8 ms·

Here's a weird, slightly roundabout analogy I like to use. The premise of the paperclip maximizer thought experiment is as follows: suppose you program a (suff

Here's a weird, slightly roundabout analogy I like to use. The premise of the paperclip maximizer thought experiment is as follows: suppose you program a (sufficiently advanced) robot to maximize the number of paperclips. It might start by -- reasonably -- collecting all the paperclips it could find, and bringing them to you. But after it does that, it might also realize that it could convert other things into paperclips — things like raw metal, other machines, and the atoms in the human body. Basically, the paperclip robot says "maximize the number of paperclips at all costs." The corporation says "maximize shareholder value at all costs." How can you be sure that the goals you've programmed into a sufficiently-complex system are actually beneficial to the people using the system?

marcosdumay 8y ago
As long as you keep wealth disparity under control, make sure people don't get stuck in poverty, correctly tax externalities, enforce honest marketing, and deal with a lot of other small details, shareholder value maximization is nearly optimal in being beneficial to the people using the system. As a bonus, it also creates a nice incentive for saving and investing into the future. What is hard to achieve on most systems.
- elvinyung 8y ago
  Yes, as long as... I totally agree that checks and balances -- in the abstract, some form of all-to-all coordination between the different components of the system -- are probably the easiest way to healthcheck any system like this. Otherwise you fall into "multipolar traps" [1] where each actor, working independently and acting game-theoretically optimally, can throw the system into undesirable states. Checks and balances should be implemented. But is this adequately true in the actually-existing implementation of the system? [1] https://slatestarcodex.com/2014/07/30/meditations-on-moloch/ https://slatestarcodex.com/2014/07/30/meditations-on-moloch/
  - chii 8y ago
    > Otherwise you fall into "multipolar traps" [1] where each actor, working independently and acting game-theoretically optimally, can throw the system into undesirable states. how does the natural ecosystem balance itself? I think that as long as each actor has enough degrees of freedom to exploit any loophole in any other actor, the system will self balance (by which, i mean become stable).
    - elvinyung 8y ago
      Actually, the idea that the nature is in balance seems to be discredited. It is basically either no more than a myth [1], poorly defined [2], or untrue in the traditional conceptualizations [3]. [1] https://press.princeton.edu/titles/8853.html https://press.princeton.edu/titles/8853.html [2] http://www.wcbbf.org/pdf/balanceofnature/8.pdf http://www.wcbbf.org/pdf/balanceofnature/8.pdf [3] https://journals.sagepub.com/doi/abs/10.1177/0963662505063022 https://journals.sagepub.com/doi/abs/10.1177/096366250506302...
- jtolmar 8y ago
  Shareholders and keeping wealth disparity under control are at odds. As long as people are able to buy investments and own the profits of those investments, those people are paid proportionate to how much money they have, making their wealth over time an exponential function, which is inherently unequal even to other exponential functions with slightly different rates of return, and even more unequal to anyone stuck making money linearly by selling their labor. I'd love to hear a good solution for this within a market system.
  - bendbro 8y ago
    For a good solution within a market system: kill everyone but myself and a small harem. Now there is a perfect market of one and all resources are optimally directed to me
  - skookumchuck 8y ago
    > I'd love to hear a good solution for this within a market system. Your wealth won't expand forever, because we all die.
