3 ms·

Is it a truism that "correctly" has the same definition for a smart, effective, honest rich person as it does for a smart, effective, honest poor person?

baddox 12y ago
The reason I put it in quotation marks is because it's not a very well-defined concept, and it assumes that there is objectively a correct society, when in reality, people have different preferences. One way to formalize it would be in terms of Pareto improvements, which are theoretical but useful for analysis. Imagine a referendum where voting yes results in rich people receiving a benefit at the expense of the poor and voting no results in no benefit or expense to anyone. One example of this might be introduction of a regressive tax. Most of us would agree that, according to standard Western civil values, the "correct" vote is no. But obviously rich people in our current system are incentivized to vote yes, and perhaps also to spend money campaigning in support of this referendum.
- Qworg 12y ago
  And rich people in this new system are incentivized to not vote yes? They gain a benefit. The poor people, who don't have any market power, do not. Why would they vote any other way?
  - baddox 12y ago
    If I understand futarchy (I haven't studied it extensively, so I may be wrong), you need over 50% of the money in the system to be voting yes in order for it to be profitable to vote yes. If, say, 75% of the money was voting no (the "correct" decision), then the rich people voting no with 25% of the money would be losing money. In our current system, rich people are incentived to vote yes, even if they will be vastly outnumbered by the people voting no, because there is very little cost to voting for the "incorrect" option (if we're ignoring the cost of educating yourself about the effect of each vote, which we assumed away previously). In this system, rich people are incentivized to vote for the "correct" option, because voting for the "incorrect" option is costly.
tikhonj 12y ago
The idea is that what "correctly" means is decided by normal voting; the markets merely determine how to get there. That's what they meant by "vote value, bet on beliefs": we use a normal democratic approach to specify what we want (things like "lower level of violent crime", "higher GDP in ten years") but then use a market-based system to decide how to get there. The trick is that, once we've settled on the metric to target, trying to sabotage it using the markets would cause you to lose large amounts of money. Moreover, if rational actors realize you're trying to sabotage the system, they can bet against you and make large amounts of money. It provides an in-built incentive to execute whatever was democratically decided in the first step. Not a perfect system, but it does address that particular issue.

baddox 12y ago

The reason I put it in quotation marks is because it's not a very well-defined concept, and it assumes that there is objectively a correct society, when in reality, people have different preferences. One way to formalize it would be in terms of Pareto improvements, which are theoretical but useful for analysis. Imagine a referendum where voting yes results in rich people receiving a benefit at the expense of the poor and voting no results in no benefit or expense to anyone. One example of this might be introduction of a regressive tax. Most of us would agree that, according to standard Western civil values, the "correct" vote is no. But obviously rich people in our current system are incentivized to vote yes, and perhaps also to spend money campaigning in support of this referendum.

Qworg 12y ago
And rich people in this new system are incentivized to not vote yes? They gain a benefit. The poor people, who don't have any market power, do not. Why would they vote any other way?
- baddox 12y ago
  If I understand futarchy (I haven't studied it extensively, so I may be wrong), you need over 50% of the money in the system to be voting yes in order for it to be profitable to vote yes. If, say, 75% of the money was voting no (the "correct" decision), then the rich people voting no with 25% of the money would be losing money. In our current system, rich people are incentived to vote yes, even if they will be vastly outnumbered by the people voting no, because there is very little cost to voting for the "incorrect" option (if we're ignoring the cost of educating yourself about the effect of each vote, which we assumed away previously). In this system, rich people are incentivized to vote for the "correct" option, because voting for the "incorrect" option is costly.

tikhonj 12y ago

The idea is that what "correctly" means is decided by normal voting; the markets merely determine how to get there. That's what they meant by "vote value, bet on beliefs": we use a normal democratic approach to specify what we want (things like "lower level of violent crime", "higher GDP in ten years") but then use a market-based system to decide how to get there. The trick is that, once we've settled on the metric to target, trying to sabotage it using the markets would cause you to lose large amounts of money. Moreover, if rational actors realize you're trying to sabotage the system, they can bet against you and make large amounts of money. It provides an in-built incentive to execute whatever was democratically decided in the first step. Not a perfect system, but it does address that particular issue.