Home price targeting

Jan 29 JDN 2459973

One of the largest divides in opinion between economists and the general population concerns the question of rent control. While the general public mostly supports rent control (and often votes for it in referenda), economists almost universally oppose it. It’s hard to get a consensus among economists on almost anything, and yet here we have one; but people don’t seem to care.

Why? I think it’s because high rents are a genuine and serious problem, which economists have invested remarkably little effort in trying to solve. Housing prices are one of the chief drivers of long-term inflation, and with most people spending over a third of their income on housing, even relatively small increases in housing prices can cause a lot of suffering.

One thing we do know is that rent control does not work as a long-term solution. Maybe in response to some short-term shock it would make sense. Maybe you do it for awhile as you wait for better long-term solutions to take effect. But simply putting an arbitrary cap on prices will create shortages in the long run—and it is not a coincidence that cities with strict rent control have the worst housing shortages and the greatest rates of homelessness. Rent control doesn’t even do a good job of helping the people who need it most.

Price ceilings in general are just… not a good idea. If people are selling something at a price that you think is too high and you just insist that they aren’t allowed to, they don’t generally sell at a lower price—they just don’t sell at all. There are a few exceptions; in a very monopolistic market, a well-targeted price ceiling might actually work. And short-run housing supply is inelastic enough that rent control isn’t the worst kind of price ceiling. But as a general strategy, price ceilings just aren’t an effective way of making things cheaper.

This is why we so rarely use them as a policy intervention. When the Federal Reserve wants to achieve a certain interest rate on bonds, do they simply demand that people buy the bonds at that price? No. They adjust the supply of bonds in the market until the market price goes to what they want it to be.

Prices aren’t set in a vacuum by the fiat of evil corporations. They are an equilibrium outcome of a market system. There are things you can do to intervene and shift that equilibrium, but if you just outlaw certain prices, it will result in a new equilibrium—it won’t simply be the same amount sold at the new price you wanted.

Maybe some graphs would help explain this. In each graph, the red line is the demand and the blue line is the supply.

Here is what the market looks like before intervention: The price is $6. We’ll say that’s too high; people can’t afford it.

[no_intervention.png]

Now suppose we impose a price ceiling at $4 (the green line). You aren’t allowed to charge more than $4. What will happen? Companies will charge $4. But they will also produce and sell a smaller quantity than before.

Far better would be to increase the supply of the good, shifting to a new supply curve (the purple line). Then you would reduce the price and increase the amount of the good available.

[supply_intervention.png]

This is precisely what we do with government bonds when we want to raise interest rates. (A greater supply of bonds makes their prices lower, which makes their yields higher.) And when we want to lower interest rates, we do the opposite.

Of course, with bonds, it’s easy to control the supply; it’s all just numbers in a network. Increasing the supply of housing is a much greater undertaking; you actually need to build new housing. But ultimately, the only way to ensure that housing is available and affordable for everyone is in fact to build more housing.

There are various ways we might accomplish that; one of the simplest would be to simply relax zoning restrictions that make it difficult to build high-density housing in cities. Those are bad laws anyway; they only benefit a small number of people a little bit while harming a large number of people a lot. (The problem is that the people they benefit are the local homeowners who show up to city council meetings.)

But we could do much more. I propose that we really use interest-rate targeting as our model and introduce home price targeting. I want the federal government to exercise eminent domain and order the construction of new high-density housing in any city that has rents above a certain threshold—if you like, the same threshold you were thinking of setting the rent control at.

Is this an extreme solution? Perhaps. But housing affordability is an extreme problem. And I keep hearing from the left wing that economists aren’t willing to consider “radical enough” solutions to housing (by which they always seem to mean the tried-and-failed strategy of rent control). So here’s a radical solution for you. If cities refuse to build enough housing for their people, make them do it. Buy up and bulldoze their “lovely” “historic” suburban neighborhoods that are ludicrous wastes of land (and also environmentally damaging), and replace them with high-rise apartments. (Get rid of the golf courses while you’re at it.)

This would be expensive, of course; we have to pay to build all those new apartments. But hardly so expensive as living in a society where people can’t afford to live where they want.

In fact, estimates suggest that we are losing over one trillion dollars per year in unrealized productivity because people can’t afford to live in the highest-rent cities. Average income per worker in the US has been reduced by nearly $7000 per year because of high housing prices. So that’s the budget you should be comparing against. Keeping things as they are is like taxing our whole population about 9%. (And it’s probably regressive, so more than that for poor people.)

Would this destroy the “charm” of the city? I dunno, maybe a little. But if the only thing your city had going for it was some old houses that are clearly not an efficient use of space, that’s pretty sad. And it is quite possible to build a city at high density and have it still be beautiful and a major draw for tourists; Paris is a lot denser than far-less-picturesque Houston. (Though I’ll admit, Houston is far more affordable than Paris. It’s not just about density.) And is the “charm” of your city really worth making it so unaffordable that people can’t move there without risking becoming homeless?

There are a lot of details to be worked out: How serious must things get before the federal government steps in? (Wherever we draw the line, San Francisco is surely well past it.) It takes a long time to build houses and let prices adjust, so how do we account for that time-lag? Where does the money come from, actually? Debt? Taxes? But these could all be resolved.

Of course, it’s a pipe dream; we’re never going to implement this policy, because homeowners dread the idea of their home values going down (even though it would actually make their property taxes cheaper!). I’d even be willing to consider some kind of program that would let people refinance underwater mortgages to write off the lost equity, if that’s what it takes to actually build enough housing.

Because there is really only one thing that’s ever going to solve the (global!) housing crises:

Build more homes.

There should be a glut of nurses.

Jan 15 JDN 2459960

It will not be news to most of you that there is a worldwide shortage of healthcare staff, especially nurses and emergency medical technicians (EMTs). I would like you to stop and think about the utterly terrible policy failure this represents. Maybe if enough people do, we can figure out a way to fix it.

It goes without saying—yet bears repeating—that people die when you don’t have enough nurses and EMTs. Indeed, surely a large proportion of the 2.6 million (!) deaths each year from medical errors are attributable to this. It is likely that at least one million lives per year could be saved by fixing this problem worldwide. In the US alone, over 250,000 deaths per year are caused by medical errors; so we’re looking at something like 100,000 lives we could safe each year by removing staffing shortages.

Precisely because these jobs have such high stakes, the mere fact that we would ever see the word “shortage” beside “nurse” or “EMT” was already clear evidence of dramatic policy failure.

This is not like other jobs. A shortage of accountants or baristas or even teachers, while a bad thing, is something that market forces can be expected to correct in time, and it wouldn’t be unreasonable to simply let them do so—meaning, let wages rise on their own until the market is restored to equilibrium. A “shortage” of stockbrokers or corporate lawyers would in fact be a boon to our civilization. But a shortage of nurses or EMTs or firefighters (yes, there are those too!) is a disaster.

