I spent a bit of time looking at the details of Negative income tax. It is possible that I am not understanding the subtleties of Negative income tax but it appears that what I proposed is different and better than Negative Income tax. The reason for this is the following. In my scheme if a person is making wage y which is less than some threshold wage x, the state pays him (y-x)/2 which satisfied two objectives (1) People who are poorer get more state aid (2) People are still incentivized to work harder and make more money since their total payout (wages + government aid) is an increasing function of their wage. Let’s take a negative tax rate of say −100%. Here a person making $1/hour gets another $1 from the government and a person making $4 per hour gets another $4 per hour from the government. This satisfies objective (2) above but not objective (1). Of course, one would argue that there would be tax slabs and consequently even different negative tax rates at different levels, but this problem exists within each tax slab. One could make each tax slab infinitesimally small and achieve the same effect as my proposal but that would be much like saying a function is linear, when it is really exponential and you are approximating it piecewise linear with really small pieces.
VijayKrishnan
| perhaps you have the good habit of translating the general thoughts in your mind into |exemplary exemplary (sic) words,
Yes I do and it has served me very well with regard to being a clearer communicator. It’s all the more helpful when communicating with people less used to talking abstractly. I strongly suggest you try it. You’ll save time and be more clear 95% of the time unless the people you are communicating with are some really biased sample.
| in which case you wouldn’t have had this specific hint that this post was fairly off topic by its narrowness.
I have no idea what you are saying here :)
I am amused at this comment more than anything else. Of course it should have been (x-y)/r where 1<r<infinity. And of course correspondingly there is no reason to set x to exactly current minimum_wage* 1.5. Your preferred method of writing and talking reminds me a lot of what I tended to do as a Computer Science undergraduate who studied discrete mathematics and formal logic and liked to make statements unambiguously in first order logic. This was all the more because I was doing a bunch of courses that involved mathematical proofs which obviously lended themselves to that format.
The reason why this kind of writing is sub-optimal is the following:
That kind of precise writing is needlessly hard to parse.
Even after people parse it, to see the intuition behind it, people necessarily have to ground it in some typical/decent instantiations of values. It is therefore much better and you transfer more bits of information from mind to mind per unit time if you directly give people the specific example and allow them to generalize the idea behind the theory in their minds.
Admittedly I could have written what I did above and still given you the generalized thing stating the different knobs that could be tweaked in the example. I however thought that at least the knobs above were perfectly obvious to any person intelligent enough to understand my example. I saw no point to treat my reader with kid gloves here.
Again, I wasn’t proposing a final solution that should be implemented tomorrow! And unless you are among a weird rare set of people incapable of reading anything other than bullet proof first order logic I find it hard to believe that you can ever read such a thing into this. In fact I would argue that there is no easy way to tell the optimal parameters above and possibly even in additional generalizations without any real empirical data regarding the utility functions of different people, how they respond to incentives, what is the histogram of people at different levels of wage in a world with no prevailing wage floor in different places etc. You would also need to evaluate if any fresh perverse incentives get created if this is implemented in some places and not others. All these go for any idea that is economics related and it is foolish to not put an idea up for discussion until you have collected data from all over the world and analyzed it thoroughly to get the optimal set of parameters, have guarded for perverse incentives thoroughly etc.
I am now an internet entrepreneur and have realized that the main objective with communication in most settings (writing research papers, pitching VCs, pitching other companies for partnerships etc.) is to transfer maximum bits of information in the shortest possible time. It is not necessary to get verbose and guard yourself against any possibly misinterpretation in the world. Such language is best used only in the context of an adversarial scenario such as a debate or a legal battle where the other party has every incentive in the world to misrepresent any of your statements, throw red-herring arguments your way etc. This is exactly why legal language is so tedious and annoying—to avoid adversarial parties at any point coming up with responses such as yours. In most normal non-adversarial scenarios, this approach is extremely sub-optimal for communication.
Thanks, orthonormal! Yes I had not heard of it and the idea seems very similar.
