Assuming the average person’s utility function is concave with respect to money and given the current income distribution the simplest and highest utility change is to take a fixed amount from high income people and give it to low income people. This follows from simple economics as the people on the lower end of the distribution know best what it is they need. GiveDirectly is the charity that pioneers this exact scheme and that is why I donate to them.
On the other end of the spectrum, the high income countries, the best people could do is eat healthier and exercise more in terms of DALY won. Though efforts are made in that direction, they seem quite futile. Two other unexplored options are training in rationality (CFAR style) and training in methods of cognitive behavioural therapy (CBT). Obviously CFAR is the go to charity for rationality but what about the latter? How large could the effect be of training young adults in the mentioned techniques in terms of DALY seeing as mental health problems such as anxiety or depression are quite prevalent and increased psychological resilience may even help with the aformentioned goals—not to mention the intangible goods such as improved quality of life, less suffering from external events and ‘better’ relationships.
Assuming the average person’s utility function is concave with respect to money and given the current income distribution the simplest and highest utility change is to take a fixed amount from high income people and give it to low income people.
When you consider second order consequences, such as the creation and elimination of certain incentives, the effect of currency transfers on utility is not quite so straightforward. Even without those consequences, it is far from obvious that the statement
This follows from simple economics as the people on the lower end of the distribution know best what it is they need.
I would argue most people’s revealed preference of utility wrt money is either incoherent or lumpy enough that describing it with a simple curve isn’t really valid.
I think most people’s revealed preferences are quite coherent once you assume that gambling is as much a purchase of a dream(lotteries) or an entertainment experience(poker, blackjack, etc.) as it is a strictly financial bet.
the simplest and highest utility change is to take a fixed amount from high income people and give it to low income people.
Let’s add the time dimension to this analysis. What you say might be true within an immediate time frame, but it is true in the one year time frame? ten years? a hundred years?
There is also the issue of side effects. Forcibly equalizing income (or wealth) has been tried. Many times.
There is also the issue of side effects. Forcibly equalizing income (or wealth) has been tried. Many times.
I don’t think he advocates equalizing. It’s more an argument for unconditional basic income policies. Even Milton Friedman made proposals that went in that direction.
yeah I think forcible equalization is terrible but the fact remains that you gotta get money from SOMEONE for government spending and the rich have way more of it.
Assuming the average person’s utility function is concave with respect to money and given the current income distribution the simplest and highest utility change is to take a fixed amount from high income people and give it to low income people. This follows from simple economics as the people on the lower end of the distribution know best what it is they need. GiveDirectly is the charity that pioneers this exact scheme and that is why I donate to them.
On the other end of the spectrum, the high income countries, the best people could do is eat healthier and exercise more in terms of DALY won. Though efforts are made in that direction, they seem quite futile. Two other unexplored options are training in rationality (CFAR style) and training in methods of cognitive behavioural therapy (CBT). Obviously CFAR is the go to charity for rationality but what about the latter? How large could the effect be of training young adults in the mentioned techniques in terms of DALY seeing as mental health problems such as anxiety or depression are quite prevalent and increased psychological resilience may even help with the aformentioned goals—not to mention the intangible goods such as improved quality of life, less suffering from external events and ‘better’ relationships.
When you consider second order consequences, such as the creation and elimination of certain incentives, the effect of currency transfers on utility is not quite so straightforward. Even without those consequences, it is far from obvious that the statement
holds.
I would argue most people’s revealed preference of utility wrt money is either incoherent or lumpy enough that describing it with a simple curve isn’t really valid.
I think most people’s revealed preferences are quite coherent once you assume that gambling is as much a purchase of a dream(lotteries) or an entertainment experience(poker, blackjack, etc.) as it is a strictly financial bet.
Let’s add the time dimension to this analysis. What you say might be true within an immediate time frame, but it is true in the one year time frame? ten years? a hundred years?
There is also the issue of side effects. Forcibly equalizing income (or wealth) has been tried. Many times.
I don’t think he advocates equalizing. It’s more an argument for unconditional basic income policies. Even Milton Friedman made proposals that went in that direction.
yeah I think forcible equalization is terrible but the fact remains that you gotta get money from SOMEONE for government spending and the rich have way more of it.
And are hurt FAR less by its removal.