Would the established interests of 95 years hence not simply lobby for repeal of the law before it takes effect? It’s generally difficult for the current legislature to thoroughly bind the hands of a future legislature.
And it seems to me that “people 100 years ago imposing a weird law that even they didn’t want to be subject to themselves” would be an easy sell to quietly cancel.
I’m not a legal expert, but I’m sure we’ve solved the problem of how to create a binding contract.
Laws are not contracts.
No contract has the power to bind anyone but its signatories. No-one but the signatories has any standing to enforce a contract. A contract has no binding force against the common will of its signatories to alter or dissolve it. In some places, a contract has no binding force beyond some limited interval after the death of its signatories.
Laws are passed by governments to impose obligations on the people. Laws have less power to bind the government itself, and almost no power to bind its successors. What laws one government can write, the next government can as easily erase.
Let me start by saying I think I really should have said 50 years instead of 100. That seems to a big sticking point for people.
I haven’t made myself clear. What I’m saying is create a contract to enforce the institution of a law. The government is the signatory, not any particular person. Governments can and do hold by agreements that past governments made, even if they disagree with their predecessors.
Now, sometimes they break those promises, and that’s why I’m talking about creating a binding contract. As in, if you break the contract, a penalty occurs.
For example, let’s say the government issues $1T of a particular financial asset. Those assets are basically inflation-adjusted perpetuities, except upon the institution of the delayed law, they cease to pay out. (Unless the law is instituted before the 50-year period, in which case they only cease to pay out after 50 years so that the perpetuity buyers aren’t swindled.) If the law is not instituted, then they continue to be perpetuities.
Upon selling those “enforcement perpetuities”, the government splits the ownership of land and buildings. So if you own a house, now you own the house itself, as well as a financial asset for the land underneath it. The land asset pays off a cashflow equal to the land value (if you’re taxed $1000 on Jan 1st, the government pays you $1000 on Jan 1st). Now, the money raised from the enforcement perpetuities can be used to buy those land assets from all current landowners.
Maybe you’d call this an incentive mechanism, rather than a contract. Whatever, I’m not a legal expert. Whether that’s the best solution or not, I don’t know. Even if there’s something wrong with the contract I just laid out, I would be shocked if there were not a way to do this. I’m sure there are plenty of creative solutions.
Obviously, that particular solution doesn’t apply to all delayed laws. Different laws will require different solutions. For the voting system problem, make a constitutional amendment requiring a unanimous vote to overturn it.
So what happens when in 50 years the government just stops paying, without passing the law? Buyers of these instruments don’t care about that law, so they will not object much, and there will be no reputation loss.
I work at an investment fund. If we held these assets, I assure you we would be trying to get paid if the government reneged. It would be a default, and government defaults are a very big deal with serious consequences for the country. So your suggestion is not really an option. Either the future government can enact the policy and get their debt wiped for free, or they can continue to pay the debt.
It’s a very strong enforcement mechanism, since the benefit to enacting the policy is so high.
I think repealing laws is a valid point. I assume you’d not only have to have the enactment of the law postponed, you’d also have add on extra terms that prevent a repealing. Maybe that’s what you mean by “binding contract”. Consider the example of Hunduras’ ZEDEs.
Constitutional law as a separate category with higher standards to make a change is the textbook way of making a law that isn’t so easily un-made (that and international treaties). But of course making a change to the constitution requires a stronger consensus to begin with—and probably in most cases you could use that strong consensus to pass a law with immediate effect.
I don’t expect “this amendment shall require a unanimous vote to be repealed” would be a valid thing to include though—a regular amendment going through the normal process could still simply say “no it doesn’t” and supersede the previous amendment.
People may also have a sense that constitutional law has a specific proper role, and that making provisions that aren’t to do with the fundamental architecture of how the government works is outside of that remit and thus unwise. So using it to change the voting system would be on-brand, but making arbitrary other changes would be susceptible to an accusation of “that’s not what the constitution is for”, in the battle for public opinion.
Setting up financial products in such a way that the future government would be fiscally incentivised to follow through seems more promising, but might be more difficult to persuade current voters to go along with. Those inclined to oppose might find it easy to spread fear/doubt of anything too novel and unfamiliar; call it a trillion dollar future debt bomb or whatever. And you can try to explain that the “bomb” only goes off if the future government reneges on the current government’s commitment, but “if you’re explaining you’re losing” and “you get about five words”.
