Marginal utility is decreasing, but in practice falls off far less than geometrically.
I think this is only true if you’re planning to give the money to charity or something. If you’re just spending the money on yourself then I think marginal utility is literally zero after a certain point.
I think this doesn’t take into account two things:
The line between “spending on yourself” and “giving to charity” is thin.
Signaling arms races.
For example, suppose I am a billionaire. I’ve got my mansions in every city, my helicopter, my private island, and a vault full of gold that I can dive into, Scrooge McDuck style. What more can I want?
In a word: intangibles. I’ve purchased joy, security, and freedom; now I want respect. I want people everywhere to love me, and my name to be synonymous with goodness and benevolence.
So I give to charity. But so does everyone, right? My friend/rival Bob—also a billionaire—has just given five hundred million dollars to save cute puppies in war-torn countries. TIME magazine man of the year! Me? I’m a footnote on page 40.
The more money I make, the more I can give. The more I can give (and/or spend on other things! there’s more than one way to reap the intangible benefits of fame, after all), the more I gain—in real benefit, to myself, personally.
My marginal utility of money, then, is far greater than zero.
Consider the parallel to the AI whose goal is to bring you coffee, so it takes over the world to make sure no one can stop it from bringing you coffee: The fact that one might need or want more money makes it nonzero.
The more serious issue here is something I call the Uncanny Valley of Money, which I hope to write about at some point soon, where you have to move from spending on yourself (at as little as 1:1, in some sense) to spending on everyone (at up to 7000000000:1, or even more if you count the future, in some sense), in order to actually make any progress even for yourself.
I think this is only true if you’re planning to give the money to charity or something. If you’re just spending the money on yourself then I think marginal utility is literally zero after a certain point.
I think this doesn’t take into account two things:
The line between “spending on yourself” and “giving to charity” is thin.
Signaling arms races.
For example, suppose I am a billionaire. I’ve got my mansions in every city, my helicopter, my private island, and a vault full of gold that I can dive into, Scrooge McDuck style. What more can I want?
In a word: intangibles. I’ve purchased joy, security, and freedom; now I want respect. I want people everywhere to love me, and my name to be synonymous with goodness and benevolence.
So I give to charity. But so does everyone, right? My friend/rival Bob—also a billionaire—has just given five hundred million dollars to save cute puppies in war-torn countries. TIME magazine man of the year! Me? I’m a footnote on page 40.
The more money I make, the more I can give. The more I can give (and/or spend on other things! there’s more than one way to reap the intangible benefits of fame, after all), the more I gain—in real benefit, to myself, personally.
My marginal utility of money, then, is far greater than zero.
Consider the parallel to the AI whose goal is to bring you coffee, so it takes over the world to make sure no one can stop it from bringing you coffee: The fact that one might need or want more money makes it nonzero.
The more serious issue here is something I call the Uncanny Valley of Money, which I hope to write about at some point soon, where you have to move from spending on yourself (at as little as 1:1, in some sense) to spending on everyone (at up to 7000000000:1, or even more if you count the future, in some sense), in order to actually make any progress even for yourself.