The first Seasteading conference went rather well. It got a good turnout of intelligent people, in spite of being on a weekday (they didn’t plan far enough ahead to find a good weekend spot).
I was somewhat disappointed by the time spent on the basic motivations behind seasteading (do people come to this kind of conference without understanding the motivations?), and I wanted to focus more on a serious analysis of how close the business plans are to being a good investment.
One interesting idea that was briefly mentioned is unmanned farms, herded by small robotic boats. If you’re willing to lose farms to an occasional storm, that drastically cuts costs. But when I imagine the cheapest possible farms, it seems the plants would get significant salt spray, which drastically limits the types of crops which will thrive.
The most interesting subject was Ephemerisle. Before the conference I had been wondering whether it would be interesting enough that I would want to attend. The conference convinced me that it will attract the kind of people I like, and that there will be some interesting technical challenges. Since my very rusty knowledge of sailing seems to leave me better informed than most seasteaders about some of those challenges, I will want to provide some help with the planning. It’s still too poorly thought out for me to feel confident that it will be done safely, but it can probably be planned well enough to be safe under most conditions (and hopefully people will be prepared to cancel it if unusual winds make it look unsafe).
The location seems very uncertain, and will have some important impacts on the risks. During the conference, the tentative plan seemed to be a few miles of the southern California coast, but afterward I got some indications that the plan had changed to the San Francisco bay, which would be a good deal easier but which would do less to promote any long-term vision.
Politics
To deter any suspicion that the comparisons I plan to make between Intrade’s predictions and polls are comparisons I selected to make Intrade look good, I’m announcing now that I intend to use FiveThirtyEight.com as the primary poll aggregator. I intend to pay attention to predictions that are more long-term than I focused in 2004, so the comparison I’ll attach the most importance to will be based on the first snapshot I took of FiveThirtyEight.com’s state by state projections, which was on July 24.
Also, as of last week, one of the Presidential Decision Markets that I’m subsidizing, DEM.PRES-OIL.FUTURES, has attracted enough trading (I suspect from one large trader) to make me reasonably confident that it’s showing the effects of trader opinion rather than the effects of my automated market maker (saying that oil futures will drop if the Democratic candidate wins, and rise if he loses).
Book Review: Let Their People Come: Breaking the Gridlock on Global Labor Mobility by Lant Pritchett.
This book is primarily written for economists and academics in related fields, but most of it can be understood by an average person.
I was a little hesitant to read this book because I suspected it would do little more than reinforce my existing beliefs. There were certainly parts of the book that I would have been better off skipping for that reason.
But one important effect of the book was to convince me that the effects on the poor of migration to wealthier countries is so large compared to things like “foreign aid” and free trade that anyone trying to help the poor by influencing government policies shouldn’t spend any time thinking about how to improve “foreign aid” or trade barriers.
I’ve long been wondering how to respond to remarks such as Jimmy Carter’s ‘We are the stingiest nation of all’ based the U.S.’s low “foreign aid” to GDP ratio. Pointing out that “foreign aid” is mostly wasted or even harmful requires too much analysis of lots of not-too-strong evidence. Pritchett shows that the wealth affects of allowing the poor to work in rich countries should dominate any measure of how those rich countries treat the poor. By that measure, adjusting for country size, the U.S. ranks better than countries in the EU, but is embarrassingly callous compared to the United Arab Emirates, Kuwait, and Jordan.
The book addresses both moral and selfish arguments for restricting immigration. It treats the selfish arguments (even those based on myths) as problems that can’t be overcome, but which can be reduced via compromises. These pragmatic parts of the book are too ordinary to be worth much.