I see your point about constitutionality, but I think something such as the electoral system falls within its remit, which was my recommendation. But yeah, I would have no problem with extending the uses of the constitution, although I know that others would.
I agree that the financial product is more promising, because of its generality. The interesting thing is that even if they issue the asset with the intention of breaking the promise, they lose basically nothing in net present terms (because those cashflows 50 years into the future are discounted by 1+d to the 50th power). Thus it wouldn’t be a mistake to do it (even while planning to renege). Since it’s equivalent to issuing regular perpetuities in terms of how much money a given debt would raise, it’s outright incorrect to call it a “bomb”. They don’t have to pay $1T all at once at the 50-year mark, it’s just that the present value of the debt will be worth that amount (assuming the same discount rate is the same as it was upon issuance).
Don’t get me wrong, I get that “if you’re explaining you’re losing”. But LessWrong, of all places, should be an area to discuss such ideas, and not have it dismissed out of hand simply because “People are too stupid/lazy/disinterested to get it”. I don’t think we should restrict our posts to 5 words or fewer. I don’t think we should avoid novel ideas. And I don’t think we should avoid politics.
The fact that everyone said Trump had no chance in the 2016 election shows that people basically don’t know what they’re talking about when it comes to political plausibility. No offence meant. I just don’t see any value in such guesses, when they’re so often wrong, and they stifle ideas.
On the point of explaining/losing and only having 5 words, I don’t mean anything in the region of “you shouldn’t have posted this for discussion” or that your posts about it here should be limited to 5 words. Only that I expect there would be major communications challenges if someone were to attempt implementing any of these ideas as actual political strategies, and that this would need to be anticipated and accounted for.
I’m also realising I fatally misread your post about perpetuities; quite right, calling it a “bomb” would be inaccurate.
Would the established interests of 95 years hence not simply lobby for repeal of the law before it takes effect? It’s generally difficult for the current legislature to thoroughly bind the hands of a future legislature.
And it seems to me that “people 100 years ago imposing a weird law that even they didn’t want to be subject to themselves” would be an easy sell to quietly cancel.
I’m not a legal expert, but I’m sure we’ve solved the problem of how to create a binding contract.
What’s weird about the laws I’ve suggested?
Edit: I’ve figured out a solution
Laws are not contracts.
No contract has the power to bind anyone but its signatories. No-one but the signatories has any standing to enforce a contract. A contract has no binding force against the common will of its signatories to alter or dissolve it. In some places, a contract has no binding force beyond some limited interval after the death of its signatories.
Laws are passed by governments to impose obligations on the people. Laws have less power to bind the government itself, and almost no power to bind its successors. What laws one government can write, the next government can as easily erase.
Let me start by saying I think I really should have said 50 years instead of 100. That seems to a big sticking point for people.
I haven’t made myself clear. What I’m saying is create a contract to enforce the institution of a law. The government is the signatory, not any particular person. Governments can and do hold by agreements that past governments made, even if they disagree with their predecessors.
Now, sometimes they break those promises, and that’s why I’m talking about creating a binding contract. As in, if you break the contract, a penalty occurs.
For example, let’s say the government issues $1T of a particular financial asset. Those assets are basically inflation-adjusted perpetuities, except upon the institution of the delayed law, they cease to pay out. (Unless the law is instituted before the 50-year period, in which case they only cease to pay out after 50 years so that the perpetuity buyers aren’t swindled.) If the law is not instituted, then they continue to be perpetuities.
Upon selling those “enforcement perpetuities”, the government splits the ownership of land and buildings. So if you own a house, now you own the house itself, as well as a financial asset for the land underneath it. The land asset pays off a cashflow equal to the land value (if you’re taxed $1000 on Jan 1st, the government pays you $1000 on Jan 1st). Now, the money raised from the enforcement perpetuities can be used to buy those land assets from all current landowners.
Maybe you’d call this an incentive mechanism, rather than a contract. Whatever, I’m not a legal expert. Whether that’s the best solution or not, I don’t know. Even if there’s something wrong with the contract I just laid out, I would be shocked if there were not a way to do this. I’m sure there are plenty of creative solutions.
