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Quillette -- Universal Basic Income and the Threat of Tyranny by Shai Shapira
'...what would a universal basic income do to the relations between citizens and government. Because when we examine historical trends in politics and economics, we can spot a basic pattern: political rights are strongly correlated with economic participation. Societies where the state economy depends on small inputs from many different citizens tend to give their citizens significantly more rights, including the right of participation in the government itself. Societies where the state economy comes from natural resources, or other sources that require only a small, fixed number of people to defend or maintain them, tend to develop autocratic regimes with little concern for the welfare of their citizens. -- This is far from a new observation. Already in classical Greece, Plato reached the same conclusion about the Greek city-states, though in his time the main factor was military more than economic. He observed that city-states with a military based on hoplites (elite infantry who came from the upper classes of society, mostly through the requirement that they finance the expensive armor and equipment for themselves, meaning poor people could not be included) tend to develop an oligarchic government; city-states whose army was based on warships (which in those days required a great number of rowers, a job which did not require much equipment or training, therefore was available for the lower classes) would develop democracy. -- Similar trends continue wherever we look: European feudalism developed in fertile lands, where mostly independent farmers grew their crops and needed nothing but protection from violence, which they got from their decentralized states, led by weak kings who depended heavily on more and more layers of nobles and professionals who could assert their rights; to the East, meanwhile, the dry lands of Mesopotamia and Egypt required large-scale irrigation projects to cultivate, which could not be done by single families – they depended on the state to create them, and those states developed centralized, absolute monarchies. -- We don’t have to go back to ancient history to see this trend – these days we have many countries in the world whose incomes are based on extracting resources from the ground, requiring little to no participation from the common people. Which countries are functioning democracies, and which are autocracies? The World Bank gives us a list of countries ordered by what percentage of their merchandise exports comes from fuels. At 50% or more we find, in this order: Iraq, Angola, Algeria, Brunei, Kuwait, Azerbaijan, Qatar, Saudi Arabia, Kazakhstan, Russia, Oman, Norway, Colombia, Bolivia and Bahrain. Can we notice a trend? How many of these countries provide a good set of political rights for their citizens? -- This should not be surprising. This pattern is not often discussed, as it conflicts the image we like to have of political rights as being the result of enlightenment and struggle, of the heroes of our past who overthrew despotic regimes and created a better world for everyone. But reality, unfortunately, seems more cynical than that. We do not get our rights because we deserve them, or even because we fight for them – we get our rights because the government needs us. It is a common hope that countries that escape poverty will move on to adopt democracy, and this indeed happened in some notable cases, like South Korea or Taiwan. But South Korea and Taiwan became rich from industry, which means their wealth came from the work of their citizens; meanwhile, Qatar or Angola became rich from natural resources, and their political situation became no better. A country that generates its wealth from its citizens has no choice but to keep those citizens happy, at least to some degree; a country that generates its wealth from oil wells, only needs to keep a handful of mercenaries happy as they guard the access to those wells. -- And this is the real danger of a universal basic income – it makes the citizens unnecessary to the government. In the suggested world of universal basic income, what puts pressure on the government to maintain democracy and political rights? Will they be afraid of a popular uprising? The people have nothing to threaten them with. A person who does not pay taxes cannot threaten to stop paying them. Violent revolution? History shows that governments tend to be significantly better than common people in using violence. All the citizens have left is the good will of the people in power, which can last for one or two generations, but past examples give little reason to be optimistic about long term sustainability. We have no shortage of examples from recent years – how much of the “Arab Spring” was made of people demanding political rights from governments who had no need for them? If tens of thousands of people in an industrial country start an uprising, it can paralyze the national economy and create serious problems for the government. If millions of people start an uprising in an oil state, what can they do? Unless they have support from some external force, as in some examples we have seen in recent years, they will be no more than a nuisance for a heartless regime. We might wish that were not the case, but the world is full of dead protesters and revolutionaries who say otherwise.'
economics  land  statism 
yesterday by adamcrowe
The Spectator -- Why driverless showers are key to the housing crisis by Rory Sutherland
'.. if you believe as I do that the single most important thing for government to do would be to disrupt the property market, thereby reversing some of the monstrous intergenerational and regional iniquities it has created, we need to have more experimentation. Part of the solution will involve building more homes, but this will only work if people are eager to move further afield to inhabit them. -- ... The truth is that the property market is no longer a market in any conventional sense. High prices are more a product of ease of borrowing than actual scarcity. And property has become a strange mixture of a veblen good and a giffen good, where rising prices drive demand up. At a guess, I would say there are half a million people in London who would like to move out — were it not for the fear that, once out, they could never afford to move back.'
economics  land  rent  RorySutherland 
yesterday by adamcrowe
The economist who won the Nobel Prize once asked a question about wine that highlights what most of us don't understand about money
In fact, it's an illustration of how many people confuse two cognitive biases: sunk costs and opportunity costs.A sunk cost is money that you've spent already. It's gone, and nothing you do now is going to change that. You have to write it off. In this case, the $50 you spent to buy the bottle in the first place is a sunk cost.An opportunity cost is the price of choosing one course of action over another — in this case, choosing to drink the bottle instead of selling it for $500, or even keeping it and selling it for more money in the future.
awards  economics 
yesterday by thomas.kochi
The Spectator -- Don’t look for any merit in meritocracy by Rory Sutherland
'...Property owners are to the present day what the National Union of Mineworkers was to the 1970s — a group you cannot challenge on any account. If the policy had referred to assets other than property — shares, say, or stamp collections — nobody would have blinked. But any suggestion that you should surrender some of the value of your home, even after death, is electoral suicide, not helped by the fact that many journalists have parents who own property in the South East. -- ... In understanding why it is so hard to challenge this sense of entitlement, it is enough to know the dominant narrative activity of all successful middle-class English people lies in maintaining a distorted reality field in which their success is attributable entirely to their own virtues rather than to good fortune. ‘I worked hard to buy a five-bedroom house in Clapham for £85,000.’ Yes, I’m sure you did, but people worked hard to buy a three-bedroom house in Oldham, too. Somehow the very people who deride the National Lottery believe, when the entry cost is a mortgage not a quid, it’s a game of skill.' -- Whom the gods would destroy they first obscure rent
