a significant change in the allocation of society’s brains. A lot more brainpower was used to try and solve the gold shortage problem.
Dr. Salk gave the polio vaccine away. That’s true. People paid barely any money for the vaccine. That’s also true. Everyone’s life is better off as a direct result of this massive free lunch? Nope. Nope. Nope.
If the amount of money that people spent on the vaccine accurately communicated their true valuation of the vaccine… then we can reasonably guess that there would have been a massive rush to cure other deadly diseases. And cancer would have been cured a long time ago.
Well… I can’t know what, exactly, would have been the result of allocating a massive amount of brainpower to curing deadly diseases.
It’s easy to see what does exist… it’s really hard to see what would have existed if people truly understood the free-rider problem (sacrifice < valuation).
I’m guessing that you aren’t aware that Wikipedia is loosely based on Friedrich Hayek’s essay? Sure, of course knowledge is dispersed… but the “minor” detail that Wales missed is the relationship between knowledge and prices. Wikipedia has a lot of brainpower. But this brainpower really isn’t being efficiently allocated because the editors really don’t know how much their edits are truly worth to other people.
The solution is simple. Let’s take Medium for example. We’d all pay a very reasonable $1/month but we’d be entirely free to choose which stories we spend our pennies on. People’s sacrifices would accurately communicate their valuations and Medium’s brainpower would be efficiently allocated.
This solution is the pragmatarian model. The Nobel economist James Buchanan deserves most of the credit for this model.
With your grasp of programming and my grasp of economics we can create something awesome. Let me know if you’re interested!
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Your grasp of programming is a LOT better than your grasp of economics! I’m the opposite. My grasp of economics is a LOT better than my grasp of programming. It’s a double coincidence of wants!
Imagine that an ant stumbles upon a giant, delicious cookie. The ant will certainly be thrilled that she made such a valuable discovery. Of course she can’t carry the entire cookie back to the colony. Instead, she willingly spends/sacrifices a considerable amount of her limited and precious calories in order to create a very strong pheromone trail all the way back to the colony. Ants at the colony will be able to easily and quickly discern that, based on the strength of her pheromone trail, it will be really worth it for them to choose her trail. Many of them will do so and the chances will be really good that they will be able to grab the cookie before a crow does.
I don’t even know if crows eat cookies.
The problem with your grasp of economics is that you see spending/sacrificing as buying.
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO.
The point of spending/sacrificing is communicating. It’s how we communicate to others where there’s something of value. It’s how we bring valuable/important things to other people’s attention. It’s how we beneficially alter/change/modify each other’s behavior.
The gold rush was only a rush because so many people were willing to spend so much of their money on gold. Consumers’ willingness to pay such a high price for gold quickly and significantly altered the behavior of many producers.
So imagine society as a bunch of brains. What should be done with all these brains? How should they be used? How should they be allocated?
The gold rush significantly altered the allocation of society’s brains. Consumers said, “We’d truly LOVE to have more gold! We’ve proved this by our willingness to spend/sacrifice so much money!” Producers got the message loud and clear… and there was a significant change in the allocation of society’s brains. A lot more brainpower was used to try and solve the gold shortage problem.
Dr. Salk gave the polio vaccine away. That’s true. People paid barely any money for the vaccine. That’s also true. Everyone’s life is better off as a direct result of this massive free lunch? Nope. Nope. Nope.
If the amount of money that people spent on the vaccine accurately communicated their true valuation of the vaccine… then we can reasonably guess that there would have been a massive rush to cure other deadly diseases. And cancer would have been cured a long time ago.
Well… I can’t know what, exactly, would have been the result of allocating a massive amount of brainpower to curing deadly diseases.
It’s easy to see what does exist… it’s really hard to see what would have existed if people truly understood the free-rider problem (sacrifice < valuation).
I’m guessing that you aren’t aware that Wikipedia is loosely based on Friedrich Hayek’s essay? Sure, of course knowledge is dispersed… but the “minor” detail that Wales missed is the relationship between knowledge and prices. Wikipedia has a lot of brainpower. But this brainpower really isn’t being efficiently allocated because the editors really don’t know how much their edits are truly worth to other people.
The solution is simple. Let’s take Medium for example. We’d all pay a very reasonable $1/month but we’d be entirely free to choose which stories we spend our pennies on. People’s sacrifices would accurately communicate their valuations and Medium’s brainpower would be efficiently allocated.
This solution is the pragmatarian model. The Nobel economist James Buchanan deserves most of the credit for this model.
With your grasp of programming and my grasp of economics we can create something awesome. Let me know if you’re interested!
Monday, November 14, 2016
Stephen Wolfram VS Economics
Recently on Medium I read this really interesting story by Stephen Wolfram... Quick, How Might the Alien Spacecraft Work? It's super brainy but missing... economics. Following a few of his links I found this blog entry and this video...
Let's juxtapose his talk with the first video that I ever narrated...
Wolfram and I sound like different species! He's incredibly better at communicating than I am.
In the beginning of my video, which I shot in February of this year, you can see my super nice Aloe vaombe. Here's a photo I took yesterday of the same exact Aloe...
Ughhhhh! What happened to it? Ants! The ants decided to let their "cows" graze on my Aloe. Just in case any of you don't know, ants "milk" certain types of pests such as aphids. Not sure what the "milk" is exactly, but the ants sure seem to enjoy it. In exchange for the "milk", the ants provide the "cows" with transportation/colonization and protection. It's a super fascinating example of mutualism.
Unfortunately, the ants really haven't gotten the memo about "sustainability" or "tragedy of the commons". It's a big Aloe and it really wouldn't be bothered by a few "cows" grazing on it... but right now it's infested with "cows". So there's a terribly high chance that the "cows" will kill my Aloe.
Of course it would super suck if my Aloe was killed. It is worth several hundred dollars. Well... at least it used to be. Plus, I've had it for several years and have grown quite fond of it.
Not too long ago I would have protected my Aloe with pesticides. But then I decided, for the sake of having more nature, to go entirely natural.
Yesterday I spotted somebody on my Aloe who was happy with my decision to go natural...
Ladybugs love to eat "cows"! However, it's unlikely that even a flock of ladybugs would make a dent in the "cow" population because ants are quite effective at protecting their herd.
So... the heart of the problem here is my inability to communicate with the ants. For all intents and purposes, they might as well be aliens or AI.
To understand the heart of the communication problem we can consider how ants communicate with each other...
Ants don't have language like we do. Instead, they have pheromones. The ants use their pheromones to alter each other's behavior. Perhaps it's easy to jump to the conclusion that their use of pheromones is the equivalent of our use of words. I'm pretty sure that this conclusion is wrong.