    - elvinyung 8y ago
      Wealth and power still get concentrated in families and corporations. I would argue that these are just as valid "agents" as the individual.
      - skookumchuck 8y ago
        Families tend to dissipate wealth. The Rockefellers have long since dropped away in wealth, for example. So have the Kennedys. Corporations are owned by shareholders, who die and pass their wealth on to the government, family, and various charities.
  - closeparen 8y ago
    This should be easy to check: do today’s wealthy people generally owe their fortune to investing their parents’ money? My understanding is that upper-middle-class fortunes today are attributed more to cultural norms and posh school districts than to trust funds.
- jopsen 8y ago
  Lol, I would wager that shareholder value maximization is far from "optimal"! In the face of poor human judgement it might be one of the more robust resource allocation schemes available to us. But optimality should never be claimed without proof.
closeparen 8y ago
>How can you be sure that the goals you've programmed into a sufficiently-complex system are actually beneficial to the people using the system? An impossible task indeed. That's the great thing about a market. The system designer doesn't have to understand what "actually beneficial" means, and participants don't have to take their word for it. People don't sign over value to companies unless they value what they're getting in return.
- miketery 8y ago
  While good in principal and as good as we can get today, we need to be aware of it's flaws. In particular, that certain stakeholders can manipulate, or have outsized influence on the market, as a result the system no longer operates as efficiently as it could, it begins to atrophy more or less. I guess this is why we hold on dearly to principals of liberty and freedom. To ensure that proper feedback mechanisms exist to keep an honest system. Edit: and rule of law. Especially application of said law without preferential treatment.
- elvinyung 8y ago
  What is your measure of "good"? Are you putting the people before the system, or the system before the people?
- mrow84 8y ago
  My wife's sister is a paediatric oncologist in India. People come to her when their kids get sick, and she does her analysis and gives them a diagnosis, which might be that there is a fairly high probability that their child is going to die. Sometimes people go away and get Ayurvedic "treatments" for their child's cancer, which claims an efficacy of 100%. After those "treatments" have failed, the parents return, now with children who were much more sick than before, and often when there is nothing that can be done, and so they end up watching their children die. All of which to illustrate why even though this statement: > People don't sign over value to companies unless they value what they're getting in return. reads as convincing, when taken in isolation, it actually says very little when held up against the harsh light of reality. Optimising towards a stupid goal is still stupid.
_bxg1 8y ago
This is why regulation is necessary for capitalistic organizations to have a net positive effect on society. Companies are fantastic at maximizing profits (through productivity and efficiency), but that's far too simplistic a goal to not become destructive at some point. Regulation by the government - the representative of the actual society, instead of just a handful of shareholders - channels the raw energy of capitalism towards the good of society through incentives and penalties (against companies' profits, their sole motivators). Otherwise corporations are just a bunch of really big dogs chasing cars, leaving destruction in their wake.
- anticensor 8y ago
  > companies' profits, their sole motivators Their primary motivators. You cannot profit in exchange for nothing. It is always profit/loss in exchange for a particular business.

