I appreciate the effort that went into this post, and the use of actual math to describe the benefits of the proposed system. I also really like that you took feedback from the comments and edited the postânot enough people do that!
That said, this reads to me as a proposal for massive structural change with no discussion of moderate/âfeasible reforms that could get us closer to a system with some of these benefits.
As a moderator, I think posts like this are fine. As a reader of the Forum, I prefer that political discussion on the Forum either:
a) Note clearly that a post is meant to be speculative (e.g. MacAskillâs Age-Weighted Voting), or
b) Engage with current political systems by discussing proposals that have existing support, or thatat least have some chance of being implemented piece-by-piece without an enormous overhaul of an entire societal institution (Iâd say the same had this piece been about education, military spending, etc.)
I think Eliezer Yudkowskyâs recent piece on police reform does this well; some of his ideas are more realistic than others, but quite a few could reasonably be proposed as legislation within weeks if a congressperson were to write a bill. And while he doesnât cite the people who side with him on some of these proposals, Iâm aware that those people exist.
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Iâd have been more convinced by the post if it referred to any existing policy which mirrors any aspect of these proposals. Does any country in the world create estimates of individual citizensâ cost to social services? Does any country in the world have a system where companies can bid for the right to collect individualsâ future tax revenue? Has anyone else (politicians, researchers, etc.) ever argued for a system resembling this one?
(I wouldnât be surprised if the answer to that last question were âyes,â but I donât know whoâs made those arguments or whether they ever made any legislative progress.)
In one comment, you note:
I think the system is something to carefully work towards.
Iâd have loved to hear thoughts in the post on how we might âcarefully work towardsâ a system that works so differently from any that (AFAIK) exist in the world today. What intermediate steps get us closer to this system without creating a full transition?
For every immigrant that we admit, the government could track how much that person pays in taxes each year, and also how much the government spends on that person via benefits whose costs can be measured individually. We could probably assign individual costs for schools, Medicare and Medicaid, prison, etc. For types of costs or benefits that canât be measured individually, weâd could attribute to each immigrant some average value across citizens of their location and demographic type. When there are doubts, let us err in the direction of estimating higher costs, so that our measures are biased against immigrants adding value.
Okay, so now we have a conservative net financial value number for each immigrant for each year, a number that can be positive or negative. From these numbers we can create financial assets that pay annual dividends proportional to these numbers. If we let many people trade such assets, their market prices should give us decent estimates of the current present financial value of this stream of future revenue. And if we allow trading in such assets regarding people who apply to immigrate, with those trades being conditional on that person being admitted and coming, then such prices would estimate the net financial value of an immigration candidate conditional on their immigrating.
We could then admit the candidates for whom such estimates are highest; using a high threshold could ensure a high confidence that each immigrant is a net financial advantage. Those who are skeptical about particular immigrants, or about immigration in general, could insure themselves against bad immigration choices via trades in these markets, trades from which they expect to profit if their skepticism is accurate.
I emailed Robin Hanson about my immigration idea in 2018. His post was in 2019. But to be fair, he came up with futarchy well before I started working on policy.
pay annual dividends proportional to these numbers
Doing things in proportion (rather than selling the full value) undervalues the impact of good forecasts. Since making forecasts has a cost, proportional payment (where the proportionality constant is not equal to 1) would generate inefficient outcomes: Imagine the contribution of the immigrant is $100 and it costs $80 to make the forecast, then paying forecasters anything less than 80% will cause poor outcomes.
Does any country in the world create estimates of individual citizensâ cost to social services? Does any country in the world have a system where companies can bid for the right to collect individualsâ future tax revenue? Has anyone else (politicians, researchers, etc.) ever argued for a system resembling this one?
Iâm not aware of any ânet tax contributionâ measurement, but I havenât done an extensive search either. Iâm not aware of anyone arguing for anything close to the system I proposed. The closest (but still far away) system that Iâve heard of is social impact bonds, which have been implemented in Australia to some degree. In the implementations of them that Iâve seen, they give prisons bonuses for reaching a low level of recidivism.