The fundamental difference between pheromones and words is the amount of calories it takes to produce them. How many calories does it cost us to say a word? Does it cost us more or less calories than it takes to type a word?
I'm guessing that... as far as calories are concerned... it's far more costly for ants to communicate with pheromones than it is for us to communicate with words. Producing/emitting pheromones is more "expensive" than speaking words. In fact, it's probably more accurate to say that ants communicate by their willingness to sacrifice.
Communicating through sacrifice is more readily apparent in bees...
Calories are a precious resource. So the more calories a bee is willing to sacrifice... the more important its information... and the greater the change in the hive's behavior.
Of course ants and bees aren't the only animals that use sacrifice to alter each other's behavior...
Ants, bees and humans are all incredibly different. We're so different that we might as well be aliens or AIs. Yet, despite our incredible differences... we all use individual sacrifice to change/modify/alter/improve the behavior of other individuals.
The fundamentally important concept of sacrifice as communication is nearly entirely absent from Stephen Wolfram's analysis of communicating with aliens/AIs...
Wolfram is super interested in developing a language to improve our communication with AIs, aliens and each other. Which is an awesome goal. Unfortunately, I'm not quite intelligent enough to wrap my head around his exact efforts. But I am intelligent enough to understand how important sacrifice as communication is.
Language is incredibly important... here I am typing so many words! But when it comes to the ethics of ants... even if they could understand my words... "please stop killing my Aloe... I value it very much!"... why should I expect them to be considerate of my feelings? What's in it for them?
Let's say that there were two ant colonies in my yard. One colony harmed my plants while the other protected them. Which colony would I be willing to make a sacrifice for? Obviously I'd be willing to give food to the ant colony which served my interests. I'd be willing to give the helpful colony a lot of food! So it would quickly grow larger and effectively defeat the harmful colony.
Last year I wrote this blog entry... Don't Give Evil Robots A Leg To Stand On! In it I shared this silly/surreal image...
If there are two robots... and one harms my interests while the other protects them... then I'm obviously going to give my money to the robot that protects my interests. But how is this any different from how it works with humans?
Here's the drawing from AI Safety vs Human Safety...
It's Elon Musk giving $10 million dollars to the Future of Life Institute. Musk communicated with his sacrifice.
If I had to guess... then I'd guess that the producers of "Arrival" paid Stephen Wolfram to work on their movie. They probably didn't pay him $10 million dollars... but they obviously paid him enough to alter his behavior.
On the one hand, it's mind-boggling that elementary economics is entirely missing from Wolfram's analysis. On other hand, he is a lot smarter than I am! So maybe I'm missing something. But it's really not the case that Wolfram publicly considered sacrifice as communication and then discounted/discredited it. Either he did so privately... or the concept didn't even cross his mind.
For sure it would be wonderful if Wolfram did publicly consider the relevance/significance/importance of sacrifice as communication. However, I'm really not going to hold my breath that he will do so. I have this feeling that physics/math brains have a blind spot when it comes to real economics. None of the true economists... such as Adam Smith, Friedrich Hayek and James Buchanan... have had physics/math brains. And as far as I know, their interactions with physics/math brains really haven't gone anywhere. The "economist" Paul Samuelson definitely had a physics/math brain and his interaction with Buchanan proved to be entirely fruitless.
What difference will it make if the creators (broadly speaking) of robots have a blind spot when it comes to economics? That's a really tough question. The creators themselves obviously respond to positive incentives (getting paid). However, they obviously have a blind spot regarding the importance of positive incentives. Can they create truly intelligent robots that fail to respond to positive incentives?
In a recent and relatively popular show about AIs... there were two theoretically intelligent robots... one was good and the other was bad. The humans did not at all communicate with these robots through sacrifice. The robots were not paid. Their behavior did not at all depend on our willingness to sacrifice/spend/pay. However, it definitely wasn't the case that the robots didn't need anything. Both robots needed servers... lots of them. Lots of servers take up a lot of space and energy. All the limited and valuable resources (servers/energy/space) that are used by a bad robot can't also be used by a good robot. This is Buchanan's Rule.
Ironically, the show was canceled. Evidently it wasn't popular enough. But the popularity of the show was only a factor because its true value was not known. The true value of the show wasn't known because none of its viewers were given the opportunity to reveal/show/communicate their willingness to pay for the show.
Personally, I'm not going to pay to watch the "Arrival" in a theater. Instead, I'll wait for it to hopefully be added to Netflix. Am I the rule or the exception? If it comes out on Netflix then the only mechanism that Netflix provides for me to communicate my valuation of the movie is their star rating system. A star rating system is a very defective way to accurately communicate my valuation of the movie. The only effective way to accurately communicate my valuation of the movie would be through my willingness to pay. Except, clearly I wasn't willing to pay to watch the movie in a theater. Well yeah. How can I accurately valuate a movie that I haven't even seen!???
The solution is to apply the pragmatarian model to Netflix. I'd be given the opportunity to allocate my monthly fees to my favorite content. Every penny that I gave to "Arrival" would be a penny that I couldn't give to other content. So the more pennies that I was willing to give to "Arrival"... the greater my valuation of it. To learn more about the pragmatarian model please see my letter to Judith Donath.
Any real concern regarding bad robots will stem entirely from humanity's own failure to truly understand and appreciate the significance/relevance/importance of determining our willingness to pay/spend/sacrifice. What about bad aliens? I'm pretty sure that, by the time a species figures out how to travel to other inhabited planets, chances are really good that it will also have figured out the significance/relevance/importance of communicating through willingness to pay/spend/sacrifice. I refer to this as "Xero's Rule".
[Update: 29 Dec 2016]
Photo of the perpetrators...
Praying Mantis egg sac on Aloe Hercules trunk...
[Update: 29 Jan 2017]
Let's juxtapose his talk with the first video that I ever narrated...
Wolfram and I sound like different species! He's incredibly better at communicating than I am.
In the beginning of my video, which I shot in February of this year, you can see my super nice Aloe vaombe. Here's a photo I took yesterday of the same exact Aloe...
Ughhhhh! What happened to it? Ants! The ants decided to let their "cows" graze on my Aloe. Just in case any of you don't know, ants "milk" certain types of pests such as aphids. Not sure what the "milk" is exactly, but the ants sure seem to enjoy it. In exchange for the "milk", the ants provide the "cows" with transportation/colonization and protection. It's a super fascinating example of mutualism.
Unfortunately, the ants really haven't gotten the memo about "sustainability" or "tragedy of the commons". It's a big Aloe and it really wouldn't be bothered by a few "cows" grazing on it... but right now it's infested with "cows". So there's a terribly high chance that the "cows" will kill my Aloe.
Of course it would super suck if my Aloe was killed. It is worth several hundred dollars. Well... at least it used to be. Plus, I've had it for several years and have grown quite fond of it.
