Thanks for writing this up. However, I am confused about the mechanism.
In my head I think of there as being three options, all of which have diminishing returns:
Direct Work
Turning money into EA outcomes.
Diminishing returns due to low hanging problems being solved, non-parallel workflows and running out of money.
Earn to Give/Spend
Turning market work into Direct Work.
Diminishing returns due to running out of good people to employ.
Earn to Save
Turning market work now into Direct work later.
Diminishing returns due to running out of good people to employ in the future.
As each possibility has diminishing returns, there is an optimal ratio of Spending to Saving. But an exogenous increase in Spending volume doesn’t increase the marginal returns of Saving, so it doesn’t increase the attractiveness of Saving vs Direct. It does make Saving more attractive vs Spending, but both of those require basically the same skills (e.g. tech or finance skills), so the value of those skills is diminished.
Separately, you might think of upcoming increases in Spending (OpenPhil, bequests, career advancement) as an artificially high level of Saving now. This would decrease the attractiveness of current Saving.
Thanks for writing this up. However, I am confused about the mechanism.
In my head I think of there as being three options, all of which have diminishing returns:
Direct Work
Turning money into EA outcomes.
Diminishing returns due to low hanging problems being solved, non-parallel workflows and running out of money.
Earn to Give/Spend
Turning market work into Direct Work.
Diminishing returns due to running out of good people to employ.
Earn to Save
Turning market work now into Direct work later.
Diminishing returns due to running out of good people to employ in the future.
As each possibility has diminishing returns, there is an optimal ratio of Spending to Saving. But an exogenous increase in Spending volume doesn’t increase the marginal returns of Saving, so it doesn’t increase the attractiveness of Saving vs Direct. It does make Saving more attractive vs Spending, but both of those require basically the same skills (e.g. tech or finance skills), so the value of those skills is diminished.
Separately, you might think of upcoming increases in Spending (OpenPhil, bequests, career advancement) as an artificially high level of Saving now. This would decrease the attractiveness of current Saving.
Hi Larks, I think that’s a nice way of framing the issue, and you might be right. I think Howie’s reply to Owen is also relevant.