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author: niplav, created: 2021-01-13, modified: 2022-02-23, language: english, status: on hold, importance: 2, confidence: remote

After a discussion with a friend of mine, I thought it would be useful to structure my current thoughts about politics and economics in order to speed up my progress on that topic. Many of these points are only rough ideas, or me collecting unrelated ideas I find good and useful. Therefore, this text might already be out of date.

Notes on Politics, Especially Economics

Dieser Gang der Ereignisse zwingt die Revolution, “alle ihre Kräfte der Zerstörung zu konzentrieren” gegen die Staatsgewalt, zwingt sie, sich nicht die Verbesserung der Staatsmaschinerie, sondern ihre Zerstörung, ihre Vernichtung zur Aufgabe zu machen.

— Vladimir Lenin, “Staat und Revolution” S. 36, 1918

Note: Writing this page is on hold until I have read a textbook on economics.

Before I Get to the Object-Level Stuff

Before I get to my beliefs about possible object-level improvements, I think that there are some broad strategies that many people would agree on at least in the abstract.

Improve Political Epistemology

Track Records

Forecasting

The Sanity Waterline

Making politicians resonsible if they don't fulfill their promises.

Copy What Successful Countries are Doing

This is known as “getting to Denmark”, and is clearly not trivial.

This Text Is About Doing Even Better (Maybe)

Sort of?

Or smth idk

What Politics Is For

Maximize aggregate preferences of humans currently living in the country (as citizens).

Not (although that would be nice) The One True Good Consequentialism, or Our Best Guess of Morality With Moral Uncertainty, since you can't coordinate around that.

This Is Not An Adequate View!

I know. People don't really have stable, coherent preferences.

However, it's the best model I know of.

How deep does this instability & incoherence go?

Arrhenius 2000 gives one answer.

Then How Do We Find These Preferences?

Ask people. Maybe quadratic voting on different metrics.

Caveat: Empirical Versus Theoretical Knowledge About Politics/Economics

Biases More Prevalent on the Object Level, Right?

A Lot of Empirical Knowledge About Politics Might Not Be Useful

More just noise.

How To Evaluate?

Assumptions

Economic Progress is Usually Good

How Much Do People Value Economic Progress?

How Much Would People Value Economic Progress if They Knew More?

How Good Is Economic Progress?

Has been so far.

Although caveats with regulation/taxation/x-risk

Having no growth kicks people back into zero-sum dynamics

Disaster-preparedness is easier & better (humans are risk-averse)

Though there's the effect of making disasters more costly Shulman 2012, and civilization more complex & therefore fragile?

Not valuable hedonically (Easterlin paradox) But makes paradise engineering more likely & easier

Markets are (at least at the Moment) Mostly Aligned

Alignment of markets is >90%.

Different Aspects of Libertarianism

Amount of Regulation

Amount of Taxation

Amount of Redistribution

Amount of Inequality

Four (Maybe Five) Problems With Pure Libertarianism

Externalities

Funding Public Goods

How Much Are Public Goods?

E.g. is animal suffering in factory farming a public good?

Okay, But What Are Public Goods Really?

The definition seems kind of hard to pin down exactly.

Different People Consider Different Things Public Goods

Aggregate their preference vectors linearly.

Harsanyi's theorem!

Human Manipulation and Addiction

Increasing Marginal Returns

Many economists believe diminishing marginal returns, what reasons do they have?

Asymmetric Information

Three Taxes I Like, One I Dislike, And One I'm Unsure About

Taxes I Like

Harberger Taxes

Pigou Taxes

Problem: Hard to compute.

Inheritance Taxes

Taxes on Positional Goods

Taxes I Dislike

Exchange Taxes

Wealth Tax

Income Tax

Stifling pareto improvements.

Unsure

Land-Value Taxes

Capital Gains Taxes

The Problems With Regulation

Regulations Are Usually Not Tested

Regulations Are Usually Very Inflexible

Subsidizing the purchase of new technologies has been a frequent strategy of national governments in relationship to fisheries, with results that have at times been disastrous. The effort to finance the acquisition of a new technology presumes that local fishers will not adopt efficient new technologies without external aid. The conservatism of fishers in regard to the use of new technologies may reflect an awareness that the management of complex resource systems depends on a delicate balance between the technologies in use and the entry and authority rules used to control access and use. If the adaptation of new technologies is accelerated, the relationship between the rules and technologies in use may become seriously unbalanced. This is particularly the case when the rules have come about through long processes of trial and error and fishers do not possess legal powers to devise new rules and get them enforced. A focus on "production costs" alone, rather than on the total of production costs, transaction costs, and enforcement costs, leads to a narrow interpretation of efficiency (North 1986a,b). The rapid introduction of a “more efficient” technology by an outside authority can trigger the very “tragedy of the commons” that the same public officials presume will occur if they do not regulate the use of these fisheries.