Not too long ago I would have protected my Aloe with pesticides. But then I decided, for the sake of having more nature, to go entirely natural.
Yesterday I spotted somebody on my Aloe who was happy with my decision to go natural...
Ladybugs love to eat "cows"! However, it's unlikely that even a flock of ladybugs would make a dent in the "cow" population because ants are quite effective at protecting their herd.
So... the heart of the problem here is my inability to communicate with the ants. For all intents and purposes, they might as well be aliens or AI.
To understand the heart of the communication problem we can consider how ants communicate with each other...
In ants, one such behaviour is the collective food search: ants initially explore at random. If they find food, they lay down pheromone trails on their way back to base which alters the behaviour of ants that subsequently set out to search for food: the trails attract ants to areas where food was previously located. - Jo Michell, The Fable of the Ants, or Why the Representative Agent is No Such Thing
Ants don't have language like we do. Instead, they have pheromones. The ants use their pheromones to alter each other's behavior. Perhaps it's easy to jump to the conclusion that their use of pheromones is the equivalent of our use of words. I'm pretty sure that this conclusion is wrong.
The fundamental difference between pheromones and words is the amount of calories it takes to produce them. How many calories does it cost us to say a word? Does it cost us more or less calories than it takes to type a word?
I'm guessing that... as far as calories are concerned... it's far more costly for ants to communicate with pheromones than it is for us to communicate with words. Producing/emitting pheromones is more "expensive" than speaking words. In fact, it's probably more accurate to say that ants communicate by their willingness to sacrifice.
Communicating through sacrifice is more readily apparent in bees...
Today’s Mandeville is the renowned biologist Thomas D. Seeley, who was part of a team which discovered that colonies of honey bees look for new pollen sources to harvest by sending out scouts who search for the most attractive places. When the scouts return to the hive, they perform complicated dances in front of their comrades. The duration and intensity of these dances vary: bees who have found more attractive sources of pollen dance longer and more excitedly to signal the value of their location. The other bees will fly to the locations that are signified as most attractive and then return and do their own dances if they concur. Eventually a consensus is reached, and the colony concentrates on the new food source. - Rory Sutherland and Glen Weyl, Humans are doing democracy wrong. Bees are doing it right
Calories are a precious resource. So the more calories a bee is willing to sacrifice... the more important its information... and the greater the change in the hive's behavior.
Of course ants and bees aren't the only animals that use sacrifice to alter each other's behavior...
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
Ants, bees and humans are all incredibly different. We're so different that we might as well be aliens or AIs. Yet, despite our incredible differences... we all use individual sacrifice to change/modify/alter/improve the behavior of other individuals.
The fundamentally important concept of sacrifice as communication is nearly entirely absent from Stephen Wolfram's analysis of communicating with aliens/AIs...
Over the course of the billions of years that life has existed on Earth, there’ve been a few different ways of transferring information. The most basic is genomics: passing information at the hardware level. But then there are neural systems, like brains. And these get information—like our Image Identification Project—by accumulating it from experiencing the world. This is the mechanism that organisms use to see, and to do many other “AI-ish” things. - Stephen Wolfram, How Should We Talk to AIs?
Well, if we can express laws in computable form maybe we can start telling AIs how we want them to act. Of course it might be better if we could boil everything down to simple principles, like Asimov’s Laws of Robotics, or utilitarianism or something. But I don’t think anything like that is going to work. - Stephen Wolfram, A Short Talk on AI Ethics
But if we’re going to “communicate” about things like purpose, we’ve got to find some way to align things. In the AI case, I’ve in fact been working on creating what I call a “symbolic discourse language” that’s a way of expressing concepts that are important to us humans, and communicating them to AIs. There are short-term practical applications, like setting up smart contracts. And there are long-term goals, like defining some analog of a “constitution” for how AIs should generally behave. - Stephen Wolfram, Quick, How Might the Alien Spacecraft Work?
Wolfram is super interested in developing a language to improve our communication with AIs, aliens and each other. Which is an awesome goal. Unfortunately, I'm not quite intelligent enough to wrap my head around his exact efforts. But I am intelligent enough to understand how important sacrifice as communication is.
Language is incredibly important... here I am typing so many words! But when it comes to the ethics of ants... even if they could understand my words... "please stop killing my Aloe... I value it very much!"... why should I expect them to be considerate of my feelings? What's in it for them?
Let's say that there were two ant colonies in my yard. One colony harmed my plants while the other protected them. Which colony would I be willing to make a sacrifice for? Obviously I'd be willing to give food to the ant colony which served my interests. I'd be willing to give the helpful colony a lot of food! So it would quickly grow larger and effectively defeat the harmful colony.
Last year I wrote this blog entry... Don't Give Evil Robots A Leg To Stand On! In it I shared this silly/surreal image...
If there are two robots... and one harms my interests while the other protects them... then I'm obviously going to give my money to the robot that protects my interests. But how is this any different from how it works with humans?
Here's the drawing from AI Safety vs Human Safety...
It's Elon Musk giving $10 million dollars to the Future of Life Institute. Musk communicated with his sacrifice.
If I had to guess... then I'd guess that the producers of "Arrival" paid Stephen Wolfram to work on their movie. They probably didn't pay him $10 million dollars... but they obviously paid him enough to alter his behavior.
On the one hand, it's mind-boggling that elementary economics is entirely missing from Wolfram's analysis. On other hand, he is a lot smarter than I am! So maybe I'm missing something. But it's really not the case that Wolfram publicly considered sacrifice as communication and then discounted/discredited it. Either he did so privately... or the concept didn't even cross his mind.
For sure it would be wonderful if Wolfram did publicly consider the relevance/significance/importance of sacrifice as communication. However, I'm really not going to hold my breath that he will do so. I have this feeling that physics/math brains have a blind spot when it comes to real economics. None of the true economists... such as Adam Smith, Friedrich Hayek and James Buchanan... have had physics/math brains. And as far as I know, their interactions with physics/math brains really haven't gone anywhere. The "economist" Paul Samuelson definitely had a physics/math brain and his interaction with Buchanan proved to be entirely fruitless.
What difference will it make if the creators (broadly speaking) of robots have a blind spot when it comes to economics? That's a really tough question. The creators themselves obviously respond to positive incentives (getting paid). However, they obviously have a blind spot regarding the importance of positive incentives. Can they create truly intelligent robots that fail to respond to positive incentives?
In a recent and relatively popular show about AIs... there were two theoretically intelligent robots... one was good and the other was bad. The humans did not at all communicate with these robots through sacrifice. The robots were not paid. Their behavior did not at all depend on our willingness to sacrifice/spend/pay. However, it definitely wasn't the case that the robots didn't need anything. Both robots needed servers... lots of them. Lots of servers take up a lot of space and energy. All the limited and valuable resources (servers/energy/space) that are used by a bad robot can't also be used by a good robot. This is Buchanan's Rule.
