Month: May 2023

Voting Your Dollars

PNRJ politics, public policy , , , , , , , , , , , , ,

May 28 JDN 2460093

It’s no secret that Americans don’t like to pay taxes. It’s almost a founding principle of our country, really, going all the way back to the Boston Tea Party. This is likely part of why the US has one of the lowest tax-to-GDP ratios in the First World; our taxes are barely half what they pay in Scandinavia. And this in turn surely contributes to our ongoing budget issues and our stingy social welfare spending. (Speaking of budget issues: As of this writing, the debt ceiling debacle is still unresolved.)

Why don’t Americans like to pay taxes? Why does no one really like to pay taxes (though some seem more willing than others)?

It surely has something to do with the fact that taxes are so coercive: You have to pay them, you get no choice. And you also have very little choice as to how that money is used; yes, you can vote for politicians who will in theory at some point enact budgets that might possibly reflect the priorities they expressed in their campaigns—but the actual budget invariably ends up quite far removed from the campaign promises you could vote based on.

What if we could give you more choice? We can’t let people choose how much to pay—then most people would choose to pay less and we’d be in even more trouble. (If you want to pay more than you’re required to, the IRS will actually let you right now. You can just refuse your refund.) But perhaps we could let people choose where the money goes?

I call this program Vote Your Dollars. I would initially limit it to a small fraction of the budget, tied to a tax increase: Say, raise taxes enough to increase revenue by 5% and use that 5% for the program.

Under Vote Your Dollars, on your tax return, you are given a survey, asking you how you want to divide up your additional money toward various categories. I think they should be fairly broad categories, such as ‘healthcare’, ‘social security’, ‘anti-poverty programs’, ‘defense’, ‘foreign aid’. If we make them too specific, it would be more work for the voters and also more likely to lead to foolish allocations. We want them to basically reflect a voter’s priorities, rather than ask them to make detailed economic management decisions. Most voters are not qualified to properly allocate a budget; the goal here is to get people to weight how much they care about different programs.

As only a small portion of the budget, Vote Your Dollars would initially have very little real fiscal impact. Money is fungible, so any funds that were expected to go somewhere else than where voters put them could easily be reallocated as needed. But I suspect that most voters would fail to appreciate this effect, and thus actually feel like they have more control than they really do. (If voters understood fungibility and inframarginal transfers, they’d never have supported food stamps over just giving poor people cash.)

Moreover, it would still provide useful information, namely: What happens when voters are given this power? Do they make decisions that seem to make sense and reflect their interests and beliefs? Does the resulting budget actually seem like one that could be viable? Could it even be better than what we currently have in some ways?

I suspect that the result would be better than most economists and political scientists imagine. There seems to be a general sense that voters are too foolish or apathetic to usefully participate in politics, which of course would raise the very big question: Why does democracy work?

I don’t think that most voters would choose a perfect budget; indeed, I already said I wouldn’t trust them with the fine details of how to allocate the funds. But I do think most people have at least some reasonable idea of how important they think healthcare is relative to defense, and it would be good to at least gather that information in a more direct way.

If it goes well and Vote Your Dollars seems to result in reasonable budgets even for that extra 5%, we could start expanding it to a larger portion of the overall budget. Try 10% for the next election, then 15% for the next. There should always be some part that remains outside direct voter control, because voters would almost certainly underspend on certain categories (such as administration and national debt payments) and likely overspend on others.

This would allow us to increase taxes—which we clearly must do, because we need to improve government services, but we don’t want to go further into debt—while giving voters more choice, and thus making taxes feel less coercive. Being forced to pay a certain amount each year might not sting as much if you get to say where a significant portion of that money goes.

To give voters even more control over their money, I think I would also include a provision whereby you can deduct the full amount of your charitable contributions to certain high-impact charities (we would need to come up with a good list, but clear examples include UNICEF, Oxfam, and GiveWell) from your tax payment. Currently, you deduct charitable contributions from your income, which means you don’t pay taxes on those donations; but you still end up with less money after donating than you did before. If we let you deduct the full amount, then you would have the same amount after donating, and effectively the government would pay the full cost of your donation. Presumably this would lead to people donating a great deal; this might hurt tax revenues, but its overall positive impact on the world would be so large that it is obviously worth it. By the time we have given enough to UNICEF to meaningfully impact the US federal budget, we have ended world hunger.