The sections about moral arguments are more powerful. He clearly demonstrates a large blind spot in the moral vision of those who think they’re opposed to all discrimination but who aren’t offended by discrimination on the basis of the nationality a person was assigned at birth. But he exaggerates when he claims that nationality is the only exception to a widely agreed on outrage at discrimination based on “condition of birth”. Discrimination based on date of birth still gets wide support (e.g. the drinking age). And if you’re born as a conjoined twin, don’t expect much protection from surgery that looks about as moral as brain surgery designed to cure a child’s homosexuality should.
Perhaps this book is one small step toward creating a movement with a slogan such as “Tear down that kinder, gentler Berlin wall!”.
This post is a response to a challenge on Overcoming Bias to spend $10 trillion sensibly.
Here’s my proposed allocation (spending to be spread out over 10-20 years):
- $5 trillion on drug patent buyouts and prizes for new drugs put in the public domain, with the prizes mostly allocated in proportion to the quality adjusted life years attributable to the drug.
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$1 trillion on establishing a few dozen separate clusters of seasteads and on facilitating migration of people from poor/oppressive countries by rewarding jurisdictions in proportion to the number of immigrants they accept from poorer / less free regions. (I’m guessing that most of those rewards will go to seasteads, many of which will be created by other people partly in hopes of getting some of these rewards).
This would also have a side affect of significantly reducing the harm that humans might experience due to global warming or an ice age, since ocean climates have less extreme temperatures, seasteads will probably not depend on rainfall to grow food, and can move somewhat to locations with better temperatures. - $1 trillion on improving political systems, mostly through prizes that bear some resemblance to The Mo Ibrahim Prize for Achievement in African Leadership (but not limited to democratically elected leaders and not limited to Africa). If the top 100 or so politicians in about 100 countries are eligible, I could set the average reward at about $100 million per person. Of course, nowhere near all of them will qualify, so a fair amount will be left over for those not yet in office.
- $0.5 trillion on subsidizing trading on prediction markets that are designed to enable futarchy. This level of subsidy is far enough from anything that has been tried that there’s no way to guess whether this is a wasteful level.
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$1 trillion existential risks
Some unknown fraction of this would go to persuading people not to work on AGI without providing arguments that they will produce a safe goal system for any AI they create. Once I’m satisfied that the risks associated with AI are under control, much of the remaining money will go toward establishing societies in the asteroid belt and then outside the solar system. - $0.5 trillion on communications / computing hardware for everyone who can’t currently afford that.
- $1 trillion I’d save for ideas I think of later.
I’m not counting a bunch of other projects that would use up less than $100 billion since they’re small enough to fit in the rounding errors of the ones I’ve counted (the Methuselah Mouse prize, desalinization and other water purification technologies, developing nanotech, preparing for the risks of nanotech, uploading, cryonics, nature preserves, etc).
Cultural Difference
From a book called Apples are from Kazakhstan, a conversation in which the author reacts to a trendy Almaty restaurant’s nostalgic depiction of Lenin and Stalin:
“It’s inconceivable to think of a Nazi beer cellar in Berlin hung with swastikas, with the waiters dressed up as SS officers handing out postcards of Goebbels, and a bust of ‘Uncle Adolf’ in the corner.”
“They don’t have a place like that?” my friend asked
Book review: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang.
This book attacks orthodoxies of the World Bank, IMF, WTO, neo-liberal economists, free-market economists, and pundits such as Thomas Friedman. Chang often implies that they all share a common orthodoxy, but the ideas he attacks are usually questioned by some of those groups.
His criticisms of the World Bank, IMF, and WTO are often correct, but it shouldn’t be surprising that they serve goals that don’t coincide with needs of developing countries.
His most important argument is a defense of mercantilist protection of infant industries. He shows that the evidence on the effects of tariffs is sufficiently mixed that his selective use of examples can give the impression that he has shown tariffs promote economic growth in developing countries. He makes claims of the form “X would have failed without protection”, but doesn’t say why his ability to predict failure is more reliable than other alleged experts (e.g. MITI’s belief that Honda would fail in the auto business). This provoked me into searching for more complete tests of the effects of tariffs. The evidence I found confirms that his confidence that tariffs work is foolish, but I was surprised to find that the evidence is too unclear to provide a guide to policy decision.
