voxette-vk replied to your post

Surely the generalization to other markets is “being good at satisfying demand”?

Ohhh, duh.  I am dumb :P  (Thanks to @mbwheats for also pointing this out)

I have to be somewhere soon so I shouldn’t write too much, but yes – this is a real and important tradeoff.  @furioustimemachinebarbarian said something good about this in this reblog, in that they framed it explicitly as a tradeoff

If you want the capitalist mode of production to work, people need to be able to reap returns from their activities that they can reinvest in capital.  But capital investment is just another element of the bundle of goods someone buys, so my argument as stated ought to apply to it as much as to anything else.  So my argument, as stated, was too broad.

I hope it was clear that my argument, as stated, was trying to establish the existence of a particular mechanism rather than provide a proposal.  I don’t actually want everyone’s wealth to be literally the same at all times (trying to cause this would break all sorts of other things too, I’d expect).  Rather, the point was that when the “initial endowments” are closer to equal, supply and demand (which I called “markets,” and which are a distinct desideratum from “capitalism”) work better.

Distinguishing capitalism from supply and demand is important.  I should have done it more clearly in the OP, but I am also not sure @neoliberalism-nightly was doing it sufficiently in their ask – as far as I can tell prediction markets are supposed to work because of supply and demand, even without capitalism (which is not yet having a non-negligible internal effect in them).

raginrayguns:

female doctor? is it gonna be miss frizzle? or is that a later incarnation?

@argumate has been talking recently about hypothetical problems with ancap/libertarian-paradise-world, and it’s making me think about a very basic issue that I don’t see talked about enough.

Namely: all of the usual arguments about how markets are great (“aggregating information” and all that stuff) also say that wealth inequality makes markets worse at doing those things.  This is not a knock-down argument for having a state that redistributes wealth at gunpoint, but it is a reason to see wealth equality as a relevant concern even if you don’t have it as a terminal value.  Even if you don’t care about it, the market needs it to achieve the things you do care about.

I’ll generalize this in a moment, but first, let’s look at an especially clean example case: prediction markets.  Prediction markets are nice here because we don’t have to worry about thorny problems about aggregating utility to construct a “social welfare function.”  There isn’t a role for disagreements about values.  Everyone agrees about what we want out of a prediction market.  (Or rather, the disagreements that exist are technical rather than ethical.)

What we want out of prediction markets is a price that corresponds to the actual observed frequency of events.  Of course, this is not always possible – sometimes there is relevant information that no one in the market knows, so even a perfect information-aggregator (say, a rational being that knows everything that anyone in the market knows) would not get the right answer.

So at best, we can only ask for some sort of information-aggregating property, something like “prices reflect the average (i.e. mean) belief.”  This is desirable because we expect many sources of individual error to be uncorrelated, and these will wash out when we take the average.

But the prices in prediction markets reflect, at best, a wealth-weighted average of beliefs.  (For “wealth” here, read “quantity of money the individual is willing to invest in this market,” which is obviously constrained by wealth in a straightforward way.)  This is easy to see informally: if there are 1000 people who are only willing to buy $1 worth of shares each, and 1 person willing to buy $1000 worth of shares, the market mechanism will get an equally large signal from the one big spender as from the 1000 small spenders.

A formal version of this is derived in this paper: with logarithmic utility, prices equal the wealth-weighted mean of beliefs.  (If you’re worried about the log utility assumption, note that this is arguably the most favorable possible result for prediction markets, and much of that paper is dedicated to showing that other plausible utility functions do not yield very large deviations from it.)

Is it a problem that the results are wealth-weighted?  Well, not necessarily.  But it’s important to note that there are two different reasons it might be a problem.

First, assume (as in the paper) that we’re in the “many traders” limit, so there is a continuous distribution of beliefs, we have integrals rather than sums, etc.  In this case, what matters is the (Pearson) correlation of belief and wealth.  (If they are uncorrelated, the wealth-weighting will be invisible.)  This correlation will either help or hurt depending on whether the bigger spenders have more accurate beliefs in any given case; it seems hard to argue that they’ll have less accurate beliefs in general, which makes this concern easy to dismiss.

But second, suppose we are not in the “many traders” limit.  The worry with finitely many traders is a situation like the “1 vs. 1000″ example mentioned earlier, where the intuition that we are getting an average becomes misleading because the prices are so heavily affected by a small number of people.