Thereâs several weaknesses of that model. Maybe one prison happens to get allocated inmates that are not likely to reoffend, in which case, they get paid for no reason (bidding on inmate contracts stops this). A reoffending murderer is given the same weight as a reoffending thief, so the prison is indifferent to who they rehabilitate (valuing âequivalent compensationâ of crimes stops this). And the government is not cost minimizing (again, bidding stops this). It also doesnât incentivize prisons to increase the net tax contribution of the convict (whereas mine does).
Iâd have loved to hear thoughts in the post on how we might âcarefully work towardsâ a system that works so differently from any that (AFAIK) exist in the world today. What intermediate steps get us closer to this system without creating a full transition?
I have some ideas, but no strong theoretical reasons for believing theyâre ideal.
You could implement a subset of the system: Just the income tax paid and welfare used. That data already exists. This data could be linked to the inmateâs attributes, which would allow the prisons to have good reference classes from which they could estimate their profit-maximizing bids. The primary difference between this half-measure and the full proposal is that the prisons donât pay the government when a crime is committed (secondarily, income tax paid is different from tax incidence).
When you have the right metrics for the full system (valuations of equivalent compensation for all crimes, and tax incidence) if, for some reason, tax incidence data canât be generated for the past, you could keep the half-measure system in place for a few decades. But during that time, you do the measurements and store the data. When itâs time to implement the full system, again, prisons have good reference classes from which they can estimate their optimal bids.
If politicians are particularly skittish on the idea, they could say to the prisons âWeâll pay you 80% of what we would under the current scheme, and pay you 20% of what we would under the new scheme.â I wouldnât recommend this, because some viable rehabilitative measures wonât be taken.
Iâd have been more convinced by the post if it referred to any existing policy which mirrors any aspect of these proposals.
I think the best argument for conservativism is âOut of all possible sets of institutions, the one weâre in is pretty goodâ. But this doesnât mean ânever implement radical changeâ (if you never do so, youâll get stuck on a local optimum). It just means that when youâre implementing radical change, you have to have good evidence. I wouldnât implement this system based off the mathematical justification Iâve given here. But I think the problems with the argument could be solved with minimal changes to the actual system. And if one of the assumptions of the argument fails when the system is implemented, we can always change back to the existing system. But if it is successful, it has implications for other policy areas (such as immigration).
An example of radical, evidence-supported policy is the kidney-exchange reform. Rather than exchange kidneys between pairs of people, they now chain groups of people together. The new system facilitates far more exchanges between willing donors and people in need. Countries that waited for the âevidenceâ (by which they mean âempirical evidenceâ) let people die because they didnât value the logical argument.
The hospital-intern matching algorithm is another example (it was also applied to student-to-school allocation).
The most prominent system thatâs supported on a theoretical-level is free markets. It is supported by the general equilibrium model. When the assumptions that model stray too far from reality, the system breaks down. When theyâre close enough, it works very well.
So the question is âAre the assumptions of the prison-policy argument close enough to realityâ. I think they mostly are, and where theyâre not, the error is balanced by a countervailing error.
I appreciate the effort that went into this post, and the use of actual math to describe the benefits of the proposed system. I also really like that you took feedback from the comments and edited the postânot enough people do that!
That said, this reads to me as a proposal for massive structural change with no discussion of moderate/âfeasible reforms that could get us closer to a system with some of these benefits.
As a moderator, I think posts like this are fine. As a reader of the Forum, I prefer that political discussion on the Forum either:
a) Note clearly that a post is meant to be speculative (e.g. MacAskillâs Age-Weighted Voting), or
b) Engage with current political systems by discussing proposals that have existing support, or that at least have some chance of being implemented piece-by-piece without an enormous overhaul of an entire societal institution (Iâd say the same had this piece been about education, military spending, etc.)
I think Eliezer Yudkowskyâs recent piece on police reform does this well; some of his ideas are more realistic than others, but quite a few could reasonably be proposed as legislation within weeks if a congressperson were to write a bill. And while he doesnât cite the people who side with him on some of these proposals, Iâm aware that those people exist.
****
Iâd have been more convinced by the post if it referred to any existing policy which mirrors any aspect of these proposals. Does any country in the world create estimates of individual citizensâ cost to social services? Does any country in the world have a system where companies can bid for the right to collect individualsâ future tax revenue? Has anyone else (politicians, researchers, etc.) ever argued for a system resembling this one?