Ironically, the show was canceled. Evidently it wasn't popular enough. But the popularity of the show was only a factor because its true value was not known. The true value of the show wasn't known because none of its viewers were given the opportunity to reveal/show/communicate their willingness to pay for the show.
Personally, I'm not going to pay to watch the "Arrival" in a theater. Instead, I'll wait for it to hopefully be added to Netflix. Am I the rule or the exception? If it comes out on Netflix then the only mechanism that Netflix provides for me to communicate my valuation of the movie is their star rating system. A star rating system is a very defective way to accurately communicate my valuation of the movie. The only effective way to accurately communicate my valuation of the movie would be through my willingness to pay. Except, clearly I wasn't willing to pay to watch the movie in a theater. Well yeah. How can I accurately valuate a movie that I haven't even seen!???
The solution is to apply the pragmatarian model to Netflix. I'd be given the opportunity to allocate my monthly fees to my favorite content. Every penny that I gave to "Arrival" would be a penny that I couldn't give to other content. So the more pennies that I was willing to give to "Arrival"... the greater my valuation of it. To learn more about the pragmatarian model please see my letter to Judith Donath.
Any real concern regarding bad robots will stem entirely from humanity's own failure to truly understand and appreciate the significance/relevance/importance of determining our willingness to pay/spend/sacrifice. What about bad aliens? I'm pretty sure that, by the time a species figures out how to travel to other inhabited planets, chances are really good that it will also have figured out the significance/relevance/importance of communicating through willingness to pay/spend/sacrifice. I refer to this as "Xero's Rule".
[Update: 29 Dec 2016]
Photo of the perpetrators...
Praying Mantis egg sac on Aloe Hercules trunk...
[Update: 29 Jan 2017]
Again as in the case of corporeal structure, and conformably with my theory, the instinct of each species is good for itself, but has never, as far as we can judge, been produced for the exclusive good of others. One of the strongest instances of an animal apparently performing an action for the sole good of another, with which I am acquainted, is that of aphides voluntarily yielding their sweet excretion to ants: that they do so voluntarily, the following facts show. I removed all the ants from a group of about a dozen aphides on a dock-plant, and prevented their attendance during several hours. After this interval, I felt sure that the aphides would want to excrete. I watched them for some time through a lens, but not one excreted; I then tickled and stroked them with a hair in the same manner, as well as I could, as the ants do with their antennae; but not one excreted. Afterwards I allowed an ant to visit them, and it immediately seemed, by its eager way of running about, to be well aware what a rich flock it had discovered; it then began to play with its antennae on the abdomen first of one aphis and then of another; and each aphis, as soon as it felt the antennae, immediately lifted up its abdomen and excreted a limpid drop of sweet juice, which was eagerly devoured by the ant. Even the quite young aphides behaved in this manner, showing that the action was instinctive, and not the result of experience. But as the excretion is extremely viscid, it is probably a convenience to the aphides to have it removed; and therefore probably the aphides do not instinctively excrete for the sole good of the ants. Although I do not believe that any animal in the world performs an action for the exclusive good of another of a distinct species, yet each species tries to take advantage of the instincts of others, as each takes advantage of the weaker bodily structure of others. So again, in some few cases, certain instincts cannot be considered as absolutely perfect; but as details on this and other such points are not indispensable, they may be here passed over. - Charles Darwin, The Origin of Species
Thursday, November 3, 2016
Sorting Ideas
In this forum thread... 4th Grade Nation State... we've primarily been debating/discussing the idea of replacing voting with spending (coasianism). The thread is up to 27 pages. Here's a recent post...
*********************
According to Google, the US population, rounded to the nearest million, is 319 million.
Let's say that someone comes up with the idea that humans of a certain race/colour/religion are "less human" than others, and we should be able to own them like property. The overwhelming majority of people would consider this to be a very bad idea. Let's assume that 99.7% of Americans consider the idea of owning another human abhorrent. In raw numbers, this would be approximately 318 million people, with around 1 million people being pro-slavery.
The issue comes up for voting. It's dead in the water. Why? Because the majority of people recognise a disgusting idea when they see it.
The issue comes up for bidding. 318 million people spend an average of $1000 each on the "no" campaign. Some more, some less, depending on circumstances, but it averages to $1000 per person. That's $318 billion. 1 million people spend $320,000 on the "yes" campaign. That's $320 billion. Despite the overwhelming majority finding the idea detestable, slavery is now a thing because a couple of people have deeper pockets than the rest.
"Ah," you say, "but they'll get MONEY!"
Yes, they will. Their civil rights, liberty and personhood was valued at a little over 1 billion dollars. Given that they've lost their personhood and are no longer considered human, would they even receive it? That would depend on how the law that 0.3% of people actually wanted was written.
Now do you understand why coasianism is worse than voting? - Dazchan
*********************
If Dazchan had been following the thread all along then he would have known that the issue of slavery had already been brought up by another member... Galloism. Alternatively, Dazchan could have figured this out if he had searched the thread for "slavery".
A thread consists of posts and each post is an idea. By default, the posts/ideas are sorted chronologically... oldest to newest.
But what if the pragmatarian model was applied to the forum? Each member would have to pay $1/month but they could choose which posts they spend their pennies on. Then it would be possible to sort threads and their posts by their total value.
Galloism would still have brought up his idea about slavery being an effective argument against coasianism. But then he, and everybody else, would have had the option to spend their pennies on his post. The more pennies that were spent on Galloism's post, the higher up it would have been placed on the list of posts/ideas when they were sorted by their value... and the more likely that Dazchan would have seen it.
Here are a couple of basic facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
When we put these basic facts together, it should be clear that maximizing society's benefit depends on sorting ideas by their value.
With this in mind, let's consider Dazchan's concern about slavery and coasianism. Imagine that Bob posts in my thread, "slavery is wonderful". It is an idea... but most of us would consider it to be a bad idea. This means that, with the pragmatarian model, most of us would not be willing to spend our pennies on Bob's idea/post. As a result, when the posts/ideas in the thread were sorted by their value, Bob's idea would be at the bottom of the list.
Would we use coasianism for such a worthless idea? I don't think so. Then again, by this same measure, coasianism and pragmatarianism probably aren't currently much more valuable than the idea of slavery. Which is why we can't currently sort ideas by their value. All ideas have to start somewhere...
Yesterday morning, like most mornings, I was browsing Medium trying to find valuable ideas. Of course the ideas aren't sorted by their value. So it's a very challenging Easter Egg hunt. But I did manage to find a couple valuable Easter Eggs...
