Note that if the government had perfect information about the firm’s demand for R&D it could have offered to pay a mere $2.5 to induce the same expansion, resulting in an AR of 18. This highlights an important principle in public policy design: ideally the government would pay firms just enough to make them willing to undertake the desired activity. Anything more is an unintended and costly transfer from taxpayers to recipients. Unfortunately, the government does not know how much to offer, so businesses can exploit this to earn ‘information rents’, a point that will be discussed in more detail later.

Econometric estimates of tax concession ARs use panel data and two kinds of exogenous shock 1) changes to concession rates or eligibility criteria over time 2) estimates of R&D elasticity of demand based on any research input price changes. They are complicated by the fact that elasticities grow the longer firms have to adjust. A review of 23 estimates across the US, Canada, Australia, France and Italy found a mean AR of 0.77 and median of 0.67 (PC Appendix M, 2007), indicating moderate levels of crowding out. Reinforcing the value of subsidising only marginal research, Bloom et al. (2001) found that programs which lower the cost of all business R&D have an average ratio of 0.83 while those which only subsidise expansions above typical or historical levels can be as high as 2.9.

Public Research Organisations (PROs)

Rather than lower R&D costs for private firms, government can employ researchers directly through PROs. Public research into promising new inventions might discourage private firms from working on the same problems, who might instead imitate PRO research. However government control of PROs allows them to focus on research the private sector is least likely to undertake. In light of the market failure described earlier, that would be research that cannot be patented and is easily imitated, with high research costs and little immediate commercial potential. So called ‘basic research’ is much more likely to be additional, and where it reveals new opportunities for commercial research could even be a complement rather than substitute for private sector R&D.

It has been suggested that PROs use up the limited supply of researchers and crowd out private R&D by driving its cost (Goolsby, 1998). However, higher wages will encourage more people to train as researchers, so this is probably only a problem in the short run. In a small country like Australia, this crowding out effect will also be reduced by the pool of foreign researchers who would relocate here as wages rose.

Guellec and Van Pottelsberghe (2001) performed an econometric analysis of different sources of R&D spending over time in a panel of 17 OECD countries, applying a range of controls. It is the largest evaluation of its kind. Across the sample they found that a 10% increase in government R&D funding reduced private R&D expenditure by 3%. The AR for non-university R&D was 0.62, while the AR for universities was 1, implying that university R&D was more distinct from, or complementary to, private R&D. When defence related R&D is excluded, non-university research also has an AR of approximately 1. Guellec and Van Pottelsberghe explain this by observing that defence R&D employs more engineers than scientists and the supply curve for engineers is less elastic. Another explanation could be that defence R&D has fewer knowledge or agglomeration spillovers for civilian R&D. This analysis reveals that local labour supply elasticities and the nature of research undertaken in PROs are key to determining their AR.

Research grants and prizes

The final way to fund R&D would be to offer grants to private firms. A serious concern in this case is a form of adverse selection: firms will most aggressively pursue grants for the large infra-marginal projects that they expect to be most profitable. This may be a successful strategy both because public servants are unable to assess how much the firm would have spent in the absence of the grant, and because the public sector would like to be seen to fund commercially successful projects (Klette et al., 2000). Finally, private organisations may be more willing to pay for the best negotiators, to assist them in seeking rents from the government. If a grant does not allow the recipient to escape some form of borrowing constraint, the firm may substitute public funding for their own dollar for dollar, resulting in an AR well below 1. Governments have used many approaches to avoid these problems, for instance setting criteria to target less profitable projects, requiring large co-investment and structuring grants as loans or equity investment to attract financially constrained firms.

All of that content will eventually arrive here too as a central repository of my work whenever I get around to it.

It has been fun blogging on my own and having full control over the site and its content. However, those groups blogs have more readers and good contributors to bounce off of. People like blogs that offer something new to read every day, and individually writing a substantive post every day would just leave me with too little time for everything else. So update your RSS subscriptions, or get onto my Twitter/Facebook!

Unfortunately animals don’t fit into this system. Animals are not able to use property, language, technology, trade and so on to achieve high states of wellbeing on their own. This is not going to change. The lot of animals is therefore up to humans; they will never be able to save themselves from poverty as we are doing for ourselves.

Currently, with a few exceptions, humans do not treat animals as worthy of concern. Farm animals through most of the world have few or no protections and are often treated very badly in order to minimise the resources humans need to sacrifice to raise them. Even the minority of people who care about the welfare of farm animals are generally unconcerned with the suffering of wild animals, no matter how bad life may be for them. Animals we have personal relationships with, like pets, get the best deal, but they are only a small share of all the animals that exist.

What might we hope that humans will do for animals?

One option would be increased regulation of the treatment animals in the same way that we now regulate the upbringing of children. While parents have a great deal of freedom in how they treat their children, they do not have free reign. They don’t ‘own’ children in the way that people currently own animals – rather they are considered to be ‘stewards’ of children. Greater wealth and education in the future might lead people to be willing to make the sacrifices to treat animals this way, just as increased wealth has made many parts of the world willing to dedicate a lot of resources to ensuring children are not mistreated.

A second approach, obvious only to an economist, would be for the government or another group to set financial incentives for treating animals well. People and businesses would be allowed to treat animals badly but they would have to pay a price if they wanted to do so, just as your employer would have to pay you to make you tolerate things you didn’t enjoy. Animal owners could also be rewarded for treating animals well. This would leave it up to the market to determine how animals should be treated once the appropriate incentives had been provided – incentives reflecting the importance society placed on the welfare of animals. One way of looking at this would be as the animal welfare equivalent of a ‘carbon tax’, where the suffering of animals was a social ill like pollution. An alternative perspective would be that the regulator was standing in as a negotiator on behalf of the animals who were themselves unable to negotiate ‘work’ contracts with their owners. These pseudo-contracts would replace the current system of slavery.

A third approach would be to take animals out of the picture altogether. If humans are able to continuously improve their lot in life with technology while non-human animals are not, then eventually human welfare will far exceed animal welfare. At that point it may just be best for humans to replace animals altogether. There are already plans to make farm animals obsolete by growing artificial meat in labs rather than on farms. Humans are also progressively displacing animals from the wilderness by clearing land for human settlement and farming. Humans might find that eventually the only animals they want to keep around are pets, which they enjoy treating well. This scenario would require humans or their descendants to continue to flourish and expand, which is possible but far from certain.

In the short run a greater appetite for direct regulation of animal welfare is the the most I really see happening. In the long term though I am hopeful that humans will end up living much better lives than they currently do, and find that they have nothing to gain by having suffering animals living on Earth.

I am skeptical of cleaning, beyond that required to stay organised and avoid disease, for the same reason most people are nervous about drug habits. People differ enormously in how much cleanliness they expect. When someone catches the ‘cleanliness bug’, I doubt they are left any better off than someone with low expectations. They could easily be worse off if they have to incur the cost of cleaning just to maintain their original level of well-being. That is to say, I think cleaning exhibits strong dependency and addiction.

Quiggin has a similar take on social expectation for housework and how we could alter our attitude to them to save ourselves the trouble:

That still leaves a number of inescapably physical and essentially crappy jobs, for which technology has yet to offer a solution. The obvious examples for me are cleaning (surfaces, baths, toilets etc) and ironing (not such a problem if, unlike me, you can do it while watching a video/TV). Something these tasks share, and which is true of a lot of crappy jobs, is that we do a lot more than is actually necessary. Social standards inherited from the days of cheap servant labour dictate much more cleanliness than is required for hygiene, and practices like ironing for which there is no need at all.

So, a final part of my idea of utopia would be the institution of social norms that frown on unnecessary crap-work. In my utopia, a freshly ironed shirt would attract the same kind of response that is now elicited by a fur coat or an ivory brooch – a mixture of anachronistic admiration with disapproval of the process by which it was produced, with the latter element predominating over time.

I am willing to do my part – or perhaps I should say not do my part – to push social norms in this direction!

The best way and probably the only way to promote faster nominal GDP growth is to get a more expansionary monetary policy. So, I think the mistake on the left is to put too much faith in fiscal stimulus. Fiscal stimulus is relatively weak, and it also tends to be offset or neutralized by monetary policy. But let’s say monetary policy stayed as it is; the President and the Congress got the Keynesian religion; they listened to Paul Krugman and they increase government spending in the United States by over a trillion dollars this year, which is what many people are advocating who are Keynesians. They argue interest rates are too low; the Fed has no bullets left. So, they can’t lower the interest rate any more; so the best thing to do is have government spend. Government spending a trillion dollars–isn’t that going to increase nominal income?

Here’s the tricky part: When you said, let’s leave monetary policy as it is, you slid over a very subtle and complicated question, and that is: What is monetary policy? And I find when I talk to people, everybody I talk to seems to have a clear and definite idea in their mind about what we mean by holding monetary policy constant. But they don’t equate with each other. So, for some people that means the Fed keeping the money supply constant. For others it means keeping interest rates constant. Which is a very different policy. And I think both of those are wrong because it’s not what the Fed is actually doing. What the Fed is actually doing is adjusting monetary policy to conditions in the aggregate economy. So, they’ll do some quantitative easing (QE), then they’ll back off; they’ll do some more. Or Operation Twist. Or they’ll promise to keep interest rates low for two years. And these policies are not highly effective, but they are probably effective in slightly nudging the economy a little bit faster, a little bit slower. So, what the Fed is doing is these on and off policies as it reads the incoming economic data. If the data gets stronger, the Fed does less. When the data gets weaker, the Fed does more.

What that means is fiscal stimulus does succeed in promoting a little bit faster growth; the Fed will react by doing less quantitative easing and other policies of that sort; and it will very likely neutralize most of the effect of the fiscal stimulus. Now, I’m not trying to stake out an extreme position here. If the Federal government did an enormous amount of fiscal stimulus, yes, I think it would boost nominal GDP. Whether it would be a good idea would be another question. But obviously, if you took it to the extreme like the spending in WWII, it would definitely boost measured GDP in the economy. But for the amounts that are politically realistic, I really don’t think–let me put it this way: The original stimulus bill was originally around $800 billion, in 2009. Ended up being $825 billion. I think it was a mixture of spending and some tax rebates. About 1/3 each–1/3 tax rebate, 2/3 spending, and of that 2/3, 1/3 on payments to the states and 1/3 on various so-called expansionary activities of various kinds. And that was done in early 2009. About the same time the Fed was getting very worried about the economy. It wasn’t “done” in 2009. The legislation authorizing it was enacted. It took a while to spend it; it spent out over 2 or 3 years. But importantly, by the way, a lot of modern theories say the effect on demand should come with expectations; so it should start even when the program is not enacted. You’ve got that program, then.

The standard way of looking at it is to assume the Fed is just this passive bystander. But everything we know about Ben Bernanke, throughout his career, tells us very clearly he had no intention of allowing a Great Depression II on his watch. He’s a scholar of the Great Depression. He passionately believes the Fed blew it by not being more aggressive. He’s also insisted all along the Fed has lots of ammunition they haven’t used. He’s talked about things they could do, things he recommended the Japanese do that he hasn’t done yet. So, the Fed has a lot of ammunition left including the most powerful tools, which they haven’t pulled out yet. Which are? Setting a higher inflation or nominal GDP target is the most powerful one probably. If they could. That would be politically controversial, especially if they did it in terms of inflation. I prefer nominal GDP. But here’s my point: Suppose Obama did nothing in 2009. There’s no way the Fed would have just sat back passively and watched the economy collapse. What would have happened is with less fiscal stimulus there would have been a lot more monetary stimulus. I don’t know exactly what it would look like. I’m not saying it would have exactly made up for the lack of fiscal stimulus, but my point is this: Any estimate of the effects of fiscal stimulus are probably really wildly exaggerated by not taking into account the reaction function of the monetary policy makers. And that’s the big flaw in the way we think about fiscal stimulus. And no matter how many times I make this point, I find it’s very hard for people to absorb it. They want to think in terms of other things equal–like, okay, there’s the monetary policy; now let’s see what fiscal policy can do. It doesn’t work that way. If fiscal policy does more, monetary policy will do less. That’s how things work.

…

The way I would put this is: He didn’t go out and say: Aha, I’m going to go out and counteract this now. If you asked him, he would deny counteracting it. No doubt. In his own mind he would not believe that he did that. But I believe that if you really think through the logical implications of what the Fed would have done in the absence of fiscal stimulus, that in essence it was sabotaged. I know that’s a very counterintuitive and controversial statement, and almost nobody agrees with me. But I think that’s because they are not thinking about the issue clearly enough. It’s not that the Fed would ever set out to hurt the economy intentionally or anything of that sort. I happen to believe the Fed underestimated the amount of stimulus that was needed. If there had been no fiscal stimulus, their estimate of what was needed on the monetary side would have been substantially higher, and that’s the logical point I’m making. Now, if you word it in a certain way, it sounds very appalling, like the Fed is sabotaging fiscal stimulus; and that’s not it at all. But that’s really kind of what it amounts to when you think about it logically. Let me give you an example of how the way we’re thinking about these issues is so unlike the orthodox view. Can I take one minute to read a quotation–and I bet you cannot guess who said this, in 1999. This is about Japan.

What continues to amaze me is this: Japan’s current strategy of massive, unsustainable deficit spending in the hopes that this will somehow generate a self-sustained recovery is currently regarded as the orthodox, sensible thing to do – even though it can be justified only by exotic stories about multiple equilibria, the sort of thing you would imagine only a professor could believe.

So, this is my view, interjecting. Continuing:

Meanwhile further steps on monetary policy – the sort of thing you would advocate if you believed in a more conventional, boring model, one in which the problem is simply a question of the savings-investment balance – are rejected as dangerously radical and unbecoming of a dignified economy.

