A Warren Buffet donating a small fraction to efficient charity has a positive impact several orders of magnitude above a teacher. It would be awesome win if we could take thousands of teachers and turn them into Buffets. The reality however is that most teachers aren’t capable of this. To build a good case I suggest you sit down and do the math of the measured life gains students get from good teachers vs the gains of mediocre white collar professionals giving the extra money they earn beyond the teacher salary to efficient charity.
Wealth doesn’t appear out of nowhere. The decreasing wages of professionals doesn’t mean there’s less wealth in the system, it means that wealth goes is distributed differently, mostly towards creating more Warren Buffets. The donation of a small sum of an accumulated fortune cannot create an impact equivalent to if that fortune in its entirety had been distributed in fairly paid labor.
A charity by definition requires an additional, socially superfluous level of bureaucracy which is paid out of donations. The charities that billionaires tend to support also don’t necessarily apply their spending in any semblance of efficiency, if they even affect good policy decisions with the impact they do have. Charities cannot achieve economies of scale, nor do they have a secular source of funding (their continued existence is dependent on appeasing potential donors, not on efficient performance). Teachers are not slaves.
It isn’t zero sum either. I’m fairly certain Warren Buffet creates quite a lot of it. I’m also sure the marginal value of yet another school teacher pales in comparison to it.
The donation of a small sum of an accumulated fortune cannot create an impact equivalent to if that fortune in its entirety had been distributed in fairly paid labor.
My inner anthropologist from Jupiter is confused by this sentence, what is this “fair pay” thing. Please elaborate on it.
The donation of a small sum of an accumulated fortune cannot create an impact equivalent to if that fortune in its entirety had been distributed in fairly paid labor.
Assuming for the sake of argument that Warren Buffet is a vampire squid on the face of the world … why not? You have humans routinely buying liquor and cigarettes instead of malaria nets for their own children, or wasting dollars on negative sum games like jostling for positional goods.
And to be avoid misunderstandings I do think you can make a good case that some people & institutions probably are vampire squids in the sense I used here.
The charities that billionaires tend to support also don’t necessarily apply their spending in any semblance of efficiency, if they even affect good policy decisions with the impact they do have.
We aren’t talking about what billionaires tend to support. We are using a thought experiment of primary school teacher vs. efficient charity donating rich dude to help you decide whether you where on the curve you want to go.
I’m pretty sure that being a pirate in Somalia and donating to efficient charity is probably justified by utilitarian calculations. If you can’t possibly imagine this being the case, pause to consider that a criminal is just a start up government, a local bandit who ideally would want to have the monopoly on violence that a real state has but just isn’t good enough for now. The best approach for the pirate would be to just stay in port and have passing ships pay him protection money. We accept some taxation of the trade routes can produce better results than not taxing it at all. I think it clear most government spending is much worse in its impact per dollar than efficient charity. If you disagree why in the world aren’t you donating money to say the US government or writing up an argument for it? Model piracy by me and my merry armed band in Somalia as a tax on the trade route, then judge them as you would a government program with the same bang for buck.
To give another controversial example, I find it plausible that selling Marijuana and several other kinds of drugs (but not all) full time and donating the money to efficient charity beats out being a primary school teacher or working in kindergarten on utilitarian grounds.
What is the mechanism by which Warren Buffet creates wealth by himself? If you’re talking about investing, couldn’t a good supercomputer hypothetically do the same job for free? Anyways, Buffet doesn’t do all of his own investments: most capitalists don’t. They engage in joint ventures and mutual funds. Their only “contribution” to these is being the owner of investment funds (an arbitrary title when removed from historical context). Buffet does contribute to society but not (through some divine justice) proportionate to the compensation he is allotted.
Consider if Warren Buffet’s teachers had not taught him to do math and he hadn’t had the opportunity to do anything he did. What if his local librarian wasn’t able to help him find books on investment, if he hadn’t happened upon mentors who could teach him business, if he had been born poor and had to work minimum wage from a young age. Now consider if there are other potential Warren Buffets who would thrive as much as him given the opportunity but actually DO experience such setbacks.
Anyways, to assume that private investment is a social imperative is not friendly to reality. China right now has a totalitarian government which controls investments (including closely regulating foreign investment), and its economy has been exploding for decades as a result of infrastructure investment. There are plenty of models in-between China and the US which also function fine.