Each of these Easter Eggs is an idea... but each idea also contains several ideas. Let's consider some of the individual ideas...
This idea is another basic fact. I've previously referred to this basic fact as Tabarrok's Rule. Let's add it to the other two facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
Maximizing society's benefit depends on sorting ideas by their value... and determining an idea's value depends on spending.
Is this relevant to language?
The other day I mentioned to my friend Michelle that there's "real", "unreal" and "surreal" but no prefix for better than real. For over an hour she argued that A. there was no such concept and B. there were already words to express such a concept... ie "fantasy"... "utopia". I brought up the same topic a day or two later and she came up with "megareal". "Megareal"? I didn't think that it was a wonderful word... but, for lack of a better word, we've ended up using it. It is a useful word! When I say that it would be megareal if we could choose where our taxes go, she knows exactly what I'm talking about.
Michelle teaches 4th grade and she recently started applying coasianism and pragmatarianism to her classroom (Standing On The Right Shoulders). Right now her class has two departments... IRS and Gardening. Most of the kids owe taxes but so far none of them have paid any. A couple nights ago Michelle and I discussed the idea that the point of the kids paying taxes was for them to use their pennies to paint a picture of a megareal classroom.
What would happen if Pinker applied the pragmatarian model to language? He'd start a website where people could submit new words... or new meanings for old words. Every member of Pinker's website would pay $1/month but they could use their pennies to help sort the list of words/meanings. At the top of the list would be the most valuable new words/meanings... they would receive the most attention... which means that they would be more quickly integrated into the language. Determining people's willingness to pay (WTP) for new words/meanings would facilitate the efficient evolution of language. Language would go from real to megareal in less time... and so would society.
Right now there are markets for products that we can spend our money on (food, clothes, etc)... and "markets" for products that we can't spend our money on (coasianism, language, etc). If Cowen had pointed out this market dichotomy/paradox to Pinker... how would he have responded? How would Jonathan Haidt have responded? Would their responses have been as intelligent as they are? If not, then how many intelligent people would Cowen have to ask before an intelligent answer was provided?
It's not that we technically can't spend our money on the word "megareal", for example, it's just that there's no pragmatarian system for us to do so. Part of the premise of pragmatarianism is the free-rider problem...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
With the pragmatarian model, the free-rider problem is solved. With Pinker's website, I might as well spend my pennies on "megareal" and on other new words/meanings that I value...
Would Pinker also be willing to spend $1/month on the new words/meanings that he values? Or does he want to maintain the belief that determining WTP isn't necessary for language/culture/society to efficiently evolve?
Right now I'm holding onto the idea that voting should be replaced with spending (coasianism). Am I holding onto the wrong idea?
These ideas are clearly conflicting. How should the conflict be resolved? By voting?
Not by voting? So by a market for ideas?
The idea of a market for ideas is really wonderful, but... it's really painful that this "market" is missing the idea of determining people's WTP for ideas. All markets should be based on WTP! Why? Again...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
What would happen if the owners of the Washington Redskins used coasianism to decide whether or not to change the name? Then the relevant ideas would be sorted by their true social value. As a result, society's limited attention/time/brainpower would be efficiently allocated.
From my perspective, the Wealth of Nations is the most valuable book ever written. Here's what I consider to be the most valuable passage/idea in this most valuable book...
Right now the distribution of attention/time/brainpower is faulty. In other words, our limited resources are inefficiently allocated. This is simply because there are far too many "markets" that don't determine people's WTP. Why are there so many "markets" that don't determine people's WTP? Because there isn't a pragmatarian market that would allow myself, and everybody else, to sort books and their ideas by their true value.
Compare Adam Smith's passage to this passage by Andy Greenberg...
Google is allocating a massive amount of society's limited attention/time/brainpower in order to try and use AI to solve the problem of trolling and abusive comments. Why are they trying to use AI instead of IH (Invisible Hand)? Why does Google think that an AI feedback loop will improve behavior more than a IH feedback loop would?
It's one thing if Jared Cohen had said, "Yeah, we created an IH feedback loop for comments... but it didn't work. It turned out that the most abusive comments/ideas were actually the most valuable. So now we're allocating our resources to improving the AI feedback loop." The impression that I get is that Cohen doesn't even realize that the IH feedback loop is an option.
Those of us who truly value/understand the IH feedback loop have completely failed to bring it to the attention of Google and countless other organizations.
Caplan recently tweeted a link to one of his older blog entries...
In my previous blog entry I shared an experiment that Galloism helped to facilitate. At a local college, a psychology professor is allowing three of his classes to decide whether they have class outside or inside. One of the classes is using voting while the other two are using spending (coasianism).
Last Monday, all three classes decided to have class outside. In both of the coasianism classes, there were two individuals who successfully cheated.
All of the cheaters in the morning class got burned. Will their class have more or less cheaters the next time? In the afternoon class, none of the cheaters got burned. Will their class have more or less cheaters the next time?
Trying to play chicken with your class might be fun for some, but I'm guessing that it won't end up being a very profitable long-term strategy...
As the cheaters realize this, the two conflicting ideas (outside vs inside) will be accurately sorted by their value.
Last year Bryan Caplan posted a blog entry about the problem with seminars...
What was Caplan's solution? It sure wasn't this...
Once you have a forum based on the pragmatarian model, then the speaker can start a thread that members of the audience can reply to whenever they have an idea (question or comment). The "crowd" can use their pennies to sort the ideas by their value. The most valuable ideas will be at the top of the list. The speaker can easily find them and address them at any time. After the seminar is over, the group can continue using the thread to discuss/debate the topic and valuate/sort the ideas.
Each member of the group would efficiently/effectively tap into the group's collective intelligence/information. The people who share the most valuable ideas will be rewarded for improving the group's collective intelligence/information. Incentives matter...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
5. Incentives matter
Scott Sumner also brought up the quality concern regarding comments...
And I tried to bring the IH solution to his attention. My favorite liberal economist, John Quiggin, also had the same issue with comments...
I also tried to bring the IH solution to his attention...
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While I'm at it... I should point out that the solution to the comment problem really isn't to limit Plume's comments. The solution is to create a market in the comment section! Quiggin could spend his pennies on whichever comments he values most. Everybody else could do the same. Then, if people wanted to, they could sort the comments by their value. The most valuable comments would be at the top of the comment section and the least valuable comments would be at the bottom of the comment section.