(I wouldnât be surprised if the answer to that last question were âyes,â but I donât know whoâs made those arguments or whether they ever made any legislative progress.)
In one comment, you note:
Iâd have loved to hear thoughts in the post on how we might âcarefully work towardsâ a system that works so differently from any that (AFAIK) exist in the world today. What intermediate steps get us closer to this system without creating a full transition?
Robin Hanson has written about similar ideas:
I emailed Robin Hanson about my immigration idea in 2018. His post was in 2019. But to be fair, he came up with futarchy well before I started working on policy.
Doing things in proportion (rather than selling the full value) undervalues the impact of good forecasts. Since making forecasts has a cost, proportional payment (where the proportionality constant is not equal to 1) would generate inefficient outcomes: Imagine the contribution of the immigrant is $100 and it costs $80 to make the forecast, then paying forecasters anything less than 80% will cause poor outcomes.
Iâm not aware of any ânet tax contributionâ measurement, but I havenât done an extensive search either. Iâm not aware of anyone arguing for anything close to the system I proposed. The closest (but still far away) system that Iâve heard of is social impact bonds, which have been implemented in Australia to some degree. In the implementations of them that Iâve seen, they give prisons bonuses for reaching a low level of recidivism.
Thereâs several weaknesses of that model. Maybe one prison happens to get allocated inmates that are not likely to reoffend, in which case, they get paid for no reason (bidding on inmate contracts stops this). A reoffending murderer is given the same weight as a reoffending thief, so the prison is indifferent to who they rehabilitate (valuing âequivalent compensationâ of crimes stops this). And the government is not cost minimizing (again, bidding stops this). It also doesnât incentivize prisons to increase the net tax contribution of the convict (whereas mine does).
I have some ideas, but no strong theoretical reasons for believing theyâre ideal.
You could implement a subset of the system: Just the income tax paid and welfare used. That data already exists. This data could be linked to the inmateâs attributes, which would allow the prisons to have good reference classes from which they could estimate their profit-maximizing bids. The primary difference between this half-measure and the full proposal is that the prisons donât pay the government when a crime is committed (secondarily, income tax paid is different from tax incidence).
When you have the right metrics for the full system (valuations of equivalent compensation for all crimes, and tax incidence) if, for some reason, tax incidence data canât be generated for the past, you could keep the half-measure system in place for a few decades. But during that time, you do the measurements and store the data. When itâs time to implement the full system, again, prisons have good reference classes from which they can estimate their optimal bids.
If politicians are particularly skittish on the idea, they could say to the prisons âWeâll pay you 80% of what we would under the current scheme, and pay you 20% of what we would under the new scheme.â I wouldnât recommend this, because some viable rehabilitative measures wonât be taken.
I think the best argument for conservativism is âOut of all possible sets of institutions, the one weâre in is pretty goodâ. But this doesnât mean ânever implement radical changeâ (if you never do so, youâll get stuck on a local optimum). It just means that when youâre implementing radical change, you have to have good evidence. I wouldnât implement this system based off the mathematical justification Iâve given here. But I think the problems with the argument could be solved with minimal changes to the actual system. And if one of the assumptions of the argument fails when the system is implemented, we can always change back to the existing system. But if it is successful, it has implications for other policy areas (such as immigration).
An example of radical, evidence-supported policy is the kidney-exchange reform. Rather than exchange kidneys between pairs of people, they now chain groups of people together. The new system facilitates far more exchanges between willing donors and people in need. Countries that waited for the âevidenceâ (by which they mean âempirical evidenceâ) let people die because they didnât value the logical argument.
The hospital-intern matching algorithm is another example (it was also applied to student-to-school allocation).
The most prominent system thatâs supported on a theoretical-level is free markets. It is supported by the general equilibrium model. When the assumptions that model stray too far from reality, the system breaks down. When theyâre close enough, it works very well.
So the question is âAre the assumptions of the prison-policy argument close enough to realityâ. I think they mostly are, and where theyâre not, the error is balanced by a countervailing error.