Chang has a good argument that the common orthodoxy about comparative advantage is a less conclusive reason for removing tariffs than it appears. But his attempts to describe a mechanism by which tariffs can be beneficial are naive. He talks about government protecting infant industries the way a parent protects a child, without any analysis of the political forces which cause governments to protect entrenched declining industries at the expense of less politically powerful startups.
He gives only vague hints about how to distinguish the tariffs he thinks are good from bad tariffs. I’ll offer a suggestion: any tariff that is designed to meet his notion of a good tariff should be set by statute to decrease to zero over a period of about a decade and never be reinstated for an industry to which they’ve been applied under this statute.
His complaints about privatizing state-owned enterprises contain some valid points. I wish people didn’t assume government and stockholder control are the only available choices. Having governments spin off enterprises as nonprofits would sometimes (often?) be a better option.
His comments about how patents and copyright affect developing countries are mostly correct. But he underestimates our dependence on drug patents when he implies that the 57% of drug research funding that comes from not-for-profit sources means we could get 57% of the results without commercial funding. A drug startup that will go broke if it doesn’t produce something valuable does different work than someone whose success comes from publishing papers.
Chang’s modest suggestions for patent reform would provide much less improvement than ideas I’ve found by reading free-market economists (e.g. prizes instead of patents, or Kremer’s patent buyout proposal).
His comments about inflation assume that it produces some benefits, but he shows no awareness of the economic literature which disputes that assumption.
He has plausible hypotheses that increasing market forces might cause an increase in corruption in some countries. I see no easy way to estimate the size of these effects.
His arguments that cultures change in response to economic change more than most people realize are strong enough to lower my opinion of Fukuyama’s book Trust (Fukuyama seems unaware that the German current high-trust culture is very different from a century ago when they had a reputation for dishonesty). But Chang exaggerates a lot when he says immigrants from poor countries working much harder in rich countries proves that work habits result from economic conditions rather than culture – those immigrants are unlikely to be typical of the culture they came from.
When I first heard and read about Seasteading, I thought it was mostly well thought out, but that it hadn’t reached its goal of providing a business plan that would support a small group of non-wealthy people to set up the first seastead in international waters.
Now Peter Thiel has donated $500,000 to fund a new organization called The Seasteading Institute. My intuition is that it will take somewhere between $2 million and $20 million of charitable contributions to reach the threshold of resources needed for a seastead to become viable in international waters. But the first big donation is typically harder for a nonprofit to get than subsequent donations, and the size of this initial donation (with only a rudimentary organization) suggests that there’s a good chance that more money can be raised once more specific plans are developed and more people indicate commitments to implement them.
Book review: The Age of Turbulence: Adventures in a New World by Alan Greenspan.
The first half of this book provides a decent history of the past 40 years, with a few special insights such as descriptions of how most presidents in that period worked (he’s one of the least partisan people to have worked with most of them). The second half is a discussion of economics of rather mixed quality (both in terms of wisdom and ability to put the reader to sleep).
He comes across as a rather ordinary person whose private thoughts are little more interesting that his congressional testimony.
One of the strangest sections describes the problems he worried would result from a projected paydown of all federal government debt. He does claim to have been careful not to forget the possibility those forecasts could be mistaken. But his failure to mention ways that forecasts of Social Security deficits could be way off suggests he hasn’t learned much from that mistake.
He mentions a “conundrum” of falling long-term interest rates in 2004-2005, when he had expected that rising short-term rates would push up long-term rates. I find his main explanation rather weak (it involves technology induced job insecurity leading to lower inflation expectations). But he then goes on to describe a better explanation (but is vague about whether he believes it explains the conundrum): the massive savings increase caused largely by rapid growth in China. I suspect this is a powerful enough force that Deng Xiaoping deserves more credit than Greenspan for the results that inspired the label Maestro.