So, he’s amazed that people are suggesting that Japan do deficit spending when they already have this big debt and asking why aren’t we doing the conventional monetary stimulus. Now do you know who said this in 1999? I’m going to guess it’s Ben Bernanke from the way you are talking. No. Paul Krugman. That was my second guess! So, here’s Paul Krugman saying exactly what I’m saying now, and I feel like my view of monetary and fiscal policy was the standard view, and in a sense the only reason we’re even having this conversation right now is that in some strange way, the conventional view became very unconventional in 2008 and 2009. As you probably know, I’m not a particularly well known economist, at least prior to getting into blogging; and so the only reason we’re having this interview is once I started blogging, I found that my view, which I thought was the conventional view, was in fact a fairly radical view and it got a lot of attention. A lot of people sort of thought of it as a very provocative, unconventional view. This is what I find so strange about what is going on. We have this situation where the standard view somehow twisted around from being monetary policy as the natural way of preventing a depression, which is the story that came out of the Great Depression, supposedly, to the view that it’s actually fiscal policy that needs to do this. Now, some people will say it’s different now because we’re in a liquidity trap; but Japan had zero interest rates in 1999, roughly, when Paul Krugman made this statement. It’s not really different. I’ll just read you one really quick quotation out of the number 1 textbook in money:

Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero.

So, that’s what we are teaching our students, right out of the number 1 textbook; and I found in late 2008 almost none of my colleagues believed this. They were all saying: Monetary policy can’t do anything right now; we have to use fiscal stimulus. What textbook is that? Frederic Mishkin, Money and Banking.

There was no fee for loading up my account or for trading – but there is a $5 account fee levied every month. You also lose the interest on your US dollars, but at the moment US dollars earn no interest so that’s not a problem. There is also a $20 fee for taking money out of the account. To minimise on these costs some friends and I are sharing an account. Unfortunately you can only add a maximum of $250 to your account within the first month.

The existence of these fees discourages people from signing up and taking advantage of incorrect standing odds. For a few weeks in 2008 a single cashed up trader managed to keep McCain the favourite to win the presidential election just by throwing more money at that market than new recruits could bring in to bet against. On the upside at least these fees do not distort people’s trading once they have signed up.

The website is quite easy to use, though it might confuse someone who was just used to gambling with ‘odds’ rather than trading shares in markets.

Given the fees involved I expect to lose money by trading, but see three other worthwhile benefits of participating. Firstly betting on events is fun as it gives you a stake in events you otherwise wouldn’t care about. Secondly, it is a humbling experience to realise how overconfident you are about most of your beliefs and be held accountable for your errors. Finally by providing liquidity to the market I am helping improve the accuracy of these markets and inform those who rely on the estimates they produce.

Anyone in New Zealand should sign up to iPredict which has lower fees and is subsidised as an academic experiment.

This may seem a bit academic but in fact it can radically change a debate or how you approach a piece of research.

A major case in point has been identified by Scott Sumner in the debate over the effect of fiscal stimulus in the USA after the 2008 financial crisis.

Fifty elite economists were asked what I thought was a very simple question:

Because of the American Recovery and Reinvestment Act of 2009, the U.S. unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill.

And only Pete Klenow got it right:

Agree. Caveat: how much was it offset by less aggressive (than otherwise) unconventional monetary policy?

…

Pete Klenow was the only one of 50 who seemed to understand the question. They were asking if fiscal policy lowered unemployment, i.e. boosted RGDP. But the standard model says that only occurs if it boosts AD. And that only occurs if NGDP rises. And the standard new Keynesian and monetarist and new classical models all agree that monetary policy drives NGDP. So it’s really asking if the 2009 fiscal stimulus in some way caused NGDP to evolve differently than otherwise, which is inescapably a question about how monetary policy would have evolved in the absence of the ARRA. And only one guy seemed to understand that.

The correct answer was; “What kind of question is that! How the hell can I answer that if you don’t tell me the monetary policy counterfactual.”

A simple explanation of this for non-economists woud be this.

1. In theory there are two ways of stimulating the economy in a downturn – fiscal policy (higher government spending) and monetary policy (lowering interest rates, which is to say printing money). What matters to the economy is primarily the combined effect of both fiscal and monetary policy.
2. In 2009 the United States Congress passed a huge fiscal stimulus.
3. Had they not done so, the US Federal Reserve would have noticed that the economy was doing worse and chosen to do more monetary stimulus. This might have included unusual practices like ‘asset purchases’ to get money into the economy even if interest rates had been stuck at zero.
4. Almost all analysis of ‘the impact of fiscal stimulus’ assumes that without that stimulus monetary policy would otherwise have stayed the same.
5. That is an irrelevant issue.

If you use the correct counterfactual you are left with a different research question. Rather than just estimating the effect of fiscal you also need some idea of what the reserve bank would have done, and how effective it would have been. Considering this will probably make fiscal policy look less effective.

Some methods for estimating the effect of fiscal stimulus will compare to the actual counterfactual, while others will not. No surprise then when they disagree!

Even though this is something hundreds of the smartest people in the world research and it is of huge consequence almost everyone in newspapers and general policy circles is asking the wrong question. A sobering thought.

I’ve previously argued that we can feed the world if we make the right choices. More precisely, our current food system produces more per person than is needed for adequate nutrition, and can continue do so in future if the right policy choices are made. The key problem is distribution, not production.

But the meat consumption data leads me to a more surprising conclusion.  Using current technology and with no additional diversion of food grain, the world could produce enough meet to give everyone an intake comparable to that of the average person in the Netherlands [fn1].

…

Each kg of grain-fed beef requires about 8kg of grain, compared to 2kg for chicken, and the trade-off similar when cattle are pastured on land that could be used for grain. So, 5kg of beef could be replaced by 20 kg of chicken.

The other main user of grain (apart from human consumption) is ethanol production which now takes something like 140 million tonnes a year. Fed to chickens that would produce around 70 million tonnes or 10kg per person per year.

That would give an average of 62kg [meat consumption] per person per year, not far below the Dutch average. To fill the remaining gap, I’ll call on the usual suspects, reductions in inefficiency and waste.

…

But a large part of my reason for doing exercises like this one is to consider the feasibility of a better world, even if it might be considered utopian at present.

This may all be correct, but far from being an unachievable utopian vision it sends a shiver down my spine. Brian Tomasik has crunched some numbers and estimated that the direct animal suffering caused by each kg of chicken meat produced is probably an order of magnitude greater than the suffering per kg of beef produced. This is because chickens are much smaller than cows and because their lives on factory farms are worse, being confined to tiny cages as they are.

If we were looking to paint utopian food scenarios, I could do better than envisage an explosion in the number of broiler chickens. We could see a shift towards vegetarianism, which the article implicitly observes requires fewer resources than meat-based diets. We could learn to grow meat or other meat substitutes the same way we grow plants, removing the need for all the suffering and inefficiency of incarcerating actual animals. Or at least we could develop the conscience not to torture chickens in this way in order to save small amounts of money.

As a result the real return I earn after tax is under 1.4%. If I were to jump up to the next income tax bracket I would be earning about 0.8%. In a year with inflation on the higher end of the Australian target, the real return would be roughly nothing. The interest I would earn on cash savings are a tiny fraction of the interest I would be charged on cash borrowings – about 15%.

The household saving rate in Australia has gone from 0% to 10% of national income since the 2008 financial crisis and a lot of those funds have gone into bank accounts. I can’t imagine the desire to earn interest has anything to do with it.

Sampling error? Omitted variable bias? Bah, that’s for first-year grad students. What I find really interesting is there are some fairly basic principles for how analysis can get really screwy but which can’t be fixed by adding more control variables, increasing your sample size, or fiddling with assumptions about the distribution of the dependent variable. I’m thinking about really scary sources of model specification problems. Or actually, not model specification in of itself, but data collection. Your typical social science graduate curriculum talks a lot about getting standard error right but on a day to day basis most of our work goes into getting the data into the proper form and this is also where most problems come from.

But before talking math, let’s contemplate a recent overheard confession that, “Turns out those funny looking toe shoes are pretty comfortable.” As someone who feels naked without footwear that involves both socks and laces I had never given much thought to this and to the extent that I had, I assumed wearing these things was a costly signal of geekiness. But on reflection it makes perfect sense. After all if something as ridiculous looking as toe shoes were not comfortable then nobody would wear them. Conversely, four inch heels are very uncomfortable (or so I am given to understand) but many women wear them because they’re attractive. So we can imagine a negative association between how attractive shoes are and how good they feel. Indeed, this describes my own collection of incredibly comfortable but informal Chucks, fairly comfortable and decent-looking dress shoes, and a second pair of dress shoes that are uncomfortable but fancy. One interpretation of this (and bear with me as I briefly sound like a critical studies type person) would be something along the lines of a sadistic gaze wherein the perceived attractiveness of a shoe is directly derived from the discomfort we imagine it imposing on its wearer. I don’t doubt that people have made this argument but I don’t buy it as a general argument because I can imagine shoes that are both hideous and uncomfortable — say Crocs made of gravel and epoxy. There is no ontological reason why we can’t have shoes that are both hideous and uncomfortable but rather there is a practical reason in that nobody wears shoes that are terrible in every way and so such shoes don’t make it unto the market. That is, there is a big difference between the covariance of traits for all conceivable shoes versus covariance of traits among those shoes that actually get bought and worn.

…
I took the 2010 wave of the General Social Survey  and pulled all 395 Republicans and GOP-leaning independents (PARTYID==4/6). For these people I compared their attitudes on marijuana (GRASS) and government redistribution of wealth (EQWLTH, which I cut to a binary with responses 1/4). Among Republicans who oppose wealth distribution, 37% favor legalizing marijuana, as opposed to 38% among those who favor wealth redistribution. This difference of one percentage point is not even remotely statistically significant (chi2 0.08, 1 df).

OK, now wait a minute you may be saying, he promised us negative relationships but this is no trend at all. True, but let’s contrast it with the same analysis for the whole sample, regardless of party. In general, 42% of those who oppose redistribution favor legalized marijuana against 53% of those who favor redistribution. This relationship is strongly statistically significant (chi2 14.50, 1 df). So among the general population there is a positive association between marijuana legalization and wealth redistribution. Among Republicans this effect is perfectly counterbalanced by conditioning on a collider. People presumably join the GOP because they agree with it on at least some issues. Republicans who oppose both weed and redistribution we can call movement conservatives, those who oppose weed but favor redistribution we can call social conservative populists, those who favor weed but oppose redistribution we can call libertarians, and those who favor both we can call people who should probably change their party registration. This case illustrates how conditioning on a collider doesn’t necessarily result in a net negative relationship but rather can partially or complete suppress an underlying general trend.

Communism has some lovely notions about sharing wealth between people in proportion to their needs and ideally we would indeed live that way. But people are not motivated to work under such egalitarian conditions. Humans are somewhat pro-social and do make some sacrifices for others, especially close friends and family. But that just isn’t enough to keep people working hard and productiviely in big, anonymous, industrial economies year in, year out. The economic system has to go with the grain of human nature and appeal to people’s greed by offering private rewards for work hard and risk-taking. That is why market economies have become rich and centrally planned ones have stagnated. Communism was a triumph of idealism over the realities of human nature.

If this really is the reason capitalism has been so successful, I’m afraid the future doesn’t look so good for capitalism.

In that caricature, capitalism is only the best economic system given the constraints imposed by human nature. Human nature has turned out to be harder to mould than 19th century idealists had hoped, but it will not remain fixed in that way forever. Over thousands of years evolution can and will change human nature, leaving us free to choose from a broader range of social structures.

Long before ‘natural selection‘ has much impact I expect that ‘human directed selection’ will take off. Initially children will be chosen for things like beauty, intelligence and health, but eventually our personalities will also become a parental or social choice. It will then be within our power to take the pro-social behaviour that humans currently display to only a small in-group of close friends and family, and direct it towards larger groups of our choosing. Communism could get a second run, only this time it wouldn’t have to work against a human nature that evolved to serve our hunter-gatherer ancestors!

Communist communities whose members are selected to cooperate selflessly among themselves could turn out to be more productive and gradually out-compete individualistic or capitalist communities. These communities might resemble hyper-social super-organisms like ant or bee colonies.

The competitive dynamics of such a scenario are a challenge to imagine. There would be lots of ways such cooperation could be undermined but it might also be possible to sustain. Excluding and punishing free-riders within the community will be an option for people as it is for insects.

Such communities might still choose to use markets and prices to solve the economic calculation problem but then redistribute what they produce in a very egalitarian way. Or future technologies might allow them to dispense with markets altogether.

Though I am personally quite an individualist and enjoy the classically liberal way of life, I am not so horrified by the thought of human or post-human societies being very different in the future. The members of such a future ‘communist’ society would not necessarily share my individualistic preferences and so might not suffer to live as slaves to giant communities as humans today do. The desirability of this scenario was discussed by Peter Singer and Tyler Cowen a few years ago:

Cowen: Let’s try some philosophical questions. You’re a philosopher, and I’ve been very influenced by your writings on personal obligation. Apart from the practical issue that we can give some money and have it do good, there’s a deeper philosophical question of how far those obligations extend, to give money to other people. Is it a nice thing we could do, or are we actually morally required to do so? What I see in your book is a tendency to say something like “people, whether we like it or not, will be more committed to their own life projects than to giving money to others and we need to work within that constraint”. I think we would both agree with that, but when we get to the deeper human nature, or do you feel it represents a human imperfection? If we could somehow question of “do we in fact like that fact?”, is that a fact you’re comfortable with about human nature? If we could imagine an alternative world, where people were, say, only 30% as committed to their personal projects as are the people we know, say the world is more like, in some ways, an ant colony, people are committed to the greater good of the species. Would that be a positive change in human nature or a negative change?

Singer: Of course, if you have the image of an ant colony everyone’s going to say “that’s horrible, that’s negative”, but I think that’s a pejorative image for what you’re really asking …

Cowen: No, no, I don’t mean a colony in a negative sense. People would cooperate more, ants aren’t very bright, we would do an ant colony much better than the ants do. …

Singer: But we’d also be thinking differently, right? What people don’t like about ant colonies is ants don’t think for themselves. What I would like is a society in which people thought for themselves and voluntarily decided that one of the most satisfying and fulfilling things they could do would be to put more of their effort and more of their energy into helping people elsewhere in need. If that’s the question you’re asking, then yes, I think it would be a better world if people were readier to make those concerns their own projects.