Partly this is due to the COVID pandemic, which has been longer and more severe than any but the most pessimistic analysts predicted. But there shortages of nurses before COVID. There should not have been. There should have been a massive glut.

Even if there hadn’t been a shortage of healthcare staff before the pandemic, the fact that there wasn’t a glut was already a problem.

This is what a properly-functioning healthcare policy would look like: Most nurses are bored most of the time. They are widely regarded as overpaid. People go into nursing because it’s a comfortable, easy career with very high pay and usually not very much work. Hospitals spend most of their time with half their beds empty and half of their ambulances parked while the drivers and EMTs sit around drinking coffee and watching football games.

Why? Because healthcare, especially emergency care, involves risk, and the stakes couldn’t be higher. If the number of severely sick people doubles—as in, say, a pandemic—a hospital that usually runs at 98% capacity won’t be able to deal with them. But a hospital that usually runs at 50% capacity will.

COVID exposed to the world what a careful analysis would already have shown: There was not nearly enough redundancy in our healthcare system. We had been optimizing for a narrow-minded, short-sighted notion of “efficiency” over what we really needed, which was resiliency and robustness.

I’d like to compare this to two other types of jobs.

The first is stockbrokers.Set aside for a moment the fact that most of what they do is worthless is not actively detrimental to human society. Suppose that their most adamant boosters are correct and what they do is actually really important and beneficial.

Their experience is almost like what I just said nurses ought to be. They are widely regarded (correctly) as very overpaid. There is never any shortage of them; there are people lining up to be hired. People go into the work not because they care about it or even because they are particularly good at it, but because they know it’s an easy way to make a lot of money.

The one thing that seems to be different from my image may not be as different as it seems. Stockbrokers work long hours, but nobody can really explain why. Frankly most of what they do can be—and has been—successfully automated. Since there simply isn’t that much work for them to do, my guess is that most of the time they spend “working” 60-80 hour weeks is actually not actually working, but sitting around pretending to work. Since most financial forecasters are outperformed by a simple diversified portfolio, the most profitable action for most stock analysts to take most of the time would be nothing.

It may also be that stockbrokers work hard at sales—trying to convince people to buy and sell for bad reasons in order to earn sales commissions. This would at least explain why they work so many hours, though it would make it even harder to believe that what they do benefits society. So if we imagine our “ideal” stockbroker who makes the world a better place, I think they mostly just use a simple algorithm and maybe adjust it every month or two. They make better returns than their peers, but spend 38 hours a week goofing off.

There is a massive glut of stockbrokers. This is what it looks like when a civilization is really optimized to be good at something.

The second is soldiers. Say what you will about them, no one can dispute that their job has stakes of life and death. A lot of people seem to think that the world would be better off without them, but that’s at best only true if everyone got rid of them; if you don’t have soldiers but other countries do, you’re going to be in big trouble. (“We’ll beat our swords into liverwurst / Down by the East Riverside; / But no one wants to be the first!”) So unless and until we can solve that mother of all coordination problems, we need to have soldiers around.

What is life like for a soldier? Well, they don’t seem overpaid; if anything, underpaid. (Maybe some of the officers are overpaid, but clearly not most of the enlisted personnel. Part of the problem there is that “pay grade” is nearly synonymous with “rank”—it’s a primate hierarchy, not a rational wage structure. Then again, so are most industries; the military just makes it more explicit.) But there do seem to be enough of them. Military officials may lament of “shortages” of soldiers, but they never actually seem to want for troops to deploy when they really need them. And if a major war really did start that required all available manpower, the draft could be reinstated and then suddenly they’d have it—the authority to coerce compliance is precisely how you can avoid having a shortage while keeping your workers underpaid. (Russia’s soldier shortage is genuine—something about being utterly outclassed by your enemy’s technological superiority in an obviously pointless imperialistic war seems to hurt your recruiting numbers.)

What is life like for a typical soldier? The answer may surprise you. The overwhelming answer in surveys and interviews (which also fits with the experiences I’ve heard about from friends and family in the military) is that life as a soldier is boring. All you do is wake up in the morning and push rubbish around camp.” Bosnia was scary for about 3 months. After that it was boring. That is pretty much day to day life in the military. You are bored.”

This isn’t new, nor even an artifact of not being in any major wars: Union soldiers in the US Civil War had the same complaint. Even in World War I, a typical soldier spent only half the time on the front, and when on the front only saw combat 1/5 of the time. War is boring.

In other words, there is a massive glut of soldiers. Most of them don’t even know what to do with themselves most of the time.

This makes perfect sense. Why? Because an army needs to be resilient. And to be resilient, you must be redundant. If you only had exactly enough soldiers to deploy in a typical engagement, you’d never have enough for a really severe engagement. If on average you had enough, that means you’d spend half the time with too few. And the costs of having too few soldiers are utterly catastrophic.

This is probably an evolutionary outcome, in fact; civilizations may have tried to have “leaner” militaries that didn’t have so much redundancy, and those civilizations were conquered by other civilizations that were more profligate. (This is not to say that we couldn’t afford to cut military spending at all; it’s one thing to have the largest military in the world—I support that, actually—but quite another to have more than the next 10 combined.)

What’s the policy solution here? It’s actually pretty simple.

Pay nurses and EMTs more. A lot more. Whatever it takes to get to the point where we not only have enough, but have so many people lining up to join we don’t even know what to do with them all. If private healthcare firms won’t do it, force them to—or, all the more reason to nationalize healthcare. The stakes are far too high to leave things as they are.

Would this be expensive? Sure.

Removing the shortage of EMTs wouldn’t even be that expensive. There are only about 260,000 EMTs in the US, and they get paid the apallingly low median salary of $36,000. That means we’re currently spending only about $9 billion per year on EMTs. We could double their salaries and double their numbers for only an extra $27 billion—about 0.1% of US GDP.

Nurses would cost more. There are about 5 million nurses in the US, with an average salary of about $78,000, so we’re currently spending about $390 billion a year on nurses. We probably can’t afford to double both salary and staffing. But maybe we could increase both by 20%, costing about an extra $170 billion per year.

Altogether that would cost about $200 billion per year. To save one hundred thousand lives.

That’s $2 million per life saved, or about $40,000 per QALY. The usual estimate for the value of a statistical life is about $10 million, and the usual threshold for a cost-effective medical intervention is $50,000-$100,000 per QALY; so we’re well under both. This isn’t as efficient as buying malaria nets in Africa, but it’s more efficient than plenty of other things we’re spending on. And this isn’t even counting additional benefits of better care that go beyond lives saved.

