Try to avoid funding crushing the locals with the weight of the economic activity your visits’ trades create.
Your comment seems to assume that visiting poor countries is bad for locals, but isn’t it good to have rich foreigners spending money? (Or just in general, having customers is better than not having customers)
No, I don’t think it’s inherently bad to visit. However, I think it easily can be, depending on which people in the country your money goes to. If the people who get customers are owners who don’t live there or who are going to refuse to share money with non-owners down the road, it’s not likely to make the country better for the non-owner locals.
I can provide low quality examples later today, or high quality examples later this week; since I know you in particular have very high standards of evidence, I’m inclined to stick to the latter. However, I can summarize what I’ll be looking for: examples of economic situations in the carribean islands area where there is a business that presents itself as locally owned but which is not, and which is right next to a poor area; in particular I’d be looking for situations where the ownership dynamics have resulted in a much greater proportion of gains from trade going to investors, rather than to locals. If I were doing this for the goal of arguing more general properties of the impact of being a nomad, I would try to assess how common it is, rather than looking for exemplars.
I can provide low quality examples later today, or high quality examples later this week;
There’s certainly no rush.
since I know you in particular have very high standards of evidence
I’m not sure I agree, but I appreciate your saying so.
in particular I’d be looking for situations where the ownership dynamics have resulted in a much greater proportion of gains from trade going to investors, rather than to locals
Well, hang on. This seems a bit different from what you said before, which was about the locals not benefiting at all (and you even implied that the locals might be made worse-off—or at least that seemed to be the connotation of “funding crushing the locals with the weight of the economic activity your visits’ trades create”).
But here you’re talking about the locals merely getting some relatively small proportion of the gains from trade. This seems very different, no? Indeed it’s not even clear that this is bad, at all, relative to the counterfactual where no trade takes place.
So (perhaps with the benefit of saving yourself some effort in searching out examples which end up being beside the point), might you clarify what exactly the claim is, in the first place? (But if you prefer to provide examples first, and then generalize a claim from them, that is also fine… in any case it’s good to get this distinction noted in advance, to forestall any claims of goalpost-moving on anyone’s part.)
I am also curious about something else—you seem to be suggesting that you’ll be looking for examples of which you’re not already specifically aware (or did I misunderstand you?). This is well and good, and I look forward to reading them—but I wonder if you recall what led you to having this sort of model in the first place? (Or was it a cached thought that you can no longer easily trace the origin of?)
update: I’ve had more trouble than I’ve expected finding descriptions of examples I’m pretty sure exist. I’m going to call this query timed out for now, and you can update on this conversation however you like from that result.
Here’s a description of a related thing instead from memory, which isn’t actually in one of the tourism-heavy areas of the carribean, but has examples of the same kind of ownership network structures.
It’s a general model of how complex incentive systems in economics work in the form of a claim about a pattern that would be expected to arise any time there are certain structures of contracts in use which are very common, of which I have seen a great many examples in life, but which is a general model and you’re asking for specific instances; very fair request, so I’ll go find the things my general model predicts in this instance after I’m done with a few other things in my queue. (Commenting on lesswrong is a guilty pleasure, it doesn’t count.)
Well, hang on. This seems a bit different from what you said before, which was about the locals not benefiting at all (and you even implied that the locals might be made worse-off—or at least that seemed to be the connotation of “funding crushing the locals with the weight of the economic activity your visits’ trades create”).
In general, it is common for networks of investors to end up participating in partial cartel monopsony over employment, resulting in ability to do some amount of price fixing. When distant investors own contracts that the implementors of law interpret to give the investors command ability over large portions of the businesses in an area, and those investors are optimizing for their own returns, the investor subnet has an incentive to use strategies that depress wages using this cartel. This typically results in the majority of money spent on goods and services from those stores going to the owners of the stores, not the employees; this is alleged to be good for the purchaser, but in reality typically indirectly makes the product much worse. in a region with many poor folks and distant investors, and where the poor locals don’t have synchronized bargaining with the investors, the investors can and often do take advantage of their synchronized bargaining against employee’s desynchronized bargaining to ensure that local market wages do not increase as fast as trade, resulting in most gains from trade being shared between purchaser and investor, with employees ending up treated as a nuisance cost by the network pattern.
You may recognize this description from somewhere; I’ve rephrased it somewhat out of the typical words because they’ve become fnords, but it’s a pretty standard criticism of stock-investment-based ownership patterns.
To participate in local markets where such things are happening, look for ways to spend money that result in more gains from trade going directly to locals, and especially in ways that result in balancing the amount of group synchronized bargaining between employees and owners.