EconTalk – Lengthy interviews with experts on economics and social science. e.g. Acemoglu on Why Nations Fail

In Our Time – Panel discussions on random topics from history and science. e.g. Voltaire’s Candide

Planet Money - News coverage of economics that presents complex ideas quite simply. e.g. Cage Match: Coin Vs. Bill

Surprisingly Free - Interviews with experts on the internet and new technologies in general. e.g. Naomi Cahn on the digital afterlife

This American Life - Stories from Americans on random topics from current affairs to childhood memories. The best show of its kind. e.g. Retraction

More or Less - Entertaining investigations into numbers that appear in the media from Tim Harford. e.g. Austerity, border queues and bank holidays

Savage Love - Relationship and sex advice show. Equal parts entertaining, useful and disgusting. e.g. Savage Love Episode 287

While we are talking about  it, I also use BeyondPod to keep the episodes on my phone up to date! Podcasts are good for commuting and exercising, if you’re not yet hooked on them.

A few weeks ago I did a cost benefit analysis of flossing to work out whether it was worth the time. Though time spent flossing does add up to a lot over a lifetime, if you want to save serious time you’ve got to find efficiencies in actions that take up a lot of your time. Commenter Pattie-oh for instance made a good observation:

Showering less frequently would save more time for most people while having no negative health consequences. In the US, many people shower every day (sometimes more than once a day). Skipping a shower probably saves about seven minutes, as opposed to two minutes saved by not flossing.

Showering every second day could be a good time saver if you live in a cold place and don’t particularly enjoy showers. I shave every only second day because I find it quite time consuming and my work doesn’t especially care.

But these are still only small matters in comparison to the thing you spend the most time on every day: sleep. Even minor improvements in the efficiency of your sleep can save a lot of time.

This post over at Reddit has a number of suggestions for how to sleep better, with the author claiming to have reduced the time they need to spend sleeping by 20%, which would essentially increase their waking lifespan by 6% (HT Hugh). A few of the ideas, like the climate controlled room, are expensive, but most of them are simple. They would certainly be worth doing if they could save anything like an hour a day as suggested. One of the suggestions is taking melatonin pills, which is analysed in detail on LessWrong.

I am going to work through these ideas and keep an eye out for a better sleeping environment when I next move house.

One of the wisest observers of human behaviour was the French writer La Rochefoucauld. If you haven’t yet read his maxims, you are in for a real treat. Below are some of the most cynical and enduring observations.

• What we term virtues are often but a mass of various actions and divers interests, which fortune or our own industry manage to arrange; and it is not always from valour or from chastity that men are brave, and women chaste.
• Hypocrisy is an homage that vice pays to virtue.
• Nobody deserves to be praised for goodness unless he is strong enough to be bad, for any other goodness is usually merely inertia or lack of will-power.
• There is great skill in knowing how to conceal one’s skill.
• We always like those who admire us; we do not always like those whom we admire.
• How can we expect others to keep our secrets if we cannot keep them ourselves?
• We are eager to believe that others are flawed because we are eager to believe in what we wish for.
• We often forgive those who bore us, but we cannot forgive those whom we bore.
• We confess to little faults only to persuade ourselves we have no great ones.
• Mediocre minds usually dismiss anything which reaches beyond their own understanding.
• Nothing prevents us being natural so much as the desire to appear so.
• In friendship and in love, one is often happier because of what one does not know than what one knows.
• Hardly any man is clever enough to know all the evil he does.
• In all professions we affect a part and an appearance to seem what we wish to be. Thus the world is merely composed of actors.
• In the human heart there is a perpetual generation of passions, such that the ruin of one is almost always the foundation of another.
• We should not be upset that others hide the truth from us, when we hide it so often from ourselves.
• We all have strength enough to endure the misfortunes of others.
• Philosophy triumphs easily over past and future evils; but present evils triumph over it. (A nod to construal level theory.)
• Neither the sun nor death can be looked at steadily.
• The evil that we do does not attract to us so much persecution and hatred as our good qualities.
• If we had no faults, we should not take so much pleasure in noting those of others.
• Self-interest speaks all sorts of tongues and plays all sorts of characters, even that of disinterestedness.
• To succeed in the world we do everything we can to appear successful already.
• Sincerity is an openness of heart; we find it in very few people; what we usually see is only an artful dissimulation to win the confidence of others.
• If we judge love by the majority of its results, it resembles hatred more than friendship.
• The love of justice is simply in the majority of men the fear of suffering injustice.
• Friendship is only a reciprocal conciliation of interests, and an exchange of good offices; it is a species of commerce out of which self-love always expects to gain something.
• It is more disgraceful to distrust than to be deceived by our friends.
• Everyone complains about his memory, and no one complains about his judgment.
• In the adversity of our best friends we often find something that is not exactly displeasing.
• Nothing is given so profusely as advice.
• The truest way to be deceived is to think oneself more knowing than others.
• When not prompted by vanity, we say little.
• Usually we only praise to be praised.
• The refusal of praise is only the wish to be praised twice.
• The art of using moderate abilities to advantage wins praise, and often acquires more reputation than actual brilliancy.
• The desire to appear clever often prevents one from being so.

Below is a scene from the movie Schindler’s List. It is one of the most haunting exchanges I have ever seen on the screen.

We all find ourselves in the same circumstance as Schindler: confronting unending opportunities to save lives at low cost. Indeed it is easier for us to save lives than it was for Schindler. None of us faces the risk of arrest and execution by the SS.

We may not weep for those we fail to save because we never see them, but they are just as real.

255. EXT. COURTYARD – BRINNLITZ CAMP – NIGHT. 255.

Schindler and Emilie emerge from his quarters, each carrying a small suitcase. In the dark, some distance away from his
Mercedes, stand all twelve hundred workers. As Schindler and his
wife cross the courtyard to the car, Stern and Levartov approach.
The rabbi hands him some papers.

LEVARTOV
We’ve written a letter trying to explain
things. In case you’re captured. Every
workers has signed it.

Schindler sees a list of signatures beginning below the
typewritten text and continuing for several pages. He pockets
it, this new list of names.

SCHINDLER
Thank you.

Stern steps forward and places a ring in Schindler’s hand. It’s
a gold band, like a wedding ring. Schindler notices an
inscription inside it.

STERN
It’s Hebrew. It says, ‘Whoever saves
one life, saves the world.’

Schindler slips the ring onto a finger, admires it a moment, nods
his thanks, then seems to withdraw.

SCHINDLER
(to himself)
I could’ve got more out …

Stern isn’t sure he heard right. Schindler steps away from him,
from his wife, from the car, from the workers.

SCHINDLER
(to himself)
I could’ve got more … if I’d just … I don’t
know, if I’d just … I could’ve got more…

STERN
Oskar, there are twelve hundred people who
are alive because of you. Look at them.

He can’t.

SCHINDLER
If I’d made more money …I threw away
so much money, you have no idea.
If I’d just …

STERN
There will be generations because of
what you did.

SCHINDLER
I didn’t do enough.

STERN
You did so much.

Schindler starts to lose it, the tears coming. Stern, too. The
look on Schindler’s face as his eyes sweep across the faces of
the workers is one of apology, begging them to forgive him for
not doing more.

SCHINDLER
This car. Goeth would’ve bought this car.
Why did I keep the car? Ten people,
right there, ten more I could’ve got.
(looking around)
This pin -

He rips the elaborate Hakenkreus, the swastika, from his lapel
and holds it out to Stern pathetically.
SCHINDLER
Two people. This is gold. Two more people.
He would’ve given me two for it. At least one.
He would’ve given me one. One more. One
more person. A person, Stern. For this.
One more. I could’ve gotten one more person
I didn’t.

He completely breaks down, weeping convulsively, the emotion he’s
been holding in for years spilling out, the guilt consuming him.

SCHINDLER
They killed so many people …
(Stern, weeping too,
embraces him)
They killed so many people …

From above, from a watchtower, Stern can be seen down below,
trying to comfort Schindler. Eventually, they separate, and
Schindler and Emilie climb into the Mercedes. It slowly pulls
out through the gates of the camp. And drives away.

The reason is simple.

A high quality laptop cost me $1100 while a comparable low quality one would have cost me $500. I use my laptop an average of about 2 hours a day, and expect it to last around two years. Over its lifetime then I should expect to use it about 1400 hours. A high end laptop then costs $0.42 an hour over a low end one. I estimate that the MacBook’s design and reliability boost my productivity by at least 10%. Do I value a 10% productivity boost at $0.42 an hour? Given my wages and the importance I place on getting things done – definitely. And then there is the pleasure and serenity I get from using a well designed product on top of that.

Likewise, a good phone cost $200 more and I use my phone about half an hour a day and also expect it to last for two years so it comes to about 55c extra each hour of use. While I don’t use the phone as much, it is particularly valuable to be able to do what you need to do on your mobile quickly, for example when you are trying to find an event, some piece of information or a person you a meeting. The faster processor and better software on the expensive phone allow me to perform most tasks almost twice as quickly as on the cheap phone. This is certainly worth the cost.

My instinct without doing the numbers was that ‘to be frugal is a virtue’, but in order to save my money I was inadvertently a spendthrift with my time. In future I will divide the price of durable items like laptops into hourly costs as I have done above in order to make it easier to work out the best decision.

Our goal can be summarised as choosing the time t which maximises

(1 + Return on investment)^t × Cost effectiveness of donation_t 

× Probability of donation actually being made_t.

Unless you are a multimillionaire, the relevant expected ROI is the highest one available without regard to risk. Giving $2m will do about twice as much good for the world as $1m, so to maximise your expected impact you should just maximise your expected donation. Note that if your favourite charity would be able to use money now to attract donations at a rate faster than you expect your investments could return profits then donating would have to be better.

The second and more challenging issue is how cost effective your donation will be in the future relative to now. If you thought basic health would be the optimal cause this would involve anticipating things like

• the extent of poverty
• the cost of delivering health services
• how much other donors will be funding the low hanging fruit.

The last point is especially relevant for those like me thinking of funding existential risk reduction because a few billion from governments or philanthropists could make a big impact on the value of further funding in that area.

In evaluating cost effectiveness we must factor in that any good charity will have impacts that propagate through time and so offer its own ROI. For instance, combatting contagious diseases now rather than in 2062 should lead to fewer people becoming infected in the meantime and so result in a richer and healthier population in 2062. Similarly, spending on existential risk reduction draws attention, money and researchers to that issue. Giving now leaves your donations more time to have this snowball effect during the window of greatest extinction risk.

On the other hand delaying leaves you more time to identify cost-effective targets for donations. Personally, I am investing rather than giving mostly because I expect groups like 80,000 Hours to give me a much better idea of how to best reduce existential risk within the next decade.

Finally you must assess the risk of your donation never being made, for example due to a catastrophe which eliminates your savings. If you can’t bind yourself through a trust fund, you must also worry about changes to you or your life which result in you deciding not to give.

Australian astronomers say finding planets outside the solar system that can sustain life should be made a top priority.

Dr Charley Lineweaver and PhD student Aditya Chopra from ANU have reviewed current research into environments where life is found on earth and the environments thought to exist on other planets.

They say understanding habitability and using that knowledge to locate the nearest habitable planet may be crucial for our survival as a species.

While I agree that in the long run space colonisation is central to humanity’s survival, this is not really sensible and is probably a misrepresentation of their research. We are far away from being able to establish self sustaining colonies on planets in our solar system let alone travelling to other star systems. By the time we have the technology to contemplate doing that we will long since have identified habitable planets without having gone out of our way to do so.

While space colonisation would help reduce the risk of human extinction the unfortunate reality is that the technologies that threaten to ruin us are going to come well before independent, robust and self-sustaining colonies are possible. Risky technologies like mind uploading or machine intelligence are probably prerequisites for colonising other star systems and maybe even long-term survival on Mars. Slowing the development of the most risky technologies, controlling their use, and developing safe havens on Earth itself are likely to be more cost effective strategies than space travel for the foreseeable future.

It takes advantage of two techniques I have rarely seen used elsewhere. We often see imagined conversations between the main characters of the show and dead or absent people from their lives. We are also frequently treated to actions the characters imagine performing – typically crazy-brave ones – before cutting back to reality where they do something different. It is not always obvious to the viewer whether you are in their imagination or reality, which keeps you on your toes.

This technique is highly effective at giving us insight into the characters without requiring overacting, or contrived conversations between them. It makes the show more like a book, where it is easier for the author to let us into the mind’s eye of their characters. It is so effective I wonder why it isn’t more often used.

Dreams are frequently appropriated for this purpose, but they are only part of our internal lives and to my mind a more random and less insightful part. Conversations in our head and things we imagine and fantasise about doing make up a huge share of our internal world and memories, and say a great deal about us because they are entirely our own invention. Their absence from movies and television is unfortunate.

“Mine production is being ramped up to satisfy a demand assumed to be as voracious in the future as it has been in the recent past (see chart below). But there is a third energy revolution underway. Shale gas. Last week the US railroad company CSX said that it might have to renegotiate its contracts with power utilities because coal demand was drying up. Their shipments of coal to power stations fell 28% last year because power stations are switching to gas. Shale gas will be as disruptive to the global economy as the internet was. Though it’s predominantly a US story today, it’s going to go global.

Which I think leaves Australia in a precarious position. If Chinese resource demand holds up everything will probably be fine. But if it doesn’t … well, everything won’t be. In fact, there might be trouble anyway. The improvement in Australia’s terms of trade (the ratio of its export prices to its import prices) has been spectacular thanks to the bull run in commodities. It should be running large current account surpluses, like Norway. But it isn’t. It’s running a deficit of 3%. So the AUD is overvalued and vulnerable. For Australians, buying bonds makes some sense to me (despite last year’s rally, developed market bonds backed by a printing press give a glimpse of the future), while buying gold makes a lot of sense (because gold is very cheap in AUD terms). For foreigners, the AUD’s own day of reckoning provides a very good hedge against any great leap backwards in China.”

It means young people alive now count for less than old people alive now. Via John Quiggin:

Much of the debate on the question of whether a pure rate of time preference can be justified is concerned with determining the appropriate way to balance the interests of “current” and “future” generations. The central question, in this framing of the problem, is whether, and to what extent, members of the current generation have the right to allocate resources in their own favour, at the expense of unborn future generations.

“We should cut immigration to make sure unemployment doesn’t get any higher.”

“We should lower the maximum number of hours that people work so that more unemployed people will be able to get jobs.” (A restriction on hours worked was actually enacted in France for this reason!)

“This construction project is going to create 100 new jobs for Sydney.”

These are all nonsense and the mistake that they make is to assume that there is some predetermined demand for ‘hours worked’ in the economy that people take from and add to. This is not the case, at least not in any ordinary circumstance. [1] A country never ‘runs out of work’ to do. We could always collectively choose to spend more time working and consume the fruits of our additional labour, if we wanted.