In fact if we nationalized US healthcare we could get more than these amounts in savings from not wasting our money on profits for insurance and drug companies—simply making the US healthcare system as cost-effective as Canada’s would save $6,000 per American per year, or a whopping $1.9 trillion. At that point we could double the number of nurses and their salaries and still be spending less.

No, it’s not because nurses and doctors are paid much less in Canada than the US. That’s true in some countries, but not Canada. The median salary for nurses in Canada is about $95,500 CAD, which is $71,000 US at current exchange rates. Doctors in Canada can make anywhere from $80,000 to $400,000 CAD, which is $60,000 to $300,000 US. Nor are healthcare outcomes in Canada worse than the US; if anything, they’re better, as Canadians live an average of four years longer than Americans. No, the radical difference in cost—a factor of 2 to 1—between Canada and the US comes from privatization. Privatization is supposed to make things more efficient and lower costs, but it has absolutely not done that in US healthcare.

And if our choice is between spending more money and letting hundreds of thousands or millions of people die every year, that’s no choice at all.

What is it with EA and AI?

Jan 1 JDN 2459946

Surprisingly, most Effective Altruism (EA) leaders don’t seem to think that poverty alleviation should be our top priority. Most of them seem especially concerned about long-term existential risk, such as artificial intelligence (AI) safety and biosecurity. I’m not going to say that these things aren’t important—they certainly are important—but here are a few reasons I’m skeptical that they are really the most important the way that so many EA leaders seem to think.

1. We don’t actually know how to make much progress at them, and there’s only so much we can learn by investing heavily in basic research on them. Whereas, with poverty, the easy, obvious answer turns out empirically to be extremely effective: Give them money.

2. While it’s easy to multiply out huge numbers of potential future people in your calculations of existential risk (and this is precisely what people do when arguing that AI safety should be a top priority), this clearly isn’t actually a good way to make real-world decisions. We simply don’t know enough about the distant future of humanity to be able to make any kind of good judgments about what will or won’t increase their odds of survival. You’re basically just making up numbers. You’re taking tiny probabilities of things you know nothing about and multiplying them by ludicrously huge payoffs; it’s basically the secular rationalist equivalent of Pascal’s Wager.

2. AI and biosecurity are high-tech, futuristic topics, which seem targeted to appeal to the sensibilities of a movement that is still very dominated by intelligent, nerdy, mildly autistic, rich young White men. (Note that I say this as someone who very much fits this stereotype. I’m queer, not extremely rich and not entirely White, but otherwise, yes.) Somehow I suspect that if we asked a lot of poor Black women how important it is to slightly improve our understanding of AI versus giving money to feed children in Africa, we might get a different answer.

3. Poverty eradication is often characterized as a “short term” project, contrasted with AI safety as a “long term” project. This is (ironically) very short-sighted. Eradication of poverty isn’t just about feeding children today. It’s about making a world where those children grow up to be leaders and entrepreneurs and researchers themselves. The positive externalities of economic development are staggering. It is really not much of an exaggeration to say that fascism is a consequence of poverty and unemployment.

4. Currently the main thing that most Effective Altruism organizations say they need most is “talent”; how many millions of person-hours of talent are we leaving on the table by letting children starve or die of malaria?

5. Above all, existential risk can’t really be what’s motivating people here. The obvious solutions to AI safety and biosecurity are not being pursued, because they don’t fit with the vision that intelligent, nerdy, young White men have of how things should be. Namely: Ban them. If you truly believe that the most important thing to do right now is reduce the existential risk of AI and biotechnology, you should support a worldwide ban on research in artificial intelligence and biotechnology. You should want people to take all necessary action to attack and destroy institutions—especially for-profit corporations—that engage in this kind of research, because you believe that they are threatening to destroy the entire world and this is the most important thing, more important than saving people from starvation and disease. I think this is really the knock-down argument; when people say they think that AI safety is the most important thing but they don’t want Google and Facebook to be immediately shut down, they are either confused or lying. Honestly I think maybe Google and Facebook should be immediately shut down for AI safety reasons (as well as privacy and antitrust reasons!), and I don’t think AI safety is yet the most important thing.

Why aren’t people doing that? Because they aren’t actually trying to reduce existential risk. They just think AI and biotechnology are really interesting, fascinating topics and they want to do research on them. And I agree with that, actually—but then they need stop telling people that they’re fighting to save the world, because they obviously aren’t. If the danger were anything like what they say it is, we should be halting all research on these topics immediately, except perhaps for a very select few people who are entrusted with keeping these forbidden secrets and trying to find ways to protect us from them. This may sound radical and extreme, but it is not unprecedented: This is how we handle nuclear weapons, which are universally recognized as a global existential risk. If AI is really as dangerous as nukes, we should be regulating it like nukes. I think that in principle it could be that dangerous, and may be that dangerous someday—but it isn’t yet. And if we don’t want it to get that dangerous, we don’t need more AI researchers, we need more regulations that stop people from doing harmful AI research! If you are doing AI research and it isn’t directly involved specifically in AI safety, you aren’t saving the world—you’re one of the people dragging us closer to the cliff! Anything that could make AI smarter but doesn’t also make it safer is dangerous. And this is clearly true of the vast majority of AI research, and frankly to me seems to also be true of the vast majority of research at AI safety institutes like the Machine Intelligence Research Institute.

Seriously, look through MIRI’s research agenda: It’s mostly incredibly abstract and seems completely beside the point when it comes to preventing AI from taking control of weapons or governments. It’s all about formalizing Bayesian induction. Thanks to you, Skynet can have a formally computable approximation to logical induction! Truly we are saved. Only two of their papers, on “Corrigibility” and “AI Ethics”, actually struck me as at all relevant to making AI safer. The rest is largely abstract mathematics that is almost literally navel-gazing—it’s all about self-reference. Eliezer Yudkowsky finds self-reference fascinating and has somehow convinced an entire community that it’s the most important thing in the world. (I actually find some of it fascinating too, especially the paper on “Functional Decision Theory”, which I think gets at some deep insights into things like why we have emotions. But I don’t see how it’s going to save the world from AI.)

Don’t get me wrong: AI also has enormous potential benefits, and this is a reason we may not want to ban it. But if you really believe that there is a 10% chance that AI will wipe out humanity by 2100, then get out your pitchforks and your EMP generators, because it’s time for the Butlerian Jihad. A 10% chance of destroying all humanity is an utterly unacceptable risk for any conceivable benefit. Better that we consign ourselves to living as we did in the Neolithic than risk something like that. (And a globally-enforced ban on AI isn’t even that; it’s more like “We must live as we did in the 1950s.” How would we survive!?) If you don’t want AI banned, maybe ask yourself whether you really believe the risk is that high—or are human brains just really bad at dealing with small probabilities?