Recall that the whole reason we’re interested in getting the average belief is that we expect uncorrelated errors to wash out if we average over a large number of people.  In situations like the “1 vs. 1000″ example, the inequality is making the effective population size smaller, i.e. making our law-of-large-numbers argument weaker.  From basic statistics, we’d expect the uncorrelated errors to get smaller by a factor of sqrt(N) when we average over N people.  That corresponds to the errors getting about 32 times smaller for N = 1001.  But in the 1 vs. 1000 case, half of the answer comes from the belief held by the single big spender, which (by hypothesis) carries random errors of the same size as everyone else’s, so the error is only cut down by (approximately) a factor of 2, not 32.

Now let’s extend this to more general markets.

This case is harder, because we don’t have an analogous law-of-large-numbers argument for the claim that the the price should reflect an unweighted population average.  To argue for that sort of claim in general, we must (horror of horrors!) introduce some sort of ethical assumption, say about no one being inherently more important than anyone else.

I was being facetious in the last sentence when I said “horror of horrors,” but there are real difficulties here.  The problem is not that some people might really be inherently more important than others, but that we are trying to do some sort of utility aggregation, and this is a famously thorny area.  So it may help to be more concrete.

The basic intuitive appeal of “invisible hand” type ideas is that the market will learn to provide what people want.  The phrase “what people want” has the same thorny issue just mentioned – how do we translate statements about what individual people want into a general statement about “what people want,” so that we can judge whether it is being provided (relatively well or poorly)?

The core of the idea is nonetheless pretty clear.  If a bunch of people want something, but not enough to buy it at the prevailing market price, someone will see the opportunity to make a profit by selling it at a lower price that these people will take.  After they take that opportunity, everyone else who produces the product will notice and lower their prices, and (after some equilibration) the market price will be low enough that people get the thing they want.  Likewise, if there is more demand for something than the low market price suggests, everyone will buy until there’s none of it left, at which point the suppliers will produce more because they can afford to do so by charging a higher price (assuming that supply curves slope upwards, which is not obvious and which I’ve heard is not always true IRL, but let’s grant it).  If you don’t allow these things to happen, you get Soviet bread lines and shortages of rent controlled housing.  Or so the argument goes.

OK, so here’s a brain-teaser for you: how much are homeless people willing to pay for housing?

Although there may be some exceptions (crust punks?), people do not generally become homeless because they simply value having a roof over their heads less than the average person does.  Many homeless people would be perfectly happy to pay the market price for housing if they could.  They just don’t have the money to.

In other words, the signal received by the market isn’t “preferences,” it’s “willingness to (actually) pay.”  It’s startling how rarely I see the distinction made between “willingness to pay” and “ability/capacity to pay”; in the academic literature it seems to be mainly made by economists interested in healthcare.  (See e.g. this paper, which presents the distinction as a novel modeling contribution, and has gotten only 2 citations since it was published in 2008, and this one, 3 citations since 2006.  If I am missing some large body of research here, let me know.)

Talking about this presents some technical difficulties, since there is no well-defined concept of “what someone would pay if they didn’t have to worry about their budget.”  For instance, what one is willing to pay in principle for vital necessities will scale up with budget in an unbounded fashion: I’m sure you could get Bill Gates to pay billions for a loaf of bread if the alternative was starvation, but this does not mean that a loaf of bread is “really” worth billions, and in fact does not mean much at all.  Even for non-essential goods, things can be pretty elastic, since many goods that are provably non-essential for human satisfaction can nonetheless feel effectively essential once one has satiated to them.  (You could extract a lot of my money by threatening to separate me from my internet connection, for instance.)

But it’s not as if spending patterns are unrelated to preferences.  If you give someone any fixed budget, they will buy some bundle of goods with it (for simplicity, you can view savings as just another good people may buy, so that everyone always “spends” their whole budget).  To determine someone’s preferences, give them a series of decreasing budgets, and watch which goods they are priced out of first and which they hold onto until the very end.  (If two people have different preferences, one person will buy more of some good than the other given a fixed budget of sufficient size, and as we decrease the budget, there will be some level at which one person is still buying some of it and the other isn’t.)

Thus, the market receives a signal about “what the people want” in the following form: it observes the extent to which the population has been priced out of buying it by their budget.