In the United States, we consistently overestimate the contribution of private industry in developing our infrastructure. Cars are only possible because of roads, telephones were only possible because of telephone wires, the internet & technology revolution were only possible because of massive Cold War defense department spending (the ARPANET was the prototype for the internet). It is not an exaggeration to say that the public has a far greater stake in private business than it realizes. In some cases, the privatization of public research can justifiably be seen as a transfer of wealth from taxpayers towards the fortunes of big business investors.
http://en.wikipedia.org/wiki/ARPANET
We accept some taxation of the trade routes can produce better results than not taxing it at all.
Unless you’re using “can” in a very weak sense—as in “if the revenue was donates to efficient charity”, I don’t think that’s true, because they cause additional wasteful substitution to intra-national trade. Taxes should fall on income (or negative externalities).
You are taking the quote in a too narrow context. Replace pirates preying on internal or international shipping with a bunch of thugs that show up in the market and take every tenth apple for themselves. Or robbing local farmer and craftsman and taking some of their stuff. Or road warriors enacting an environmentally friendly carbon tax on fuel.
I don’t understand what you mean. Is your point that taxes can be justified, and that sufficiently advanced piracy is indistinguishable from taxes? Or that taxes are better than pirates? Or that taxes on trade routes are better than other taxes? I agree with the first two, and was objecting to the last one.
I don’t understand what you mean. Is your point that taxes can be justified, and that sufficiently advanced piracy is indistinguishable from taxes?
Yep.
Or that taxes are better than pirates?
Generally they are because taxes tend towards efficient banditry at the Laffer maximum. A pirate spending a fraction of their income on efficient charity probably beats out taxes. Naturally a better utilitarian solution is to give that pirate more and more power so he can better and better approximate taxation and spend more on efficient charity, until the marginal gain of efficient charity drops to that of other government spending. Now of course maybe taxes are already too high and do more harm than good, in which case the pirate should stop earlier.
Or that taxes on trade routes are better than other taxes?
Efficient charity is a better use of wealth currently than most government programs. If you are an utilitarian and ok with something being taxed and then using that wealth on government programs, you should ceteris paribus be ok with a hypothetical pirate taking a share and giving it to optimal charity. Many people seem not to be. This suggests compartmentalization.
Also illegal means to obtaining wealth to donate to optimal charity is a good strategy that gets very little attention. This is especially the case considering the general relative ineptitude of caught criminals. It is probably true that may LWers can find their strongest comparative advantage in crime.
GLaDOS already complained about our community being more easily mind killed about it than it once was. This i why I requested a sequence on economics and especially prediction markets recently.
A Warren Buffet donating a small fraction to efficient charity has a positive impact several orders of magnitude above a teacher. It would be awesome win if we could take thousands of teachers and turn them into Buffets. The reality however is that most teachers aren’t capable of this. To build a good case I suggest you sit down and do the math of the measured life gains students get from good teachers vs the gains of mediocre white collar professionals giving the extra money they earn beyond the teacher salary to efficient charity.
Wealth doesn’t appear out of nowhere. The decreasing wages of professionals doesn’t mean there’s less wealth in the system, it means that wealth goes is distributed differently, mostly towards creating more Warren Buffets. The donation of a small sum of an accumulated fortune cannot create an impact equivalent to if that fortune in its entirety had been distributed in fairly paid labor. A charity by definition requires an additional, socially superfluous level of bureaucracy which is paid out of donations. The charities that billionaires tend to support also don’t necessarily apply their spending in any semblance of efficiency, if they even affect good policy decisions with the impact they do have. Charities cannot achieve economies of scale, nor do they have a secular source of funding (their continued existence is dependent on appeasing potential donors, not on efficient performance). Teachers are not slaves.
It isn’t zero sum either. I’m fairly certain Warren Buffet creates quite a lot of it. I’m also sure the marginal value of yet another school teacher pales in comparison to it.
My inner anthropologist from Jupiter is confused by this sentence, what is this “fair pay” thing. Please elaborate on it.
Assuming for the sake of argument that Warren Buffet is a vampire squid on the face of the world … why not? You have humans routinely buying liquor and cigarettes instead of malaria nets for their own children, or wasting dollars on negative sum games like jostling for positional goods.
And to be avoid misunderstandings I do think you can make a good case that some people & institutions probably are vampire squids in the sense I used here.
We aren’t talking about what billionaires tend to support. We are using a thought experiment of primary school teacher vs. efficient charity donating rich dude to help you decide whether you where on the curve you want to go.