I think what’s really happening here is that we have a bunch of guys (and yes, the EA and especially AI EA-AI community is overwhelmingly male) who are really good at math and want to save the world, and have thus convinced themselves that being really good at math is how you save the world. But it isn’t. The world is much messier than that. In fact, there may not be much that most of us can do to contribute to saving the world; our best options may in fact be to donate money, vote well, and advocate for good causes.

Let me speak Bayesian for a moment: The prior probability that you—yes, you, out of all the billions of people in the world—are uniquely positioned to save it by being so smart is extremely small. It’s far more likely that the world will be saved—or doomed—by people who have power. If you are not the head of state of a large country or the CEO of a major multinational corporation, I’m sorry; you probably just aren’t in a position to save the world from AI.

But you can give some money to GiveWell, so maybe do that instead?

Charity shouldn’t end at home

It so happens that this week’s post will go live on Christmas Day. I always try to do some kind of holiday-themed post around this time of year, because not only Christmas, but a dozen other holidays from various religions all fall around this time of year. The winter solstice seems to be a very popular time for holidays, and has been since antiquity: The Romans were celebrating Saturnalia 2000 years ago. Most of our ‘Christmas’ traditions are actually derived from Yuletide.

These holidays certainly mean many different things to different people, but charity and generosity are themes that are very common across a lot of them. Gift-giving has been part of the season since at least Saturnalia and remains as vital as ever today. Most of those gifts are given to our friends and loved ones, but a substantial fraction of people also give to strangers in the form of charitable donations: November and December have the highest rates of donation to charity in the US and the UK, with about 35-40% of people donating during this season. (Of course this is complicated by the fact that December 31 is often the day with the most donations, probably from people trying to finish out their tax year with a larger deduction.)

My goal today is to make you one of those donors. There is a common saying, often attributed to the Bible but not actually present in it: “Charity begins at home”.

Perhaps this is so. There’s certainly something questionable about the Effective Altruism strategy of “earning to give” if it involves abusing and exploiting the people around you in order to make more money that you then donate to worthy causes. Certainly we should be kind and compassionate to those around us, and it makes sense for us to prioritize those close to us over strangers we have never met. But while charity may begin at home, it must not end at home.

There are so many global problems that could benefit from additional donations. While global poverty has been rapidly declining in the early 21st century, this is largely because of the efforts of donors and nonprofit organizations. Official Development Assitance has been roughly constant since the 1970s at 0.3% of GNI among First World countries—well below international targets set decades ago. Total development aid is around $160 billion per year, while private donations from the United States alone are over $480 billion. Moreover, 9% of the world’s population still lives in extreme poverty, and this rate has actually slightly increased the last few years due to COVID.

There are plenty of other worthy causes you could give to aside from poverty eradication, from issues that have been with us since the dawn of human civilization (the Humane Society International for domestic animal welfare, the World Wildlife Federation for wildlife conservation) to exotic fat-tail sci-fi risks that are only emerging in our own lifetimes (the Machine Intelligence Research Institute for AI safety, the International Federation of Biosafety Associations for biosecurity, the Union of Concerned Scientists for climate change and nuclear safety). You could fight poverty directly through organizations like UNICEF or GiveDirectly, fight neglected diseases through the Schistomoniasis Control Initiative or the Against Malaria Foundation, or entrust an organization like GiveWell to optimize your donations for you, sending them where they think they are needed most. You could give to political causes supporting civil liberties (the American Civil Liberties Union) or protecting the rights of people of color (the North American Association of Colored People) or LGBT people (the Human Rights Campaign).

I could spent a lot of time and effort trying to figure out the optimal way to divide up your donations and give them to causes such as this—and then convincing you that it’s really the right one. (And there is even a time and place for that, because seemingly-small differences can matter a lot in this.) But instead I think I’m just going to ask you to pick something. Give something to an international charity with a good track record.

I think we worry far too much about what is the best way to give—especially people in the Effective Altruism community, of which I’m sort of a marginal member—when the biggest thing the world really needs right now is just more people giving more. It’s true, there are lots of worthless or even counter-productive charities out there: Please, please do not give to the Salvation Army. (And think twice before donating to your own church; if you want to support your own community, okay, go ahead. But if you want to make the world better, there are much better places to put your money.)

But above all, give something. Or if you already give, give more. Most people don’t give at all, and most people who give don’t give enough.

In defense of civility

Dec 18 JDN 2459932

Civility is in short supply these days. Perhaps it has always been in short supply; certainly much of the nostalgia for past halcyon days of civility is ill-founded. Wikipedia has an entire article on hundreds of recorded incidents of violence in legislative assemblies, in dozens of countries, dating all the way from to the Roman Senate in 44 BC to Bosnia in 2019. But the Internet seems to bring about its own special kind of incivility, one which exposes nearly everyone to some of the worst vitriol the entire world has to offer. I think it’s worth talking about why this is bad, and perhaps what we might do about it.

For some, the benefits of civility seem so self-evident that they don’t even bear mentioning. For others, the idea of defending civility may come across as tone-deaf or even offensive. I would like to speak to both of those camps today: If you think the benefits of civility are obvious, I assure you, they aren’t to everyone. And if you think that civility is just a tool of the oppressive status quo, I hope I can make you think again.

A lot of the argument against civility seems to be founded in the notion that these issues are important, lives are at stake, and so we shouldn’t waste time and effort being careful how we speak to each other. How dare you concern yourself with the formalities of argumentation when people are dying?

But this is totally wrongheaded. It is precisely because these issues are important that civility is vital. It is precisely because lives are at stake that we must make the right decisions. And shouting and name-calling (let alone actual fistfights or drawn daggers—which have happened!) are not conducive to good decision-making.

If you shout someone down when choosing what restaurant to have dinner at, you have been very rude and people may end up unhappy with their dining experience—but very little of real value has been lost. But if you shout someone down when making national legislation, you may cause the wrong policy to be enacted, and this could lead to the suffering or death of thousands of people.

Think about how court proceedings work. Why are they so rigid and formal, with rules upon rules upon rules? Because the alternative was capricious violence. In the absence of the formal structure of a court system, so-called ‘justice’ was handed out arbitrarily, by whoever was in power, or by mobs of vigilantes. All those seemingly-overcomplicated rules were made in order to resolve various conflicts of interest and hopefully lead toward more fair, consistent results in the justice system. (And don’t get me wrong; they still could stand to be greatly improved!)

Legislatures have complex rules of civility for the same reason: Because the outcome is so important, we need to make sure that the decision process is as reliable as possible. And as flawed as existing legislatures still are, and as silly as it may seem to insist upon addressing ‘the Honorable Representative from the Great State of Vermont’, it’s clearly a better system than simply letting them duke it out with their fists.

A related argument I would like to address is that of ‘tone policing‘. If someone objects, not to the content of what you are saying, but to the tone in which you have delivered it, are they arguing in bad faith?