To clarify what this means, consider an example.  Suppose that everyone has the same budget.  Their spending patterns will vary, because preferences vary, but there will be trends.  For instance, there are some goods that almost everyone will be willing to pay you money for if they don’t have it (food, housing), and some goods that many people will happily do without.  Demand curves will be generated by people successively pricing themselves out (in) in response to price increases (decreases).  Few people will ever be willing to price themselves out of food or housing, so these goods will have nearly flat demand curves (low price elasticity of demand) with high intercepts, while goods that people will happily prices themselves out of (yachts, tchotchkes) will have steep demand curves (high price elasticity of demand) with low intercepts.  If some good has a given supply curve, it will be produced in a large quantity if it is of the former type (food, housing), and in a small quantity if it is of the latter type (yachts, tchotchkes) – interestingly, this is true no matter which way the supply curve slopes.

Thus, in this hypothetical world, a lot of resources go into producing food (or more relevantly, distributing food), and not as much into manufacturing yachts.  Because people – you, me, even Bill Gates – value food more than yachts, and the market mechanism responds to preferences.  The invisible hand works!  Chew on that, socialist planners!

But in our world, many resources are allocated to the production of bizarre luxury goods while billions go hungry.  Is this because “the people” want the former more than the latter?  Of course not.  No one wants the former more than the latter.  If you gave me the choice between food and my MacBook Air, I’d take the food, and so would you and Tim Cook and everyone else alive.

Why are resources misallocated in this way?  Because the starving have been priced out of food, while I have not been priced out of buying a MacBook Air, and the market only sees preferences in the form of the “what have people been priced out of” signal.

When people’s budgets are all the same (or similar), this signal results in production patterns that track people’s relative preferences about different goods.  When people’s budgets are wildly dissimilar, this does not occur.  The production patterns don’t even reflect rich people’s preferences, since they prefer essentials over luxuries just like everyone else.  (It satisfies rich people’s preferences, which is not the same thing as reflecting them.  Being rich means having the opportunity to buy things which have incredibly low, although still positive, marginal value to you.)

Does this mean we have to spread the wealth around at gunpoint?  Well, I don’t know.  We don’t need to do anything.  But the market cannot do its Adam Smithy magic if the wealth is very unevenly distributed.  Maybe you value not having a state more than you value the market doing its Adam Smithy magic!  But it is worth being clear that these values are in conflict.

gurguliare:

etirabys:

youzicha:

Tardigrades may be tough, but they were still not tough enough to survive in The secret Google project to put an aquarium full of tiny, wiggly water bears inside your phone.

But is this an example of Google spending their resources on a public good (modular cellphone tardigrade aquarium technology), or should we condemn it as a strategic move to obtain monopoly in the hand-held tardigrade space?

well they’re not wrong

“It’s sort of like bears hibernating, where they need the environmental signals to tell them to do the thing. And they need time to do the thing. We kept being like, ‘Why are all these guys dead?’ And it was like, ‘Oh, it was a 70-degree day. That’s why they’re all dead,’” said Borgatti.

…

“The first time that we discovered that the camera being on was an obstacle for these guys staying alive was a little bit of a frightening moment. It got to such a temperature where these guys were dying off, and if you don’t think about it too hard, that’s almost like, ‘Oh my gosh, how are you going to take pictures of these guys if they can’t survive for a long period of time when the camera’s on?’ That’s kind of a mini-crisis that sort of requires a lot of rethinking,” said Gonzalez.

…

The engineers designed the experience around nudges that let you “play” with your tardigrades without killing them with love. “If you’ve been looking at [them] too much, we’d have a control that says, the next time you try to open the app if it hasn’t cooled down enough, it would say ‘They’re resting right now, why don’t you see some videos that we’ve taken before’, or what-not,” said Feehan.

(via transgenderer)

argumate:

Tumblr Teens! let’s get ‘putrid’ in the lexicon as a simile for lit, cool, rad, gnarly, wicked, awesome, bodacious,

Free on the Internet Archive: 255 issues of Galaxy Magazines, 1950-1976

mostlysignssomeportents:

Galaxy was one of the first pulps to explicitly bill itself as a magazine for “adults,” in 1950 under founding editor HL Gold.

I grew up on Galaxy, buying old issues for a quarter from the sale rack outside of Bakka, Toronto’s stalwart sf bookstore. Later, I studied under Kate Wilhelm, who told uproarious stories about editing the magazine under Fred Pohl – I also spent a couple entertaining evenings getting Pohl’s version of these stories.