Of course, it’s very unlikely that anything like Vote Your Dollars would ever be implemented. There are already ways we could make paying taxes less painful that we haven’t done—such as sending you a bill, as they do in Denmark, rather than making you file a tax form. And we could already increase revenue with very little real cost by simply expanding the IRS and auditing rich people more. These simple, obvious reforms have been repeatedly obstructed by powerful lobbies, who personally benefit from the current system even though it’s obviously a bad system. I guess I can’t think of anyone in particular who would want to lobby against Vote Your Dollars, but I feel like Republicans might just because they want taxes to hurt as much as possible so that they have an excuse to cut spending.

But still, I thought I’d put the idea out there.

We ignorant, incompetent gods

PNRJ book reviews, cognitive science, core principles, ethics, futurism, inequality, tribal paradigm , , , , , , , , , , , , , , , , ,

May 21 JDN 2460086

A review of Homo Deus

The real problem of humanity is the following: We have Paleolithic emotions, medieval institutions and godlike technology.

E.O. Wilson

Homo Deus is a very good read—and despite its length, a quick one; as you can see, I read it cover to cover in a week. Yuval Noah Harari’s central point is surely correct: Our technology is reaching a threshold where it grants us unprecedented power and forces us to ask what it means to be human.

Biotechnology and artificial intelligence are now advancing so rapidly that advancements in other domains, such as aerospace and nuclear energy, seem positively mundane. Who cares about making flight or electricity a bit cleaner when we will soon have the power to modify ourselves or we’ll all be replaced by machines?

Indeed, we already have technology that would have seemed to ancient people like the powers of gods. We can fly; we can witness or even control events thousands of miles away; we can destroy mountains; we can wipeout entire armies in an instant; we can even travel into outer space.

Harari rightly warns us that our not-so-distant descendants are likely to have powers that we would see as godlike: Immortality, superior intelligence, self-modification, the power to create life.

And where it is scary to think about what they might do with that power if they think the way we do—as ignorant and foolish and tribal as we are—Harari points out that it is equally scary to think about what they might do if they don’t think the way we do—for then, how do they think? If their minds are genetically modified or even artificially created, who will they be? What values will they have, if not ours? Could they be better? What if they’re worse?

It is of course difficult to imagine values better than our own—if we thought those values were better, we’d presumably adopt them. But we should seriously consider the possibility, since presumably most of us believe that our values today are better than what most people’s values were 1000 years ago. If moral progress continues, does it not follow that people’s values will be better still 1000 years from now? Or at least that they could be?

I also think Harari overestimates just how difficult it is to anticipate the future. This may be a useful overcorrection; the world is positively infested with people making overprecise predictions about the future, often selling them for exorbitant fees (note that Harari was quite well-compensated for this book as well!). But our values are not so fundamentally alien from those of our forebears, and we have reason to suspect that our descendants’ values will be no more different from ours.

For instance, do you think that medieval people thought suffering and death were good? I assure you they did not. Nor did they believe that the supreme purpose in life is eating cheese. (They didn’t even believe the Earth was flat!) They did not have the concept of GDP, but they could surely appreciate the value of economic prosperity.

Indeed, our world today looks very much like a medieval peasant’s vision of paradise. Boundless food in endless variety. Near-perfect security against violence. Robust health, free from nearly all infectious disease. Freedom of movement. Representation in government! The land of milk and honey is here; there they are, milk and honey on the shelves at Walmart.

Of course, our paradise comes with caveats: Not least, we are by no means free of toil, but instead have invented whole new kinds of toil they could scarcely have imagined. If anything I would have to guess that coding a robot or recording a video lecture probably isn’t substantially more satisfying than harvesting wheat or smithing a sword; and reconciling receivables and formatting spreadsheets is surely less. Our tasks are physically much easier, but mentally much harder, and it’s not obvious which of those is preferable. And we are so very stressed! It’s honestly bizarre just how stressed we are, given the abudance in which we live; there is no reason for our lives to have stakes so high, and yet somehow they do. It is perhaps this stress and economic precarity that prevents us from feeling such joy as the medieval peasants would have imagined for us.

Of course, we don’t agree with our ancestors on everything. The medieval peasants were surely more religious, more ignorant, more misogynistic, more xenophobic, and more racist than we are. But projecting that trend forward mostly means less ignorance, less misogyny, less racism in the future; it means that future generations should see the world world catch up to what the best of us already believe and strive for—hardly something to fear. The values that I believe are surely not what we as a civilization act upon, and I sorely wish they were. Perhaps someday they will be.