Well, possibly. Certainly, arguments about tone can be used that way. In particular I remember that this was basically the only coherent objection anyone could come up with against the New Atheism movement: “Well, sure, obviously, God isn’t real and religion is ridiculous; but why do you have to be so mean about it!?”

But it’s also quite possible for tone to be itself a problem. If your tone is overly aggressive and you don’t give people a chance to even seriously consider your ideas before you accuse them of being immoral for not agreeing with you—which happens all the time—then your tone really is the problem.

So, how can we tell which is which? I think a good way to reply to what you think might be bad-faith tone policing is this: “What sort of tone do you think would be better?”

I think there are basically three possible responses:

1. They can’t offer one, because there is actually no tone in which they would accept the substance of your argument. In that case, the tone policing really is in bad faith; they don’t want you to be nicer, they want you to shut up. This was clearly the case for New Atheism: As Daniel Dennett aptly remarked, “There’s simply no polite way to tell someone they have dedicated their lives to an illusion.” But sometimes, such things need to be said all the same.

2. They offer an alternative argument you could make, but it isn’t actually expressing your core message. Either they have misunderstood your core message, or they actually disagree with the substance of your argument and should be addressing it on those terms.

3. They offer an alternative way of expressing your core message in a milder, friendlier tone. This means that they are arguing in good faith and actually trying to help you be more persuasive!

I don’t know how common each of these three possibilities is; it could well be that the first one is the most frequent occurrence. That doesn’t change the fact that I have definitely been at the other end of the third one, where I absolutely agree with your core message and want your activism to succeed, but I can see that you’re acting like a jerk and nobody will want to listen to you.

Here, let me give some examples of the type of argument I’m talking about:

1. “Defund the police”: This slogan polls really badly. Probably because most people have genuine concerns about crime and want the police to protect them. Also, as more and more social services (like for mental health and homelessness) get co-opted into policing, this slogan makes it sound like you’re just going to abandon those people. But do we need serious, radical police reform? Absolutely. So how about “Reform the police”, “Put police money back into the community”, or even “Replace the police”?

2. “All Cops Are Bastards”: Speaking of police reform, did I mention we need it? A lot of it? Okay. Now, let me ask you: All cops? Every single one of them? There is not a single one out of the literally millions of police officers on this planet who is a good person? Not one who is fighting to take down police corruption from within? Not a single individual who is trying to fix the system while preserving public safety? Now, clearly, it’s worth pointing out, some cops are bastards—but hey, that even makes a better acronym: SCAB. In fact, it really is largely a few bad apples—the key point here is that you need to finish the aphorism: “A few bad apples spoil the whole barrel.” The number of police who are brutal and corrupt is relatively small, but as long as the other police continue to protect them, the system will be broken. Either you get those bad apples out pronto, or your whole barrel is bad. But demonizing the very people who are in the best position to implement those reforms—good police officers—is not helping.

3. “Be gay, do crime”: I know it’s tongue-in-cheek and ironic. I get that. It’s still a really dumb message. I am absolutely on board with LGBT rights. Even aside from being queer myself, I probably have more queer and trans friends than straight friends at this point. But why in the world would you want to associate us with petty crime? Why are you lumping us in with people who harm others at best out of desperation and at worst out of sheer greed? Even if you are literally an anarchist—which I absolutely am not—you’re really not selling anarchism well if the vision you present of it is a world of unfettered crime! There are dozens of better pro-LGBT slogans out there; pick one. Frankly even “do gay, be crime” is better, because it’s more clearly ironic. (Also, you can take it to mean something like this: Don’t just be gay, do gay—live your fullest gay life. And if you can be crime, that means that the system is fundamentally unjust: You can be criminalized just for who you are. And this is precisely what life is like for millions of LGBT people on this planet.)

A lot of people seem to think that if you aren’t immediately convinced by the most vitriolic, aggressive form of an argument, then you were never going to be convinced anyway and we should just write you off as a potential ally. This isn’t just obviously false; it’s incredibly dangerous.

The whole point of activism is that not everyone already agrees with you. You are trying to change minds. If it were really true that all reasonable, ethical people already agreed with your view, you wouldn’t need to be an activist. The whole point of making political arguments is that people can be reasonable and ethical and still be mistaken about things, and when we work hard to persuade them, we can eventually win them over. In fact, on some things we’ve actually done spectacularly well.

And what about the people who aren’t reasonable and ethical? They surely exist. But fortunately, they aren’t the majority. They don’t rule the whole world. If they did, we’d basically be screwed: If violence is really the only solution, then it’s basically a coin flip whether things get better or worse over time. But in fact, unreasonable people are outnumbered by reasonable people. Most of the things that are wrong with the world are mistakes, errors that can be fixed—not conflicts between irreconcilable factions. Our goal should be to fix those mistakes wherever we can, and that means being patient, compassionate educators—not angry, argumentative bullies.

The Efficient Roulette Hypothesis

Nov 27 JDN 2459911

The efficient market hypothesis is often stated in several different ways, and these are often treated as equivalent. There are at least three very different definitions of it that people seem to use interchangeably:

  1. Market prices are optimal and efficient.
  2. Market prices aggregate and reflect all publicly-available relevant information.
  3. Market prices are difficult or impossible to predict.

The first reading, I will call the efficiency hypothesis, because, well, it is what we would expect a phrase like “efficient market hypothesis” to mean. The ordinary meaning of those words would imply that we are asserting that market prices are in some way optimal or near-optimal, that markets get prices “right” in some sense at least the vast majority of the time.

The second reading I’ll call the information hypothesis; it implies that market prices are an information aggregation mechanism which automatically incorporates all publicly-available information. This already seems quite different from efficiency, but it seems at least tangentially related, since information aggregation could be one useful function that markets serve.

The third reading I will call the unpredictability hypothesis; it says simply that market prices are very difficult to predict, and so you can’t reasonably expect to make money by anticipating market price changes far in advance of everyone else. But as I’ll get to in more detail shortly, that doesn’t have the slightest thing to do with efficiency.

The empirical data in favor of the unpredictability hypothesis is quite overwhelming. It’s exceedingly hard to beat the market, and for most people, most of the time, the smartest way to invest is just to buy a diversified portfolio and let it sit.

The empirical data in favor of the information hypothesis is mixed, but it’s at least plausible; most prices do seem to respond to public announcements of information in ways we would expect, and prediction markets can be surprisingly accurate at forecasting the future.

The empirical data in favor of the efficiency hypothesis, on the other hand, is basically nonexistent. On the one hand this is a difficult hypothesis to test directly, since it isn’t clear what sort of benchmark we should be comparing against—so it risks being not even wrong. But if you consider basically any plausible standard one could try to set for how an efficient market would run, our actual financial markets in no way resemble it. They are erratic, jumping up and down for stupid reasons or no reason at all. They are prone to bubbles, wildly overvaluing worthless assets. They have collapsed governments and ruined millions of lives without cause. They have resulted in the highest-paying people in the world doing jobs that accomplish basically nothing of genuine value. They are, in short, a paradigmatic example of what inefficiency looks like.

