Before we dismiss the money taboo as something that obviously hurts people (which it does), I wonder what is the upside? What are the situations in life where not discussing money is the right thing to do?
This is an important Chesterton’s Fence to identify.
Status games and social/family obligations and judgement are the main reasons NOT to discuss the reasons for your choices, nor too much detail about your current or projected situation. Envy is a real thing for many (most!) humans, even if it’s a little more rare (or better-hidden) in rationalist and high-IQ groups. Even fairly close friends can take your decisions which differ from theirs as a judgement on them, and react badly.
I wonder whether there is a strictly better solution, something that would preserve the obligations without incentivizing against becoming visibly rich.
For example, imagine that a group of people takes a vow (written, legally binding) that 20 years later each of them will redistribute 10% of their net worth to the rest of the group. That means, if they all have approximately the same wealth, no money will change hands (the amounts will cancel out on paper). But if one of them becomes a millionaire, they will distribute 10% of their wealth among the rest of the group.
With such vow, you would be happy if one of your friends becomes visibly rich, and you would gladly support them to become even more rich, because that would mean a payout waiting for you in the future. If they are a millionaire, you would wish them to become a billionaire instead!
Of course, this would not be so easy. People would be picky about whom to include in the group, and 20 years later would regret their choices. The millionaires would try various tax evasion techniques to minimize the amount they need to distribute. Perhaps it wouldn’t work at all, dunno.
In the past, people had all kinds of implied obligations, many of them sucked. Today, in theory we are free to make various kinds of contracts, in practice most people suck at designing contracts and coordination is hard.
Of course, this would not be so easy. People would be picky about whom to include in the group, and 20 years later would regret their choices. The millionaires would try various tax evasion techniques to minimize the amount they need to distribute. Perhaps it wouldn’t work at all, dunno.
Tax evasion might decrease taxes, but not necessarily ‘net worth’.
Yeah. But there are techniques (perhaps unrelated to tax evasion) for decreasing net worth, that the millionaire might use to avoid paying the 10%. Politicians use them to pretend they didn’t get rich while in the office. Divorcees use them to reduce alimony. Criminals use them to not appear suspiciously rich.
For example, “this is not my property, it all belongs to my wife and/or children”. Or it is owned by a shell company, which is owned by another shell company, which is owned by… oops, this one is registered in a country that does not disclose this information. Depending on the exact definition of “net worth”, the money could be (temporarily) converted to something that technically does not count as “net worth”.
(There is also an opposite problem, that sometimes the net worth is overestimated. For example, if you own a large fraction of shares of some company, their total value is calculated as “value of 1 share × the number of shares you own”, which ignores the fact that if you actually started selling the shares, that would automatically drive their price down.)
Hm. You may have made a case for not using ‘net worth’. (Though what else to use isn’t clear.) At the same time, it’s also not clear how much that would be an issue. (Is the practice more common among billionaires than millionaires perhaps?)
Such a thing, if done at all, might make more sense taking in to account the plans the people involved have for the future, i.e. they’re all doing something risky which could pay out big.
For most groups, the obligations are not written nor legally binding. They’re implied and illegible, and VERY hard to change, or even talk rationally about.
In fact, most contracts you can imagine are un-enforceable—only some narrow topics are in the overton window of contracts that can be discussed, and only some of those are in realms that many courts will enforce.
For your specific (group agrees to share 10% of individual wealth after 20 years), it would be tricky to adjust for expected net worth (why would someone with better prospects agree?), and you’d need some way to handle entry and exit (or just decide not to have any new social contacts, I guess).
I don’t see a solution here, other than secrecy, at least among those who aren’t very-well-trusted rational individuals in pretty close relationships. Which describes vanishingly small groups.
OR maybe we bite the bullet. Take the Scandinavian approach, and publish tax returns, or further—publish all wealth and income worldwide. Get through the strife and pain that would happen in many regions and in many groups, and those who survive can learn to stop worrying about it. A guy can dream, huh?
This is an important Chesterton’s Fence to identify.
Status games and social/family obligations and judgement are the main reasons NOT to discuss the reasons for your choices, nor too much detail about your current or projected situation. Envy is a real thing for many (most!) humans, even if it’s a little more rare (or better-hidden) in rationalist and high-IQ groups. Even fairly close friends can take your decisions which differ from theirs as a judgement on them, and react badly.
Ah yes—wealth (not kept secret) creates obligations.
I wonder whether there is a strictly better solution, something that would preserve the obligations without incentivizing against becoming visibly rich.
For example, imagine that a group of people takes a vow (written, legally binding) that 20 years later each of them will redistribute 10% of their net worth to the rest of the group. That means, if they all have approximately the same wealth, no money will change hands (the amounts will cancel out on paper). But if one of them becomes a millionaire, they will distribute 10% of their wealth among the rest of the group.
With such vow, you would be happy if one of your friends becomes visibly rich, and you would gladly support them to become even more rich, because that would mean a payout waiting for you in the future. If they are a millionaire, you would wish them to become a billionaire instead!
Of course, this would not be so easy. People would be picky about whom to include in the group, and 20 years later would regret their choices. The millionaires would try various tax evasion techniques to minimize the amount they need to distribute. Perhaps it wouldn’t work at all, dunno.
In the past, people had all kinds of implied obligations, many of them sucked. Today, in theory we are free to make various kinds of contracts, in practice most people suck at designing contracts and coordination is hard.
Tax evasion might decrease taxes, but not necessarily ‘net worth’.
Yeah. But there are techniques (perhaps unrelated to tax evasion) for decreasing net worth, that the millionaire might use to avoid paying the 10%. Politicians use them to pretend they didn’t get rich while in the office. Divorcees use them to reduce alimony. Criminals use them to not appear suspiciously rich.
For example, “this is not my property, it all belongs to my wife and/or children”. Or it is owned by a shell company, which is owned by another shell company, which is owned by… oops, this one is registered in a country that does not disclose this information. Depending on the exact definition of “net worth”, the money could be (temporarily) converted to something that technically does not count as “net worth”.
(There is also an opposite problem, that sometimes the net worth is overestimated. For example, if you own a large fraction of shares of some company, their total value is calculated as “value of 1 share × the number of shares you own”, which ignores the fact that if you actually started selling the shares, that would automatically drive their price down.)
Hm. You may have made a case for not using ‘net worth’. (Though what else to use isn’t clear.) At the same time, it’s also not clear how much that would be an issue. (Is the practice more common among billionaires than millionaires perhaps?)
Such a thing, if done at all, might make more sense taking in to account the plans the people involved have for the future, i.e. they’re all doing something risky which could pay out big.
For most groups, the obligations are not written nor legally binding. They’re implied and illegible, and VERY hard to change, or even talk rationally about.
In fact, most contracts you can imagine are un-enforceable—only some narrow topics are in the overton window of contracts that can be discussed, and only some of those are in realms that many courts will enforce.
For your specific (group agrees to share 10% of individual wealth after 20 years), it would be tricky to adjust for expected net worth (why would someone with better prospects agree?), and you’d need some way to handle entry and exit (or just decide not to have any new social contacts, I guess).
I don’t see a solution here, other than secrecy, at least among those who aren’t very-well-trusted rational individuals in pretty close relationships. Which describes vanishingly small groups.
OR maybe we bite the bullet. Take the Scandinavian approach, and publish tax returns, or further—publish all wealth and income worldwide. Get through the strife and pain that would happen in many regions and in many groups, and those who survive can learn to stop worrying about it. A guy can dream, huh?