I can even imagine something that I myself would recognize as better than me: Me, but less hypocritical. Strictly vegan rather than lacto-ovo-vegetarian, or at least more consistent about only buying free range organic animal products. More committed to ecological sustainability, more willing to sacrifice the conveniences of plastic and gasoline. Able to truly respect and appreciate all life, even humble insects. (Though perhaps still not mosquitoes; this is war. They kill more of us than any other animal, including us.) Not even casually or accidentally racist or sexist. More courageous, less burnt out and apathetic. I don’t always live up to my own ideals. Perhaps someday someone will.

Harari fears something much darker, that we will be forced to give up on humanist values and replace them with a new techno-religion he calls Dataism, in which the supreme value is efficient data processing. I see very little evidence of this. If it feels like data is worshipped these days, it is only because data is profitable. Amazon and Google constantly seek out ever richer datasets and ever faster processing because that is how they make money. The real subject of worship here is wealth, and that is nothing new. Maybe there are some die-hard techno-utopians out there who long for us all to join the unified oversoul of all optimized data processing, but I’ve never met one, and they are clearly not the majority. (Harari also uses the word ‘religion’ in an annoyingly overbroad sense; he refers to communism, liberalism, and fascism as ‘religions’. Ideologies, surely; but religions?)

Harari in fact seems to think that ideologies are strongly driven by economic structures, so maybe he would even agree that it’s about profit for now, but thinks it will become religion later. But I don’t really see history fitting this pattern all that well. If monotheism is directly tied to the formation of organized bureaucracy and national government, then how did Egypt and Rome last so long with polytheistic pantheons? If atheism is the natural outgrowth of industrialized capitalism, then why are Africa and South America taking so long to get the memo? I do think that economic circumstances can constrain culture and shift what sort of ideas become dominant, including religious ideas; but there clearly isn’t this one-to-one correspondence he imagines. Moreover, there was never Coalism or Oilism aside from the greedy acquisition of these commodities as part of a far more familiar ideology: capitalism.

He also claims that all of science is now, or is close to, following a united paradigm under which everything is a data processing algorithm, which suggests he has not met very many scientists. Our paradigms remain quite varied, thank you; and if they do all have certain features in common, it’s mainly things like rationality, naturalism and empiricism that are more or less inherent to science. It’s not even the case that all cognitive scientists believe in materialism (though it probably should be); there are still dualists out there.

Moreover, when it comes to values, most scientists believe in liberalism. This is especially true if we use Harari’s broad sense (on which mainline conservatives and libertarians are ‘liberal’ because they believe in liberty and human rights), but even in the narrow sense of center-left. We are by no means converging on a paradigm where human life has no value because it’s all just data processing; maybe some scientists believe that, but definitely not most of us. If scientists ran the world, I can’t promise everything would be better, but I can tell you that Bush and Trump would never have been elected and we’d have a much better climate policy in place by now.

I do share many of Harari’s fears of the rise of artificial intelligence. The world is clearly not ready for the massive economic disruption that AI is going to cause all too soon. We still define a person’s worth by their employment, and think of ourselves primarily as collection of skills; but AI is going to make many of those skills obsolete, and may make many of us unemployable. It would behoove us to think in advance about who we truly are and what we truly want before that day comes. I used to think that creative intellectual professions would be relatively secure; ChatGPT and Midjourney changed my mind. Even writers and artists may not be safe much longer.

Harari is so good at sympathetically explaining other views he takes it to a fault. At times it is actually difficult to know whether he himself believes something and wants you to, or if he is just steelmanning someone else’s worldview. There’s a whole section on ‘evolutionary humanism’ where he details a worldview that is at best Nietschean and at worst Nazi, but he makes it sound so seductive. I don’t think it’s what he believes, in part because he has similarly good things to say about liberalism and socialism—but it’s honestly hard to tell.

The weakest part of the book is when Harari talks about free will. Like most people, he just doesn’t get compatibilism. He spends a whole chapter talking about how science ‘proves we have no free will’, and it’s just the same old tired arguments hard determinists have always made.

He talks about how we can make choices based on our desires, but we can’t choose our desires; well of course we can’t! What would that even mean? If you could choose your desires, what would you choose them based on, if not your desires? Your desire-desires? Well, then, can you choose your desire-desires? What about your desire-desire-desires?