Yet, we still have economists who insist that “the efficient market hypothesis” is a proven fact, because the unpredictability hypothesis is clearly correct.

I do not think this is an accident. It’s not a mistake, or an awkwardly-chosen technical term that people are misinterpreting.

This is a motte and bailey doctrine.

Motte-and-bailey was a strategy in medieval warfare. Defending an entire region is very difficult, so instead what was often done was constructing a small, highly defensible fortification—the motte—while accepting that the land surrounding it—the bailey—would not be well-defended. Most of the time, the people stayed on the bailey, where the land was fertile and it was relatively pleasant to live. But should they be attacked, they could retreat to the motte and defend themselves until the danger was defeated.

A motte-and-bailey doctrine is an analogous strategy used in argumentation. You use the same words for two different versions of an idea: The motte is a narrow, defensible core of your idea that you can provide strong evidence for, but it isn’t very strong and may not even be interesting or controversial. The bailey is a broad, expansive version of your idea that is interesting and controversial and leads to lots of significant conclusions, but can’t be well-supported by evidence.

The bailey is the efficiency hypothesis: That market prices are optimal and we are fools to try to intervene or even regulate them because the almighty Invisible Hand is superior to us.

The motte is the unpredictability hypothesis: Market prices are very hard to predict, and most people who try to make money by beating the market fail.

By referring to both of these very different ideas as “the efficient market hypothesis”, economists can act as if they are defending the bailey, and prescribe policies that deregulate financial markets on the grounds that they are so optimal and efficient; but then when pressed for evidence to support their beliefs, they can pivot to the motte, and merely show that markets are unpredictable. As long as people don’t catch on and recognize that these are two very different meanings of “the efficient market hypothesis”, then they can use the evidence for unpredictability to support their goal of deregulation.

Yet when you look closely at this argument, it collapses. Unpredictability is not evidence of efficiency; if anything, it’s the opposite. Since the world doesn’t really change on a minute-by-minute basis, an efficient system should actually be relatively predictable in the short term. If prices reflected the real value of companies, they would change only very gradually, as the fortunes of the company change as a result of real-world events. An earthquake or a discovery of a new mine would change stock prices in relevant industries; but most of the time, they’d be basically flat. The occurrence of minute-by-minute or even second-by-second changes in prices basically proves that we are not tracking any genuine changes in value.

Roulette wheels are extremely unpredictable by design—by law, even—and yet no one would accuse them of being an efficient way of allocating resources. If you bet on roulette wheels and try to beat the house, you will almost surely fail, just as you would if you try to beat the stock market—and dare I say, for much the same reasons?

So if we’re going to insist that “efficiency” just means unpredictability, rather than actual, you know, efficiency, then we should all speak of the Efficient Roulette Hypothesis. Anything we can’t predict is now automatically “efficient” and should therefore be left unregulated.

Is the cure for inflation worse than the disease?

Nov 13 JDN 2459897

A lot of people seem really upset about inflation. I’ve previously discussed why this is a bit weird; inflation really just isn’t that bad. In fact, I am increasingly concerned that the usual methods for fixing inflation are considerably worse than inflation itself.

To be clear, I’m not talking about hyperinflationif you are getting triple-digit inflation or more, you are clearly printing too much money and you need to stop. And there are places in the world where this happens.

But what about just regular, ordinary inflation, even when it’s fairly high? Prices rising at 8% or 9% or even 11% per year? What catastrophe befalls our society when this happens?

Okay, sure, if we could snap our fingers and make prices all stable without cost, that would be worth doing. But we can’t. All of our mechanisms for reducing inflation come with costs—and often very high costs.

The chief mechanism by which inflation is currently controlled is open-market operations by central banks such as the Federal Reserve, the Bank of England, and the European Central Bank. These central banks try to reduce inflation by selling bonds, which lowers the price of bonds and reduces capital available to banks, and thereby increases interest rates. This also effectively removes money from the economy, as banks are using that money to buy bonds instead of lending it out. (It is chiefly in this odd indirect sense that the central bank manages the “money supply”.)

But how does this actually reduce inflation? It’s remarkably indirect. It’s actually the higher interest rates which prevent people from buying houses and prevent companies from hiring workers which result in reduced economic growth—or even economic recession—which then is supposed to bring down prices. There’s actually a lot we still don’t know about how this works or how long it should be expected to take. What we do know is that the pain hits quickly and the benefits arise only months or even years later.

As Krugman has rightfully pointed out, the worst pain of the 1970s was not the double-digit inflation; it was the recessions that Paul Volcker’s economic policy triggered in response to that inflation. The inflation wasn’t exactly a good thing; but for most people, the cure was much worse than the disease.

Most laypeople seem to think that prices somehow go up without wages going up, but that simply isn’t how it works. Prices and wages rise at close to the same rate in most countries most of the time. In fact, inflation is often driven chiefly by rising wages rather than the other way around. There are often lags between when the inflation hits and when people see their wages rise; but these lags can actually be in either direction—inflation first or wages first—and for moderate amounts of inflation they are clearly less harmful than the high rates of unemployment that we would get if we fought inflation more aggressively with monetary policy.

Economists are also notoriously vague about exactly how they expect the central bank to reduce inflation. They use complex jargon or broad euphemisms. But when they do actually come out and say they want to reduce wages, it tends to outrage people. Well, that’s one of three main ways that interest rates actually reduce inflation: They reduce wages, they cause unemployment, or they stop people from buying houses. That’s pretty much all that central banks can do.

There may be other ways to reduce inflation, like windfall profits taxes, antitrust action, or even price controls. The first two are basically no-brainers; we should always be taxing windfall profits (if they really are due to a windfall outside a corporation’s control, there’s no incentive to distort), and we should absolutely be increasing antitrust action (why did we reduce it in the first place?). Price controls are riskier—they really do create shortages—but then again, is that really worse than lower wages or unemployment? Because the usual strategy involves lower wages and unemployment.

It’s a little ironic: The people who are usually all about laissez-faire are the ones who panic about inflation and want the government to take drastic action; meanwhile, I’m usually in favor of government intervention, but when it comes to moderate inflation, I think maybe we should just let it be.