The book is often more notable for what it evades than what it says. It says nothing about his inflationary policies in 2003-2004 or his favorable comments about ARMs and how they contributed to the housing bubble.
He gives a brief explanation of how Ayn Rand converted him to an Objectivist by pointing out a flaw in his existing worldview, but he is vague about his drift away from Objectivism. His description of the 1995 government “shutdown” as a crisis is fairly strong evidence of a non-Randian worldview, but mostly he tries to avoid controversies between libertarianism and the policies of politicians he likes.
He often praises markets’ abilities to signal valuable information, yet when claiming that the invasion of Iraq was “about oil”, he neglects to mention the relevant market prices. Those prices appear to discredit his position (see Leigh, Wolfers and Zitzewitz’ paper What do Financial Markets Think of War in Iraq?).
He argues against new hedge fund regulations on the grounds that hedge funds change their positions faster than regulators can react. He is right about the regulations that he imagines, but it’s unfortunate that he stops there. The biggest financial problems involve positions that can’t be liquidated in a few weeks. It seem like it ought to be possible for accounting standards to provide better ways for institutions to communicate to their investors how leveraged they are and how sensitive their equity is to changes in important economic variables.
He argues against using econometric models to set Fed policy, citing real problems with measuring things like NAIRU and GDP, but if he was really interested in scientifically optimizing Fed policy, why didn’t he try to create models based on more relevant and timelier data (such as from the ISM?) the way he did when he had a job that depended on providing business with useful measures? Maybe he couldn’t have become Fed chairman if he had that kind of desire.
I listened to the cd version of this book because I got it as a present and listening to it while driving had essentially no cost. I wouldn’t have bought it or read the dead tree version.
Since mideast military policy appears to be one of the most important issues in this presidential campaign, I’m mentioning the best criticisms I’ve seen of the leading candidates’ plans:
Obama Imitates Olmert points out the problems with expecting air power to help the U.S. retain some control over Iraq (i.e. if Obama will withdraw troops from Iraq, he ought to give up hope of influencing whatever violence is left behind).
The amount of money that the U.S. has apparently needed to pay the enemy to stop fighting raises serious doubts about McCain’s hope that Iraq is being stabilized in any sustainable way (HT David Brin).
Sen. John Barrasso (R-WY) has introduced a bill to create prizes for carbon sequestration:
This is how it would work. There would be four different levels of prizes. The first level award would go to the public or private entity that could first demonstrate a design for a successful technology that could remove and permanently sequester greenhouse gases. Second, there would be a prize for a lab scale demonstration project of the technology that accomplishes the same thing. Third, there would be an award for demonstrating the technology to remove and permanently sequester greenhouse gases that is operational at a larger, working model scale. Finally, there would be an award for whoever could demonstrate the technology to remove and permanently sequester greenhouse gases on a commercially viable scale.
It sounds like many important details would be decided by a federal commission. The prizes could have many of the promises and drawbacks of Virgin Earth Challenge.
The first three levels of the prizes appear to create incentives to create designs with little regard for commercial feasibility. If those prizes are large, they might end up rewarding technologies that are too expensive to be worth using. Small prizes might have little trouble with this due to inventors not wanting to spend much money to win the prizes, but I’d still have concerns about inventors paying little attention to reliability and maintenance costs. The fourth level appears more promising.
Bureaucrats are likely to put more effort into clarifying prize rules that the Virgin Earth group did. But it’s unclear whether any approaches that a government agency is likely to recommend will do a decent job of translating the “commercially viable” goal into a clear enough set of rules that inventors will be able to predict how the prizes will be awarded.
My advice for the commission, should it be created, is that it tie the prizes to actual amounts of carbon removed from the atmosphere over some pre-specified period, or to estimates of those amounts derived from a prediction market.
(HT Jim Manzi).