marcosdumay 8y ago

As long as you keep wealth disparity under control, make sure people don't get stuck in poverty, correctly tax externalities, enforce honest marketing, and deal with a lot of other small details, shareholder value maximization is nearly optimal in being beneficial to the people using the system. As a bonus, it also creates a nice incentive for saving and investing into the future. What is hard to achieve on most systems.

elvinyung 8y ago
Yes, as long as... I totally agree that checks and balances -- in the abstract, some form of all-to-all coordination between the different components of the system -- are probably the easiest way to healthcheck any system like this. Otherwise you fall into "multipolar traps" [1] where each actor, working independently and acting game-theoretically optimally, can throw the system into undesirable states. Checks and balances should be implemented. But is this adequately true in the actually-existing implementation of the system? [1] https://slatestarcodex.com/2014/07/30/meditations-on-moloch/ https://slatestarcodex.com/2014/07/30/meditations-on-moloch/
- chii 8y ago
  > Otherwise you fall into "multipolar traps" [1] where each actor, working independently and acting game-theoretically optimally, can throw the system into undesirable states. how does the natural ecosystem balance itself? I think that as long as each actor has enough degrees of freedom to exploit any loophole in any other actor, the system will self balance (by which, i mean become stable).
  - elvinyung 8y ago
    Actually, the idea that the nature is in balance seems to be discredited. It is basically either no more than a myth [1], poorly defined [2], or untrue in the traditional conceptualizations [3]. [1] https://press.princeton.edu/titles/8853.html https://press.princeton.edu/titles/8853.html [2] http://www.wcbbf.org/pdf/balanceofnature/8.pdf http://www.wcbbf.org/pdf/balanceofnature/8.pdf [3] https://journals.sagepub.com/doi/abs/10.1177/0963662505063022 https://journals.sagepub.com/doi/abs/10.1177/096366250506302...
jtolmar 8y ago
Shareholders and keeping wealth disparity under control are at odds. As long as people are able to buy investments and own the profits of those investments, those people are paid proportionate to how much money they have, making their wealth over time an exponential function, which is inherently unequal even to other exponential functions with slightly different rates of return, and even more unequal to anyone stuck making money linearly by selling their labor. I'd love to hear a good solution for this within a market system.
- bendbro 8y ago
  For a good solution within a market system: kill everyone but myself and a small harem. Now there is a perfect market of one and all resources are optimally directed to me
- skookumchuck 8y ago
  > I'd love to hear a good solution for this within a market system. Your wealth won't expand forever, because we all die.
  - elvinyung 8y ago
    Wealth and power still get concentrated in families and corporations. I would argue that these are just as valid "agents" as the individual.
    - skookumchuck 8y ago
      Families tend to dissipate wealth. The Rockefellers have long since dropped away in wealth, for example. So have the Kennedys. Corporations are owned by shareholders, who die and pass their wealth on to the government, family, and various charities.
- closeparen 8y ago
  This should be easy to check: do today’s wealthy people generally owe their fortune to investing their parents’ money? My understanding is that upper-middle-class fortunes today are attributed more to cultural norms and posh school districts than to trust funds.
jopsen 8y ago
Lol, I would wager that shareholder value maximization is far from "optimal"! In the face of poor human judgement it might be one of the more robust resource allocation schemes available to us. But optimality should never be claimed without proof.

closeparen 8y ago

>How can you be sure that the goals you've programmed into a sufficiently-complex system are actually beneficial to the people using the system? An impossible task indeed. That's the great thing about a market. The system designer doesn't have to understand what "actually beneficial" means, and participants don't have to take their word for it. People don't sign over value to companies unless they value what they're getting in return.

miketery 8y ago
While good in principal and as good as we can get today, we need to be aware of it's flaws. In particular, that certain stakeholders can manipulate, or have outsized influence on the market, as a result the system no longer operates as efficiently as it could, it begins to atrophy more or less. I guess this is why we hold on dearly to principals of liberty and freedom. To ensure that proper feedback mechanisms exist to keep an honest system. Edit: and rule of law. Especially application of said law without preferential treatment.
elvinyung 8y ago
What is your measure of "good"? Are you putting the people before the system, or the system before the people?
mrow84 8y ago
My wife's sister is a paediatric oncologist in India. People come to her when their kids get sick, and she does her analysis and gives them a diagnosis, which might be that there is a fairly high probability that their child is going to die. Sometimes people go away and get Ayurvedic "treatments" for their child's cancer, which claims an efficacy of 100%. After those "treatments" have failed, the parents return, now with children who were much more sick than before, and often when there is nothing that can be done, and so they end up watching their children die. All of which to illustrate why even though this statement: > People don't sign over value to companies unless they value what they're getting in return. reads as convincing, when taken in isolation, it actually says very little when held up against the harsh light of reality. Optimising towards a stupid goal is still stupid.

_bxg1 8y ago

This is why regulation is necessary for capitalistic organizations to have a net positive effect on society. Companies are fantastic at maximizing profits (through productivity and efficiency), but that's far too simplistic a goal to not become destructive at some point. Regulation by the government - the representative of the actual society, instead of just a handful of shareholders - channels the raw energy of capitalism towards the good of society through incentives and penalties (against companies' profits, their sole motivators). Otherwise corporations are just a bunch of really big dogs chasing cars, leaving destruction in their wake.

anticensor 8y ago
> companies' profits, their sole motivators Their primary motivators. You cannot profit in exchange for nothing. It is always profit/loss in exchange for a particular business.