economics  land  rent  rentseeking  landlordism  "capitalism"  narcissism  falseself  delusion  RorySutherland 
yesterday by adamcrowe
The Spectator -- Why aspirin should be reassuringly expensive by Rory Sutherland
'...The psychologist Nicholas Humphrey argues that placebos work by prompting the body to invest more of its limited resources in recovery. He believes that evolution has parsimoniously calibrated our immune system for a harsher environment than the current one, so we need to hack our unconscious into believing the conditions for recovery are especially propitious for our immune system to work at full tilt. The ministrations of doctors (witch or NHS), exotic potions (homeopathic or antibiotic), or the caring presence of relatives and friends can all create this benign illusion. -- Yet policymakers hate the idea of any solution which involves such unconscious processes. If you suggested the NHS invested in more elaborate drugs packaging, they’d have conniptions. Too little is spent on researching the placebo effect in proportion to its importance. Why is this? -- Most of our leaders today, in business or government, have been trained to see efficiency as the highest virtue. In this they have been led by economists, who understand nothing except efficiency — and for whom efficiency is an end in itself. -- Yet the human unconscious has evolved in the opposite direction. We instinctively respond to things which are inefficient. Effective placebos have to be rare, costly, foul-tasting or ideally all three. In manners, in art, in friendship (in advertising, too) we are drawn to the unnecessary, the effortful or the extravagant. Hence most of the efforts of business and government go towards creating organisations we just don’t like very much.'
economics  psychology  placebo  expectancy  RorySutherland 
yesterday by adamcrowe
Почему мы кормим Кавказ, Кострому и Чукотку - Финансы - Новости Санкт-Петербурга - Фонтанка.Ру
На дотации регионам в 2018 году федеральный центр планирует потратить 645 миллиардов рублей. Без малого десятую часть всего пакета, 59 миллиардов, получит Дагестан, на втором месте – Якутия с её гигантскими налоговыми доходами, 44 миллиарда. Дальше места в первой пятёрке распределились так: Камчатка – 39 миллиардов, Алтайский край и Чечня – по 27 миллиардов. Из 85 субъектов Федерации двенадцать не получают ничего. Это – доноры: Татарстан, Ханты-Мансийский автономный округ, Ненецкий и Ямало-Ненецкий автономный округа, Ленинградская, Московская, Самарская и Свердловская области, Сахалин, Тюмень, Москва и Санкт-Петербург.
russian  economics 
yesterday by some_hren
Universal Basic Income and the Threat of Tyranny - Quillette
What is not discussed enough, however, are the political implications–what would a universal basic income do to the relations between citizens and government. Because when we examine historical trends in politics and economics, we can spot a basic pattern: political rights are strongly correlated with economic participation. Societies where the state economy depends on small inputs from many different citizens tend to give their citizens significantly more rights, including the right of participation in the government itself. Societies where the state economy comes from natural resources, or other sources that require only a small, fixed number of people to defend or maintain them, tend to develop autocratic regimes with little concern for the welfare of their citizens.
economy  economics  government  money  work  state  parecon 
yesterday by msszczep
[1709.02015] The microstructure of high frequency markets
We present a novel approach to describing the microstructure of high frequency trading using two key elements. First we introduce a new notion of informed trader which we starkly contrast to current informed trader models. We describe the exact nature of the `superior information' high frequency traders have access to, and how these agents differ from the more standard `insider traders' described in past papers. This then leads to a model and an empirical analysis of the data which strongly supports our claims. The second key element is a rigorous description of clearing conditions on a limit order book and how to derive correct formulas for such a market. From a theoretical point of view, this allows the exact identification of two frictions in the market, one of which is intimately linked to our notion of `superior information'. Empirically, we show that ignoring these frictions can misrepresent the wealth exchanged on the market by 50%. Finally, we showcase two applications of our approach: we measure the profits made by high frequency traders on NASDAQ and re-visit the standard Black - Scholes model to determine how trading frictions alter the delta-hedging strategy.
financial-engineering  planning  trading  agent-based  economics  horse-races  rather-interesting  nudge-targets  consider:looking-to-see  consider:rediscovery 
yesterday by Vaguery
The Spectator -- A better way to be charitable: just give money by Rory Sutherland
'...In short, sends your money via mobile phone to really poor people. That’s it. No Land Cruisers, no degrees in development studies, no distorting the local economy by causing ambitious Kenyans to study sociology for three years in the hope of landing a job with an aid agency. Having identified someone who is inarguably very poor, it sends them large payments every month for a year — totalling $1,000, effectively doubling their income. The money is sent directly using the mobile phone payment systems, which are, fascinatingly, far more advanced in Kenya or Uganda than here. -- At this point, you’re probably thinking, ‘But can it really be that simple?’ Well, here’s the odd thing: it seems that direct cash transfer really works. There is very little opportunity to game the system — because there is not much system to game. Moreover, all the research shows that for years after people receive this year-long influx of funds, they earn more, own more, work more and are substantially happier. -- Two things seem to be significant about this. One is that the money is given unconditionally — trusting that individuals rather than outside experts know what’s needed to improve their lives. The second is that the money is paid in large lump sums, but for a limited time. Conventional wisdom suggest that poor people given lump sums simply spend it all in some massive binge. All the evidence so far suggests the opposite is true. Most of us, after all, are both stingier and more far-sighted with windfalls than with our day-to-day salaries. Why should Ugandans be any different? -- If it really is so simple, why did we not discover it before? One scary possibility presents itself. Quite simply, because many people like performing jobs that are visibly charitable and altruistic, might they overcomplicate solutions through the unconscious urge to play a heroic role in achieving them?' -- For every Rescuer, a Victim.
economics  charity  altruism  pathologicalaltruism  victimhood  RorySutherland 
yesterday by adamcrowe
UK public finance: councils build a credit bubble
property speculation esp in shopping centres, and also incipient financial market ventures (see also Lazzarato's eye-watering figure on french local government).
local  local_government  economics  finance  financialization  property  ft 
yesterday by diasyrmus
How to Build Self-Conscious Artificial Intelligence | WIRED
Very good.