Rather than think of the labour market as being about rationing out some fixed lump of ‘demand for labour’ between people, we should think of it more like a speed dating service, or a so called ‘matching market‘. Employers and employees move between tables, talk to one another briefly and try to find appropriate matches between customer demand, willingness to pay, skills, culture, wage demanded, preferences for work-life balance and so on, just as speed-daters talk to one another in order to assess their compatibility for a relationship. When two partners match, they enter into an employment arrangement, a relationship, a friendship, or whatever. Clearly it is appropriate for people to be unemployed or single at times, so that they can search around for appropriate partners. Some folks will end up unemployed or single for extended lengths of time because they can’t find appropriate partners, perhaps because they aren’t going on many dates, have high standards, or their particular traits aren’t much desired by potential partners.

The curious thing is that while the ‘lump of labour’ fallacy is the standard way the human mind appears to approach employment, I have never heard anyone commit a ‘lump of relationship’ fallacy. People would look at you astray if you suggested that we would improve social relations by preventing any two friends or lovers from spending more than a certain number of hours enjoying one another’s company in a given week. Nobody thinks that immigrants necessary result in more lonely hearts among everyone else. Nor would releasing 100 men and women keen to hook up with engineers into the Sydney CBD result in 100 additional relationships for Sydney’s engineers, though it might result in a few more if it facilitated some easy matches.

I don’t know why we think about jobs and relationships in such different ways, but whatever the reason, this analogy seems like an quick way to improve people’s thinking.

[1] For the economists, that is when fiscal and monetary policy is able to keep us out of a self fulfilling cycle of low demand and low output, which is most of the time.

Early in Katherine Boo’s unforgettable book, a boy from Annawadi, a Mumbai slum, rushes into his makeshift school, bleeding. The classroom is nothing more than a single room in a neighbor’s hut, but it is the only place he can go for medical attention after being hit by a car. No sooner has the teacher begun treating his wound than his mother surges into the hut, wielding a large piece of scrap metal and screaming: “No car will kill you! No god will save you! You went in the road, roaming loose like that, and now you will die at my hands!” After receiving a beating, the boy is rescued by his teacher. Prior to departing, his mother threatens to “break his legs and pour kerosene on his face.” For this boy, an injury could mean financial catastrophe. “If the driver had hurt you worse, how would I have paid the doctor?” the mother asks her son while striking him. “Do I have one rupee to spend to save your life?”

More than one hundred pages later, a Mumbai garbage-sorter takes the witness stand to defend the honor of his dead wife. A trial is being held to determine whether the defendant beat, and drove to suicide by self-immolation, the woman everyone in Annawadi calls The One Leg. After an argument with her neighbors, she poured cooking fuel over her head and lit a match; her face and hair exploded in flames. The reader has long since known that the deceased—a vindictive woman whose life was full of pathos and bitterness—performed this act for other reasons. But her widowed husband is desperate to deny the idea that his wife had been depressed, let alone suicidal. As proof, he offers up the observation that when their two-year-old daughter drowned in a pail, her death did nothing to shake his wife’s composure.

Boo’s book, which traces the lives of a dozen or so characters in Annawadi between 2007 and 2010, so accustoms the reader to scenes such as this that the widower’s testimony does not quite register, at least initially. None of the witnesses at the trial are reported as reacting to what would generally be considered a damning appraisal of a dead woman’s character. (Unlike those in the court, we have reason to suspect that The One Leg killed her own daughter.) But what does it mean for a husband to state proudly that his wife had not been affected by the death of their child? What does it mean, in a separate incident, for a boy to lose his hand in a plastic shredder and shed tears not from the pain but from the fear of losing his job?

…

In a recent, noisy debate between Princeton economist Paul Krugman and Harvard historian Niall Ferguson, Krugman scolded Ferguson as belonging to a ‘Dark Age’ of pre-Keynesian economics. In justifying his thoughtful reply, Ferguson retorted cheekily: ‘A cat may look at a king, and sometimes a historian can challenge an economist.’

Around the time of that well-publicised tiff in mid-2009, a dike was breached: at least since then, an ongoing squabble has occurred about the value of economists’ analysis in society, given the degree to which the global financial crisis was unanticipated by the profession. Into this debate, John Quiggin—certainly a king within the Australian economics profession—released his book Zombie Economics.

Quiggin is one of the most influential economic theorists in Australia. His most well-known contribution to the field, in expected utility theory, launched him in the early 1980s to international fame (or at least as much fame as could be gained in the sub-discipline of expected utility theory); since then, he has written several popular books on industrial relations, microeconomic reform, and taxation as well as a large number of papers on a diverse range of issues, including risk pricing and environmental economics. Since 2002, he has been a figurehead in the Australian blogging community, and with Zombie Economics, he pioneered a new editing strategy, publishing chapters on his blog to solicit criticism from readers. Since 1996, he has been a regular columnist for the Australian Financial Review, and he is a federation fellow at the University of Queensland.

Quiggin is a self-described social democrat who does not shy from public debate, welcoming opportunities to engage those he disagrees with. Quiggin’s writing, at least from the late 1980s, has been consistently critical of faith in ‘economic rationalism.’ Most recently, he has been a fierce public critic of the Queensland Rail privatisation. Zombie Economics is his latest salvo at the perceived oversteps of laissez-faire economists. The book takes aim at five big ideas that he believes should have been finally discredited by the global financial crisis: the so called great moderation in the business cycle since the mid-1980s; the efficient markets hypothesis that financial market prices incorporate all of the information we have about the future; the belief that dynamic stochastic general equilibrium models can describe the macroeconomy and wisely inform fiscal and monetary policy; the trickle-down theory that the poor can be effectively helped by policies that directly benefit the rich; and finally the belief that the public interest is best served through the privatisation of public enterprises. Quiggin builds his case against these ideas around the zombie motif, the zombies being the theories he believes should have been buried by experience but somehow dig out of their graves and shuffle onwards in the public debate. Quiggin clearly relishes the zombie metaphor and opens each chapter with zombie images to help break up the challenging combination of history, empirical evidence, and rhetorical flourish that make up the rest of the book.

Continued…

Fortunately death is something we keep very good data on, and the Australian Bureau of Statistics publishes the figures broken down by location, age and gender so I can get a good idea of the risks for someone in my approximate circumstance. I encourage you to do the same using data from your own statistics bureau. Here is the rate of death per 100,000 people between 2007 and 2010 for men aged 25-35 living in Canberra:

Cause of death
Intentional self-harm (X60-X84)(g) – 18.9
Accidental poisoning by and exposure to noxious substances (X40-X49) – 10
Motorcycle rider injured in transport accident (V20-V29) – 8.9
Other forms of heart disease (I30-I52) – 5.6
Assault (X85-Y09) – 4.4
Car occupant injured in transport accident (V40-V49) – 4.4

Starting from the bottom, death in a car accident is a notable risk. No surprise there and as I usually ride a bike I’m probably at even greater risk than that figure suggests. I should travel carefully on roads and invest in lights, helmets and so on.

A few people were also killed in assaults. I don’t tend to hang around violent people so that’s probably not such a significant risk for me.

Heart disease also killed a number, which surprised me for such a young age group. My guess is these are unexpected heart attacks due to inherited heart problems. Probably not a lot to be done about that, and there is no history of early-onset heart problems in my family.

Motorbike accidents killed a huge number given how few people ride motorbikes. I’m not a motorbike rider and given this figure I don’t think I’ll take it up!

Second most significant is “accidental poisoning by and exposure to noxious substances,” which I wouldn’t have suspected. Unfortunately I couldn’t get more detailed information describing the kind of poisonings but I would guess the main ones are drug overdose and food poisoning. I will do some further research on this later using a different dataset from the Bureau of Statistics.

However the top risk by far is that I will kill myself. Though I have never had depression or been suicidal there is a history of depression and suicide in my family, so that figure probably reflects a real risk for me. How can I make sure I don’t go and kill myself? Maintain strong connections to friends and family, get help and treatment if I start feeling depressed or suicidal, join religious or cultural groups that oppose suicide, and avoid having guns, knives and poisons around the house. [1] While none of these is hard per se, the high frequency of young male suicide suggest that not everyone in my position manages to do them. Given the self-reinforcing nature of unhappiness, I should probably organise for myself and others to intervene early if I feel myself spiralling into depression.

This excellent piece of journalism outlines the importance of social supports and resilience for achieving a lot in life over the long run. If the anecdotes from that study are representative it is actually very common for smart and successful people to fly off the rails due to traumatic experiences in their lives.

Ultimately though the figures show that my risk of dying between 25 and 35 is under 1%. This is 1% too high, but it is still a pretty low risk. To find the low hanging fruit for increasing my life expectancy, I should look beyond causes of immediate death and think about my long term health. To do so I’ll take a look at what causes of death at any age result in the largest loss of potential years of life for men in Canberra in a future post.

There are three new resources available for those who would like to spread the word. The Felicifia wiki offers a nice compendium describing the issue and what might be done about it.

Utilitarian Essays now hosts a detailed pamphlet called Life in the Wild, which aims to persuade people who are already concerned with captive animal welfare to offer the same empathy to wild animals.

It isn’t new, but Tyler Cowen’s paper Policing Nature offers responses to some common arguments against giving ethical consideration to wild animals, both from utilitarian and other perspectives.

Finally, Oscar Horta is looking for “a graphic designer and a web designer for a project aimed at spreading the word about animal suffering in the wild and animal ethics.”

Hopefully the stock of research and publications on the issue will continue to grow.

But maybe I was right when I couldn’t be bothered flossing. What evidence do I actually have that flossing regularly is worth it, given the frequent if small inconvenience it involves?

Whether or not you floss on any particular occasion is a minor decision, but whether you do so over your whole life is a significant one. The cost of dealing with fillings, root canal surgery and decaying teeth can easily run into hundreds or thousands of dollars a year – tens of thousands over a lifetime. On the other hand, if you floss every day for the next sixty years, taking two minutes each time, that would come to around 730 hours, or some 90 eight-hour work days spent flossing! It’s tempting to follow instinct, dentist advice or habit but I don’t see why any of those would be reliable guides in this case. Given the substantial costs and benefits at stake it’s worth looking at the evidence and making a considered decision.

For some reason though it looks like I’m one of the first people to want a cost benefit analysis of flossing. Google and Google Scholar turned up nothing. Economist Bryan Caplan wanted to produce one but didn’t get very far. Tim Harford laughed at the idea. An hour’s search couldn’t even provide me any figures on how much flossing could be expected to reduce the appearance of cavities! There must be research out there but it isn’t easy to find.

But uncertainty is no reason not to run some numbers. Guesses about the individual parts of the overall equation will be better than guesses about the final result. If we put in some reasonable numbers and end up with a strong conclusion (that is floss a lot, or don’t floss at all) we will some guidance as to what we should do.

I produced a spreadsheet that uses the following personalised inputs (my preferences/guesses in parentheses)

• Annual discount rate (0%)
• Age (25)
• Life expectancy (85)
• Financial and non-financial cost of getting a filling ($300)
• Average lifetime of a filling (8 years) [1]
• Unpleasantness of having a filling ($50 per filling per year)
• Value of time ($20 per hour)
• Attention-adjusted time taken to floss (1 minute)
• Unpleasantness of flossing ($0.20 each time)
• Cost of 50m of floss ($4)

• frequency of new cavities, depending on the frequency of flossing

to produce a dollar ‘loss’ from the costs you incur both due to flossing and dental work. You can try various combinations, and see which minimises your loss.

Based on past experience and the advice of my dentist, I have guessed that with occasional flossing I will get a new cavity roughly each four years. This will probably vary a lot between people; some teeth stay good no matter how much people abuse them. If I floss daily though, I expect to get a new cavity only each 8 years. With these numbers I come out about $15,000 ahead over my lifetime from flossing daily relative to flossing once a week. Sounds like a good idea!

Unfortunately the result is not very robust. If flossing takes two minutes of my undivided attention, and a high wage makes me value each hour at $40 rather than $20, then flossing looks like a bad idea. Of course, with a higher income I might also be willing to pay more to have nicer teeth and not endure fillings. The other key determinant of the outcome is age. The older someone gets the less valuable continued flossing is as they will not have to deal with any additional damage to their teeth for as long.

Overall however it looks like someone who is young and has teeth that are vulnerable to decay should probably floss regularly.

I encourage you to try out the calculator, suggest improvements and work out your own estimates.

Improvements to the model I would like to make, and would appreciate help with are:

• Find clearer figures on how expected tooth decay varies a) with flossing b) between people
• Consider other kinds of treatments one might end up needing (e.g. false/missing teeth)
• Factor in changing costs and preferences over someone’s life
• Include other benefits of flossing, such as better breath or gum health
• Determine how cavities actually increase over a lifetime rather than using linear growth (you will probably run out of high-risk spots for new cavities over time)
• Expand for use with mouthwash, brushing, cleaning, etc.

I have found this framework to be helpful in clarifying my thinking about which habits I should and should not take up.

We should enthusiastic to accumulate habits that are characterised by appreciation and satisfaction. The stronger the effect the better. Dependency is undesirable but you can still be better off from the habit if the effect isn’t too strong. Intense dependency is no good because eventually you will end up gaining nothing or losing from the habit. Addiction is not a problem so long as you will always want and be able to continue with the habit. If you will eventually stop, due to dependency, cost or unavailability, addiction will bite.

Appreciation and satisfaction is the ideal because you win out whether you continue the habit or not.

Addiction on top of strong dependency is the worst case because you will eventually be worse off whether you continue or not. These are the most problematic habits.

Appreciation and addiction together is fine, so long as you don’t expect to have to give up the habit for some reason. If you will, it will be a judgement call as to the initial gain and expected loss later on.

Satisfaction and dependency isn’t perfect but you can’t lose out overall. Even if dependency means you no longer gain from continuing the activity, you will continue to gain for having done it in the past.

The matrix below puts the above into a colourful tabular format.

The hard challenge is knowing which habits have which effects and with what intensity, but this framework at least allows you to ask the right questions and know what to do when you get the answers. It also makes it easy to understand and categorise the claims other people make about their habits.