What even is this ultimate uncaused freedom that libertarian free will is supposed to consist in? No one seems capable of even defining it. (I’d say Kant got the closest: He defined it as the capacity to act based upon what ought rather than what is. But of course what we believe about ‘ought’ is fundamentally stored in our brains as a particular state, a way things are—so in the end, it’s an ‘is’ we act on after all.)

Maybe before you lament that something doesn’t exist, you should at least be able to describe that thing as a coherent concept? Woe is me, that 2 plus 2 is not equal to 5!

It is true that as our technology advances, manipulating other people’s desires will become more and more feasible. Harari overstates the case on so-called robo-rats; they aren’t really mind-controlled, it’s more like they are rewarded and punished. The rat chooses to go left because she knows you’ll make her feel good if she does; she’s still freely choosing to go left. (Dangling a carrot in front of a horse is fundamentally the same thing—and frankly, paying a wage isn’t all that different.) The day may yet come where stronger forms of control become feasible, and woe betide us when it does. Yet this is no threat to the concept of free will; we already knew that coercion was possible, and mind control is simply a more precise form of coercion.

Harari reports on a lot of interesting findings in neuroscience, which are important for people to know about, but they do not actually show that free will is an illusion. What they do show is that free will is thornier than most people imagine. Our desires are not fully unified; we are often ‘of two minds’ in a surprisingly literal sense. We are often tempted by things we know are wrong. We often aren’t sure what we really want. Every individual is in fact quite divisible; we literally contain multitudes.

We do need a richer account of moral responsibility that can deal with the fact that human beings often feel multiple conflicting desires simultaneously, and often experience events differently than we later go on to remember them. But at the end of the day, human consciousness is mostly unified, our choices are mostly rational, and our basic account of moral responsibility is mostly valid.

I think for now we should perhaps be less worried about what may come in the distant future, what sort of godlike powers our descendants may have—and more worried about what we are doing with the godlike powers we already have. We have the power to feed the world; why aren’t we? We have the power to save millions from disease; why don’t we? I don’t see many people blindly following this ‘Dataism’, but I do see an awful lot blinding following a 19th-century vision of capitalism.

And perhaps if we straighten ourselves out, the future will be in better hands.

Why does democracy work?

PNRJ book reviews, ethics, politics, tribal paradigm , , , , , , , , , , , ,

May 14 JDN 2460079

A review of Democracy for Realists

I don’t think it can be seriously doubted that democracy does, in fact, work. Not perfectly, by any means; but the evidence is absolutely overwhelming that more democratic societies are better than more authoritarian societies by just about any measure you could care to use.

When I first started reading Democracy for Realists and saw their scathing, at times frothing criticism of mainstream ideas of democracy, I thought they were going to try to disagree with that; but in the end they don’t. Achen and Bartels do agree that democracy works; they simply think that why and how it works is radically different from what most people think.

For it is a very long-winded book, and in dire need of better editing. Most of the middle section of the book is taken up by a deluge of empirical analysis, most of which amounts to over-interpreting the highly ambiguous results of underpowered linear regressions on extremely noisy data. The sheer quantity of them seems intended to overwhelm any realization that no particular one is especially compelling. But a hundred weak arguments don’t add up to a single strong one.

To their credit, the authors often include the actual scatter plots; but when you look at those scatter plots, you find yourself wondering how anyone could be so convinced these effects are real and important. Many of them seem more prone to new constellations.

Their econometric techniques are a bit dubious, as well; at one point they said they “removed outliers” but then the examples they gave as “outliers” were the observations most distant from their regression line rather than the rest of the data. Removing the things furthest from your regression line will always—always—make your regression seem stronger. But that’s not what outliers are. Other times, they add weird controls or exclude parts of the sample for dubious reasons, and I get the impression that these are the cherry-picked results of a much larger exploration. (Why in the world would you exclude Catholics from a study of abortion attitudes? And this study on shark attacks seems awfully specific….) And of course if you try 20 regressions at random, you can expect that at least 1 of them will probably show up with p < 0.05. I think they are mainly just following the norms of their discipline—but those norms are quite questionable.

