Benquo
Karma: 8,242
NewTop
This is pretty much what The Last Psychiatrist is about. Nearly all his late blogging is a combination of:
(1) Poor people are assigned disability status and drugged to stop them from rioting because their lives are shitty and society doesn’t want to (or perhaps can’t) spend the resources necessary to fix the problem.
(2) The rest of us have been raised to be narcissists in a way that would have been genuinely exceptional a couple of generations ago, and are desperate to have our narratives affirmed by someone else with the right to pass judgment.
This seems to elide an important reason for withholding information: power imbalances. I think this is part of what Said is getting at. Except for somewhat equal partnerships or other genuinely nonhierarchical arrangements, I’d expect disclosing this sort of info to be used to extract more from me, and not to help me.
What is a story?
It seems like it’s a sort of compression optimized for human brains. Some elements of a story:
Components tend to be agents with intelligible social motives, or stereotyped roles; we have a bunch of specialized capacity for social modeling, which means that we can store information more efficiently if it fits that paradigm.
Components are “causally” linked. Because of causal linkage, stories tend to unfold unidirectionally over time. Stories are not lists of things that exist simultaneously, though they do require object permanence to understand; elements in a story tend to get reused. Once you understand a story, you can infer fuzzy or forgotten parts from the parts you know. Chekhov’s Gun inference works in both directions.
I don’t understand how this post makes that mistake—what’s an example of something Ruby said that’s inconsistent with this?
This seems like a good explanation of the dynamic underlying “skin in the game” considerations. If you care about literally achieving the stated goal, you should strongly prefer stories from contexts where a story’s prominence has more to do with its entanglement with reality than with marketability.
That seems like a reason not to make a recommendation until someone trusted has done a proper lit review, not a reason to make an affirmative recommendation based on an old consensus with momentum behind it despite the glaringly obvious cultural and incentive problems that make the consensus likely to ignore new evidence.
So, social proof?
I’m going to use the word “vacation,” because it isn’t overloaded with the meaning of “holy day,” and you seem not to be asking about the latter.
Civilized working people spend a lot of time doing routine tasks, and don’t do a lot of learning or encountering new things or places, relative to the ancestral environment. We also tend to stay indoors or otherwise in environments unlike the ones we evolved to enjoy.
People often feel better when they leave their usual place, and go somewhere they can experience either a lot of novelty (being in a new place and seeing lots of new things and people) or a place that would have been especially advantageous (and therefore pleasant) in the ancestral environment (e.g. mountains, hills overlooking rivers, seashores). Since most people cannot afford to run a household while doing this, they do it at short stretches. This is called a vacation (or “going on holiday”).
Visiting family is another thing people tend to do in short intense bursts like that, as we tend to live much farther from family than we would have been in premodern societies.
Going somewhere to see or do a specific thing that’s of affirmative interest (e.g. pilgrimage) can be very different, though it’s often a pretext for a vacation (e.g. Canterbury Tales).
Why shouldn’t I believe Slate Star Codex’s argument?
But what about this? http://slatestarcodex.com/2014/05/23/ssc-gives-a-graduation-speech/
Singer also recommends charities like the GW top charities, specifically mentions GiveWell approvingly, does cost-benefit analyses that ignore social & physical infrastructure, etc. These are also things Singer is saying.
This points at a thing that’s been bothering me for a while in the discourse around economics.
Often there are specific concepts or models worth learning from a discipline. For instance, comparative advantage and asymmetric information are important, but not all that complicated and hard to understand, and once you understand them you can apply them in new circumstances without holding onto the formalism that professionals fit them into.
In much rarer cases, an entire disciplinary framework is worth preserving. Physics in the Newtonian paradigm (by which I mean to include most of 20th Century physics as well) is an example—you can’t really understand “momentum” or “energy” except in relation to a much larger mathematized framework, which has a huge amount of descriptive, explanatory, and predictive power.
My sense of economics is that many concepts are important, but the frameworks are systematically obscuring a lot of what’s important to see. A lot of what I tried to do with Talents and There is a war was explain a bunch of stuff I’d learned from reading widely about economics, in nonideological terms that would help the reader apply patterns economists know about to concrete situations without providing anything pretending to be a comprehensive framework, and without claiming the mantle of what I consider spurious intellectual authority.
Most comments I see of the type “you should engage more with economics” don’t really seem to be thinking about costs clearly, which does not exactly reflect well on the discipline. In particular, it doesn’t seem like “economists have thought about this stuff a lot and made some progress” tells us much about whether the framework of economics is worth the time learning. The Roman Catholic Church has thought about moral and political philosophy a bunch, but while I might recommend someone read Augustine or some other Catholic writer to learn some particular insights or models that I think are relevant to their interests, I wouldn’t think of suggesting they engage with the Catholic framework rather than starting over. The same with academic research psychology. Why should I think better of academic economics?
The burden of evidence is a lot lower for recommendations like “this specific book or paper by an economist contains models that I expect would make this substantially clearer or more complete” or “this subfield of economics has standard arguments against your position that I’d need a clear response to in order to accept your model.”
There’s another reason to engage with a field, which is to contribute to the field—i.e. they might want to learn what someone has to say, but be unable to engage with it if it doesn’t speak their language. But almost no one seems to be saying this.
EAs say they don’t care about overhead per se and just care about outcomes, but public-facing recommenders like GiveWell and CEA keep recommending charities with low overhead relative to programmatic spending, such as AMF and GiveDirectly, rather than charities that do the sort of hard-to-account-for institution-building which low-overhead charities depend on.