For instance, someone who thinks it is worth ‘getting into’ fine food might claim that fine food is about appreciation. Someone like me who is skeptical of fine food, might think it is actually about dependency and/or addiction. I have in fact been going out of my way to buy cheap clothes, food, wine and beer lately in order to see if any dependency I currently have gradually disappears. If so I will be able to save money buying cheap goods for the rest of my life and be no worse off. I’ll let you know how it goes.

What got me thinking about all this was cleaning up my house on the weekend. I am skeptical of cleaning, beyond that required to stay organised and avoid disease, for the same reason most people are nervous about drug habits. People differ enormously in how much cleanliness they expect. When someone catches the ‘cleanliness bug’, I doubt they are left any better off than someone with low expectations. They could easily be worse off if they have to incur the cost of cleaning just to maintain their original level of well-being. That is to say, I think cleaning exhibits strong dependency and addiction. Amirite?

I’m not sure whether it’s because I have more ambitious goals than others or just less discipline, but I only rarely feel I’m using my spare time as well as I could. I spend too much time on easy things like reading and talking and too little doing substantive research.

Why is this akrasia such a common experience? If you’ll permit me some evolutionary ‘just-so story’ telling, and I know you will, my guess is that hunter-gatherers did not have to deal with many far off goals that required the determination to stick with unrewarding, difficult or tedious tasks. Hunting, gathering and socialising all offered pretty immediate payoffs so humans are not programmed to do the things the modern world requires of us. As a result discipline – who has it and how to achieve it – is a huge concern through farmer and industrial culture.

Whatever the cause, I think I have found a partial cure. For the last month I’ve been using the website Beeminder to set myself goals and stay on track to meet them. I signed up on the recommendation of two close friends who said it had dramatically enhanced their lives and it has had a similar impact for me.

The strategy of Beeminder is to remove procrastination as an option. Beeminder takes whatever long term goal you are aspring towards and sets out a linear trajectory until it is reached. If you ever fall below that trajectory you have failed at your goal. As a result you regularly face days when you must make some progress towards your goal, or lose. If you do extra today, then you build up a buffer that takes the pressure off tomorrow. The system does rely on you being honest about what you have done, though you could give your account to a friend and let them enter the data for you. It’s very satisfying to see your graph grow as you inch towards your goal, and once you have made some progress, it feels tragic to let your graph get frozen and have to start from scratch.

The first time you attempt a task there is no penalty for failure – apart from whatever disappointment and shame you happen to feel – but if you want to reattempt it Beeminder prompts you to put some money on the line. That money is taken from you if you fail and choose to attempt again. The financial penalty grows three-fold for each subsequent attempt, so you can pretty quickly end up with a lot of cash on the line, if you weren’t otherwise sufficiently motivated. These penalties are how the Beeminder folks hope to make money.

I now approach my evenings and weekends in a much more structured way. On Saturday morning I knew for example, that I had to work-out twice, write two blog posts and get at least three unreplied emails out of my backlog before the weekend was over. Rather than drift through until the early afternoon, as I often used to do, I mentally set out a schedule that allowed me to achieve all of those things. When I’m not working on Beeminder tasks I get to enjoy true ‘down-time’ and the fact that I have ‘things to get done’ means that I treasure and use that time much more effectively than I otherwise would. The fact that I have satisfied my pre-defined targets also means I don’t feel guilty when I do relax.

Some people who hear about Beeminder are nervous about the apparent loss of control over their lives. While it is true that the ‘momentary you’ loses some control, it is only giving up control to your ‘past self’. You can always change your goals with a week’s notice, so you are only ever a slave to a very recent past ‘you’. And while it can be a pain to have to complete a task on a particular day, once you notice that, you will naturally work up a buffer so you can always take the day off if something urgent does come up.

Other people feel that Beeminder will crowd-out their ‘true’ discipline, which is what they should be relying on. If you care about outcomes the proof will be in the pudding; for now at least this tool has enhanced my apparent discipline. The immediacy Beeminder creates does mean I need less willpower to motivate myself to do some things, but I see that as a postive rather than a negative. Drawing on willpower is exhausting.

Others value carefree spontaneity over the kind of focus Beeminder is designed to foster. Certainly a Beeminder task mandating that you ‘relax and enjoy the moment’ would have a touch of irony – though if I ever do a PhD I think I’ll need one. If you are comfortable with how much you satisfy your second-order desires or your first-order and second-order desires coincide – lucky you - then feel free to ignore this post.

But for the rest of us there’s now Beeminder.

A natural response might be to ask what value there is in saving someone’s life in such a poor country. Though I don’t know a great deal about quality of life in rural Mozambique, living in a country with “one of the lowest GDP per capita, one of the worst human development index and amongst the highest inequality in the world” presumably isn’t great. Anywhere that you can save lives for a few hundred dollars would have to be pretty rough! Given this, the justification for vaccinations has to rest on more than just averting death. It must also be about improving people’s quality of life.

Population effects aside, reducing the rate at which people die is a significant way to improve quality of life. Being sick and dying is painful for the person involved and those who care for them. Further, raising kids only to have them die in infancy uses up resources in a community that has no resources to waste. Childhood disease reduces the intelligence and health of survivors and depresses school attendance. A high risk of a child dying discourages investment in human capital and encourages large families, both of which are probably bad for economic development.

If we want to do as much good as possible with health interventions we should aim to not only avert direct suffering from disease and death. The treatments that will most effectively improve quality of life in the long run will also spur on the economic development that allows people to support themselves.

What’s more, for someone who wants to maximise ‘total welfare’, the impact health spending has on population is not a second-tier issue. If Village Reach improves health without increasing incomes or reducing fertility, then it may just result in more people living in abject poverty, which is a questionable achievement. On the other hand folks who are optimistic about the quality of life of people living in poverty will not be so enthusiastic about fertility falling unless the population decline does a lot to improve average quality of life.

It is much harder to quantify these flow on effects on development and population, which is why they usually get short shrift. Education, health and development all cause one another with different intensities and lags, and unravelling the chains of causation between them is extremely difficult, if not impossible, in the absence of randomised experiments. A charity like Village Reach could randomly allocate villages to treatment and non-treatment groups and collect data on incomes and fertility in addition to health. Tracking these effects would require collecting data for an extended period of time, but would be a very valuable research project in its own right.

GiveWell has chosen to focus on health and nutrition interventions over others in large part because many more of them are cheap and have proven impacts. [1] Strong evidence of cost effectiveness is key for GiveWell, as a large part of what they are trying to achieve is a shift the culture among NGOs towards thorough data collection and evaluation of projects. [2] Given the current low standards of evaluation for most charities, this is a creditable goal.

A manageable improvement given this constraint would be to look at which kinds of disease do the most to depress education and productivity. A long lasting tropical parasite, childhood diarrhoea, chronic illness or fatal adult disease could all have different impacts on family structure and capacity for education and work. Likewise some countries may be in a better position to advance economic development in response to improved health than others. These flow on effects may be as important, if not more so, than the number of deaths averted per dollar.

[1]  An education program which can’t demonstrate an impact on education presumably isn’t doing much for quality of life, population or development either, so it is fair enough to ignore it.

[2]  While GiveWell’s evaluation style is likely to be biased towards interventions that have easily measured, short-term outcomes, this isn’t a problem necessarily. While GiveWell may miss highly effective charities, something which can’t be measured can’t be targetted.

Cowen: Let me ask you a question about animal welfare. I have been very influenced by a lot of what you’ve written, but I’m also not a pure vegetarian by any means, and when it comes to morality, for instance, my view is that it’s perfectly fine to eat fish. There may be practical reasons, like depleting the oceans, that are an issue, but the mere act of killing and eating a fish I don’t find anything wrong with. Do you have a view on this?
Singer: There’s certainly, as you say, the environmental aspect, which is getting pretty serious with a lot of fish stocks, but the other thing is there’s no humane killing of fish, right? If we buy commercially killed fish they have died pretty horrible deaths. They’ve suffocated in nets or on the decks of ships, or if they’re deep sea fish pulled up by nets they’ve died of decompression, basically their internal organs exploding as they’re pulled up. I would really … I don’t need to eat fish that badly that I need to do that to fish. If I was hungry and nothing else to eat I would, perhaps, do it but not given the choices I have.
Cowen: But now you’re being much more the Jewish Moralist and less the Utilitarian. Because the Utilitarian would look at the marginal impact and say “most fish die horrible deaths anyway, of malnutrition or they’re eaten or something else terrible happens to them”. The marginal impact of us killing them to me seems to be basically zero. I’m not even sure a fish’s life is happy, and why not just say “it’s fine to eat fish”? Should it matter that we make them suffer? It’s a very non-Utilitarian way of thinking about it, a very moralizing approach.
Singer: You would need to convince me that in fact they’re going to die just as horrible deaths in nature, and I’m not sure that that’s true. Probably many of them would get gobbled up by some other fish, and that’s probably a lot quicker than what we are doing to them.
Cowen: You have some good arguments against Malthusianism for human beings in your book. My tendency is to think that fish are ruled by a Malthusian model, and being eaten by another fish has to be painful. Maybe it’s over quickly, but having your organs burst as you’re pulled up out of the water is probably also pretty quick. I would again think that in marginal terms it doesn’t matter, but I’m more struck by the fact that it’s not your first instinct to view the question in marginal terms. You view us as active agents and ask “are we behaving in some manner which is moral, and you’re imposing a non-Utilitarian theory on our behavior. Is that something you’re willing to embrace, or something that was just a mistake?
Singer: Look, I think economists tend to think more in terms of marginal impact than I do and you may be right that is something I may need to think about more. Look, Tyler, I have to finish unfortunately, I’ve got another interview I’ve got to go to, so it’s been great talking to you, but I think we’re going to have to leave it at that point.

The recent spat between the big retailers and the rest of society over the absence of a GST on imported goods brought into the public spotlight the fact that the internet is a bargain hunter’s dream. Here I’ll reveal some of the best sites that can save you money, sometimes a lot of it.

If you’re ordering books or DVDs, you can’t go past http://www.booko.com.au, which will search over 20 websites and automatically factor in the cost of shipping to Australia. Two stores that often come out the cheapest are http://www.bookdepository.com and http://www.abebooks.com. Book Depository is similar to Amazon but charges nothing to ship to Australia; AbeBooks is a huge catalogue of second hand and discounted books and often features the international versions of textbooks for a third the price at the Co-Op Bookshop. You will typically pay half the price found in Australia.

UK stores http://www.handtec.co.uk and http://www.clove.co.uk both sell unlocked mobile phones for substantially less than you’ll find anywhere in Australia. Orders arrive within a few days, and accessories like batteries, cases and memory cards are also very cheap. Other electronics accessories can be bought from wholesalers via http://www.ebay.com.au. If you are looking for a cheap mobile phone plan http://www.liveconnected.me is an Optus reseller that offers better value pre-paidplans than any of the brand names.

If they don’t suit, http://www.spreadsheets.google.comccc?key=p1er2CJsp39KBREZvsqzUHQ compares all mobile options in Australia.If you are looking for good value broadband, http://www.bc.whirlpool.net.au is the only site you need. It has comparisons of all ADSL plans in Australia, and reviews of their quality of service. The attached forum, Whirlpool, is a font of wisdom on all tech issues. Consider dumping your landline for nakedADSL with a VoIP connection to save another $20 a month.

http://www.switchwise.com.au will do its best to find the cheapest electricity and gas contracts available in your area. For computers and electronics goods http://www.staticice.com.au tracks most shops in Australia, though it’s not so easy to search. American site http://www.testfreaks.com does an excellent job of aggregating reviews on all consumer electronics. The Australian Consumer Association’s magazine, Choice, offers detailed advice on a wide range of products at http://www.choice.com.au, but many are behind a pay-wall.

Seeking cheap wine, spirits and beer? You won’t want to order these by mail, but http://www.boozle.com.au will help you track down the cheapest Bottle-O near you for your poison of choice.

If you have some money to throw around (or lack two coins to scrape together), http://www.infochoice.com.au/banking/ will find you the highest rate for an online savings account or term deposit while http://www.creditcardoffers.com.au will compare most credit card deals (if you want to make a deal with that particular devil). Services like http://www.tranzfers.com and http://www.bestexchangerates.net will help you send money to family overseas or buy currency for your holiday for less than what the banks charge (or worse still, Travelex and Western Union). Websites such as http://www.pricespy.com.au, http://www.getprice.com.au and http://www.myshopping.com.au do a reasonable job of comparing prices for many miscellaneous goods, though they are full of advertising and a pain to use.

It’s easy to blow time on ‘bargain’ sites like http://www.ozbargain.com.au and http://www.allthedeals.com.au as any special offers are quickly submitted to these sites. If you enjoy the thrill of the chase, you should certainly check them out!

There are many services that try to compare flights, among them http://www.wego.com/flights/, http://www.adioso.com, http://www.flightcentre.com.au, http://www.webjet.com.au and http://www.lastminute.com.au. These are often more effort than they’re worth for domestic travel, but you would be crazy to book any international flights without searching a few such sites to make sure you have a good deal.

Two startups designed to match consumers with discounts are http://www.wotif.com and http://www.groupon.com (which in Australia is called http://www.stardeals.com.au). WofIf offers discounts for hotels and hostel accomodation, particularly for last minute bookings.

Groupon/Stardeals offers discounts on all sorts of goods and encourages you to get your friends to buy them too. The more friends decide to join you, the cheaper the deal gets for your whole friendship group! I haven’t used either yet, but both sites are now valued well over $100m, which speaks for itself.

If you wear glasses or contact lenses there are many places that will sell them for less than half the price your optometrist charges. A large Australian store is http://www.clearlycontacts.com.au, and a popular one in the USA is http://www.zennioptical.com. Unfortunately the law presumes you can’t tell whether you can see straight or not, so you’ll still need a prescription from within the last year to order.

Clothes stores I have heard good things about are http://www.tailorstore.au.com, http://www.pickashirt.com and http://www.indochino.com, which sell customised shirts and suits respectively. Look around at similar sites and consider getting one shirt to try out before ordering a bunch.

All of these sites and many more are easy to find on Google by combining the name of the item you want to buy with ‘compare prices’ or ‘buy australia’. So get out there, find your own money saving tips and send them in to be shared with Woroni!