If we think of Quiggin's blog entry as a home... then the comment section would be the garden. Plume is a weed that grows everywhere in the garden. He takes up way too much space in the garden. The thing is... it's a really big garden... and not all the space is equally valuable. The most valuable space is closest to the house. So the problem really isn't that Plume is taking up too much space... the problem is that he's taking up too much valuable space. All the valuable space that Plume takes up could be used for far more valuable plants. Sure, Quiggin could manually limit the amount of valuable space that Plume occupies... but a far more effective approach would be for Quiggin to give more water, food and love to the plants that he values most. They would grow more vigorously and, as a result, they would crowd out Plume and all the other weeds. Pretty soon all the most valuable space in the garden would be occupied entirely by the most valuable plants. The garden would still have weeds... but they would be located in the most remote part of the very big garden.
This is how and why markets work. Consumers can't pull weeds... but they can help nourish the most beneficial plants. The logical result of consumer choice is that resources are unevenly distributed among the unequally beneficial plants. Redistribution might seem fair... but it simply provides more valuable space to less valuable plants.
Nobody truly benefits when society's limited resources are placed in less beneficial hands. In other words, the opportunity cost of fairness is way too high.
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And a bit here as well....
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Some weeds are hard to get rid of! Clearly Quiggin doesn't value Plume's and Brett's contributions as highly as he values other people's contributions. Just like I don't value all the different plants in my garden equally. "Weeds" are the plants that I value the least. I'd be happy if my garden didn't have any weeds in it! In fact, I'd love to have a magic wand that would instantly turn each and every weed in my garden into an orchid! How awesome would that be? I would just wave the wand over a weed and voila! It would be instantly transformed into an orchid! Then my garden would provide me with much more value!
Quiggin definitely wants his blog's comment section to provide him with much more value. He also definitely opposes slavery. But honestly I'm not quite sure why he opposes slavery. I don't think that I've ever read a blog entry of his that he's dedicated to explaining why, exactly, he opposes slavery.
What's wrong with slavery? Let's take Brett for example. Right now he's a weed in Quiggin's garden. From Quiggin's perspective... all the space that Brett takes up in Quiggin's garden could be allocated to far more valuable plants. In other words... the opportunity cost of Brett is too high. What if Quiggin could wave his magic wand and transform Brett into an orchid? Wouldn't that be a good thing? And isn't slavery a magic wand that would do the trick? Then Brett would do whatever Quiggin wanted him to do.
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Anyways, I think that you get my point. Ideas should be sorted by their value. This can only be accomplished when we determine people's WTP for ideas. As far as I can tell, according to the basic facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
5. Incentives matter
... pragmatarianism and coasianism are two excellent ways to determine people's WTP for ideas.
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According to Google, the US population, rounded to the nearest million, is 319 million.
Let's say that someone comes up with the idea that humans of a certain race/colour/religion are "less human" than others, and we should be able to own them like property. The overwhelming majority of people would consider this to be a very bad idea. Let's assume that 99.7% of Americans consider the idea of owning another human abhorrent. In raw numbers, this would be approximately 318 million people, with around 1 million people being pro-slavery.
The issue comes up for voting. It's dead in the water. Why? Because the majority of people recognise a disgusting idea when they see it.
The issue comes up for bidding. 318 million people spend an average of $1000 each on the "no" campaign. Some more, some less, depending on circumstances, but it averages to $1000 per person. That's $318 billion. 1 million people spend $320,000 on the "yes" campaign. That's $320 billion. Despite the overwhelming majority finding the idea detestable, slavery is now a thing because a couple of people have deeper pockets than the rest.
"Ah," you say, "but they'll get MONEY!"
Yes, they will. Their civil rights, liberty and personhood was valued at a little over 1 billion dollars. Given that they've lost their personhood and are no longer considered human, would they even receive it? That would depend on how the law that 0.3% of people actually wanted was written.
Now do you understand why coasianism is worse than voting? - Dazchan
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If Dazchan had been following the thread all along then he would have known that the issue of slavery had already been brought up by another member... Galloism. Alternatively, Dazchan could have figured this out if he had searched the thread for "slavery".
A thread consists of posts and each post is an idea. By default, the posts/ideas are sorted chronologically... oldest to newest.
But what if the pragmatarian model was applied to the forum? Each member would have to pay $1/month but they could choose which posts they spend their pennies on. Then it would be possible to sort threads and their posts by their total value.
Galloism would still have brought up his idea about slavery being an effective argument against coasianism. But then he, and everybody else, would have had the option to spend their pennies on his post. The more pennies that were spent on Galloism's post, the higher up it would have been placed on the list of posts/ideas when they were sorted by their value... and the more likely that Dazchan would have seen it.
Here are a couple of basic facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
When we put these basic facts together, it should be clear that maximizing society's benefit depends on sorting ideas by their value.
With this in mind, let's consider Dazchan's concern about slavery and coasianism. Imagine that Bob posts in my thread, "slavery is wonderful". It is an idea... but most of us would consider it to be a bad idea. This means that, with the pragmatarian model, most of us would not be willing to spend our pennies on Bob's idea/post. As a result, when the posts/ideas in the thread were sorted by their value, Bob's idea would be at the bottom of the list.
Would we use coasianism for such a worthless idea? I don't think so. Then again, by this same measure, coasianism and pragmatarianism probably aren't currently much more valuable than the idea of slavery. Which is why we can't currently sort ideas by their value. All ideas have to start somewhere...
Our creed is that the science of government is an experimental science, and that, like all other experimental sciences, it is generally in a state of progression. No man is so obstinate an admirer of the old times as to deny that medicine, surgery, botany, chemistry, engineering, navigation, are better understood now than in any former age. We conceive that it is the same with political science. Like those physical sciences which we have mentioned, it has always been working itself clearer and clearer, and depositing impurity after impurity. There was a time when the most powerful of human intellects were deluded by the gibberish of the astrologer and the alchemist; and just so there was a time when the most enlightened and virtuous statesman thought it the first duty of a government to persecute heretics, to found monasteries, to make war on Saracens. But time advances; facts accumulate; doubts arise. Faint glimpses of truth begin to appear, and shine more and more unto the perfect day. The highest intellects, like the tops of mountains, are the first to catch and reflect the dawn. They are bright, while the level below is still in darkness. But soon the light, which at first illuminated only the loftiest eminences, descends on the plain and penetrates to the deepest valley. First come hints, then fragments of systems, then defective systems, then complete and harmonious systems. The sound opinion, held for a time by one bold speculator, becomes the opinion of a small minority, of a strong minority, of a majority of mankind. Thus the great progress goes on, till schoolboys laugh at the jargon which imposed on Bacon, till country rectors condemn the illiberality and intolerance of Sir Thomas More. - Thomas Macaulay
Yesterday morning, like most mornings, I was browsing Medium trying to find valuable ideas. Of course the ideas aren't sorted by their value. So it's a very challenging Easter Egg hunt. But I did manage to find a couple valuable Easter Eggs...
Each of these Easter Eggs is an idea... but each idea also contains several ideas. Let's consider some of the individual ideas...