Obviously, that particular solution doesn’t apply to all delayed laws. Different laws will require different solutions. For the voting system problem, make a constitutional amendment requiring a unanimous vote to overturn it.
So what happens when in 50 years the government just stops paying, without passing the law? Buyers of these instruments don’t care about that law, so they will not object much, and there will be no reputation loss.
I work at an investment fund. If we held these assets, I assure you we would be trying to get paid if the government reneged. It would be a default, and government defaults are a very big deal with serious consequences for the country. So your suggestion is not really an option. Either the future government can enact the policy and get their debt wiped for free, or they can continue to pay the debt.
It’s a very strong enforcement mechanism, since the benefit to enacting the policy is so high.
Defaults only matter due to reputation. But stopping a weird practice which no one else does doesn’t really damage reputation.
What’s stopping Congress in the 49th year from passing an exemption into law that lets the government then ignore it with minimal consequences?
I think repealing laws is a valid point. I assume you’d not only have to have the enactment of the law postponed, you’d also have add on extra terms that prevent a repealing. Maybe that’s what you mean by “binding contract”. Consider the example of Hunduras’ ZEDEs.
I’ve just written a post on how exactly to enforce these contracts: Enforcing Far-Future Contracts for Governments.
Let me know what you think!
I’ve figured out a solution to the enforcement problem
Let me know your thoughts
Constitutional law as a separate category with higher standards to make a change is the textbook way of making a law that isn’t so easily un-made (that and international treaties). But of course making a change to the constitution requires a stronger consensus to begin with—and probably in most cases you could use that strong consensus to pass a law with immediate effect.
I don’t expect “this amendment shall require a unanimous vote to be repealed” would be a valid thing to include though—a regular amendment going through the normal process could still simply say “no it doesn’t” and supersede the previous amendment.
People may also have a sense that constitutional law has a specific proper role, and that making provisions that aren’t to do with the fundamental architecture of how the government works is outside of that remit and thus unwise. So using it to change the voting system would be on-brand, but making arbitrary other changes would be susceptible to an accusation of “that’s not what the constitution is for”, in the battle for public opinion.
Setting up financial products in such a way that the future government would be fiscally incentivised to follow through seems more promising, but might be more difficult to persuade current voters to go along with. Those inclined to oppose might find it easy to spread fear/doubt of anything too novel and unfamiliar; call it a trillion dollar future debt bomb or whatever. And you can try to explain that the “bomb” only goes off if the future government reneges on the current government’s commitment, but “if you’re explaining you’re losing” and “you get about five words”.
I see your point about constitutionality, but I think something such as the electoral system falls within its remit, which was my recommendation. But yeah, I would have no problem with extending the uses of the constitution, although I know that others would.
I agree that the financial product is more promising, because of its generality. The interesting thing is that even if they issue the asset with the intention of breaking the promise, they lose basically nothing in net present terms (because those cashflows 50 years into the future are discounted by 1+d to the 50th power). Thus it wouldn’t be a mistake to do it (even while planning to renege). Since it’s equivalent to issuing regular perpetuities in terms of how much money a given debt would raise, it’s outright incorrect to call it a “bomb”. They don’t have to pay $1T all at once at the 50-year mark, it’s just that the present value of the debt will be worth that amount (assuming the same discount rate is the same as it was upon issuance).
Don’t get me wrong, I get that “if you’re explaining you’re losing”. But LessWrong, of all places, should be an area to discuss such ideas, and not have it dismissed out of hand simply because “People are too stupid/lazy/disinterested to get it”. I don’t think we should restrict our posts to 5 words or fewer. I don’t think we should avoid novel ideas. And I don’t think we should avoid politics.
The fact that everyone said Trump had no chance in the 2016 election shows that people basically don’t know what they’re talking about when it comes to political plausibility. No offence meant. I just don’t see any value in such guesses, when they’re so often wrong, and they stifle ideas.
On the point of explaining/losing and only having 5 words, I don’t mean anything in the region of “you shouldn’t have posted this for discussion” or that your posts about it here should be limited to 5 words. Only that I expect there would be major communications challenges if someone were to attempt implementing any of these ideas as actual political strategies, and that this would need to be anticipated and accounted for.
I’m also realising I fatally misread your post about perpetuities; quite right, calling it a “bomb” would be inaccurate.
Okay cool. And you didn’t misread it the first time, I had to heavily edit it to make it clearer.