Thank you for your detailed response! I am glad when we explore the design-space; to find a decent idea, we must find the patterns amongst many.
In regards to each specific option you mentioned:
futarchy hopes to create a prediction-market, and reward those who make good predictions, yet it does nothing to reward those who invest in the implementation of beneficial projects, the key difference.
Eliezer is looking for a way to coordinate crowd actions; again, the people who invest time and resources are not rewarded directly and materially for funding those benefits.
pigovian taxes, for negative externalities, are included in my line of reasoning, yet they miss the key point again: material reward for those who invest in beneficial projects.
partisan cost-benefit discussions are commonly among elected officials prior to knowing the truth; I contrast that with verification that policy performed as expected, carried-out by apolitical experts randomly assigned, by metrics agreed upon in legislation, in line with the concepts of principled negotiation (see Bill Ury’s classic “Getting to Yes”). I have no expectation that a legislature should ever determine the worth of each proposal—they’d never finish! And I would be glad to pass a ban on political parties at a Constitutional Convention, though I know that won’t happen. Instead, I expect we will need to start from scratch, in which case a foundation of apolitical metrics is better than none.
quadratic funding is nice, to balance the interests of the majority, yet again it does nothing to directly and materially reward those who invest in the solutions. A hope that the coin functions better, maintaining its value or increasing in value, is only a secondary reward, and that reward is focused in the hands of the largest holders.
So, the key difference I have with all of those mentioned is that I propose an incentive for regular, self-interested investors to pay for benefits. That certainly would not happen in each other method. (And yes, those taxes and dividends would be retroactive, similar to the prizes for social good you mentioned.) Without material rewards for the investors, we will only pull a few tens of billions in philanthropic dollars toward benefits every year, while my goal is to internalize externalities in totality or close to it.
This is a critical distinction, because there are a few hundred trillion dollars sloshing around in businesses and real estate, NOT because the investors like capitalism—rather, they like a high rate of return! :0 Due to the efficiencies available in the space of positive externalities, we can give investors that rate of return, while keeping the lion’s share of the benefits in the public. Investors would look at their distribution of assets and say “oh, I was only holding this real estate as a HEDGE against inflation, I’d rather put my cash into a diversified portfolio of public benefits, because they earn an annual return of greater than 12%!” That’s how we can get tens of trillions thrown toward beneficent work. Just give them enough cash back that they are happy. (...and, that shift in assets would lower the price of urban real estate, once they clear out of it!)
[[It’s also worth noting that the article you gave to dismiss wealth taxes only showed that “European countries had all kinds of weird exemptions, while they didn’t exclude basics like your farm or small business, so some people suffered… they also let the millionaires leave—which they did.” Elizabeth Warren’s wealth tax plan, in contrast, is shown in that same article to address those concerns. Compared to the disincentives from sales tax and income tax, I’d prefer a progressive-rate wealth tax only, with a hefty cut taken from those who leave citizenship behind.]]
I see some form of governance as essential to enforce taxation; and that taxation is the only reliable means to gather the broadly-distributed value of most positive externalities, in order to reward investors. Without that reward-structure, we’re leaving tens of trillions of dollars on the table, when we could be spending that on public benefit. So, what might that governance look like? A smart contract, binding sea-steaders into a loose federation, perhaps? I look forward to any other ideas that come up! It should seek to internalize as much as possible, ideally leaving no externality untouched, so that pricing is an accurate representation of public value, and allocation is efficient. Then, I wouldn’t be so worried about markets ruining planets. :)
Thank you for your detailed response! I am glad when we explore the design-space; to find a decent idea, we must find the patterns amongst many.
In regards to each specific option you mentioned:
futarchy hopes to create a prediction-market, and reward those who make good predictions, yet it does nothing to reward those who invest in the implementation of beneficial projects, the key difference.
Eliezer is looking for a way to coordinate crowd actions; again, the people who invest time and resources are not rewarded directly and materially for funding those benefits.
pigovian taxes, for negative externalities, are included in my line of reasoning, yet they miss the key point again: material reward for those who invest in beneficial projects.
partisan cost-benefit discussions are commonly among elected officials prior to knowing the truth; I contrast that with verification that policy performed as expected, carried-out by apolitical experts randomly assigned, by metrics agreed upon in legislation, in line with the concepts of principled negotiation (see Bill Ury’s classic “Getting to Yes”). I have no expectation that a legislature should ever determine the worth of each proposal—they’d never finish! And I would be glad to pass a ban on political parties at a Constitutional Convention, though I know that won’t happen. Instead, I expect we will need to start from scratch, in which case a foundation of apolitical metrics is better than none.
quadratic funding is nice, to balance the interests of the majority, yet again it does nothing to directly and materially reward those who invest in the solutions. A hope that the coin functions better, maintaining its value or increasing in value, is only a secondary reward, and that reward is focused in the hands of the largest holders.
So, the key difference I have with all of those mentioned is that I propose an incentive for regular, self-interested investors to pay for benefits. That certainly would not happen in each other method. (And yes, those taxes and dividends would be retroactive, similar to the prizes for social good you mentioned.) Without material rewards for the investors, we will only pull a few tens of billions in philanthropic dollars toward benefits every year, while my goal is to internalize externalities in totality or close to it.
This is a critical distinction, because there are a few hundred trillion dollars sloshing around in businesses and real estate, NOT because the investors like capitalism—rather, they like a high rate of return! :0 Due to the efficiencies available in the space of positive externalities, we can give investors that rate of return, while keeping the lion’s share of the benefits in the public. Investors would look at their distribution of assets and say “oh, I was only holding this real estate as a HEDGE against inflation, I’d rather put my cash into a diversified portfolio of public benefits, because they earn an annual return of greater than 12%!” That’s how we can get tens of trillions thrown toward beneficent work. Just give them enough cash back that they are happy. (...and, that shift in assets would lower the price of urban real estate, once they clear out of it!)
[[It’s also worth noting that the article you gave to dismiss wealth taxes only showed that “European countries had all kinds of weird exemptions, while they didn’t exclude basics like your farm or small business, so some people suffered… they also let the millionaires leave—which they did.” Elizabeth Warren’s wealth tax plan, in contrast, is shown in that same article to address those concerns. Compared to the disincentives from sales tax and income tax, I’d prefer a progressive-rate wealth tax only, with a hefty cut taken from those who leave citizenship behind.]]
I see some form of governance as essential to enforce taxation; and that taxation is the only reliable means to gather the broadly-distributed value of most positive externalities, in order to reward investors. Without that reward-structure, we’re leaving tens of trillions of dollars on the table, when we could be spending that on public benefit. So, what might that governance look like? A smart contract, binding sea-steaders into a loose federation, perhaps? I look forward to any other ideas that come up! It should seek to internalize as much as possible, ideally leaving no externality untouched, so that pricing is an accurate representation of public value, and allocation is efficient. Then, I wouldn’t be so worried about markets ruining planets. :)