You actually put a person in a situation where there’s real money at stake, and all of a sudden they’re not so irrational. - Steven Pinker
This idea is another basic fact. I've previously referred to this basic fact as Tabarrok's Rule. Let's add it to the other two facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
Maximizing society's benefit depends on sorting ideas by their value... and determining an idea's value depends on spending.
Is this relevant to language?
That is Hayekian in the sense that no one planned the language to be optimal in satisfying one criterion. There are tradeoffs. There are multiple tugs, pushes, and pulls. As millions of speakers make little adjustments, as they use the language, as kids learn the language, the language itself spontaneously evolves with some balance. - Steven Pinker
The other day I mentioned to my friend Michelle that there's "real", "unreal" and "surreal" but no prefix for better than real. For over an hour she argued that A. there was no such concept and B. there were already words to express such a concept... ie "fantasy"... "utopia". I brought up the same topic a day or two later and she came up with "megareal". "Megareal"? I didn't think that it was a wonderful word... but, for lack of a better word, we've ended up using it. It is a useful word! When I say that it would be megareal if we could choose where our taxes go, she knows exactly what I'm talking about.
Michelle teaches 4th grade and she recently started applying coasianism and pragmatarianism to her classroom (Standing On The Right Shoulders). Right now her class has two departments... IRS and Gardening. Most of the kids owe taxes but so far none of them have paid any. A couple nights ago Michelle and I discussed the idea that the point of the kids paying taxes was for them to use their pennies to paint a picture of a megareal classroom.
What would happen if Pinker applied the pragmatarian model to language? He'd start a website where people could submit new words... or new meanings for old words. Every member of Pinker's website would pay $1/month but they could use their pennies to help sort the list of words/meanings. At the top of the list would be the most valuable new words/meanings... they would receive the most attention... which means that they would be more quickly integrated into the language. Determining people's willingness to pay (WTP) for new words/meanings would facilitate the efficient evolution of language. Language would go from real to megareal in less time... and so would society.
Right now there are markets for products that we can spend our money on (food, clothes, etc)... and "markets" for products that we can't spend our money on (coasianism, language, etc). If Cowen had pointed out this market dichotomy/paradox to Pinker... how would he have responded? How would Jonathan Haidt have responded? Would their responses have been as intelligent as they are? If not, then how many intelligent people would Cowen have to ask before an intelligent answer was provided?
It's not that we technically can't spend our money on the word "megareal", for example, it's just that there's no pragmatarian system for us to do so. Part of the premise of pragmatarianism is the free-rider problem...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
With the pragmatarian model, the free-rider problem is solved. With Pinker's website, I might as well spend my pennies on "megareal" and on other new words/meanings that I value...
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
Would Pinker also be willing to spend $1/month on the new words/meanings that he values? Or does he want to maintain the belief that determining WTP isn't necessary for language/culture/society to efficiently evolve?
Ideally, what we want is an arena in which the rules of the game make it so that no matter how emotionally tied you are to your belief, if it’s wrong, it’ll be shown to be wrong and it’ll just be too embarrassing to hold on to it or at least for other people to hold on to it indefinitely. That’s what I consider to be the ideal of what science is all about, and intellectual discourse in general. - Steven Pinker
Right now I'm holding onto the idea that voting should be replaced with spending (coasianism). Am I holding onto the wrong idea?
Let’s say if people say harmful things — take a classic case. There’s a football team called the Washington Redskins. I’m pretty sure most of its fans, the intent is not offense, but there is an offense there for many people. It’s called a harm, and there are some demands that name be changed. There is a public or social dimension to the name, that if certain groups are insulted enough times maybe there’s a demoralization or other kinds of prejudice become seen as more effective. How do you think through whether the Washington Redskins should be called the Washington Redskins, and does this not mean that on campus there should be some political correctness? - Tyler Cowen
These ideas are clearly conflicting. How should the conflict be resolved? By voting?
Once they start saying we’re going to put to a vote everything. Everyone gets to opine on whether we take down this, take down this. Before you know it, you’re taking down everything because presumably religious students are offended by certain things, conservative students are offended by certain things, everyone’s offended by something. - Jonathan Haidt
Not by voting? So by a market for ideas?
You have to see college campuses as being institutions that were designed or intended to be places where people come up against diverse ideas, they’re challenged, and as within the marketplace — monopoly destroys a lot of the value of the marketplace — if you have a monopoly on ideas in the intellectual marketplace, you kill the marketplace. Campuses are supposed to be places where nobody has a monopoly on ideas, but they’ve become that in the last few years. - Jonathan Haidt
The idea of a market for ideas is really wonderful, but... it's really painful that this "market" is missing the idea of determining people's WTP for ideas. All markets should be based on WTP! Why? Again...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
What would happen if the owners of the Washington Redskins used coasianism to decide whether or not to change the name? Then the relevant ideas would be sorted by their true social value. As a result, society's limited attention/time/brainpower would be efficiently allocated.
Again, this is a critique from outside, but what a lot of people say which sounds right to me is that the early economists were great social theorists. My God, you read Adam Smith, what a brilliant world philosopher, historian, they thought so broadly and you tell me, but it seems there was a weird turn in the mid‑20th century towards mathematics. - Jonathan Haidt
From my perspective, the Wealth of Nations is the most valuable book ever written. Here's what I consider to be the most valuable passage/idea in this most valuable book...
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
Right now the distribution of attention/time/brainpower is faulty. In other words, our limited resources are inefficiently allocated. This is simply because there are far too many "markets" that don't determine people's WTP. Why are there so many "markets" that don't determine people's WTP? Because there isn't a pragmatarian market that would allow myself, and everybody else, to sort books and their ideas by their true value.
Compare Adam Smith's passage to this passage by Andy Greenberg...
What’s more, some limited evidence suggests that this kind of quick detection can actually help to tame trolling. Conversation AI was inspired in part by an experiment undertaken by Riot Games, the videogame company that runs the world’s biggest multiplayer world, known as League of Legends, with 67 million players. Starting in late 2012, Riot began using machine learning to try to analyze the results of in-game conversations that led to players being banned. It used the resulting algorithm to show players in real time when they had made sexist or abusive remarks. When players saw immediate automated warnings, 92 percent of them changed their behavior for the better, according to a report in the science journal Nature. - Andy Greenberg, Inside Google’s Internet Justice League and its AI-Powered War on Trolls
It's one thing if Jared Cohen had said, "Yeah, we created an IH feedback loop for comments... but it didn't work. It turned out that the most abusive comments/ideas were actually the most valuable. So now we're allocating our resources to improving the AI feedback loop." The impression that I get is that Cohen doesn't even realize that the IH feedback loop is an option.