I’m pretty sure that being a pirate in Somalia and donating to efficient charity is probably justified by utilitarian calculations. If you can’t possibly imagine this being the case, pause to consider that a criminal is just a start up government, a local bandit who ideally would want to have the monopoly on violence that a real state has but just isn’t good enough for now. The best approach for the pirate would be to just stay in port and have passing ships pay him protection money. We accept some taxation of the trade routes can produce better results than not taxing it at all. I think it clear most government spending is much worse in its impact per dollar than efficient charity. If you disagree why in the world aren’t you donating money to say the US government or writing up an argument for it? Model piracy by me and my merry armed band in Somalia as a tax on the trade route, then judge them as you would a government program with the same bang for buck.
To give another controversial example, I find it plausible that selling Marijuana and several other kinds of drugs (but not all) full time and donating the money to efficient charity beats out being a primary school teacher or working in kindergarten on utilitarian grounds.
What is the mechanism by which Warren Buffet creates wealth by himself? If you’re talking about investing, couldn’t a good supercomputer hypothetically do the same job for free? Anyways, Buffet doesn’t do all of his own investments: most capitalists don’t. They engage in joint ventures and mutual funds. Their only “contribution” to these is being the owner of investment funds (an arbitrary title when removed from historical context). Buffet does contribute to society but not (through some divine justice) proportionate to the compensation he is allotted.
Consider if Warren Buffet’s teachers had not taught him to do math and he hadn’t had the opportunity to do anything he did. What if his local librarian wasn’t able to help him find books on investment, if he hadn’t happened upon mentors who could teach him business, if he had been born poor and had to work minimum wage from a young age. Now consider if there are other potential Warren Buffets who would thrive as much as him given the opportunity but actually DO experience such setbacks.
Anyways, to assume that private investment is a social imperative is not friendly to reality. China right now has a totalitarian government which controls investments (including closely regulating foreign investment), and its economy has been exploding for decades as a result of infrastructure investment. There are plenty of models in-between China and the US which also function fine.
In the United States, we consistently overestimate the contribution of private industry in developing our infrastructure. Cars are only possible because of roads, telephones were only possible because of telephone wires, the internet & technology revolution were only possible because of massive Cold War defense department spending (the ARPANET was the prototype for the internet). It is not an exaggeration to say that the public has a far greater stake in private business than it realizes. In some cases, the privatization of public research can justifiably be seen as a transfer of wealth from taxpayers towards the fortunes of big business investors. http://en.wikipedia.org/wiki/ARPANET
Unless you’re using “can” in a very weak sense—as in “if the revenue was donates to efficient charity”, I don’t think that’s true, because they cause additional wasteful substitution to intra-national trade. Taxes should fall on income (or negative externalities).
You are taking the quote in a too narrow context. Replace pirates preying on internal or international shipping with a bunch of thugs that show up in the market and take every tenth apple for themselves. Or robbing local farmer and craftsman and taking some of their stuff. Or road warriors enacting an environmentally friendly carbon tax on fuel.
I don’t understand what you mean. Is your point that taxes can be justified, and that sufficiently advanced piracy is indistinguishable from taxes? Or that taxes are better than pirates? Or that taxes on trade routes are better than other taxes? I agree with the first two, and was objecting to the last one.
Yep.
Generally they are because taxes tend towards efficient banditry at the Laffer maximum. A pirate spending a fraction of their income on efficient charity probably beats out taxes. Naturally a better utilitarian solution is to give that pirate more and more power so he can better and better approximate taxation and spend more on efficient charity, until the marginal gain of efficient charity drops to that of other government spending. Now of course maybe taxes are already too high and do more harm than good, in which case the pirate should stop earlier.
I didn’t mean to claim this.
Efficient charity is a better use of wealth currently than most government programs. If you are an utilitarian and ok with something being taxed and then using that wealth on government programs, you should ceteris paribus be ok with a hypothetical pirate taking a share and giving it to optimal charity. Many people seem not to be. This suggests compartmentalization.
Also illegal means to obtaining wealth to donate to optimal charity is a good strategy that gets very little attention. This is especially the case considering the general relative ineptitude of caught criminals. It is probably true that may LWers can find their strongest comparative advantage in crime.
glances at thread
Econ is the mind-killer.
GLaDOS already complained about our community being more easily mind killed about it than it once was. This i why I requested a sequence on economics and especially prediction markets recently.
Poorly informed anything is a mind-killer http://www.youtube.com/watch?v=JroogX7zBek