Monthly Archives: April 2013

Advertising Podcast

Katja Grace and I did another podcast, this time on advertising. Audio here.

GD Star Rating
Tagged as: ,

Talkative Sell, Silent Buy

Me six years ago:

Every transaction has both a buyer and a seller. Yet we hear much more about salesmen, and how to sell, than we do about buyermen and how to buy. … Why? [Since] buyers are usually more uncertain about their value than sellers are about their cost, … whether a sale happens is more clearly a signal of seller ability than of buyer ability. … We like to see and affiliate with people who have impressive abilities associated with sales. (more)

Katja and I did another podcast recently, this time on advertising, and we talked a bit about how people seem to pay more attention to selling than to buying. Katja noted that we seem to give more attention to the signals we send, vs. interpreting the signals of others. For example, we think more about what we will wear than about the judgements we form based on what other people wear. We think a lot more what our charity says about us than about what we think about others based on their charity.

Someone at the talk last Thursday argued that they can’t be donating to look good, since they don’t tell anyone. And that reminded me of how terrified people are to speak in public. And that brought a unifying explanation to mind: we more often need to verbally justify the signals we send than how we interpret the signals of others. Let me explain.

For our distant forager ancestors, their most important public speaking probably happened in situations where they were being accused, and needed to defend themselves. Since the generic accusation behind any specific accusation was that one wasn’t doing enough overall for the band, and maybe should be exiled or killed, our ancestors should have been eager to collect examples of the help they have given, especially unheralded help. So we may have inherited a habit of doing helpful things, and not calling attention to them, but remembering them so we could mention them later if called on to defend ourselves.

More generally, our ancestors probably acquired the habit of consciously thinking about actions that others were likely to challenge or criticize. They’d continually come up with explanations of what they did and why, and be ready to tell those stories, even if they didn’t actually have to explain or justify most of them. And because they were rarely asked to justify or explain the judgements they made about others, they didn’t get into as much of a habit of explaining those.

This theory predicts that we in fact give just as much mental attention to buying as to selling, and just as much to interpreting signals as to sending signals, because these are in fact on average equally as important to us. But we give a lot more conscious attention to the side that needs to be explained, because that is what consciousness is about – consciousness helps much less to make decisions than to explain and justify them.

GD Star Rating
Tagged as: , ,

If More Now, Less Later

On Thursday I talked, together with Elie Hassenfeld of GiveWell, at the UC Berkeley Faculty Club on Effective Altruism (audio here). Scott Alexander wrote a thoughtful report, which Tyler blogged. One claim I made that I’ve before (here, here, here) is that because real interest rates (i.e., average investment rates of return) tend to be positive, it is more effective to wait, investing now and then donating later. Since many continue to question that claim, I thought I’d elaborate a bit.

In the past I’ve used Ben Franklin as an example of the possibility of using trusts to save for a very long time. But I think that distracted from my basic point, which can be made just by suggesting that you wait until the end of your life to donate. Waiting longer might in fact be better, but it has more tax and agency issues; you can’t as easily ensure your money is spent the way you want.

I admit that a good reason to donate now is if you believe that we are quickly running out of worthy recipients of charity, either because the world is getting richer and nicer, the charity world is getting more effective, or we happen to live in an unusual time of great need or danger. People who think that global warming and ecological collapse will soon make the world a hell can’t believe this, nor can those who fear great disruption in an em transition. But others may.

I also agree that tax considerations will change the rate of return you can expect, and that by giving over a period of time you may learn from your early gifts to better pick later gifts. But it should be enough to start this learning process when you are older; your life experience will help you learn faster then.

The issue I want to focus on in this post is: how high do interest rates have to be to justify saving to donate later? I’ve sometimes said that interest rates need to be higher than growth rates, and some have questioned if interest rates are in fact higher than growth rates. Others, like my co-speaker Ellie Hassenfeld and his college Holden Karnofsky at Givewell, argue that giving now to help people who are sick or under-schooled creates future benefits that grow faster than ordinary growth rates. But now I think I was mistaken – if real charity needs are just as strong in the future as today, then all we really need are positive interest rates. Let me explain.

When a person chooses to save financially, they choose to spend a bit less in their usual ways, in order to give money to someone else, in the expectation of getting money back from that someone else at a later date. If they had instead not saved, and spent the money instead, that spending may well have also indirectly benefited them in the future. They might buy some medicine, get more exercise, get more sleep, try out some new products, make some new friends, or learn some new skills, any of which might help their future self.

But at the margin, a person who saves another dollar, or chooses not to borrow another dollar, must typically expect the financial returns from their investments will help them more in the future than will such indirect effects of spending today. In fact, they should expect this savings will benefit their future self more than any of these other ways of spending today. After all, why give up money today if that both gives you less to spend today, and gives you less in the future? So there wouldn’t be any savings, or less than maximal borrowing, if people didn’t expect more gains later from saving than from spending today.

This implies that unless charity recipients are saving nothing and borrowing as much as they possibly can, they must expect that you would benefit them more in the future by saving and giving them the returns of your savings later, than if you had given them the money today, even after taking into account all of the ways in which their spending today might help them in the future. So there really must be a tradeoff between helping today and helping later; if you help more today, you help less in the future. At least if you help them in a way they could have helped themselves, if only they had the money.

