I’ve figured out a solution to the enforcement problem
Let me know your thoughts
FCCC
Karma: 43
I’ve just written a post on how exactly to enforce these contracts: Enforcing Far-Future Contracts for Governments.
Let me know what you think!
I think it’s rather unfair to classify me as a confidently underinformed fanatic. I’ve worked in federal government, the country’s largest bank, and am now an investment analyst at a large fund. High confidence usually indicates overconfidence, sure, but that correlation breaks down when someone really has thought deeply about a topic. Mathematicians, for instance, are nearly 100% confident of long-known peer-reviewed claims.
I’ve written quite extensively on optimal policy methodology. Have a read here, The Benevolent Ruler’s Handbook (Part 1): The Policy Problem. As I said in one of my other comments, “As for the 1923 question, I’d say we didn’t have a theoretical foundation for what makes a policy optimal. Given that, there is no policy I would have tried to have advocated for in this way (even though the land value tax was invented before 1879). The article that I linked you to contains my attempt to lay those theoretical foundations (or the start of it anyway, I haven’t finished it yet).”
Once you have these foundations, you can say things like “I know this policy is optimal, and will continue to be so”.
Enforcing Far-Future Contracts for Governments
Let me start by saying I think I really should have said 50 years instead of 100. That seems to a big sticking point for people.
I haven’t made myself clear. What I’m saying is create a contract to enforce the institution of a law. The government is the signatory, not any particular person. Governments can and do hold by agreements that past governments made, even if they disagree with their predecessors.
Now, sometimes they break those promises, and that’s why I’m talking about creating a binding contract. As in, if you break the contract, a penalty occurs.
For example, let’s say the government issues $1T of a particular financial asset. Those assets are basically inflation-adjusted perpetuities, except upon the institution of the delayed law, they cease to pay out. (Unless the law is instituted before the 50-year period, in which case they only cease to pay out after 50 years so that the perpetuity buyers aren’t swindled.) If the law is not instituted, then they continue to be perpetuities.
Upon selling those “enforcement perpetuities”, the government splits the ownership of land and buildings. So if you own a house, now you own the house itself, as well as a financial asset for the land underneath it. The land asset pays off a cashflow equal to the land value (if you’re taxed $1000 on Jan 1st, the government pays you $1000 on Jan 1st). Now, the money raised from the enforcement perpetuities can be used to buy those land assets from all current landowners.
Maybe you’d call this an incentive mechanism, rather than a contract. Whatever, I’m not a legal expert. Whether that’s the best solution or not, I don’t know. Even if there’s something wrong with the contract I just laid out, I would be shocked if there were not a way to do this. I’m sure there are plenty of creative solutions.
Obviously, that particular solution doesn’t apply to all delayed laws. Different laws will require different solutions. For the voting system problem, make a constitutional amendment requiring a unanimous vote to overturn it.
I’m not a legal expert, but I’m sure we’ve solved the problem of how to create a binding contract.
What’s weird about the laws I’ve suggested?
Depends on domain we’re talking about. The post I linked in the last paragraph will probably answer your question in more detail than you’d ever want, but I’ll answer it briefly here.
I’d very happily back the two examples that I gave. And that’s because we can define reasonable optimality criteria for each of those areas (voting systems and tax policy) and show that our policy proposals satisfy those criteria under some reasonable assumptions.
The key point here is that, for the land value tax, the optimality criteria and the assumptions required are extremely weak, i.e. every person informed on the matter would agree with them.
For the voting system change, there’s actually a proof that you can’t satisfy all the conditions that you probably want for that system (Arrow’s impossibility theorem). So in that example, there could be reasonable debate about which property set we want, but I’d be happy If America changed to any number of proposed voting systems. For an introduction on the topic, see CGP Grey’s video.
This delay strategy is definitely a last resort. If you can implement a good policy today, then do that. But if you face insurmountable road blocks, and you know the policy is optimal (by some reasonable definition), then it may very well be the best option available to you.
As for the 1923 question, I’d say we didn’t have a theoretical foundation for what makes a policy optimal. Given that, there is no policy I would have tried to have advocated for in this way (even though the land value tax was invented before 1879). The article that I linked you to contains my attempt to lay those theoretical foundations (or the start of it anyway, I haven’t finished it yet).
Great post!
I wouldn’t be surprised if a lot of EAs see my takes here as a slippery slope to warm glow thinking and wanton spending that needs to be protected against.
It’s a shame that we have to caveat things like this when we write. Some readers, perversely, see what they don’t want to see and will attack you for it.
