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In the example in the article, many more people did contribute to the lead pipes (100 people vs. 10 for the art museum). And they still get only a fraction of t

In the example in the article, many more people did contribute to the lead pipes (100 people vs. 10 for the art museum). And they still get only a fraction of the funding that the art museum gets. Agree, coordination is a larger threat to QF. But this issue has been discussed extensively. In this article I wanted to point out all the other assumptions behind QF and what happens when they don't hold.

sokoloff 1y ago
But they got 99 shares of government contribution for each share they put up for a 100x multiplier while the art patrons got 9 shares of government contribution for a 10x multiplier. Setting aside the emotional content and looking only at the math, it’s not at all obvious to me that the project with 100 donors was somehow shorted.
- spencerflem 1y ago
  Many people would consider fixing pipes a more important project despite the fact that the wealthy contributors could front a lot more cash for their pick.
  - sokoloff 1y ago
    Great. Now, suppose the 10 wealthy people are in favor of the pipes project and the 100 average people are in favor of an art museum. Is the art museum or the pipes project more important?
    - spencerflem 1y ago
      You're missing the point, which is that the group with a lot more money to start have their voices heard more. It matters some that their multiplier is different , but in absolute numbers its still more to the program that benefits fewer people. The "utility function" is not accurate because the wealthy's utility starts out with a massive advantage. So yes, I think it would still be unfair if you switched it given the poor majority genuinely would rather have art than lead free pipes. The problem is that their voices are counted less due to not starting with money. But regardless, that would be a silly thing to switch because that's not a situation that ever comes up, while the original framing is a genuine problem in our society right now.
      - sokoloff 1y ago
        Yes, money has utility. That should be unsurprising to everyone. This proposal's pairing of hypothetical projects levels the playing field by a factor of 10 versus the starting point. That seems like a pretty good improvement over the purely monetary starting point. If your objection is that government can't work this way, because some projects need to be done for the benefit of people who literally cannot even contribute so much as a penny, while other projects are optional, then I'll agree with you. It means that this funding mechanism is fundamentally flawed in regards to required projects. But if you want to augment government spending with private contributions for certain public-private partnership projects, this might be a good way to allocate government matching funds for these optional projects. You can't treat a lead pipe replacement project as an optional project (the responsible government or utility just has to do it), but if you wanted to trade off funds towards a skate park versus towards an art museum, this process seems better than a straight matching funds percentage process. Or, if you want to have no partnership projects and use existing government mechanisms exclusively, that also avoids this problem.
        spencerflem 1y ago
        The point is that its not socially optimal. The socially optimal solution would optimize global utility, as in it would not be influenced by the starting wealth of each person. If you allow starting wealth to influence things, their needs will be optimized for more at the expense of people who do not. Yes, that goes against the idea that "money has utility" but the point the article was making was that its not socially optimal anymore not that is regressive compared to whatever other strategy, like straight matching funds. There's no math claim that straight matching funds is optimal either. I think maybe we're speaking past eachother? Because yea totally I'd rather there be a multiplier based on the # of people than not given either that or a straight match. And your other options sound good too: "always fix non-optional things" and "do things democraticly (so 1 person 1 vote, not 1 dollar)" But the article is making a very specific point about a claim of QF being mathematically socially optimal that isn't being met.
        sokoloff 1y ago
- sdenton4 1y ago
  A core problem of capitalism is that it only solves the problems of people with money... This is more of the same. Consider that any of those 100 people might have a kid who would be the next Einstein, if only they hadn't been lead-poisoned. But these hundred people also have rent to pay and food to buy, and can only set aside $100 to deal with the lead-pipes problem. The existing distribution of wealth is not a good measure of the importance of the problems that these different individuals are experiencing. And the existing distribution of wealth is thus not a great way to prioritize solving problems for maximum societal benefit.
- jwarden 1y ago
  Yes good point. We'd have to actually flesh out the assumptions about marginal utility of wealth for low-income vs. the high-income group (as well as assumptions about individual utility functions), to demonstrate that this outcome was not optimal. I didn't do that in this article because it gets too mathy. However, the optimality of QF does assume wealth equality. When you drop that assumption and assume diminishing marginal utility of wealth, you can show that QF is not optimal. But I think you are right that the example in this article doesn't necessarily show that clearly. The example leans heavily on intuition (or emotional appeal). I think I will try to improve that section.
gs17 1y ago
But do we know the "ideal" funding values for the pipes and museum (and if we can, then why not use that)? It's only really "unfair" if we know that the pipes "deserve" a disproportionately larger multiplier. If the pipes deserve to be funded regardless of contributions (and they probably do), then the issue is using a system that could possibly fail to provide for them in the first place. It's not a good way to allocate funds, but I don't think it's a slam dunk to say it multiplied a larger group's money more than it did a smaller group's.
- jwarden 1y ago
  Well it's also unfair if we assume large difference in the marginal utility of wealth -- for example to go to extremes, we might assume that a $10 contribution from a low-income individuals represents the same sacrifice as a $1,000,000 contribution from a high-income individual. If that were the case, a $100 contribution from a low-income individual represents 10x the utility of a $1,000,000 contribution from a high-income individual. So in that case the lead would pipes have both more contributors, and higher utility per contributor, than the art. So total utility would be maximized by giving more money to the lead pipes.