They don’t ever get into much detail as to what sort of practical institutional changes they would recommend, so it’s hard to know whether I would agree with those. Some of their suggestions, such as more stringent rules on campaign spending, I largely agree with. Others, such as their opposition to popular referenda and recommendation for longer term limits, I have more mixed feelings about. But none seem totally ridiculous or even particularly radical, and they really don’t offer much detail about any of them. I thought they were going to tell me that appointment of judges is better than election (which many experts widely agree), or that the Electoral College is a good system (which far fewer experts would assent to, at least since George W. Bush and Donald Trump). In fact they didn’t do that; they remain eerily silent on substantive questions like this.

Honestly, what little they have to say about institutional policy feels a bit tacked on at the end, as if they suddenly realized that they ought to say something useful rather than just spend the whole time tearing down another theory.

In fact, I came to wonder if they really were tearing down anyone’s actual theory, or if this whole book was really just battering a strawman. Does anyone really think that voters are completely rational? At one point they speak of an image of the ‘sovereign omnicompetent voter’; is that something anyone really believes in?

It does seem like many people believe in making government more responsive to the people, whereas Achen and Bartels seem to have the rather distinct goal of making government make better decisions. They were able to find at least a few examples—though I know not how far and wide they had to search—where it seemed like more popular control resulted in worse outcomes, such as water fluoridation and funding for fire departments. So maybe the real substantive disagreement here is over whether more or less direct democracy is a good idea. And that is indeed a reasonable question. But one need not believe that voters are superhuman geniuses to think that referenda are better than legislation. Simply showing that voters are limited in their capacity and bound to group identity is not enough to answer that question.


In fact, I think that Achen and Bartels seriously overestimate the irrationality of voters, because they don’t seem to appreciate that group identity is often a good proxy for policy—in fact, they don’t even really seem to see social policy as policy at all. Consider this section (p. 238):

“In this pre-Hitlerian age it must have seemed to most Jews that there were no crucial issues dividing the major parties” (Fuchs 1956, 63). Yet by 1923, a very substantial majority of Jews had abandoned their Republican loyalties and begun voting for the Democrats. What had changed was not foreign policy, but rather the social status of Jews within one of America’s major political parties. In a very visible way, the Democrats had become fully accepting and incorporating of religious minorities, both Catholics and Jews. The result was a durable Jewish partisan realignment grounded in “ethnic solidarity”, in Gamm’s characterization.

Gee, I wonder why Jews would suddenly care a great deal which party was more respectful toward people like them? Okay, the Holocaust hadn’t happened yet, but anti-Semitism is very old indeed, and it was visibly creeping upward during that era. And just in general, if one party is clearly more anti-Semitic than the other, why wouldn’t Jews prefer the one that is less hateful toward them? How utterly blinded by privilege do you need to be to not see that this is an important policy difference?

Perhaps because they are both upper-middle-class straight White cisgender men (I would also venture a guess nominally but not devoutly Protestant), Achens and Bartel seem to have no concept that social policy directly affects people of minority identity, that knowing that one party accepts people like you and the other doesn’t is a damn good reason to prefer one over the other. This is not a game where we are rooting for our home team. This directly affects our lives.

I know quite a few transgender people, and not a single one is a Republican. It’s not because all trans people hate low taxes. It’s because the Republican Party has declared war on trans people.

This may also lead to trans people being more left-wing generally, as once you’re in a group you tend to absorb some views from others in that group (and, I’ll admit, Marxists and anarcho-communists seem overrepresented among LGBT people). But I absolutely know some LGBT people who would like to vote conservative for economic policy reasons, but realize they can’t, because it means voting for bigots who hate them and want to actively discriminate against them. There is nothing irrational or even particularly surprising about this choice. It would take a very powerful overriding reason for anyone to want to vote for someone who publicly announces hatred toward them.

Indeed, for me the really baffling thing is that there are political parties that publicly announce hatred toward particular groups. It seems like a really weird strategy for winning elections. That is the thing that needs to be explained here; why isn’t inclusiveness—at least a smarmy lip-service toward inclusiveness, like ‘Diversity, Equity, and Inclusion’ offices at universities—the default behavior of all successful politicians? Why don’t they all hug a Latina trans woman after kissing a baby and taking a selfie with the giant butter cow? Why is not being an obvious bigot considered a left-wing position?

Since it obviously is the case that many voters don’t want this hatred (at the very least, its targets!), in order for it not to damage electoral changes, it must be that some other voters do want this hatred. Perhaps they themselves define their own identity in opposition to other people’s identities. They certainly talk that way a lot: We hear White people fearing ‘replacement‘ by shifting racial demographics, when no sane forecaster thinks that European haplotypes are in any danger of disappearing any time soon. The central argument against gay marriage was always that it would somehow destroy straight marriage, by some mechanism never explained.