The Internet Archive has nearly the entire run of Galaxy for your perusal, with classic stories by Le Guin, Cherryh, Heinlein, Bradbury, Asimov, Bester, and other pioneers. Also available is most of IF, Galaxy’s sister magazine.

https://boingboing.net/2017/07/16/embattled-male-mesomorphs.html

(via multiheaded1793)

I reading started reading stuff by David Bentley Hart as part of my “occasionally hatereading Christian intellectuals” micro-hobby, but the funny thing about David Bentley Hart is that unlike so many of his peers he is actually smart, and so I can often meet him halfway and learn things and stuff (e.g. I got some good book recommendations from this)

This got a bit surreal when I read an essay of his on hell, and found that a man who writes books with titles like “Atheist Delusions” was making good points against traditional concepts of hell that I’d never even clearly thought about, and making them with the kind of force that makes me want to yell “daaaaamn straight” from the back of the room:

The economics of the exchange is really quite monstrous. We can all appreciate, I imagine, the shattering force of Vanya’s terrible question to Alyosha in The Brothers Karamazov: If universal harmony and joy could be secured by the torture and murder of a single innocent child, would you accept that price? But let us say that somehow, mysteriously – in, say, Zosima’s sanctity, Alyosha’s kiss, the million-mile march of Vanya’s devil, the callous old woman’s onion – an answer is offered that makes the transient torments of history justifiable in the light of God’s everlasting Kingdom. But eternal torments, final dereliction? Here the price is raised beyond any calculus of relative goods, and into the realm of absolute – of infinite – expenditure. And the arithmetic is fairly inflexible. We need not imagine, in traditional fashion, that the legions of the damned will far outnumber the cozy company of the saved. Let us imagine instead that only one soul will perish eternally, and all others enter into the peace of the Kingdom. Nor need we think of that soul as guiltless, like Vanya’s helpless child, or even as mildly sympathetic. Let it be someone utterly despicable – say, Hitler. Even then, no matter how we understand the fate of that single wretched soul in relation to God’s intentions, no account of the divine decision to create out of nothingness can make its propriety morally intelligible. This is obvious, of course, in predestinarian systems, since from their bleak perspective, manifestly, that poor, ridiculous, but tragically conscious puppet who has been consigned to the abyss exists for no other purpose than the ghastly spectacle of divine sovereignty. But, then, for the redeemed, each of whom might just as well have been denied efficacious grace had God so pleased, who is that wretch who endures God’s final wrath, forever and ever, other than their surrogate, their redeemer, the one who suffers in their stead – their Christ? Compared to that unspeakable offering, that interminable and abominable oblation of infinite misery, what would the cross of Christ be? How would it be diminished for us? And to what? A bad afternoon? A temporary indisposition of the infinite? And what would the mystery of God becoming man in order to effect a merely partial rescue of created order be, as compared to the far deeper mystery of a worthless man becoming the suffering god upon whose perpetual holocaust the entire order of creation finally depends? But predestination need not be invoked here at all. Let us suppose instead that rational creatures possess real autonomy, and that no one goes to hell save by his or her own industry and ingenuity: when we then look at God’s decision to create from that angle, curiously enough, absolutely nothing changes.

voxette-vk:

judiciousimprecation:

voxette-vk:

One of the things with the wall is you need transparency. You have to be able to see through it. In other words, if you can’t see through that wall—so it could be a steel wall with openings, but you have to have openings because you have to see what’s on the other side of the wall.

And I’ll give you an example. As horrible as it sounds, when they throw the large sacks of drugs over, and if you have people on the other side of the wall, you don’t see them—they hit you on the head with 60 pounds of stuff? It’s over. As crazy as that sounds, you need transparency through that wall. But we have some incredible designs.

— POTUS

I dislike how uncertain I am about whether this is parody or not

http://reason.com/blog/2017/07/14/donald-trump-admits-border-wall-wont-sto

Oh, but wait, it gets better. The entire conversation was supposed to be off the record, until Trump, according to the Times, changed the rules in the middle of the exchange and put the entire thing—including his comments about the importance of transparency in building the border wall—on the record for the world to see.

East meets West as one of the most talented British Sherlockian scholars, John Hall and a Japanese member of the Baker Street Irregulars, Hirayama Yuichi argue important Sherlockian questions. One offers the other three questions, and the other answers them with all their Sherlockian knowledge. They are serious Sherlockian battles between an English Knight and Japanese samurai! This volume also includes Hirayama’s Sherlockian papers published in The Musgraves, The Baker Street Journal, The Canadian Holmes and The Shoso-in Bulletin.