And of course, as you imply, many people who bring up this network pattern and critique employment structures take it too far and assume this means no gains from trade go to the employees. Some definitely often do. But quite often the system becomes efficient only at some subgoals, while the biggest investors end up with a significant majority of control and thus can induce market inefficiencies selectively that limit growth of locally owned, small-owner small businesses. It’s especially frustrating because it’s not always obvious where this is happening.
Your comment seems to assume that visiting poor countries is bad for locals, but isn’t it good to have rich foreigners spending money? (Or just in general, having customers is better than not having customers)
No, I don’t think it’s inherently bad to visit. However, I think it easily can be, depending on which people in the country your money goes to. If the people who get customers are owners who don’t live there or who are going to refuse to share money with non-owners down the road, it’s not likely to make the country better for the non-owner locals.
What are some examples of this?
I can provide low quality examples later today, or high quality examples later this week; since I know you in particular have very high standards of evidence, I’m inclined to stick to the latter. However, I can summarize what I’ll be looking for: examples of economic situations in the carribean islands area where there is a business that presents itself as locally owned but which is not, and which is right next to a poor area; in particular I’d be looking for situations where the ownership dynamics have resulted in a much greater proportion of gains from trade going to investors, rather than to locals. If I were doing this for the goal of arguing more general properties of the impact of being a nomad, I would try to assess how common it is, rather than looking for exemplars.
There’s certainly no rush.
I’m not sure I agree, but I appreciate your saying so.
Well, hang on. This seems a bit different from what you said before, which was about the locals not benefiting at all (and you even implied that the locals might be made worse-off—or at least that seemed to be the connotation of “funding crushing the locals with the weight of the economic activity your visits’ trades create”).
But here you’re talking about the locals merely getting some relatively small proportion of the gains from trade. This seems very different, no? Indeed it’s not even clear that this is bad, at all, relative to the counterfactual where no trade takes place.
So (perhaps with the benefit of saving yourself some effort in searching out examples which end up being beside the point), might you clarify what exactly the claim is, in the first place? (But if you prefer to provide examples first, and then generalize a claim from them, that is also fine… in any case it’s good to get this distinction noted in advance, to forestall any claims of goalpost-moving on anyone’s part.)
I am also curious about something else—you seem to be suggesting that you’ll be looking for examples of which you’re not already specifically aware (or did I misunderstand you?). This is well and good, and I look forward to reading them—but I wonder if you recall what led you to having this sort of model in the first place? (Or was it a cached thought that you can no longer easily trace the origin of?)
update: I’ve had more trouble than I’ve expected finding descriptions of examples I’m pretty sure exist. I’m going to call this query timed out for now, and you can update on this conversation however you like from that result.
Here’s a description of a related thing instead from memory, which isn’t actually in one of the tourism-heavy areas of the carribean, but has examples of the same kind of ownership network structures.
Alright, thank you for the update.
Do you know if this info you linked is available in non-video form? I do not find it easy to absorb information from videos.
It’s a general model of how complex incentive systems in economics work in the form of a claim about a pattern that would be expected to arise any time there are certain structures of contracts in use which are very common, of which I have seen a great many examples in life, but which is a general model and you’re asking for specific instances; very fair request, so I’ll go find the things my general model predicts in this instance after I’m done with a few other things in my queue. (Commenting on lesswrong is a guilty pleasure, it doesn’t count.)
In general, it is common for networks of investors to end up participating in partial cartel monopsony over employment, resulting in ability to do some amount of price fixing. When distant investors own contracts that the implementors of law interpret to give the investors command ability over large portions of the businesses in an area, and those investors are optimizing for their own returns, the investor subnet has an incentive to use strategies that depress wages using this cartel. This typically results in the majority of money spent on goods and services from those stores going to the owners of the stores, not the employees; this is alleged to be good for the purchaser, but in reality typically indirectly makes the product much worse. in a region with many poor folks and distant investors, and where the poor locals don’t have synchronized bargaining with the investors, the investors can and often do take advantage of their synchronized bargaining against employee’s desynchronized bargaining to ensure that local market wages do not increase as fast as trade, resulting in most gains from trade being shared between purchaser and investor, with employees ending up treated as a nuisance cost by the network pattern.
You may recognize this description from somewhere; I’ve rephrased it somewhat out of the typical words because they’ve become fnords, but it’s a pretty standard criticism of stock-investment-based ownership patterns.
To participate in local markets where such things are happening, look for ways to spend money that result in more gains from trade going directly to locals, and especially in ways that result in balancing the amount of group synchronized bargaining between employees and owners.
And of course, as you imply, many people who bring up this network pattern and critique employment structures take it too far and assume this means no gains from trade go to the employees. Some definitely often do. But quite often the system becomes efficient only at some subgoals, while the biggest investors end up with a significant majority of control and thus can induce market inefficiencies selectively that limit growth of locally owned, small-owner small businesses. It’s especially frustrating because it’s not always obvious where this is happening.