— Elinor Ostrom, “Governing the Commons” pp. 259-260, 1990

Regulations Are Usually Not Retracted

Market based decision are quite different to those made by governments. If a firm offers a product that nobody wants, it soon leaves business. If government enacts a bad policy, rarely is it repealed. Instead, lip service is given to reform, and when the reform fails, more reform is pursued. Take, for example, farm support policies, which were enacte d to provide financial assistance to struggling farmers during and after the Great Depression. Henry Wallace, the Secretary of Agriculture from 1930 to 1940, argued that the farm subsidies were, “a temporary solution to deal with an emergency.”² But even though the average farm household income now exceeds that of the average US household, and even tough there are now many fewer farmers, farm policies persist.

— F. Bailey Norwood/Jayson L. Lusk, “Compassion, by the Pound” p. 323, 2011

Examples

Prediction Markets

Arrow et al. 2008

Nuclear Power

Crawford 2021

Tax Rather Than Regulate

Alexander 2013

How Much To Redistribute is an Empirical Question

Heuristic against: Disincentivizes production, since more redistribution makes production more like a public good, and public goods are hard to fund.

Heuristic against: People do seem motivated by large amounts of money.

Heuristic in favour: There are strong social incentives for people to want to work.

Heuristic in favour: Shlegeris says so.

Some Low-key Utopias

A-Btopia

Test your damn laws.

Why Is There So Little Large-Scale Testing?

Decaytopia

At least the regulation is not forever.

Scaletopia

Strength of regulation scales with organisational size. (Is this actually good?)

Futarchy

Spectrum from "Politicians sometimes look at prediction markets" to "What do you mean by “politicians”? We quadratically vote our values, then the markets optimize for us"/Raikoth.

Problems With Futarchy

Correlation of Payout-Currency and Policies

Possible solution: create a stable independent currency (maybe with crypto, isn't there a Wei currency that tries to achieve this?)

Goodharts Law

Mild optimization by reducing size/funding for prediction markets.

Resulting problem: this makes manipulation easier.

Reward Hacking

Don't know how to approach this one, maybe secret cabal of data collectors? Data collectors are not allowed to trade?

Turns into Assassination Market

Approval-Directed Futarchy?

Select n random people (something like 10k, or 0.01% of the population), ask them how much they approve of the governing in the last year (or whatever timespan the prediction markets operate on). Try to optimize that measure.

Miscellania

Democracy

Democracy Is Good For One Thing We Don't Really Use It For

Discovering values, not policies.

Modern Democracies Are Highly Indirect For A Reason

Voting Is Participating In A Public Good

Inequality

Inequality Might be About Grabbing

Why So Specific Inequality?

Most Complaints About Capitalism are Complaints About Other People Not Caring

Unions Seem Good

Use the same cartel laws for unions as for companies. Also the current implementation for unions is really weird.

Regulate/Tax Companies Proportional to Size

Nate Soares Should Release His Notes on this Topic

Planned Economies Should be Possible, but Seem Difficult

See johnswentworth 2018. The whole method of analysing the way in which markets are information processing systems is fascinating. Related: Towards a New Socialism by Cockshott, Hayek's essay on the economic calculation problem, that one paper that claims markets are efficient iff P=NP.

Related question: How much are current economies limited by very hard computational problems, compared to mundane everyday "nobody bothered looking at this yet" problems?

Some Infuriating Arguments Related to Economics

“If We Fix Climate-Change and it Wasn't A Concern, We Will Have Lost Nothing”

Opportunity cost, huge: around $100b per year.

This is not to say that I believe climate change to be harmless, I don't, and currently believe the recommendations in Marblestone 2019a, Marblestone 2019b and Marblestone 2019c to be reasonable (although geoengineering seems quite dangerous, and should probably only be used as a last measure, if at all).

“We Should Regulate Companies Rather Than Encouraging Individual Actions”

Regulating companies propagates down higher prices to customers, since what you want to regulate is more ineffective than current practices (i.e. costs more).

There are other reasons why regulating companies might be better (more concentrated leverage points, more fine-grained control).

But there's no free lunch here, people will probably suffer because of this.