Now is the time for CTCR

Nov 6 JDN 2459890

We live in a terrifying time. As Ukraine gains ground in its war with Russia, thanks in part to the deployment of high-tech weapons from NATO, Vladimir Putin has begun to make thinly-veiled threats of deploying his nuclear arsenal in response. No one can be sure how serious he is about this. Most analysts believe that he was referring to the possible use of small-scale tactical nuclear weapons, not a full-scale apocalyptic assault. Many think he’s just bluffing and wouldn’t resort to any nukes at all. Putin has bluffed in the past, and could be doing so again. Honestly, “this is not a bluff” is exactly the sort of thing you say when you’re bluffing—people who aren’t bluffing have better ways of showing it. (It’s like whenever Trump would say “Trust me”, and you’d know immediately that this was an especially good time not to. Of course, any time is a good time not to trust Trump.)

(By the way, financial news is a really weird thing: I actually found this article discussing how a nuclear strike would be disastrous for the economy. Dude, if there’s a nuclear strike, we’ve got much bigger things to worry about than the economy. It reminds me of this XKCD.)

But if Russia did launch nuclear weapons, and NATO responded with its own, it could trigger a nuclear war that would kill millions in a matter of hours. So we need to be prepared, and think very carefully about the best way to respond.

The current debate seems to be over whether to use economic sanctions, conventional military retaliation, or our own nuclear weapons. Well, we already have economic sanctions, and they aren’t making Russia back down. (Though they probably are hurting its war effort, so I’m all for keeping them in place.) And if we were to use our own nuclear weapons, that would only further undermine the global taboo against nuclear weapons and could quite possibly trigger that catastrophic nuclear war. Right now, NATO seems to be going for a bluff of our own: We’ll threaten an overwhelming nuclear response, but then we obviously won’t actually carry it out because that would be murder-suicide on a global scale.

That leaves conventional military retaliation. What sort of retaliation? Several years ago I came up with a very specific method of conventional retaliation I call credible targeted conventional response (CTCR, which you can pronounce “cut-core”). I believe that now would be an excellent time to carry it out.

The basic principle of CTCR is really quite simple: Don’t try to threaten entire nations. A nation is an abstract entity. Threaten people. Decisions are made by people. The response to Vladimir Putin launching nuclear weapons shouldn’t be to kill millions of innocent people in Russia that probably mean even less to Putin than they do to us. It should be to kill Vladimir Putin.

How exactly to carry this out is a matter for military strategists to decide. There are a variety of weapons at our disposal, ranging from the prosaic (covert agents) to the exotic (precision strikes from high-altitude stealth drones). Indeed, I think we should leave it purposefully vague, so that Putin can’t try to defend himself against some particular mode of attack. The whole gamut of conventional military responses should be considered on the table, from a single missile strike to a full-scale invasion.

But the basic goal is quite simple: Launching a nuclear weapon is one of the worst possible war crimes, and it must be met with an absolute commitment to bring the perpetrator to justice. We should be willing to accept some collateral damage, even a lot of collateral damage; carpet-bombing a city shouldn’t be considered out of the question. (If that sounds extreme, consider that we’ve done it before for much weaker reasons.) The only thing that we should absolutely refuse to do is deploy nuclear weapons ourselves.

The great advantage of this strategy—even aside from being obviously more humane than nuclear retaliation—is that it is more credible. It sounds more like something we’d actually be willing to do. And in fact we likely could even get help from insiders in Russia, because there are surely many people in the Russian government who aren’t so loyal to Putin that they’d want him to get away with mass murder. It might not just be an assassination; it might end up turning into a coup. (Also something we’ve done for far weaker reasons.)


This is how we preserve the taboo on nuclear weapons: We refuse to use them, but otherwise stop at nothing to kill anyone who does use them.

I therefore call upon the world to make this threat:

Launch a nuclear weapon, Vladimir Putin, and we will kill you. Not your armies, not your generals—you. It could be a Tomahawk missile at the Kremlin. It could be a car bomb in your limousine, or a Stinger missile at Aircraft One. It could be a sniper at one of your speeches. Or perhaps we’ll poison your drink with polonium, like you do to your enemies. You won’t know when or where. You will live the rest of your short and miserable life in terror. There will be nowhere for you to hide. We will stop at nothing. We will deploy every available resource around the world, and it will be our top priority. And you will die.

That’s how you threaten a psychopath. And it’s what we must do in order to keep the world safe from nuclear war.

The United Kingdom in transition

Oct 30 JDN 2459883

When I first decided to move to Edinburgh, I certainly did not expect it to be such a historic time. The pandemic was already in full swing, but I thought that would be all. But this year I was living in the UK when its leadership changed in two historic ways:

First, there was the death of Queen Elizabeth II, and the coronation of King Charles III.

Second, there was the resignation of Boris Johnson, the appointment of Elizabeth Truss, and then, so rapidly I feel like I have whiplash, the resignation of Elizabeth Truss.

In other words, I have seen the end of the longest-reigning monarch and the rise and fall of the shortest-reigning prime minister in the history of the United Kingdom. The three hundred-year history of the United Kingdom.

The prior probability of such a 300-year-historic event happening during my own 3-year term in the UK is approximately 1%. Yet, here we are. A new king, one of a handful of genuine First World monarchs to be coronated in the 21st century. The others are the Netherlands, Belgium, Spain, Monaco, Andorra, and Luxembourg; none of these have even a third the population of the UK, and if we include every Commonwealth Realm (believe it or not, “realm” is in fact still the official term), Charles III is now king of a supranational union with a population of over 150 million people—half the size of the United States. (Yes, he’s your king too, Canada!) Note that Charles III is not king of the entire Commonwealth of Nations, which includes now-independent nations such as India, Pakistan, and South Africa; that successor to the British Empire contains 54 nations and has a population of over 2 billion.

I still can’t quite wrap my mind around this idea of having a king. It feels even more ancient and anachronistic than the 400-year-old university I work at. Of course I knew that we had a queen before, and that she was old and would presumably die at some point and probably be replaced; but that wasn’t really salient information to me until she actually did die and then there was a ten-mile-long queue to see her body and now next spring they will be swearing in this new guy as the monarch of the fourteen realms. It now feels like I’m living in one of those gritty satirical fractured fairy tales. Maybe it’s an urban fantasy setting; it feels a lot like Shrek, to be honest.

Yet other than feeling surreal, none of this has affected my life all that much. I haven’t even really felt the effects of inflation: Groceries and restaurant meals seem a bit more expensive than they were when we arrived, but it’s well within what our budget can absorb; we don’t have a car here, so we don’t care about petrol prices; and we haven’t even been paying more than usual in natural gas because of the subsidy programs. Actually it’s probably been good for our household finances that the pound is so weak and the dollar is so strong. I have been much more directly affected by the university union strikes: being temporary contract junior faculty (read: expendable), I am ineligible to strike and hence had to cross a picket line at one point.

Perhaps this is what history has always felt like for most people: The kings and queens come and go, but life doesn’t really change. But I honestly felt more directly affected by Trump living in the US than I did by Truss living in the UK.