Of course you might not care as much about future suffering, or future folks might suffer less. But if you do care as much, and there is as much future need to help, then if interest rates are positive you can obtain more real resources with which to give more real help if you will save now, and donate later.

You might wonder: what if a deserving charity recipient is borrowing, and at a higher interest rate than you can get from by investing? This implies that you might benefit them and yourself by loaning them money, if you could overcome the barriers that have prevented others from doing so. It also implies that if you were going to help them, you might want to do it now rather than later. But this doesn’t change the fact that there is a tradeoff between helping today vs. tomorrow. And if there will be people later in a similar situation of need, you can do more good by waiting to help them later.

GD Star Rating
Tagged as: , ,

This Is A Personal Blog Again

Last June I turned this into a group blog to help me overcome my addiction to blogging, and focus on writing a book. I think I’ve succeed in changing my work habits, and the book is coming along well, so I think it is time to switch this back to being a personal blog. After all, blogs work best when they have a very distinct coherent voice, and I’m weird enough that most anyone stands out in contrast.

So I offer my deep thanks to Katja Grace, Rob Wiblin, and Carl Shulman, who have honored me with their thoughtful contributions over the last ten months. They are promising young folks for whom I have great expectations, and I suggest you continue to read them, as will I, at their blogs:

GD Star Rating
Tagged as: ,

Civilization Vs. Human Desire

A few years ago I posted on Kevin Kelly on the Unabomber:

The Unabomber’s manifesto … succinctly states … the view … that the greatest problems in the world are due not to individual inventions but to the entire self-supporting system of technology itself. … The technium also contains power to harm itself; because it is no longer regulated by either nature of humans, it could accelerate so fast as to extinguish itself. …

But … the Unabomber is wrong to want to exterminate it … [because] the machine of civilization offers use more actual freedoms than the alternative. … We willingly choose technology with its great defects and obvious detriments, because we unconsciously calculate its virtues. … After we’ve weighted downsides and upsides in the balance of our experience, we find that technology offers a greater benefit, but not by much. (more)

Lately I’ve been reading Against Civilization, on “the dehumanizing core of modern civilization,” and have been struck by the strength and universality of its passions; I agree with much of what they say. Yes, we humans pay huge costs because we were built for a different world than this one. Yes, we see gains, but mostly because we are culturally plastic – we let our culture tell us what we want and like, and thus what to do.

And yes, contrary to Kelly, we mostly do not choose how civilization changes, nor would we pick the changes that do happen if we could. As I reported a week ago, our usual main criteria in verbal evaluations of distant futures is if future folks will be caring and moral, and since moral standards change most would usually rate future morals as low. Also, high interest rates show that we try hard to transfer resources from the future to ourselves. And if we could, we’d also probably make future folks remember and honor us more, and not forget our favorite art, music, stories, etc.

So, if we could, we’d pick futures that transfer to us, honor us, preserve our ways, and act warm and moral by our standards. But we don’t get what we’d want. That is, we mostly don’t consciously and deliberately choose to change civilization according to our preferences. Instead, changes are mostly side effects of our each trying to get what we want now. Civilizations change as cultures and technologies are selected for being more militarily, rhetorically, economically, etc. powerful, and for giving people what they now want. This is mostly out of anyone’s control, and yes it could end very badly.

And yet, it is our unique willingness and ability to let our civilization change and be selected by forces out of our control, and then to tell us that we like it, that has let our species dominate the Earth, and gives us a good chance to dominate the galaxy and more. While our descendants may be somewhat less happy than us, or than our distant ancestors, there may be trillions of trillions or more of them. I more fear a serious attempt by overall humanity to coordinate to dictate its future, than I fear this out of control process.

By my lights, things would probably have gone badly had our ancestors chosen their collective futures, and I doubt things have changed much lately. Yes, our descendants may not share today’s moral sense, or remember us and our art as much as most of us might like. But they will want something, often get it, and there may be so so many of them. And that could be so very good, by my lights.

So I say let us venture on, out of control, into the great and perhaps terrible civilization that we may become. Yes, it might be even better if a few forward looking elites could at least steer civilization modestly away from total destruction. But I fear that once substantial steering-abilities exist, they may not stay modest.

GD Star Rating
Tagged as: ,

A City Is A Village Of Villages

There have been three major eras of human history: foraging, farming, and industry. During each era our economy has grown at a roughly steady exponential rate, and I’ve written before about some intriguing patterns in these growth eras: eras encompassed a similar number of doublings (~7-10), transitions between eras were much shorter than prior doubling times, and such transitions encompassed a similar number of growth rate doublings (~6-8). I’ve also noted that transition-induced inequality seems to have fallen over time.

I just noticed another intriguing pattern, this time in community sizes. Today in industrial societies roughly half of the population lives in metropolitan areas with between one hundred thousand and ten million people, with a mid size of about a million. While good data seems hard to find, during the farming era most people seem to have lived in communities (usually centered around a village) of between roughly three hundred and three thousand people, with a mid size of about a thousand. Foragers typically lived in mobile bands of size roughly twenty to fifty, with a best size of about thirty.