In personal decisions this is clear enough. If you are trying to decide what to do and are going through programs you could watch on television, there is no use comparing each program to staring at a blank TV screen, to whatever channel it happens to be tuned to now, or to sitting and doing nothing. The fact that a show is better than a blank screen is irrelevant to your decision. Instead you should compare watching each program to the best alternative activity you can think of and only watch it if it is better.

When someone says that giving money to a charity is ‘a good thing to do,’ for some reason that standard tends to be relaxed. They ought to compare that charity to the best way to spend that money, not just to destroying it or spending it on themselves. For some reason wastefully spending the money on oneself is the standard comparison in this case. Similarly, when we consider a government policy, we should compare it to the best policy in that area that we can think of, not to doing nothing at all or continuing to do whatever we are already doing.

That’s not to say you should never consider other more limited comparisons. For example, we might restrict our comparison to ‘other charitable acts we would actually be willing to do’, or ‘other policies that would be able to get through parliament.’ If someone else thinks that doing nothing is the best option, then in a conversation with them we may want to use that as the comparison for the sake of argument. However, when we want to make a more limited claim we should ensure everyone understands what comparison we are drawing and why we have chosen that counterfactual.

I’ve heard a lot of conversations over the last few years about the merit or lack thereof of the Australian Government’s National Broadband Network rollout. Many people evaluate the network compared to ‘changing nothing’. Most others evaluate it relative to ‘the best alternative broadband policy I can think of,’ or ‘the best way to spend that money.’ [2] Needless to say, the people who draw the first comparison tend to judge the NBN positively, while those who apply the latter standards are more likely to evaluate it negatively. [1] To my mind the first comparison would only be interesting if doing nothing were the likely alternative, which I’m pretty sure is not the case. We should at least ask whether the NBN is ‘good’ compared to other broadband policies, and ideally whether it is good relative to all the other things the government could spend that money on.

[1] I am taking no position on the merits of the NBN.

[2] If we are spending money to achieve some goal, at a minimum we should compare that expenditure to the best alternative way of achieving that goal we can find. This is called cost-effectiveness. Ideally we would go further and compare spending money on that goal to the best way we could spend money to achieve any goal. That is usually much more difficult to do, and requires agreement not only about whether that goal is desirable, but how important all goals are relative to one another. So if we going to dedicate some resources to achieving that original goal, it can be useful to search for the most cost effective way to do so without comparing it to all possible alternatives.

Should a similar principle exist for selfless as well as selfish finance? When a guaranteed opportunity to do a lot of good for the world appears, philanthropists should notice and pounce on it, and only stop shifting resources into that activity once the opportunity has been exhausted. This wouldn’t work as quickly as arbitrage on financial markets of course. Rather it would look more like entrepreneurs searching for and exploiting opportunities to open new and profitable businesses. Still, in general competition to do good should make it challenging for an altruistic start-up or budding young philanthropist to beat existing charities at their own game.

There is a very important difference though. Most investors are looking to make money and to them a dollar is a dollar, whatever business activity it comes from. Competition between investors makes opportunities to get those dollars hard to find. The same is not true of altruists, who have very diverse preferences about who is most deserving of help and how we should help them; a ‘util’ from one charitable activity is not the same as a ‘util’ from another. This suggests that unlike in finance, we may able to find ‘altruistic arbitrages’,  that is to say ‘opportunities to do a lot of good for the world that others have left unexploited.’

The rule is simple: target groups you care about that other people mostly don’t, and take advantage of strategies other people are biased against using.  The rule  is the root of a lot of advice offered to thoughtful givers and consequentialist-oriented folks. An obvious example of the rule is that you shouldn’t look to help poor people in rich countries. There are already a lot of government and private dollars chasing opportunities to assist them, so the low hanging fruit has all been used up and then some. The better value opportunities are going to be in poor, unromantic places you have never heard of, where fewer competing philanthropist dollars are directed. Similarly, you should think about taking high risk-high return strategies. Most do-gooders are searching for guaranteed and respectable opportunities to do a bit of good, rather than peculiar long-shot opportunities to do a lot of good. If you only care about the ‘expected‘ return to your charity, then you can do more by taking advantage of the quirky, improbable bets neglected by others.

Who do I personally care about more than others? For me the main candidates are animals, especially wild ones, and people who don’t yet exist and may never exist – interest groups that go largely ignored by the majority of humanity. What are the risky strategies I can employ to help these groups? Working on future technologies most people think are farcical naturally jumps to mind but I’m sure there are others and would love to hear them.

This principle is the main reason I am skeptical of mainstream political activism as a way to improve the world. If you are part of a significant worldwide movement, it’s unlikely that you’re working in a neglected area and exploiting how your altruistic preferences are distinct from those of others.

What other conclusions can we draw thinking about philanthropy in this way?

The first requires a reasonable computer, an up to date browser and will appeal to fans of the Arcade Fire. I won’t give away any more.

The second uses crowd-sourced frames to recreate a classic video clip. Bravo!

If extra education spending helped people gain entry to a fixed number of professional positions but did nothing to improve their ability of course that would be undesirable. But that is a very strong claim. More expensive primary or high schools may well help their graduates, but presumably that is because the training they offer makes them better students and employees. Universities and employers would learn to ignore such education if that weren’t so. Further, if primary and high schools really did nothing to enhance the skills of students, neither the rich nor the poor should have their education subsidised because all that would matter is someone’s underlying (and unalterable) talent!

Even if it were true that private schools provided unmerited advantage to their alumni, the blame for that would lie with universities and employers for using inappropriate selection criteria, not with the student for attending a private school. If university entrance criteria accurately selected people based on how equipped they were for a career or course of study, families would be able to purchase useful classes for their kids rather than force them to jump through useless and expensive hoops to get admitted.

And even if schools had no way to use extra funding to offer better classes, improved selection criteria would not spell the end of expensive schools, because parents are not concerned exclusively with academic success. Private schools offer diverse extracurricular, personal and cultural services which attract parents and students. Prohibiting families from spending money on schooling is a bad substitute for addressing bad university entrance criteria, because in order to discourage wasteful classes and bad students getting an advantage, it would also hit the useful courses and extra services families want to buy from private schools.

Notice also that for his conclusion to hold, Isdale has had to assume that each extra student who enrols in a course displaces another student. Fortunately this is not longer true in Australia’s demand-driven higher education system, at least for professions without anti-competitive guilds or ongoing shortages of teaching staff.

Finally I would note that to call the situation he describes a ‘serious injustice’ Isdale must believe that it is just (and not just efficient) for those who happen to inherit talent but not money to profit from their talent, but unjust for those who inherit money but not talent to profit from their money. This is a common attitude, but the reason has never been obvious to me. It seems more sensible to target equity after all of someone’s advantages in life have been taken into account, and not just one of them.

Next I’ll look at the main reason Government’s allow parents to contribute to education expenses and present what I think is a stronger foundation for seeking equality in school funding.

N.B. All opinion here are exclusively my own, and I am not taking a position on school funding, simply critiquing the models in the original post.

I actually believe the “singleton” scenario to be very, very improbable, even more so after reading your definition: ”a single decision-making agency … capable of exerting effective control over its domain, and permanently preventing both internal and external threats to its supremacy”

“effective control” it obviously have to delegate responsibility (not a singleton anymore) or move about its domain to do that… The speed of light problem, I actually quite confidently predict this to be, well impossible…

Again no one else can be allowed to do something even in small domains, the singleton has to do mundane stuff like the plumbing to high tasks like: “permanently preventing both internal and external threats to its supremacy” how is it going to do this? There will be have to be some parallelism, so the possibility of an “other” emerging.

This concept is just self contradictory and illogical really.

I do believe there maybe some way to setup a strict monopoly over a domain with free individuals, but it will be difficult to guarantee it to be “permanent”.

I think Dave is too pessimistic. A singleton is possible with delegated responsibility as long as there is one decision maker can rein in the delegate if they attempted to deviated from the central decision maker’s goals. This is clearly very difficult when the delegate is light years away. It would take too long to find out about and intervene in any conspiracy to deviate from the singleton’s plans before the conspiracy could prepare and defend itself. Anticipating this, a singleton would have to design any space colonisers it released such that they would never want to deviate from its original plans. For an AI this might be possible if the AI made an exact copy of itself and designed the copy in such a way that its goals could not change in random ways. Ensuring that its utility function could never change might require making the AI less flexible or less able to grow and evolve – that is to say, make it stupider. But it may not be an insurmountable problem.

I am less clear whether this is possible for uploads or other creatures that have evolved rather than been designed from scratch, and so whose inner workings are not fully understood. Has anyone investigated this properly?

One possible strategic response to human-created risks is the slowing or halting of our technological evolution, but you have been a critic of that view, arguing that the permanent failure to develop advanced technology would itself constitute an existential risk. Why is that?

Bostrom: Well, again I think the definition of an existential risk goes beyond just extinction, in that it also includes the permanent destruction of our potential for desirable future development. Our permanent failure to develop the sort of technologies that would fundamentally improve the quality of human life would count as an existential catastrophe. I think there are vastly better ways of being than we humans can currently reach and experience. We have fundamental biological limitations, which limit the kinds of values that we can instantiate in our life—our lifespans are limited, our cognitive abilities are limited, our emotional constitution is such that even under very good conditions we might not be completely happy. And even at the more mundane level, the world today contains a lot of avoidable misery and suffering and poverty and disease, and I think the world could be a lot better, both in the transhuman way, but also in this more economic way. The failure to ever realize those much better modes of being would count as an existential risk if it were permanent.

Another reason I haven’t emphasized or advocated the retardation of technological progress as a means of mitigating existential risk is that it’s a very hard lever to pull. There are so many strong forces pushing for scientific and technological progress in so many different domains—there are economic pressures, there is curiosity, there are all kinds of institutions and individuals that are invested in technology, so shutting it down is a very hard thing to do.

What technology, or potential technology, worries you the most?

Bostrom: Well, I can mention a few. In the nearer term I think various developments in biotechnology and synthetic biology are quite disconcerting. We are gaining the ability to create designer pathogens and there are these blueprints of various disease organisms that are in the public domain—you can download the gene sequence for smallpox or the 1918 flu virus from the Internet. So far the ordinary person will only have a digital representation of it on their computer screen, but we’re also developing better and better DNA synthesis machines, which are machines that can take one of these digital blueprints as an input, and then print out the actual RNA string or DNA string. Soon they will become powerful enough that they can actually print out these kinds of viruses. So already there you have a kind of predictable risk, and then once you can start modifying these organisms in certain kinds of ways, there is a whole additional frontier of danger that you can foresee.

In the longer run, I think artificial intelligence—once it gains human and then superhuman capabilities—will present us with a major risk area. There are also different kinds of population control that worry me, things like surveillance and psychological manipulation pharmaceuticals.

…

If I wanted some sort of scheme that laid out the stages of civilization, the period before machine super intelligence and the period after super machine intelligence would be a more relevant dichotomy. When you look at what’s valuable or interesting in examining these stages, it’s going to be what is done with these future resources and technologies, as opposed to their structure. It’s possible that the long-term future of humanity, if things go well, would from the outside look very simple. You might have Earth at the center, and then you might have a growing sphere of technological infrastructure that expands in all directions at some significant fraction of the speed of light, occupying larger and larger volumes of the universe—first in our galaxy, and then beyond as far as is physically possible. And then all that ever happens is just this continued increase in the spherical volume of matter colonized by human descendants, a growing bubble of infrastructure. Everything would then depend on what was happening inside this infrastructure, what kinds of lives people were being led there, what kinds of experiences people were having. You couldn’t infer that from the large-scale structure, so you’d have to sort of zoom in and see what kind of information processing occurred within this infrastructure.

It’s hard to know what that might look like, because our human experience might be just a small little crumb of what’s possible. If you think of all the different modes of being, different kinds of feeling and experiencing, different ways of thinking and relating, it might be that human nature constrains us to a very narrow little corner of the space of possible modes of being. If we think of the space of possible modes of being as a large cathedral, then humanity in its current stage might be like a little cowering infant sitting in the corner of that cathedral having only the most limited sense of what is possible.

I’m going to do a back-of-the-envelope calculation on ‘local food’ and then later ‘fair trade’ to explain why I don’t think they are worth putting much effort into. I hope it will inspire you to do the same for whatever approaches you currently use to make the world a better place.

As you probably know, local food or locovorism is where people aspire to buy food made near to where they live. On a recent trip to the States I was astonished at the size of the local food movement. Everywhere I went people would beam with pride about how nearby their food was produced. There are several proposed benefits of local food [1] but probably the most common one is wanting to reduce the environmental damage caused by food transport, so called ‘food miles’. For this to be the best thing for someone to dedicate their attention to a few things need to be true:

• environmental degradation and climate change would need to be valuable things to direct attention to on the margin;
• reducing your personal environmental footprint would need to be an effective thing to do about those problems;
• buying food produced near you would need to be a cost-effective or effort-effective way to achieve that.

Let’s assume for the moment that environmental degradation were the most important problem to work on. Reducing the effect of your personal consumption would be only one way to direct your effort. Others would include working to change environmental regulations, convincing others to do more themselves, expanding humanity’s ability to adapt to environmental degradation (for instance through poverty alleviation, migration or geoengineering) or assisting researchers developing green technology. Intuitively I expect all of those to pack a bigger punch per hour than trying to change your own consumption habits. But let’s say my instinct is wrong about that.

If you wanted to reduce the environmental impact of your own consumption, would buying food produced nearby be an effective approach? Let’s get some indication of the good you could hope to do:

Desrochers and Shimizu cite a comprehensive study done by the United Kingdom’s Department of Environment, Food and Rural Affairs (DEFRA) which reported that 82 percent of food miles were generated within the U.K. Consumer shopping trips accounted for 48 percent and trucking for 31 percent of British food miles. Air freight amounted to less than 1 percent of food miles. In total, food transportation accounted for only 1.8 percent of Britain’s carbon dioxide emissions.

In the United States, a 2007 analysis found that transporting food from producers to retailers accounted for only 4 percent of greenhouse emissions related to food. According to a 2000 study, agriculture was responsible for 7.7 percent of total U.S. greenhouse gas emissions. In that study, food transport accounted for 14 percent of the greenhouse gas emissions associated with agriculture, which means that food transport is responsible for about 1 percent of total U.S. greenhouse gas emissions.