This may be in part because Elizabeth Truss was a very unusual politician; she combined crazy far-right economic policy with generally fairly progressive liberal social policy. A right-wing libertarian, one might say. (As Krugman notes, such people are astonishingly rare in the electorate.) Her socially-liberal stance meant that she wasn’t trying to implement horrific hateful policies against racial minorities or LGBT people the way that Trump was, and for once her horrible economic policies were recognized immediately as such and quickly rescinded. Unlike Trump, Truss did not get the chance to appoint any supreme court justices who could go on to repeal abortion rights.

Then again, Truss couldn’t have appointed any judges if she’d wanted to. The UK Supreme Court is really complicated, and I honestly don’t understand how it works; but from what I do understand, the Prime Minister appoints the Lord Chancellor, the Lord Chancellor forms a commission to appoint the President of the Supreme Court, and the President of the Supreme Court forms a commission to appoint new Supreme Court judges. But I think the monarch is considered the ultimate authority and can veto any appointment along the way. (Or something. Sometimes I get the impression that no one truly understands the UK system, and they just sort of go with doing things as they’ve always been done.) This convoluted arrangement seems to grant the court considerably more political independence than its American counterpart; also, unlike the US Supreme Court, the UK Supreme Court is not allowed to explicitly overturn primary legislation. (Fun fact: The Lord Chancellor is also the Keeper of the Great Seal of the Realm, because Great Britain hasn’t quite figured out that the 13th century ended yet.)

It’s sad and ironic that it was precisely by not being bigoted and racist that Truss ensured she would not have sufficient public support for her absurd economic policies. There’s a large segment of the population of both the US and UK—aptly, if ill-advisedly, referred to by Clinton as “deplorables”—who will accept any terrible policy as long as it hurts the right people. But Truss failed to appeal to that crucial demographic, and so could find no one to support her. Hence, her approval rating fell to a dismal 10%, and she was outlasted by a head of lettuce.

At the time of writing, the new prime minister has not yet been announced, but the smart money is on Rishi Sunak. (I mean that quite literally; he’s leading in prediction markets.) He’s also socially liberal but fiscally conservative, but unlike Truss he seems to have at least some vague understanding of how economics works. Sunak is also popular in a way Truss never was (though that popularity has been declining recently). So I think we can expect to get new policies which are in the same general direction as what Truss wanted—lower taxes on the rich, more privatization, less spent on social services—but at least Sunak is likely to do so in a way that makes the math(s?) actually add up.

All of this is unfortunate, but largely par for the course for the last few decades. It compares quite favorably to the situation in the US, where somehow a large chunk of Americans either don’t believe that an insurrection attempt occurred, are fine with it, or blame the other side, and as the guardrails of democracy continue breaking, somehow gasoline prices appear to be one of the most important issues in the midterm election.

You know what? Living through history sucks. I don’t want to live in “interesting times” anymore.

The era of the eurodollar is upon us

Oct 16 JDN 2459869

I happen to be one of those weirdos who liked the game Cyberpunk 2077. It was hardly flawless, and had many unforced errors (like letting you choose your gender, but not making voice type independent from pronouns? That has to be, like, three lines of code to make your game significantly more inclusive). But overall I thought it did a good job of representing a compelling cyberpunk world that is dystopian but not totally hopeless, and had rich, compelling characters, along with reasonably good gameplay. The high level of character customization sets a new standard (aforementioned errors notwithstanding), and I for one appreciate how they pushed the envelope for sexuality in a AAA game.

It’s still not explicit—though I’m sure there are mods for that—but at least you can in fact get naked, and people talk about sex in a realistic way. It’s still weird to me that showing a bare breast or a penis is seen as ‘adult’ in the same way as showing someone’s head blown off (Remind me: Which of the three will nearly everyone have seen from the time they were a baby? Which will at least 50% of children see from birth, guaranteed, and virtually 100% of adults sooner or later? Which can you see on Venus de Milo and David?), but it’s at least some progress in our society toward a healthier relationship with sex.

A few things about the game’s world still struck me as odd, though. Chiefly it has to be the weird alternate history where apparently we have experimental AI and mind-uploading in the 2020s, but… those things are still experimental in the 2070s? So our technological progress was through the roof for the early 2000s, and then just completely plateaued? They should have had Johnny Silverhand’s story take place in something like 2050, not 2023. (You could leave essentially everything else unchanged! V could still have grown up hearing tales of Silverhand’s legendary exploits, because 2050 was 27 years ago in 2077; canonically, V is 28 years old when the game begins. Honestly it makes more sense in other ways: Rogue looks like she’s in her 60s, not her 80s.)

Another weird thing is the currency they use: They call it the “eurodollar”, and the symbol is, as you might expect, €$. When the game first came out, that seemed especially ridiculous, since euros were clearly worth more than dollars and basically always had been.

Well, they aren’t anymore. In fact, euros and dollars are now trading almost exactly at parity, and have been for weeks. CD Projekt Red was right: In the 2020s, the era of the eurodollar is upon us after all.

Of course, we’re unlike to actually merge the two currencies any time soon. (Can you imagine how Republicans would react if such a thing were proposed?) But the weird thing is that we could! It almost is like the two currencies are interchangeable—for the first time in history.

It isn’t so much that the euro is weak; it’s that the dollar is strong. When I first moved to the UK, the pound was trading at about $1.40. It is now trading at $1.10! If it continues dropping as it has, it could even reach parity as well! We might have, for the first time in history, the dollar, the pound, and the euro functioning as one currency. Get the Canadian dollar too (currently much too weak), and we’ll have the Atlantic Union dollar I use in some of my science fiction (I imagine the AU as an expansion of NATO into an economic union that gradually becomes its own government).Then again, the pound is especially weak right now because it plunged after the new prime minister announced an utterly idiotic economic plan. (Conservatives refusing to do basic math and promising that tax cuts would fix everything? Why, it felt like being home again! In all the worst ways.)

This is largely a bad thing. A strong dollar means that the US trade deficit will increase, and also that other countries will have trouble buying our exports. Conversely, with their stronger dollars, Americans will buy more imports from other countries. The combination of these two effects will make inflation worse in other countries (though it could reduce it in the US).

It’s not so bad for me personally, as my husband’s income is largely in dollars while our expenses are in pounds. (My income is in pounds and thus unaffected.) So a strong dollar and a weak pound means our real household income is about £4,000 than it would otherwise have been—which is not a small difference!

In general, the level of currency exchange rates isn’t very important. It’s changes in exchange rates that matter. The changes in relative prices will shift around a lot of economic activity, causing friction both in the US and in its (many) trading partners. Eventually all those changes should result in the exchange rates converging to a new, stable equilibrium; but that can take a long time, and exchange rates can fluctuate remarkably fast. In the meantime, such large shifts in exchange rates are going to cause even more chaos in a world already shaken by the COVID pandemic and the war in Ukraine.