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For unto ev­ery one that hath shall be given, and he shall have abun­dance: but from him that hath not shall be taken away even that which he hath.
- The Gospel ac­cord­ing to Matthew
r > g
-Thomas Piketty, Cap­i­tal in the Twenty-First Century

From Je­sus to Piketty, it is a com­mon­place that wealth is a pos­i­tive feed­back loop.

Un­der one model, differ­en­tial abil­ity to stew­ard cap­i­tal, plus com­pound­ing gains, im­plies that perfectly benev­olent peo­ple with more money than most should keep it more of­ten than a naive ex­pected util­ity max­i­miza­tion would sug­gest. On the other hand, con­quer­ing em­pires also ex­pe­rience com­pound­ing gains; the abil­ity to lev­er­age force into more force im­plies that this is a harm­ful pos­i­tive feed­back loop.

When seek­ing to do good, one should of­ten at­tend to the spe­cific de­tails of the situ­a­tion and take whichever ac­tion has the out­come they most pre­fer. But of­ten there isn’t a very strong case for one par­tic­u­lar ac­tion, and we’re left in need of a gen­eral heuris­tic for how to al­lo­cate our re­sources. Us­ing ex­plicit ex­pected-value calcu­la­tions in those cir­cum­stances will sys­tem­at­i­cally un­der­al­lo­cate re­sources to good uses that are less leg­ible, and over­al­lo­cate to things that illeg­ibly cause harm. Ac­cord­ingly, we need some baseline pre­sump­tion for how to al­lo­cate one’s sur­plus be­tween one­self, in­sti­tu­tions one is par­ti­ci­pat­ing in, and the rest of the world.

The de­serv­ing rich hypothesis

Money is a tool of ex­change, which can’t ex­ist un­less there are goods pro­duced and men able to pro­duce them. Money is the ma­te­rial shape of the prin­ci­ple that men who wish to deal with one an­other must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the loot­ers, who take it from you by force. Money is made pos­si­ble only by the men who pro­duce. Is this what you con­sider evil?
When you ac­cept money in pay­ment for your effort, you do so only on the con­vic­tion that you will ex­change it for the product of the effort of oth­ers. It is not the moochers or the loot­ers who give value to money. Not an ocean of tears not all the guns in the world can trans­form those pieces of pa­per in your wallet into the bread you will need to sur­vive to­mor­row. Those pieces of pa­per, which should have been gold, are a to­ken of honor–your claim upon the en­ergy of the men who pro­duce. Your wallet is your state­ment of hope that some­where in the world around you there are men who will not de­fault on that moral prin­ci­ple which is the root of money.
-Ayn Rand, At­las Shrugged

Sup­pose I am perfectly benev­olent and value ev­ery­one’s well-be­ing equally. I grow some wheat on oth­er­wise un­used land, har­vest it, grind it, and bake it into a thing of value: bread. If other peo­ple are also hun­gry, I might share my bread. But even from the point of view of perfectly egal­i­tar­ian benev­olence, there should be a strong pre­sump­tion that I ought to feed my­self first. This is be­cause my pos­ses­sion of the bread is ev­i­dence of my ca­pac­ity to pro­duce it; feed­ing me in­di­rectly feeds oth­ers, be­cause it en­ables me to pro­duce more bread in the fu­ture. Feed­ing oth­ers who did not pro­duce bread does not have that sort of flow-through effect.

Like­wise, I may save some seed corn to rein­vest by plough­ing it back into my field, even if some­one else is hun­gry. Even if I value oth­ers’ well-be­ing equally to my own, I have demon­strated an abil­ity to use grain to make more grain, which will feed peo­ple bet­ter in the long run.

This prin­ci­ple can be gen­er­al­ized. Sup­pose my village’s econ­omy is com­plex enough to have a need for a cur­rency to serve as an unit of ac­count and store of value. If I sell my bread for money, then my pos­ses­sion of money serves as ev­i­dence that I have some sort of pro­duc­tive ca­pac­ity. In a world where this is the main way one ac­quires money, there should be a similar gen­er­al­ized pre­sump­tion that even a perfectly benev­olent per­son should hold onto a dis­pro­por­tionate share of the money they earn.

The war prof­i­teer hypothesis

Every­body knows that the dice are loaded
Every­body rolls with their fingers crossed
Every­body knows the war is over
Every­body knows the good guys lost
Every­body knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Every­body knows
-Leonard Cohen

Sup­pose in­stead that my village does not pos­sess the shield­mak­ing craft, and is be­ing ha­rassed by a gang of archers, who can make shields, albeit ones whose use­ful­ness de­cays over time. Th­ese archers pe­ri­od­i­cally rain ar­rows down on the village, at which point peo­ple with­out shields have a sub­stan­tial chance of dy­ing of ar­row wounds. How­ever, they make me an offer: if I make them some ar­rows for them, they will give me a shield in ex­change.

In this situ­a­tion, while it is un­der­stand­able for me to earn some shields in or­der to pro­tect my­self, pos­ses­sion of shields is prima fa­cie ev­i­dence of com­plic­ity in the vi­o­lence be­ing done to my village. Ac­cu­mu­lat­ing a sur­plus is par­tic­u­larly bad be­hav­ior. I would not want to gen­er­al­ize the heuris­tic that ar­row­mak­ers should get to keep their shields; that would mean more ar­rows, re­sult­ing in in­creased need for shields, in a harm­ful pos­i­tive feed­back loop. The pre­sump­tion that one should keep a dis­pro­por­tionate share of the shields one has made no longer ap­pears to hold.

A sec­ondary con­se­quence of this is that shields, which may have had no value in the village be­fore, are now highly sought af­ter. The archers might also ex­change shields for bread, since the bread­maker has as much in­cen­tive as the ar­row­maker to ac­cept shields as pay­ment. I, the ar­row­maker, might trade one of my shields to the bread­maker for bread. If the ar­row­mak­ers make a spe­cial effort to at­tack peo­ple pro­duc­ing “coun­terfeit” shields, and peo­ple trans­act­ing in other cur­ren­cies, then shields might quickly be­come a stan­dard unit of ac­count and store of value. Un­der those con­di­tions, pos­ses­sion of a large stock­pile of shields could be ev­i­dence of com­plic­ity in vi­o­lence, but it is also ev­i­dence that some­one has pro­duced gen­uinely valuable goods and ser­vices that one might want to see more of.

Possess­ing shields could mean that you have made much bread. Or that you have made many ar­rows, with which those lack­ing shields will be harmed. Or, in many cases, some com­bi­na­tion of the two. Pro­duc­tion and vi­o­lence are bound to­gether into a sin­gle unit of ac­count.

For now, the ap­pli­ca­tion to the pre­sent situ­a­tion is left as an ex­er­cise for the reader.


Thanks to Jes­sica Tay­lor for the shields metaphor, and Wei Dai for ask­ing the right ques­tions to force me to clar­ify my thoughts on this.

Re­lated: Matthew 25, Cash trans­fers are not nec­es­sar­ily wealth trans­fers, Why I am not a Quaker (even though it of­ten seems as though I should be), The hu­mil­ity ar­gu­ment for honesty