So if we assume that buying local food eliminated all emissions from food transport you could hope to cut 1-2% of your total greenhouse gas emissions. Then there are some offsetting effects. A strong preference among consumers for local food would tend to drive agriculture towards places where it is otherwise less efficient, requiring more machinery, labour or land to produce the same food. This would also be bad for the environment. On top of this, as indicated in the quote above, retail-to-home transport has about the same impact as farm-to-retail transport. If someone drives further to the farmers’ market to buy local, they could end up producing more food miles overall. How significant these offsetting effects are will vary depending on the person and the food they are buying, but they suggest that 2 per cent is a generous upper bound.

What would be the rough value of a 2 per cent reduction in your emissions? Let’s say you are a big polluter and produce 20 tonnes of CO2 equivalent each year. Let’s also take a high value of emissions reductions of $100 per tonne. This is several times the current marginal cost of reducing emissions and is probably more than enough to get us climate stabilisation at 450 CO2e, but let’s use it anyway. A 2% reduction in your emissions would then be worth $40 of good to the world (20 tonnes * $100 * 2%). This seems small to me for a year’s work buying local food, and that is the best case scenario. Insulating your home, not eating livestock or holidaying by plane, or buying up and ‘retiring’ carbon credits in carbon markets are likely to offer much more bang for buck.

Could eating local still be worthwhile? Sure. If you would eat food produced nearby for selfish rather than altruistic reasons, or are tossing up between a local and foreign item it’s little or no difference to you to choose the local one, go ahead. But if your goal is to effectively convert your time and money into good outcomes for the world it would be very surprising if ‘eating local’ were something worth making a fuss about.

[1] Other reasons I’ve heard offered are ‘I enjoy having a relationship with the farmer/land or helping small growers’ or ‘I like knowing how the animals/land are treated’. Insofar as you are eating local food because you enjoy it more you can disregard this post. As for being more informed about the effects of the farming techniques employed, or wanting to support small scale farming over big the same considerations apply. Does this really offer a high return on your effort? My other question would be: should you really have to eat locally to know how your food is produced? It seems like a less elegant solution than certification labels like ‘organic’ or ‘free range’.

Preventing catastrophes like nuclear war does avoid human extinction and keep us on the path of growth and eventual space colonisation. However, it is unclear how pleasant this world will be for its inhabitants. If a singleton does not develop, that is ”a single decision-making agency … exerting effective control over its domain, and permanently preventing both internal and external threats to its supremacy,” the logic of survival means that we will eventually end up regressing to a competitive Malthusian world. That world is one where vast numbers of beings compete for survival on subsistence incomes, as has been the case for most creatures on Earth since life first appeared billions of years ago. The creatures working to survive could be mind uploads or something else entirely. In this scenario it is competitive pressure and evolution which determine the long run outcome. There will be little if any path dependence. Just as it was not possible for a group of people planted on Earth millions of years ago to change the welfare of the beings that exist today after evolution has had its way, so too it will be impossible for anyone today to change what kinds of creatures win out in the battle for survival millions of years from now. The only impact we could have now would be to reduce the risk of life disappearing altogether at this brief bottleneck on Earth where extinction is a real possibility. The difference between the best and worst futures possible is that between the desirability of life disappearing altogether and the desirability of a Malthusian world.

As competitive pressures do not necessarily drive creatures towards states of high wellbeing, it is hard to say which of these is the better outcome. I hope that technology which allows us to consciously design our minds and therefore our experience of life will lead to a nicer outcome even in the presence of competitive pressures, but that is hard to predict. Whatever the merits of the competitive future, it falls short of what a benevolent, all-powerful being trying to maximise welfare would choose.

On the other hand if a singleton is possible or inevitable, the difference between the best and worst futures is much greater. The desires of the singleton which comes to dominate Earth will be the final word on what Earth originating life goes on to do. It will be free to create whatever utopia or dystopia it chooses without competitors or restrictions, other than those posed by the laws of physics. In this world it is possible to influence what happens millions or billions of years from now, by influencing the kind of singleton which takes over and spreads acoss the universe. The difference in desirability between the best and worst case is that between an evil singleton which unrelentingly spreads misery across the universe, and the ideal benevolent singleton which goes about turning the entire universe into the things you most value.

If you think there is much uncertainty about whether a singleton is possible, and want to maximise your expected impact on the future, you should act as though you live in a world where it is possible. You should only ignore those scenarios if they are very improbable.

What technology is most likely to deliver us a singleton in the next century or two, giving you a chance to have a big impact on the future? I think the answer is a generalised artificial intelligence, though one might also suggest a non-AI group achieving total dominance through mind uploads, ubiquitous surveillance, nanotechnology, or whatever other emerging technology.

So if any of you are tempted to dismiss the Singularity Institute because the runaway AI scenario seems so improbable: you shouldn’t. It makes sense to work on it even if it is. The same goes for those who focus on the possibility of an irreversible global government.

Update: I have tried to clarify my view in a reply to Carl Shulman below. My claim is not that the probability is irrelevant, just that it is only part of the story and that working on low probability scenarios can be justified if you can have a larger impact, which I believe is the case here. Nor do I or many people working on AI believe that an intelligence explosion scenario is particularly unlikely.

He could well be right that we should target a greater share of funding on disadvantaged children, but he takes us through some common silly arguments to get us there. I’ll look at them across a few short posts.

First Isdale notes that,

“…there are in fact reasons to subsidise private education in some instances. One reason is that education is a public good; a society of well-educated people is better than one where people are never afforded those opportunities.”

Reasonable enough. On the other hand,

“…education is a positional good as well as … one with public benefits. Access to rewarding jobs is to a large extent (but not wholly) a zero-sum game. If someone lands a great job, someone else misses out. Since education is one of the main ways in which we land such jobs and win out over others, there are good reasons for believing that its advantages should be based on talents and not money. Not doing so is not only unfair, but it’s bad for society.”

This substantially underestimates the extent to which education is a positive sum game in a dynamic economy like our own. At the individual level when one person becomes more educated and takes a highly skilled job from another person, it looks as though one person’s gain has been another person’s loss. But if you look across countries and times you see some places where the vast majority of workers are poorly skilled and most jobs require few skills, and others where most of the population is highly educated and the economy has adjusted to make use of most of those skills. As their population became more educated the Swedes for instance didn’t just redistribute a fixed share of professional jobs between themselves – businesses that demanded professional employees opened and expanded. Jobs that had previously been done by those those with low skills were now done by machines and immigrants, and in some cases those jobs disappeared altogether (for example, it’s rare to hire housemaids or shoe-shiners today). Most people in a country can have high skilled and high paying jobs if they have the required talent and education, and employers are given time to adjust to make use of the skills they have. I would reverse the order and say that access to rewarding jobs is to a large extent (but not wholly) a positive-sum game.

To be fair to Isdale, while access to rewarding jobs is positive sum, the status associated with being a wealthy professional is more of a positional (or zero sum) good. A wealthy engineer will feel less special when 10% of the population are wealthy engineers than when 1% of the population are. Discouraging education spending to defuse this zero-sum competition might would sense if people would then redirect their efforts to other more positive-sum activities. However I don’t see what those other activities are meant to be. Most things people can do with their time, even overall helpful ones, have some competitive element to them. Becoming more skilled and educated seems about as useful for society as anything most people do.

On the face of it Isdale’s case contradicts itself. If having the people around you become better educated is overall a negative externality as he seems to suggest, then we should be taxing education rather than subsidising it. But Isdale wants us to subsidise it more, at least for disadvantaged groups! We can make sense of his position if we assume that education spending for an individual is initially a positive externality for the rest of society, but then as the spending goes up, becomes a negative one. This could be true if education spending is initially about learning skills, but at higher levels just serves to help students signal their distinguished pedigree to future teachers and employers. Unfortunately he never gets around to making that case. My understanding is that we struggle to measure the externalities from education at all, so it would be hard to convincingly mount an empirical case for such a precise claim.

The obvious answer is yes. By matching donations I am inducing others to donate more than they otherwise would. As long as I can find enough people to match that I don’t donate much less than I otherwise would, I’m increasing the additional effect of my donation. This is probably right. That said, it’s likely that many of those other folk were planning to give some money away anyway and reduced their other donations in order to match mine. For this reason I don’t believe that I was really causing two dollars to be donated for each dollar that I gave. The additional impact was probably quite a bit less.

An outside possibility is that donation matching not only doesn’t induce extra donations but rather ‘crowds them out’. This would be the effect if the people who matched my donation reduced their other donations by more than one dollar for each dollar they matched for me. Why would that happen? It could if they were targetting a certain amount of charitable donations each year and counted each dollar they matched for me as more than one dollar given, because the considered themselves partially ‘responsible’ for my donation as well. Having given $X, they feel like they have given $2X and cut back on $2X donations in the rest of their life. Thinking through human psychology I doubt this happens much, but it’s possible.

Even if it were true though, I would still use matching donations. The charity that I was donating to, VillageReach, can probably avert an infant death through vaccinations for around $500. That is far more effective than most other chartiable organisations [1]. While the people matching my donations are a clever and discriminating lot, my guess is that any donations I might have ‘crowded out’ would still have gone to less effective causes. It was worth matching just to better direct the funds.

Furthermore, inducing someone to give to VillageReach once, and making them aware of how effective their interventions are, will probably tempt them to give more in future both out of habit and a desire for consistency in their behaviour.

Further still, I was able to splash our giving all over our Facebook profiles, advertising what we were doing to my and their friends. While normally advertising one’s generosity in this way would be gauche, I have a good excuse (I am looking for matching donations!) and so do they (I did it not them, and it’s good to raise awareness!) which makes it socially acceptable. This raises the benefits of giving to us donors, probably tempting us to give more than we would otherwise.

This scheme also changes and raises the standards of what is admirable do-goodery to everyone who happens to be watching: not signing a petition or watching a YouTube clip, but rather giving hundreds or thousands of dollars to an organisation you have properly researched. Maybe this will improve their behaviour too.

The only mystery to me is why matching donations on social networking sites are not more popular. I hope I am just ahead of the rush.

[1] Though not as effective as existential risk reduction I now think. I would say the key downside of using matching donations is that it tempted me to give to familiar ‘African health program’ interventions that would attract matching donations, rather than more unusual but probably more effective animal welfare or existential risk charities.

Last week’s National Union of Students (NUS) ‘Day of Action’ at ANU had the peculiar tagline ‘Say No to a HECS Increase’. I say strange because changes to HECS fees, whether up or down, will have little impact on the welfare of students or the nation relative to most other issues in education policy.

The evidence is clear that changes in HECS fees over time have hardly impacted how many people study or what they study. This is unsurprising because relative to the large increases in income, job interest and quality of life that most students gain from higher education, HECS is a minor consideration. If HECS fees don’t influence enrolments, that means that they are neither preventing students from staying in university forever to milk the system, nor driving them to enter jobs early rather than build up their skills for the good of society. So much for that.

Perhaps HECS fees discourage students from poor backgrounds from attending university because it looks like a lot of money to them? The evidence is in and they don’t – a poor and rich year 12 finisher are equally likely to go to university given the same ENTER score. The problem for poor kids is what happens before their year 12 exams, not after. We should be vigilant that this remains the case, by allowing them to defer most of their costs until after graduation through loans like HECS.

Perhaps it’s unfair to make those disadvantaged people who never get to go to university pay for the privileged minority who do? It would be, but due to our quite progressive tax system, low income earners don’t pay much tax anyway. The unfairness is mostly towards those who make good money without ever receiving higher education.

Maybe HECS has a negative impact on the welfare of people after they graduate and earn over $45,000 a year? It’s unlikely to, as any graduate earning over $45,000 a year and paying back some HECS is probably doing just fine financially. I’ll save my sympathy for those actually struggling to make ends meet, most of them in countries much poorer than our own. In any case, the alternative is that they (and non-graduates too!) pay for university in the form of higher taxes, which would leave them no better off overall.

Might HECS repayments discourage students from working or participating in society? If anything HECS, being a debt you can pay off, would encourage participation and work relative to raising other taxes, which you can never pay off. On average taxes cost the public at least $1.20 for each dollar the government spends. Income tax increases on high earners cost society at a minimum $1.30 for each extra dollar raised. I am confident the overhead with HECS fees is less than 30%, which is why I prefer it. Nonetheless I won’t pretend the difference is huge.

Doesn’t society have a moral obligation to pay students for doing something that benefits everyone? Actually, it should only bother if they aren’t already motivated to study out of self-interest, which clearly isn’t the case. I hope I’m doing good for society when I write for Woroni, but the editors have no obligation to pay me if I enjoy it enough to do it for free!

Don’t HECS fees commercialise universities? If only that were so. I would much rather the priority for Vice-Chancellors was to provide a quality education at a good price to drive up student enrolments, rather than curry favour with politicians and public servants. Maybe we should change the rules so that administrators have to spend most of our fees on our education, but can spend a proportion on their pet projects as a reward for attracting our business.

Aren’t HECS fees currently set arbitrarily, with law students paying most of the cost of their degree and science students only a small fraction? Yes. When politicians set education prices you can’t expect there to be much rhyme or reason, but that’s no reason for a general increase or decrease. If you want a general principle for setting fees for different areas of study I would suggest this one, which is both efficient and equitable: raise them until they discourage students from enrolling, then stop.

Ultimately though, the level of HECS fees is a second-tier issue in education policy. Ensuring administrators and academics provide quality lectures and tutorials; giving special help to kids who struggle in primary school, before they fall behind; getting degree places to match up with student and employer demand; ensuring income support allows poorer students to attend university without becoming a handout to the wealthy. These are the issues NUS rallies and Woroni opinion pieces should be about.

He shared links to a number of organisations that were new to me which I thought I would pass along.

Seth and his colleague Tony Barrett are founding a new organisation, the Global Catastrophic Risk Institute. Their hope is to evaluate which existential risks are most important to focus on, and which techniques are most likely to succeed at reducing them, for instance stockpiling food or building bunkers. Unlike GiveWell they will be rating strategies rather than organisations. The effectiveness of different approaches presumably varies by orders of magnitude, so this is incredibly important work. It will be a useful guide to those who become concerned about global catastrophic risk and make a big difference to the universe. Sister organisations, Blue Marble Space and One Flag in Space aim to promote space colonisation in order to reduce the risk of human extinction and conflict between nations, among other reasons.