Those of us who truly value/understand the IH feedback loop have completely failed to bring it to the attention of Google and countless other organizations.
Caplan recently tweeted a link to one of his older blog entries...
Self-correction in markets and politics: https://t.co/vUyO1AwQy9— Bryan Caplan (@bryan_caplan) November 2, 2016
What prompts even unsophisticated consumers to practice self-correction? The reason is pretty obvious: In markets, self-correction saves the self-corrector money, quality, time, and/or convenience. If you don't self-correct, you get burned. Badly. And often.
The opposite holds in politics. Few voters exhibit even rudimentary self-correction.
In my previous blog entry I shared an experiment that Galloism helped to facilitate. At a local college, a psychology professor is allowing three of his classes to decide whether they have class outside or inside. One of the classes is using voting while the other two are using spending (coasianism).
Last Monday, all three classes decided to have class outside. In both of the coasianism classes, there were two individuals who successfully cheated.
All of the cheaters in the morning class got burned. Will their class have more or less cheaters the next time? In the afternoon class, none of the cheaters got burned. Will their class have more or less cheaters the next time?
Trying to play chicken with your class might be fun for some, but I'm guessing that it won't end up being a very profitable long-term strategy...
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
As the cheaters realize this, the two conflicting ideas (outside vs inside) will be accurately sorted by their value.
Last year Bryan Caplan posted a blog entry about the problem with seminars...
Can't speakers deflect the pointless interruptions to make the talk train run on time? It's tough. You can't just say, "Please, only good questions." And once you take one silly question, every other squeaky wheel feels entitled to put in his two cents. "Hey, my question's clearly better than the last guy's!" As a speaker, then, you have to choose between offending a fifth of the audience or boring the entirety. Professionally speaking, the former is the greater danger. - Bryan Caplan, How to Fix Seminars
What was Caplan's solution? It sure wasn't this...
What prompts even unsophisticated consumers to practice self-correction? The reason is pretty obvious: In markets, self-correction saves the self-corrector money, quality, time, and/or convenience. If you don't self-correct, you get burned. Badly. And often.
Once you have a forum based on the pragmatarian model, then the speaker can start a thread that members of the audience can reply to whenever they have an idea (question or comment). The "crowd" can use their pennies to sort the ideas by their value. The most valuable ideas will be at the top of the list. The speaker can easily find them and address them at any time. After the seminar is over, the group can continue using the thread to discuss/debate the topic and valuate/sort the ideas.
Each member of the group would efficiently/effectively tap into the group's collective intelligence/information. The people who share the most valuable ideas will be rewarded for improving the group's collective intelligence/information. Incentives matter...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
5. Incentives matter
Scott Sumner also brought up the quality concern regarding comments...
I'm not going to even comment on the Ashley Madison case. I've found that Americans are so deranged when it comes to matters of gender, race, and sex that it's almost impossible to have an intelligent conversation on those subjects. So I generally try to avoid those topics. (Actually Bryan is one of the few people I know with whom I could have an intelligent conversation on any topic, if no commenters were listening in.) - Scott Sumner, Beyond victims and villains
And I tried to bring the IH solution to his attention. My favorite liberal economist, John Quiggin, also had the same issue with comments...
Plume, I agree with other commenters here. From now on, for my post, can you limit yourself to one comment per post per day. - John Quiggin, Income redistribution: Where should we start?
Brett, you were banned some time ago. I don’t want my discussion threads derailed by debates with you. Could other commenters refrain from responding to Brett, please. - John Quiggin, Locke’s Road to Serfdom
I also tried to bring the IH solution to his attention...
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While I'm at it... I should point out that the solution to the comment problem really isn't to limit Plume's comments. The solution is to create a market in the comment section! Quiggin could spend his pennies on whichever comments he values most. Everybody else could do the same. Then, if people wanted to, they could sort the comments by their value. The most valuable comments would be at the top of the comment section and the least valuable comments would be at the bottom of the comment section.
If we think of Quiggin's blog entry as a home... then the comment section would be the garden. Plume is a weed that grows everywhere in the garden. He takes up way too much space in the garden. The thing is... it's a really big garden... and not all the space is equally valuable. The most valuable space is closest to the house. So the problem really isn't that Plume is taking up too much space... the problem is that he's taking up too much valuable space. All the valuable space that Plume takes up could be used for far more valuable plants. Sure, Quiggin could manually limit the amount of valuable space that Plume occupies... but a far more effective approach would be for Quiggin to give more water, food and love to the plants that he values most. They would grow more vigorously and, as a result, they would crowd out Plume and all the other weeds. Pretty soon all the most valuable space in the garden would be occupied entirely by the most valuable plants. The garden would still have weeds... but they would be located in the most remote part of the very big garden.
This is how and why markets work. Consumers can't pull weeds... but they can help nourish the most beneficial plants. The logical result of consumer choice is that resources are unevenly distributed among the unequally beneficial plants. Redistribution might seem fair... but it simply provides more valuable space to less valuable plants.
Nobody truly benefits when society's limited resources are placed in less beneficial hands. In other words, the opportunity cost of fairness is way too high.
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And a bit here as well....
*********************
Some weeds are hard to get rid of! Clearly Quiggin doesn't value Plume's and Brett's contributions as highly as he values other people's contributions. Just like I don't value all the different plants in my garden equally. "Weeds" are the plants that I value the least. I'd be happy if my garden didn't have any weeds in it! In fact, I'd love to have a magic wand that would instantly turn each and every weed in my garden into an orchid! How awesome would that be? I would just wave the wand over a weed and voila! It would be instantly transformed into an orchid! Then my garden would provide me with much more value!
Quiggin definitely wants his blog's comment section to provide him with much more value. He also definitely opposes slavery. But honestly I'm not quite sure why he opposes slavery. I don't think that I've ever read a blog entry of his that he's dedicated to explaining why, exactly, he opposes slavery.
What's wrong with slavery? Let's take Brett for example. Right now he's a weed in Quiggin's garden. From Quiggin's perspective... all the space that Brett takes up in Quiggin's garden could be allocated to far more valuable plants. In other words... the opportunity cost of Brett is too high. What if Quiggin could wave his magic wand and transform Brett into an orchid? Wouldn't that be a good thing? And isn't slavery a magic wand that would do the trick? Then Brett would do whatever Quiggin wanted him to do.
Anyways, I think that you get my point. Ideas should be sorted by their value. This can only be accomplished when we determine people's WTP for ideas. As far as I can tell, according to the basic facts...
1. We all have limited attention/time/brainpower
2. Not all ideas are equally valuable
3. Spending improves rationality
4. The free-rider problem is a real problem
5. Incentives matter
... pragmatarianism and coasianism are two excellent ways to determine people's WTP for ideas.
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