Indeed, perhaps it is this very blindness toward social policy that makes Achen and Bartels unable to see the benefits of more direct democracy. When you are laser-focused on economic policy, as they are, then it seems to you as though policy questions are mainly technical matters of fact, and thus what we need are qualified experts. (Though even then, it is not purely a matter of fact whether we should care more about inequality than growth, or more about unemployment than inflation.)

But once you include social policy, you see that politics often involves very real, direct struggles between conflicting interests and differing moral views, and that by the time you’ve decided which view is the correct one, you already have your answer for what must be done. There is no technical question of gay marriage; there is only a moral one. We don’t need expertise on such questions; we need representation. (Then again, it’s worth noting that courts have sometimes advanced rights more effectively than direct democratic votes; so having your interests represented isn’t as simple as getting an equal vote.)

Achen and Bartels even include a model in the appendix where politicians are modeled as either varying in competence or controlled by incentives; never once does it consider that they might differ in whose interests they represent. Yet I don’t vote for a particular politician just because I think they are more intelligent, or as part of some kind of deterrence mechanism to keep them from misbehaving (I certainly hope the courts do a better job of that!); I vote for them because I think they represent the goals and interests I care about. We aren’t asking who is smarter, we are asking who is on our side.

The central question that I think the book raises is one that the authors don’t seem to have much to offer on: If voters are so irrational, why does democracy work? I do think there is strong evidence that voters are irrational, though maybe not as irrational as Achen and Bartels seem to think. Honestly, I don’t see how anyone can watch Donald Trump get elected President of the United States and not think that voters are irrational. (The book was written before that; apparently there’s a new edition with a preface about Trump, but my copy doesn’t have that.) But it isn’t at all obvious to me what to do with that information, because even if so-called elites are in fact more competent than average citizens—which may or may not be true—the fact remains that their interests are never completely aligned. Thus far, representative democracy of one stripe or another seems to be the best mechanism we have for finding people who have sufficient competence while also keeping them on a short enough leash.

And perhaps that’s why democracy works as well as it does; it gives our leaders enough autonomy to let them generally advance their goals, but also places limits on how badly misaligned our leaders’ goals can be from our own.

Reckoning costs in money distorts them

PNRJ core principles, critique of neoclassical economics, ethics, inequality, market failure, public policy , , , , , , , , , , , , ,

May 7 JDN 2460072

Consider for a moment what it means when an economic news article reports “rising labor costs”. What are they actually saying?

They’re saying that wages are rising—perhaps in some industry, perhaps in the economy as a whole. But this is not a cost. It’s a price. As I’ve written about before, the two are fundamentally distinct.

The cost of labor is measured in effort, toil, and time. It’s the pain of having to work instead of whatever else you’d like to do with your time.

The price of labor is a monetary amount, which is delivered in a transaction.

This may seem perfectly obvious, but it has important and oft-neglected implications. A cost, one paid, is gone. That value has been destroyed. We hope that it was worth it for some benefit we gained. A price, when paid, is simply transferred: One person had that money before, now someone else has it. Nothing was gained or lost.

So in fact when reports say that “labor costs have risen”, what they are really saying is that income is being transferred from owners to workers without any change in real value taking place. They are framing as a loss what is fundamentally a zero-sum redistribution.

In fact, it is disturbingly common to see a fundamentally good redistribution of income framed in the press as a bad outcome because of its expression as “costs”; the “cost” of chocolate is feared to go up if we insist upon enforcing bans on forced labor—when in fact it is only the price that goes up, and the cost actually goes down: chocolate would no longer include complicity in an atrocity. The real suffering of making chocolate would be thereby reduced, not increased. Even when they aren’t literally enslaved, those workers are astonishingly poor, and giving them even a few more cents per hour would make a real difference in their lives. But God forbid we pay a few cents more for a candy bar!

If labor costs were to rise, that would mean that work had suddenly gotten harder, or more painful; or else, that some outside circumstance had made it more difficult to work. Having a child increases your labor costs—you now have the opportunity cost of not caring for the child. COVID increased the cost of labor, by making it suddenly dangerous just to go outside in public. That could also increase prices—you may demand a higher wage, and people do seem to have demanded higher wages after COVID. But these are two separate effects, and you can have one without the other. In fact, women typically see wage stagnation or even reduction after having kids (but men largely don’t), despite their real opportunity cost of labor having obviously greatly increased.