A similar organisation is Saving Humanity from Homo Sapiens which is attempting to link donors concerned about existential risk with organisations that can most effectively use extra funding. This will hopefully in the future also involve evaluating their effectiveness.

Skill Global Threats Fund is a charitable foundation aiming to support those dealing with a range of catastrophic risks such as climate change and nuclear war. It’s goal is to “work proactively to find, initiate, or co-create breakthrough ideas and/or activities that we believe will have large-scale impact, either directly or indirectly, and whether on cross-cutting issues or individual threats.”

The Tellus Institute engages in future scenario mapping, including potential collapses of humanity and growth into post-human or space-faring civilizations. The paper Great Transitions is an example, though I am yet to read it.

The UPMC Biosecurity is a leading research organisation on catastrophic biosecurity threats. The Cultural Cognition project at Yale is moving into studying duel use problems in technology, including Nanotechnology Risk Perception.

Finally, if you haven’t checked out Nick Bostrom’s personal site then you really should. He has some excellent papers on existential risk, among other futurist issues. I hope to blog about some of the highlights in the near future.

For that reason I am very happy to see the growth of the 80,000 Hours organisation, which is a part of the Centre for Effective Altruism. They are collecting people who are researching and writing about how to most effectively make a difference, encouraging folk to commit to doing good, and then providing support for them the meet their giving goals. Their mission statement is to “help you be an effective altruist by providing a supporting community of dedicated members who share their insights and experience.”

Similarly, whatever their imperfections, it is very valuable to have the Less Wrong community and Singularity Institute as magnets for people who are concerned with existential risk, clear thinking and the future, who might otherwise give up from the lack of anyone to talk and work with.

If you haven’t thought much about how you can have a big positive impact on the world, watch the short video below and then the longer presentation underneath and consider taking the 80,000 Hours pledge. By giving a bit of thought to how you can best contribute you can do a lot more good for others at no extra cost to the rest of your life.

This is a a very common experience among many people I know, especially the academically successful ones. It is doubly an issue for postgraduates, who on top of everything get little meaningful feedback on how they are performing and whether they are doing enough. I know people who are avoiding doing PhDs specifically because they dread never being able to walk away.

As my friends and I make the transition from study to work, the most common reaction is that of relief. Work may be challenging at times, but for most it is a contained part of life. I certainly don’t feel bad that I lack the discipline to go into the office every weekend.

Study guilt may be gone for now, but I still feel a lot of guilt when it comes to trying to be a good person. If I were to life consistently with my values, I would forgo all Earthly pleasures – except those required to stay healthy and productive – and dedicate myself to existential risk reduction. The expected return to putting effort into reducing existential risk is very high, I would never run out of very important things to do, and I would never get feedback on whether what I was doing was enough or even making any difference. Knowing this is a serious drag: every dollar I spend on myself is a dollar not given to savings future generations from annihilation.

At the moment, guilt is necessary to motivate me to do good things, but however much it motivates me to do, it will still taint the rest of my life. I am not sure what to do about this, but I have a few options I’m looking into.

One option is to set a maximum target amount of effort to put into study or do-goodery and then commit myself to not doing more. I would convince myself that that is a target I should be happy with and not feel any need to exceed. While this may be successful at preventing me from working too hard and burning out, I’m not sure that it would necessarily help me focus properly when doing other things.

Another better option would be to cultivate the ability to focus and control my state of mind hour to hour. Friends have suggested to me that learning to experience flow or meditating regularly help with this.

Another idea would be to switch from being motivated primarily by guilt and horror at bad things that could happen, to hope for a better future or something else more pleasant. I am not clear how to do this but presumably there is advice out there.

A final possibility is to irrevocably commit myself to doing good, for instance with a contract obliging me to give away some share of my future income to a given cause. I would then be free to cultivate much less concern for existential risk (or the problems of the world in general) as I will no longer need to feel guilty for motivation.

Being able to switch off and enjoy life is important. I would like to achieve a lot for the world, but preferably without being a martyr. I am unlikely to be able to keep up a lifestyle I don’t enjoy in the long run. I’d be keen to hear your thoughts if you’re in the same situation, or better yet, if you’ve been here before and can suggest what has worked for you.

As I was watching the film Avatar and the cinemagoers around me were cheering on the Na’vi heroes in their fight against human invaders, I couldn’t help but wonder how many of us would actually want to live alongside such an uncompromising society. Why is the audience intended to admire the Na’vi’s complete self-satisfaction and unwillingness to deal with humans despite the fact that it is Na’vi isolationism and idealism as much as human avarice which drive the two groups into conflict?

Thinking about it I realised it is hardly an isolated case. In our stories we love idealistic heroes to fight for what they believe in against all odds. But if we were to encounter such uncompromising characters in our families or offices they would strike us as unreasonable lunatics. I am reminded of what Alan Moore, creator of Watchmen, was reported to have thought we would call an archetypical, vengeance-fuelled vigilante like Batman in the real world: ‘in short, a nutcase’.

Why is it that rather than celebrate the values of conflict resolution, tolerance and deal-making, which make our advanced societies function so effectively, our favourite stories continue to be about zero-sum conflicts that are impossible to resolve peaceably? From afar, the kind of conflict found in Avatar seems noble. We can easily imagine one side to be all good and the other all bad. There is no need to dwell on the suffering of those extras who die in battle or the problems that go unsolved back on Earth for want of ‘unobtainium’. A quick cut to the next scene is always just seconds away! But in real life, conflict is painful and messy and something we work hard to avoid.

In fact we are so used to finding compromises in our everyday lives that to make his conflict story hang together, writer and director James Cameron is forced to pile absurdity upon absurdity: an intelligent species totally disinterested in trade with aliens and the magical technology they bring; a business that sees fighting interstellar war as a cheaper way to access ‘unobtainium’ than a peace treaty; a race of people willing to reveal all their secrets to conspicuous spies, but unwilling to negotiate or make concessions to humans even in the face of a catastrophic defeat. The crazy plot twists used to make compromise impossible result in a world unlike anything on Earth and as a result the movie is unable to teach us anything useful about how we ought to live.

Finally, we are led to a deus ex machina moment in which the megafauna of Pandora rise up to repel the human colonisers. To my knowledge, a revolt of Gaia is beyond the powers of the hunter gatherer tribes today struggling to coexist with industrial society, so I’m not sure what they can hope to take away from Avatar. The apparent moral of Avatar, ‘fight hard if you’re in the right and Gaia will provide’, is one only someone very isolated from the real challenges of hunter gatherers could put forward. Why does popular fiction so often favour staunch idealism over the central wisdom embodied in modern political systems and their laws: ‘dealism’? We could tell stories of the countless political compromises reached through well-functioning democratic institutions. We could tell the stories of all the terrible wars that never happened because of careful diplomacy. We could tell the story of the merchant who buys low and sells high, leaving everyone they deal with a little better off. These are the everyday tales which make modern society so great to live in. But will any such movie gross a billion dollars in the near future? I suspect not.

An Australian movie with a very similar plot to Avatar is The Castle, in which the Kerrigan family fights the compulsory acquisition of their home for the expansion of Melbourne Airport. Audiences were predictably united in their support for the charming Kerrigan family in their struggle against big business. In real life, I suspect the public would be strongly divided on the fairness of the acquisition, especially if sticking up for the Kerrigan family meant airport delays and fewer discount airlines. We would want to find a deal which left both the Kerrigans better off and allowed for a larger airport by offering them more and more compensation until they voluntarily moved.

Why split our values like this, some for our stories and others for our own lives? I suspect the answer lies in what we subconsciously want our taste in fiction to say about us. Celebrating the Na’vi allows us to signal how much we value loyalty and justice. Denigrating Melbourne Airport allows us to show our suspicion of greedy and powerful people. In real life, when defending our stated values requires that we make serious sacrifices whether or not we are likely to win, we sensibly value the opportunity to compromise. But when a fictional character will do all the fighting for you, why compromise on anything? Though popular fiction will never say it, we know the best fight is not that won by the righteous but the one nobody needed fight in the first place.

But what the terms of trade can give us, the terms of trade can take away. One possible scenario that has attracted attention lately is Europe experiencing an ongoing downturn and taking trading partner China with it. Perhaps China’s state-owned banks will experience financial problems due to an asset bubble burst. Who knows. Either way, this could send the value of our exports plummeting. The Australian dollar might fall as much as 30-40%, as it did during the nadir of the global financial crisis in 2007-08. An ongoing decline would presumably reverse many of the gains a higher terms of trade brought. Tax revenues would fall, potentially triggering government austerity or higher taxes. Real wages would fall and take asset prices (read: house prices) along with them. Depending on how effective our monetary stimulus and floating exchange rate were in response, and how robust our financial system remained, employment could fall as well.

I’m not saying that scenarios like this are more likely than macroeconomic soothsayers or the market are saying. I don’t know that. Nobody really knows. All I want to suggest is that you can insure yourself against this kind of risk with a very simple financial instrument: a bank account.

As our terms of trade move, the Australian dollar moves roughly in proportion. [1] So what asset increases in value for an Australian when the global economy is going poorly and dragging down our export values? Foreign currencies! [2] If a terms of trade crash causes a recession in Australia it would be sad to see your purchasing power and wages fall, or worse, your job disappear. But it would be some welcome compensation for your holdings of US dollars to suddenly be worth a third more in Australian dollar terms.

Holding a variety of currencies is just an instance of the most mundane piece of investing advice around: diversify. [3] It also obeys another simple investment strategy: buy assets whose values are negatively correlated with one another. That is, organise your portfolio so that when some of your investments go unusually badly, others go unusually well. If you live and work in Australia you are highly ‘invested’ in the Australian dollar, Australian taxes and Australian wages. When those things take a turn for the worse, foreign currencies do unusually well, so they function as a form of insurance.

Fortunately holding foreign currency is relatively cheap. You can get savings accounts in Australia with HSBC that attract no fees apart from a two-way exchange rate spread of around 0.9% (i.e. if you move your Australian dollars to US dollars and back again you’ll lose about 1% of your holdings). [4] If you have an account overseas and more than a few thousand dollars to transfer it would be cheaper to move them with OzForex. Though you won’t earn much interest on Euros or US dollars relative to Australian dollars at the moment, the ‘interest rate differential’ should be factored into the expected movements in the exchange rates, so on average you won’t miss out on any interest (though how much you receive will be variable).

So is anyone else going to join me and start converting a share of their savings into foreign currency?

[1] When Australian exports are valuable, foreigners have to buy more Australian dollars to purchase them. Their higher demand for Australian dollars drives up their value. And when the value of our exports declines, the value of the dollar falls for the same reason.

[2] And other assets that have relatively stable value in foreign currencies.

[3] If you wanted to even out the purchasing power of your money, to a first approximation, you would want to split your cash between different currencies in proportion to what share of your consumption came from each country (in the form of holidays and TVs and so on). As about 30% of Australia’s GDP is traded, that would suggest holding a third of your wealth overseas.

[4] An alternative way to ‘hedge your bets’ without actually having to tie up large amounts of wealth in foreign currency (or other assets) is to buy foreign exchange ‘options’. These give you the right to buy foreign currency in the future at a given rate. If the Australian dollar declines in value you can exercise the ‘option’, buy foreign currency at the above-market rate and take a profit. Westpac among others offers this service for those with substantial sums of money. I haven’t gone into this in detail to avoid confusing people.

But of course not everything we do in life is traded off against something else. Many things we do are completely complementary with one another. For example, spending some time eating doesn’t conflict with my desire to get my work done. If I didn’t eat or drink at all I would pretty quickly find I wasn’t getting any work done at all! On the other hand long boozy lunches with friends every day could well conflict with my productivity. Between these two extremes there is some amount of effort dedicated to eating that doesn’t come at the expense of any other goal I have. This idea is represented in the figure below where the black line indicates the maximum amount of ‘other activities’ I get can get done for any amount of time spent meeting my body’s need for sustenance. We can label the amount of time on eating that come at no cost to other activities as point A.

We can do the same with a range of other activities that we might neglect for fear that we ‘don’t have time.’

Not doing any exercise is bad for life expectancy, general health and energy levels. Moderate exercise a few times a week is likely to ‘pay for itself’ by making your mind and body work more effectively and longer throughout the rest of your life, almost irrespective of what else you are doing. On the other hand lengthy marathon training wouldn’t improve your productivity in the rest of life sufficiently to come for free: you would have to give something else up, whether it’s other recreation, time with family and friends, or work accomplishments. But failing to do any exercise because you ‘don’t have time’ doesn’t make any sense. Initially exercise would give you more time than it used up!

Friends of mine who spend a few hours meditating a week say that it improves their focus enough through the rest of life and replaces sleep such that overall it is a free activity.

A notable candidate is investment in strong relationships with friends and family. For most people these relationships are necessary to feel satisfied and motivated in life and buffer us against difficulties we face.

Neglecting our physical, mental and social health may help us get more other things done temporarily, but is a lousy strategy in the long run.

Some actual figures for how much of these different activities do actually come at no cost would be very useful research in my opinion, though I expect they will vary quite a bit between people.

Other Details

The amount of time we should spend on one activity to improve our performance in another depends on the ratio of how long we spend doing each. For instance, if I start working 8 hours a day and then take half an hour out of that for exercise, then that exercise only has to enhance my productivity the rest of the time by 7% for me to break even on work output. On the other hand, if I an work only 1 hour and switch to spending half of that exercising, I would have to work double as effectively the rest of the time to come out ahead. If you wanted to use support activities to get more of everything else done, you would have to take a little bit of time out of all your other activities, rather than just out of a specific activity you dislike or don’t spend much time on!

A related point to keep in mind is that many of these ‘self-care’ activities are probably substitutes for one another. Someone who spends a lot of time nourishing their friendships and staying physically healthy would not get such a great benefit from meditation on top of those as someone who otherwise works

Finally, I should add that I’m not saying that the amount of time on an activity which comes for ‘free’ is the right amount to spend on it. If you enjoy long lunches for their own sake then you may want to spend much more than that minimum amount of time eating. But if you wish you had more time to spend caring for your wellbeing, then doing less than the ‘free amount’ is throwing away an opportunity to have more of everything you want!

[1] In my view most people are biased against noticing trade-offs, especially when doing so shows things about them which they would rather not acknowledge, but that’s another story – or at least blog post.