EAs are good at explaining why you shouldn’t do what they’re (we’re?) doing. That’s different than actually doing the right thing.
I think this is the main problem. And for domains like finance that concentrate wealth a lot (enabling capture of the political decisionmaking system), the system has to be designed extremely well to avoid runaway alignment problems.
I don’t see why I should expect real costs to be lower here.
In cases where there are real savings, it’s usually pretty easy to point to the kinds of resources being saved. Efficiency gains in real goods, such as just-in-time supply chains, allow for less warehousing of goods, which means we don’t need to make as much stuff, in order to have stuff when we need it. I think the burden of proof here is on the claim that the financial savings in financial engineering correspond to real savings on net.
This kind of financial engineering allows banks to do something closer to just-in-time lending, reserving less against losses—the effect should be similar to lowering reserve requirements for banks. But with a managed fiat currency, it doesn’t cost any real resources to warehouse money, so there are accounting savings due to MBS but no less actual stuff being moved around and consumed or people employed per house financed.
In a world that’s exogenously liquidity-constrained, financial engineering on MBS creates liquidity, which can be very good. IIRC the original MBS were a US government backed program to achieve specific policy goals (government-guaranteed assets for banks to hold, more liquidity in the housing market) without massive overt subsidies. In a highly regulated banking industry with a fiat currency like the current US (and to a lesser extent global) system, it’s not obvious that arbitraging slight inefficiencies there via financial engineering solved any real problem, while it very clearly created systemic risk.
Insofar as there are real rather than just nominal savings here, they’re lower transaction costs for consumers and risk-pooling for investors, at the expense of reducing skin in the game, offloading to the US government the tasks of oversight and maintaining the underlying trust that lets the system work. These costs aren’t accounted for financially, and offloading them to an entity that has little in the way of short-run competition and gets little short-run feedback on whether it’s doing a good job seems likely to erode the relevant institutions in the long run.
I’m not saying we should never take advantage of economies of scale. I’m saying that if participation in large-scale activities is massively subsidized e.g. by the state, it’s not clear that the financial savings from increasing dependence on that system are meaningful.
I think you’re right that my account is incomplete. Thanks for pointing that out. Possibly I was wrong to think central banking is even relevant here.
The direct consequences of MBS (or further financial engineering in that domain) is to simultaneously lower borrowing costs for home-buyers, and raise yields for debt similar to MBS. HIgher yields makes borrowing more costly for other ventures, before taking into account any action by a central bank.
We should also expect it to increase financial investment relative to consumption, but my understanding is that demand for financial savings is pretty inelastic on current margins, so I’d expect that to be outweighed by the inflationary effect of reduced borrowing costs for the debtors whose debts are being securitized.
I think I understand better what my main problem is with this article now. The story in the beginning is about using a real good, food, more efficiently. This is clearly good. But finance is about using an unit of account more efficiently. This is good when saving money corresponds to wasting less of things that we care about for their own sake like people’s time or trees or food or clean water or air.
But sometimes dollar savings do not represent doing anything else more efficiently. MBS don’t use real things more efficiently to build houses. They are just a way for investors to pool financial risk. This makes it cheaper to borrow, if and only if you are doing the kind of thing that can be securitized: something that a lot of people are doing the same way, that Wall Street thinks it understands. It also makes the system more fragile by correlating risks.
If interest rates were not managed by central planners, this sort of program might lead to more real investment. But in our world, if financial innovation lowers borrowing costs in one area, an active central bank is likely to respond by raising interest rates. This would crowd out other kinds of investment.This is why I think it is so important to distinguish between money and the real resources it stands in for. Financial engineering lowers the borrowing costs of large centrally planned investments, relative to small heterogeneous investments executed by small autonomous agents with local knowledge.
Sort of. With the kind of regulatory capture we have now, I don’t think we can assume that any plan like that will be done in a way that does what we want it to do, without a very close analysis of the specific institutions affected.
For example, it seems as though lower interest rates should have lowered the cost of living in a home. But instead they helped drive up prices where supply was inelastic until it was just as expensive. It also created a speculative bubble which led to the construction of many homes that eventually sat idle for a long time, not an obvious improvement in the use of capital. Wealth was transferred to incumbent homeowners, and intermediaries who make money on transaction volume. I worry that piecemeal deregulation like this would have analogous perverse consequences.
This might also just be trying to solve the wrong problem. If policymakers tried to make rules to keep the system stable, and then large actors used their bargaining power to extract profitable concessions that externalized costs onto the rest of the system, and then the system blew up in part because of those exceptions, it seems a bit strange to say that the problem is that small actors should have gotten a break too.
2 and 3 need to be contextualized a bit more: they’re cultural appropriation in circumstances where the more powerful group has forced the less powerful one to mix with or assimilate to it.
In 2, mixing means that the less powerful group’s ability to maintain their own set of signals within their territory is diminished. This is why fashionably copying their signals is a problem: it disrupts one of the few remaining ways for minority-group members to recognize and selectively pay attention to other full participants in their culture.
In 3, assimilation means that members of the less powerful group face an incentive to distance themselves from signifiers of their culture, so they often can’t profit from such signifiers, while members of the more powerful culture may have more freedom to countersignal by playing around with things from the less powerful culture.
I feel like my life would get a lot better if I had a list of these things, so I could reflect on them and see whether I actually like them.