Agreed. But does this problem not exist in even bigger measure when you have min wage and social security for those unemployed as a result of minimum wage. The social security cannot be equal to the min wage, since otherwise no one would work at min wage. However the social security would presumably be something like 2⁄3 of min wage to ensure that those who are unemployed are able to have some decent standard of living. And this per your argument would put the implicit tax rate of those earning minimum wage at 67%!
A potentially great improvement to minimum wage laws to handle both economic efficiency as well as poverty concerns
It’s not obvious that it’s a subsidy. This would be a subsidy only if an employer would have to pay a person less here compared to a market with no minimum wage laws and no social security. For example, imagine that in such a market a person’s wage is $4 per hour (who is currently almost certainly unemployed in California due to the $8/hr min wage). Now let’s analyze what happens to the prevailing wage of a person of similar skill with the above scheme where the government ensures that a person makes at least $6 an hour. The marginal utility of money is lower for the aforesaid person given that he is already guaranteed $6 an hour. This will cause some of the people to not work (whereas in the min wage + fixed social security for the employed scheme, all the people fitting the above profile wouldn’t be working). Since there are smaller number of people of the same skill level competing for the jobs, employers will actually have to pay more money to make it worth the while of the employees! So if anything it is the very opposite of a subsidy for the employers who will now be employing all the people who cannot command minimum wage, and are unemployed now.
This seems to be a good idea. But the only problem with it is that the labor market is not as liquid as a financial market. It is in principle quite possible for a person in a free market to be commanding 1.5 * minimum_wage in a part time job or for part of the year, but unable to find work for the rest of the year or rest of the free time, which would push his annual salary below minimum wage. Theoretically there should be absolutely zero unemployment with no minimum wage laws. However in practice it would still be a couple of percent due to liquidity holes in the market, with people in between jobs, in the process of talking with multiple employers etc. In my method, there is still incentive for people earning above min wage to work as hard as possible, since the state subsidy is only (x-y)/2 and not (x-y). I agree with your point though, that the incentives would be stronger in the event of replacing earnings with “hourly wages”, if only you could handle the issue of genuine unemployment due to liquidity holes that prevent the person from making min wage averaged across the year.
The ridiculous amount of activity by the untrained and uninformed on the stock markets seems to suggest that people could use a significantly higher amount of “zero sum” bias there. There are tons of people who would not peg their investment skill in the top 1%, who nonetheless think they have a good chance of making money in short term trades. There certainly seems to be the thinking that the stock market is a source of profits for one and all, regardless of investment skill and understanding.
This bias however is most prevalent in the idea that getting rich cannot possibly be a noble act, a point extensively addressed in Paul Graham’s essays.
You are right about competition serving quite a useful purpose in the real world. However the real world is not like financial markets where you have liquidity by the milli second with regard to competing offers. If competition did a great job of providing an alternative in real time, they would be no need to do the following in pretty much any negotiation
Pretend that you have lots of time and are in no hurry to close this deal with the other party or anyone else.
Pretend that you looked up and found/know of much better deals elsewhere that what the other party is offering. Alternatively claim that the competing deals you are getting are much better than they truly are.
Pretend that your “last price” is very different from your true last price.
If competition were doing an amazing job, there would be no reason to do 1-3 above.
You say above “you can just get a competing dealer to make an offer which becomes the upper bound”. If you are a person who is putting time to productive use, it would not be unreasonable to value your hour at well over $50. The question is therefore whether you can find competing offers without spending 10-20 hours which would pretty much erode your whole margin of savings.
I have been heavily leaning towards the anti-cryonics stance at least for myself with the current state of information and technology. My reasons are mostly the following.
I can see it being very plausible that somewhere along the line I would be subject to immense suffering, over which death would have been a far better option, but that I would be either potentially unable to take my life due to physical constraints or would lack the courage to do so (it takes quite some courage and persistent suffering to be driven to suicide IMO). I see this as analogous to a case where I am very near death and am faced with the two following options. (a) Have my life support system turned off and die peacefully.