“Perhaps the best thing to come from AI research isn’t an understanding of computers, but rather an understanding of ourselves. The challenges we face in building machines that think highlight the various little miracles of our own biochemical goo. They also highlight our deficiencies. To replicate ourselves, we have to first embrace both the miracles and the foibles.”


“The third component is a bit more unusual, and I don’t know why anyone would build one except to reproduce evolution’s botched mess. This final component is a separate part of the machine that observes the rest of its body and makes up stories about what it’s doing—stories that are usually wrong.”


“Sue guessing what Juan is thinking is known as First Order Theory of Mind. It gets more complex. Sue might also be curious about what Juan thinks of her. This is Second Order Theory of Mind, and it is the root of most of our neuroses and perseverate thinking. “Does Juan think I’m smart?” “Does Juan like me?” “Does Juan wish me harm?” “Is Juan in a good or bad mood because of something I did?”

Questions like these should sound very, very familiar. We fill our days with them. And that’s just the beginning.

Third Order Theory of Mind would be for Sue to wonder what Juan thinks Josette thinks about Tom. More simply, does Tom know Josette is into him? Or Sue might wonder what Josette thinks Juan thinks about Sue. Is Josette jealous, in other words? This starts to sound confusing, the listing of several names and all the “thinking about” thrown in there like glue, but this is what we preoccupy our minds with more than any other conscious-level sort of thinking. We hardly stop doing it. We might call it gossip, or socializing, but our brains consider this their main duty—their primary function. There is speculation that Theory of Mind, and not tool use, is the reason for the relative size of our brains in the first place.”

tech  ai  technology  economics  robots  how_we_live 
yesterday by alexpriest
Nobel winner Richard Thaler explains the bizarre decision Americans make when gas prices plummet
In his 2015 book “Misbehaving,” Thaler outlined a particularly elucidating example of how regular people make decisions that differ from what many in the economics field assume an “Econ” — that is, someone who always acts to maximize their economic potential — would behave.And it requires us to simply look at the household budget.Thaler highlights a study conducted by economists Justine Hastings and Jesse Shapiro, which, Thaler writes, “offers the most rigorous demonstration of the effects of mental budgeting to date.” Mental budgeting is the idea that we all have spending “buckets” which we treat as more or less immutable.During the onset of the financial crisis in 2008, the price of gas went from about $4 a gallon to about $2. Using data from a grocery store chain that also sells gas, Hastings and Shapiro tracked where this money saved on gasoline went.The answer: gasoline.“The question Hastings and Shapiro investigated is what happens to the choice of regular versus premium gasoline when the price of gasoline changes,” Thaler writes. Economists would largely assume that this savings would be allocated to other areas of the household budget or saved for a rainy day.Except this is not what happened.“The shift toward higher grades of gasoline was fourteen times greater than would be expected in a world in which money is treated as fungible,” Thaler writes. “Further supporting the mental accounting interpretation of the results, the authors found that there was no tendency for families to upgrade the quality of two other items sold at the grocery stores, milk and orange juice.”
yesterday by thomas.kochi

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