However, standard economic theory has not taken the hedonic treadmill into account. People seem to adapt to most physical pleasures pretty quickly. We know that a drug addict isn’t actually any happier than a non-addict. And we know that drug addiction works by hijacking the same reward mechanisms in the brain that are responsible for ordinary physical pleasures. So it may be that case that a rich person who goes to an expensive spa every weekend is basically a kind of drug addict, and that their consumption only serves to prevent withdrawal rather than to actually give more utility per hour of leisure.
This is plausible but not clearly true.
I think there’s an interesting consequence of a) valuing leisure time equally across different consumption levels (going against people’s revealed preferences somewhat) and b) assuming that marginal leisure time is worth ~the same as average leisure time. Namely, I haven’t modeled it myself but this will naively point very strongly in favor of a large welfare state. Especially if you either ignore economic growth or have substantial discounting for the future. Like the equilibrium for a society with initial conditions like the US might well look like one where you incentivize 10% of ultra-productive people work all the time and for the remaining 90% to specialize in leisure.
Not sure how you get around this with your framework (or perhaps you find it desirable?)
Analytical EA types often tie themselves into knots trying to make a Grand Unified Theory to base all decisions on. This does not and will not work. All models are wrong, but some models are useful. You can, and should, use different heuristics in different situations. I am not trying to program an AI that I put in charge of the world. I am merely justifying treating all people’s time the same for the purpose of EA cause prioritization with donor money.
Clearly it would break the economy to base all government policy on the assumption that consumption has no social value, and optimize hard on that assumption. Although yes, I do believe that a world where only 10% of people are operating critical infrastructure in exchange for high social status, and the rest get a basic income and (maybe) do ‘hobby jobs’, is both possible and desirable. That flows not from the leisure time valuation, but from a rather strong intuition that most current GDP goes to things that are either positional or an addiction.
Also, in my preferred specification, I do not assume that average and marginal values are the same. An average value of $70 (relative to nonexistence) is perfectly compatible with the marginal value of the last hour of leisure (relative to working) to be equal to take-home pay. Assuming equality was just an extreme estimate to set a lower bound on things.
This is plausible but not clearly true.
I think there’s an interesting consequence of a) valuing leisure time equally across different consumption levels (going against people’s revealed preferences somewhat) and b) assuming that marginal leisure time is worth ~the same as average leisure time. Namely, I haven’t modeled it myself but this will naively point very strongly in favor of a large welfare state. Especially if you either ignore economic growth or have substantial discounting for the future. Like the equilibrium for a society with initial conditions like the US might well look like one where you incentivize 10% of ultra-productive people work all the time and for the remaining 90% to specialize in leisure.
Not sure how you get around this with your framework (or perhaps you find it desirable?)
Analytical EA types often tie themselves into knots trying to make a Grand Unified Theory to base all decisions on. This does not and will not work. All models are wrong, but some models are useful. You can, and should, use different heuristics in different situations. I am not trying to program an AI that I put in charge of the world. I am merely justifying treating all people’s time the same for the purpose of EA cause prioritization with donor money.
Clearly it would break the economy to base all government policy on the assumption that consumption has no social value, and optimize hard on that assumption. Although yes, I do believe that a world where only 10% of people are operating critical infrastructure in exchange for high social status, and the rest get a basic income and (maybe) do ‘hobby jobs’, is both possible and desirable. That flows not from the leisure time valuation, but from a rather strong intuition that most current GDP goes to things that are either positional or an addiction.
Also, in my preferred specification, I do not assume that average and marginal values are the same. An average value of $70 (relative to nonexistence) is perfectly compatible with the marginal value of the last hour of leisure (relative to working) to be equal to take-home pay. Assuming equality was just an extreme estimate to set a lower bound on things.