Far-Future Commitments as a Policy Consensus Strategy
The Benevolent Ruler’s Handbook (Part 2): Morality Rules
I’m not sure why you think I’m generalising from one example. Sure, I wrote only one example, but this article is not the sum of my knowledge. There are many, many examples of this.
I’ll give you another one. Policymakers in the area of university funding saw that universities were underfunded by about 15%. Their solution? Increase student fees by 15%. At no point did they ask themselves, “Why does funding get out of sync every decade?” Or “How could we design a system of scratch so that this will never be an issue, and so that degrees are always priced appropriately?”
Focusing on fixing the current problem is often an incremental approach. It assumes that if we just tweak the dials a little, the problem is solved. And maybe it is. For a while. And then it stuffs up again. Or maybe it creates new issues, because they weren’t focused on the things they couldn’t yet see. The problem is basically that you can’t polish a turd. And a lot of policy is pure shit. No underlying deductive argument with reasonable assumptions. Just “Oh, this sounds alright” and then they go with it.
The Benevolent Ruler’s Handbook (Part 1): The Policy Problem
I am up, compared to the market, yes.
Yep, down from 4327 at the time of posting, but not down enough for my prediction to be correct.
As far as I can tell, the main issue with my prediction was the Fed moving soooooo slllllooooow to increase interest rates, past the point of utter delusion on their part. Not only does this mean delaying the market crash, it means the dollars in which they are valued were worth less (meaning higher stock prices than they would’ve been with less inflation).
If I’m charitable to myself, I’d say right in direction, wrong in magnitude. And potentially only wrong in time frame, if it does drop below 3029 over the next few years.
But there’s other things I missed, like Russia invading Ukraine. And even if I knew that was likely, I wouldn’t have predicted the West’s massive financial sanction response. But though much of the inflation blame got put onto the war, inflation was high before the invasion. I also should have looked into the past performance of the Fed to see how late to the party they’ve previously been.
I’ve been doing some backtests to get more accurate investment decisions. Will do an update when I’m happy with my methodology.
Again, as I mentioned in my earlier response, ideals don’t have anything to do with the claim. The claim is that countries that call themselves communist make large policy errors more frequently due to heavy-handed policies. The thing you label yourself with provides some information. That information might be contrary to what you want to portray (as in the case of countries with “democratic” in their name), but it’s valid Bayesian information nevertheless.
Changing policy based on different circumstances is certainly part of granularity. It’s granularity with respect to time and circumstance.
Ah well, hoped to bring you over, but I’ll agree to disagree.
For the CCP to declare themselves as “Communist” means they are likely to disregard much granularity that good policy must have
I think this claim has aged pretty well. Do you still disagree with this statement?
In my experience, not enough people on here publically realise their errors and thank the corrector. Nice to see it happen here.
I think private messages are more appropriate for notifying someone about their typos. Cleaning up typos is helpful, but posting it publicly clutters up the comment section.
I don’t think this experiment could prove anything other than “it doesn’t work”. It’s too gameable. Even if it works in the short term, that’s only true for the current population. You’d change the people who join the community in the long run towards people who are willing to game the system.
I see your point about constitutionality, but I think something such as the electoral system falls within its remit, which was my recommendation. But yeah, I would have no problem with extending the uses of the constitution, although I know that others would.
I agree that the financial product is more promising, because of its generality. The interesting thing is that even if they issue the asset with the intention of breaking the promise, they lose basically nothing in net present terms (because those cashflows 50 years into the future are discounted by 1+d to the 50th power). Thus it wouldn’t be a mistake to do it (even while planning to renege). Since it’s equivalent to issuing regular perpetuities in terms of how much money a given debt would raise, it’s outright incorrect to call it a “bomb”. They don’t have to pay $1T all at once at the 50-year mark, it’s just that the present value of the debt will be worth that amount (assuming the same discount rate is the same as it was upon issuance).
Don’t get me wrong, I get that “if you’re explaining you’re losing”. But LessWrong, of all places, should be an area to discuss such ideas, and not have it dismissed out of hand simply because “People are too stupid/lazy/disinterested to get it”. I don’t think we should restrict our posts to 5 words or fewer. I don’t think we should avoid novel ideas. And I don’t think we should avoid politics.
The fact that everyone said Trump had no chance in the 2016 election shows that people basically don’t know what they’re talking about when it comes to political plausibility. No offence meant. I just don’t see any value in such guesses, when they’re so often wrong, and they stifle ideas.