(b) Keep the life support system going but subsequently give up all autonomy over my life and body and place it entirely in the hands of others who are likely not even my immediate kin. I could be made to put up with immense suffering either due to technical glitches which are very likely since this is a very nascent area, or due to willful malevolence. In this case I would very likely choose (a).
Note that in addition to prolonged suffering where I am effectively incapable of pulling the plug on myself, there is also the chance that I would be an oddity as far as future generations are concerned. Perhaps I would be made a circus or museum exhibit to entertain that generation. Our race is highly speciesist and I would not trust the future generations with their bionic implants and so on to even necessarily consider me to be of the same species and offer me the same rights and moral consideration.
Last but not the least is a point I made as a comment in response to Robin Hanson’s post. Robin Hanson expressed a preference for a world filled with more people with scarce per-capita resources compared to a world with fewer people with significantly better living conditions. His point was that this gives many people the opportunity to “be born” who would not have come into existence. And that this was for some reason a good thing.
I couldn’t care less if I weren’t born. As the saying goes, I have been dead/not existed for billions of years and haven’t suffered the slightest inconvenience. I see cryonics and a successful recovery as no different from dying and being re-born. Thus I assign virtually zero positives to being re-born, while I assign huge negatives to 1 and 2 above. This is probably related to the sense of identity mentioned in this post.
We are evolutionarily driven to dislike dying and try to postpone it for as long as possible. However I don’t think we are particularly hardwired to prefer this form of weird cryonic rebirth over never waking up at all. Given that our general preference to not die has nothing fundamental about it, but is rather a case of us following our evolutionary leanings, what makes it so obvious that cryonic rebirth is a good thing. Some form of longetivity research which extends our life to say 200 years without going the cryonic route with all the above risks especially for the first few generations of cryonic guinea pigs, seems much harder to argue against.
I wrote “probably 50%”. I guess it could be reasonably inferred that this is an extrapolation using my best guess coupled with actual numbers.
Agreed! In fact I was toying with the idea of emailing Robin this idea in a couple of lines as a potential idea for a future post at overcomingbias. I finally overcame inertia and went on to compose this :)
The 50% american divorce rate is mostly in line with published statistics. I don’t think it is unrealistic to assume that an overwhelming majority of folks getting married, feel that they are getting married to “the one”, so I am just keeping the 50% figure. In any case getting this number to be very accurate is not important to the argument, so I didn’t care to get the best possible estimate of this possible.
Yeah that’s what I meant but wrote the sentence clumsily. Have corrected it now.
I think the legal details of this will need to be worked out but this is certainly very interesting! In theory, such a move ought to make you a more desirable wife and ought to prevent certain types of mistrust in the hypothetical husband. I doubt both of these would pan out in practice though, unless you are fairly certain to restrict your pool of potential husbands to the ultra-rationalists (who probably barely even exist in practice), or to guys who would a priori have preferred paternity testing, even before you bring it up to them.
One general question, folks. This is my first lesswrong post. What do I need to have this post as part of the “promoted posts” and consequently accessible to more readers of this site. Till today I never even noticed the new tabs post, which is currently the only easy way to reach my post.
Thanks.
(1) and (2) seem pretty easy.
If there is a contradiction in pre-pre nups, either one party reneges on the contract and pays the stiff price or the marriage doesn’t take place. When you opt for such a pre-pre-nup you are presumably willing to eliminate the pool of potential partners who are fundamentally opposed to the terms of your pre-pre-nup. Think of this as ideally no different from a situation when community property and other similar laws were abolished. In such a situation, you are free to turn down suitors who want pre-nups that enforce community property laws, or have pre-pre-nups which bind them to the same.
Of course, I don't know enough of the issue of "inalienable rights" and what kind ofcontracts are made illegal by law. With my limited knowledge it seems that it should be possible to make contracts that achieve these, possibly by some circuitous means. Of course I am no lawyer and don’t know the fine points.
My bad. Friedman’s NIT implementation seems to be the exact same thing I wrote. NIT seems like a really lousy name for it though, given that it naturally lends itself to the interpretation in my previous comment ; as a fixed percentage bonus added to your salary by the government within some wage band.