On an individual level, it’s not such a big mistake to equate price and cost. If you are buying something, its cost to you basically just is its price, plus a little bit of transaction cost for actually finding and buying it. But on a societal level, it makes an enormous difference. It distorts our policy priorities and can even lead to actively trying to suppress things that are beneficial—such as rising wages.

This false equivalence between price and costs seems to be at least as common among economists as it is among laypeople. Economists will often justify it on the grounds that in an ideal perfect competitive market the two would be in some sense equated. But of course we don’t live in that ideal perfect market, and even if we did, they would only beproportional at the margin, not fundamentally equal across the board. It would still be obviously wrong to characterize the total value or cost of work by the price paid for it; only the last unit of effort would be priced so that marginal value equals price equals marginal cost. The first 39 hours of your work would cost you less than what you were paid, and produce more than you were paid; only that 40th hour would set the three equal.

Once you account for all the various market distortions in the world, there’s no particular relationship between what something costs—in terms of real effort and suffering—and its price—in monetary terms. Things can be expensive and easy, or cheap and awful. In fact, they often seem to be; for some reason, there seems to be a pattern where the most terrible, miserable jobs (e.g. coal mining) actually pay the leastand the easiest, most pleasant jobs (e.g. stock trading) pay the most. Some jobs that benefit society pay well (e.g. doctors) and others pay terribly or not at all (e.g. climate activists). Some actions that harm the world get punished (e.g. armed robbery) and others get rewarded with riches (e.g. oil drilling). In the real world, whether a job is good or bad and whether it is paid well or poorly seem to be almost unrelated.

In fact, sometimes they seem even negatively related, where we often feel tempted to “sell out” and do something destructive in order to get higher pay. This is likely due to Berkson’s paradox: If people are willing to do jobs if they are either high-paying or beneficial to humanity, then we should expect that, on average, most of the high-paying jobs people do won’t be beneficial to humanity. Even if there were inherently no correlation or a small positive one, people’s refusal to do harmful low-paying work removes those jobs from our sample and results in a negative correlation in what remains.

I think that the best solution, ultimately, is to stop reckoning costs in money entirely. We should reckon them in happiness.

This is of course much more difficult than simply using prices; it’s not easy to say exactly how many QALY are sacrificed in the extraction of cocoa beans or the drilling of offshore oil wells. But if we actually did find a way to count them, I strongly suspect we’d find that it was far more than we ought to be willing to pay.

A very rough approximation, surely flawed but at least a start, would be to simply convert all payments into proportions of their recipient’s income: For full-time wages, this would result in basically everyone being counted the same, as 1 hour of work if you work 40 hours per week, 50 weeks per year is precisely 0.05% of your annual income. So we could say that whatever is equivalent to your hourly wage constitutes 50 microQALY.

This automatically implies that every time a rich person pays a poor person, QALY increase, while every time a poor person pays a rich person, QALY decrease. This is not an error in the calculation. It is a fact of the universe. We ignore it only at out own peril. All wealth redistributed downward is a benefit, while all wealth redistributed upward is a harm. That benefit may cause some other harm, or that harm may be compensated by some other benefit; but they are still there.

This would also put some things in perspective. When HSBC was fined £70 million for its crimes, that can be compared against its £1.5 billion in net income; if it were an individual, it would have been hurt about 50 milliQALY, which is about what I would feel if I lost $2000. Of course, it’s not a person, and it’s not clear exactly how this loss was passed through to employees or shareholders; but that should give us at least some sense of how small that loss was for them. They probably felt it… a little.

When Trump was ordered to pay a $1.3 million settlement, based on his $2.5 billion net wealth (corresponding to roughly $125 million in annual investment income), that cost him about 10 milliQALY; for me that would be about $500.

At the other extreme, if someone goes from making $1 per day to making $1.50 per day, that’s a 50% increase in their income—500 milliQALY per year.

For those who have no income at all, this becomes even trickier; for them I think we should probably use their annual consumption, since everyone needs to eat and that costs something, though likely not very much. Or we could try to measure their happiness directly, trying to determine how much it hurts to not eat enough and work all day in sweltering heat.

Properly shifting this whole cultural norm will take a long time. For now, I leave you with this: Any time you see a monetary figure, ask yourself: “How much is that worth to them?” The world will seem quite different once you get in the habit of that.