sokoloff 1y ago

But they got 99 shares of government contribution for each share they put up for a 100x multiplier while the art patrons got 9 shares of government contribution for a 10x multiplier. Setting aside the emotional content and looking only at the math, it’s not at all obvious to me that the project with 100 donors was somehow shorted.

spencerflem 1y ago
Many people would consider fixing pipes a more important project despite the fact that the wealthy contributors could front a lot more cash for their pick.
- sokoloff 1y ago
  Great. Now, suppose the 10 wealthy people are in favor of the pipes project and the 100 average people are in favor of an art museum. Is the art museum or the pipes project more important?
  - spencerflem 1y ago
    You're missing the point, which is that the group with a lot more money to start have their voices heard more. It matters some that their multiplier is different , but in absolute numbers its still more to the program that benefits fewer people. The "utility function" is not accurate because the wealthy's utility starts out with a massive advantage. So yes, I think it would still be unfair if you switched it given the poor majority genuinely would rather have art than lead free pipes. The problem is that their voices are counted less due to not starting with money. But regardless, that would be a silly thing to switch because that's not a situation that ever comes up, while the original framing is a genuine problem in our society right now.
    - sokoloff 1y ago
      Yes, money has utility. That should be unsurprising to everyone. This proposal's pairing of hypothetical projects levels the playing field by a factor of 10 versus the starting point. That seems like a pretty good improvement over the purely monetary starting point. If your objection is that government can't work this way, because some projects need to be done for the benefit of people who literally cannot even contribute so much as a penny, while other projects are optional, then I'll agree with you. It means that this funding mechanism is fundamentally flawed in regards to required projects. But if you want to augment government spending with private contributions for certain public-private partnership projects, this might be a good way to allocate government matching funds for these optional projects. You can't treat a lead pipe replacement project as an optional project (the responsible government or utility just has to do it), but if you wanted to trade off funds towards a skate park versus towards an art museum, this process seems better than a straight matching funds percentage process. Or, if you want to have no partnership projects and use existing government mechanisms exclusively, that also avoids this problem.
      - spencerflem 1y ago
        The point is that its not socially optimal. The socially optimal solution would optimize global utility, as in it would not be influenced by the starting wealth of each person. If you allow starting wealth to influence things, their needs will be optimized for more at the expense of people who do not. Yes, that goes against the idea that "money has utility" but the point the article was making was that its not socially optimal anymore not that is regressive compared to whatever other strategy, like straight matching funds. There's no math claim that straight matching funds is optimal either. I think maybe we're speaking past eachother? Because yea totally I'd rather there be a multiplier based on the # of people than not given either that or a straight match. And your other options sound good too: "always fix non-optional things" and "do things democraticly (so 1 person 1 vote, not 1 dollar)" But the article is making a very specific point about a claim of QF being mathematically socially optimal that isn't being met.
        sokoloff 1y ago
sdenton4 1y ago
A core problem of capitalism is that it only solves the problems of people with money... This is more of the same. Consider that any of those 100 people might have a kid who would be the next Einstein, if only they hadn't been lead-poisoned. But these hundred people also have rent to pay and food to buy, and can only set aside $100 to deal with the lead-pipes problem. The existing distribution of wealth is not a good measure of the importance of the problems that these different individuals are experiencing. And the existing distribution of wealth is thus not a great way to prioritize solving problems for maximum societal benefit.
jwarden 1y ago
Yes good point. We'd have to actually flesh out the assumptions about marginal utility of wealth for low-income vs. the high-income group (as well as assumptions about individual utility functions), to demonstrate that this outcome was not optimal. I didn't do that in this article because it gets too mathy. However, the optimality of QF does assume wealth equality. When you drop that assumption and assume diminishing marginal utility of wealth, you can show that QF is not optimal. But I think you are right that the example in this article doesn't necessarily show that clearly. The example leans heavily on intuition (or emotional appeal). I think I will try to improve that section.

gs17 1y ago

But do we know the "ideal" funding values for the pipes and museum (and if we can, then why not use that)? It's only really "unfair" if we know that the pipes "deserve" a disproportionately larger multiplier. If the pipes deserve to be funded regardless of contributions (and they probably do), then the issue is using a system that could possibly fail to provide for them in the first place. It's not a good way to allocate funds, but I don't think it's a slam dunk to say it multiplied a larger group's money more than it did a smaller group's.

jwarden 1y ago
Well it's also unfair if we assume large difference in the marginal utility of wealth -- for example to go to extremes, we might assume that a $10 contribution from a low-income individuals represents the same sacrifice as a $1,000,000 contribution from a high-income individual. If that were the case, a $100 contribution from a low-income individual represents 10x the utility of a $1,000,000 contribution from a high-income individual. So in that case the lead would pipes have both more contributors, and higher utility per contributor, than the art. So total utility would be maximized by giving more money to the lead pipes.