So community sizes went roughly from thirty to a thousand to a million. The pattern here is that each new era had a typical community size that was roughly the square of the size during the previous era. That is, a city is roughly a village of villages, and a village is roughly a band of bands. We could extend this patter further if we liked, saying that an extended family group has about four to eight members, with a mid size of six, so that a band is a family of families. (We might even go further and say that a family is a couple of couples, where a couple has two or so members.)

If previous growth patterns were to continue, I’ve written before that a new growth era might appear sometime in roughly the next century, and over a few years the economy would transition to a new growth rate of doubling every week to month. If this newly-noticed community size pattern were to continue, the new era would have communities of size roughly a trillion, perhaps ranging from ten billion to a hundred trillion.

Admittedly, after a year or two of this new era, things might change again, to yet another era. And the growth and community size trends couldn’t both continue to that next era, since a community size of a trillion trillion would require much more than twenty doublings of growth. So these trends clearly have to break down at some point.

I’ve been exploring a particular scenario for this new era: it might be enabled and dominated by brain emulations, or “ems.” Interestingly, I had already estimated an em community size of roughly a trillion based on other considerations. Ems could take up much less physical space than do humans, and since ems could visit each other in virtual reality without moving physically, em community sizes would be less limited by travel congestion costs.

So what should one call a city of cities of a trillion souls? A “world”?

GD Star Rating
Tagged as: , , ,

In favour of finite meta

A while back I wrote in favour of fundraising for the best charities as an effective cause. Alyssa Vance, who also happens to be the President of MetaMed, which Robin critiqued recently, wrote a response titled ‘Against Infinite Meta’ strongly disagreeing. I think her points are, in order:

  1. The fact that on average fundraising is effective today, doesn’t mean that additional fundraising ‘on the margin’, would also be effective;
  2. Fundraisers for effective charities won’t do better than other fundraisers in general;
  3. The reason high spending on fundraising is unappealing to donors is because funders want confirmation that a charity has a useful project on which to spend the money they raise, rather than because spending more money on fundraising would be bad for the charity sector as a whole;
  4. There’s plenty of money around, so what matters is finding useful things to do with it, not advocacy about how it should be spent;
  5. Starting a fundraising group is harder than I imagine.

I find her evidence for 2 and 5 reasonable enough and agree 3 is a better explanation, though for a different reason than the one she gives [1]. I just want to take issue with 1 and then 4.

While the high average effectiveness of fundraising doesn’t translate into a high ‘marginal’ effectiveness of fundraising for the charity sector as a whole, it probably does for any individual charity. The model I have in mind here is a fixed pool of donations D and a total fundraising spend F, which is some fraction of D. Different charities choose to contribute to F, and the share of D that each charity receives is proportional to their share of F. In this scenario, any extra money that one charity raises through fundraising comes wholly at the expense of other charities. But on the margin, their fundraising ratio is still approximately D/F, which is the average cost-effectiveness of fundraising. This is too optimistic insofar as each organisation will gradually run out of donors who can easily be convinced to fund their specific cause. But when you are as small as GiveWell’s recommended charities – which receive only millions of dollars each year – I don’t think that will be a significant effect. It is also too pessimistic, insofar as total donations to the charity sector could be increased through extra fundraising.

Regarding point four, there are a range of approaches one can take when trying to help others: the least meta would be to start or fund a project that used effective methods to directly help people (let’s just call this charity); another would be to try to identify organisations who are already using effective methods to directly help people (let’s call this meta-charity); another would be to draw greater attention to the work of meta-charities who have identified such organisations (let’s call this meta-meta-charity). In support of her skepticism about meta-meta-charity, Alyssa points out that the effectiveness of more meta approaches can’t go up forever:

This logic immediately falls apart, once one takes it a step further. If fundraising offers a 3x multiplier, why not fundraise to fundraise, and get 9x? 27x? 81x? Where does the tower of meta end? The answer, of course, is that doing things everyone is already doing (like generic “fundraising”) never has a 3x return.

While I agree that ‘meta’ approaches can’t get better forever [2], this objection can’t be right either, because it seems to demonstrate that fundraising must always be useless. It can’t be the case that you should never put effort into raising money for a useful and unfunded project you are aware of, even if you are trying to get it off the ground yourself! Instead, I suggest that operating effective charities, finding effective charities, and fundraising for those effective charities are complementary inputs which each have declining marginal returns. Which one will most benefit from additional resources depends on which component is comparatively neglected.

If there are a lot of organisations trying to find effective charities, and donors lining up to give to them, but no final-level charities doing a good job, we most need altruistic entrepreneurs to start promising projects. If there are many organisations that can make cost-effective use of money, and donors keen to give to them, but donors don’t know who they are, then we most need more meta-charity. On the other hand, if there are effective charities, and we know who they are, but they still face a ‘funding gap’, there is a place for meta-meta-charity.

Alyssa is right that there is a lot of money available on Earth, or as an economist would more naturally put it, there are a lot of potentially productive inputs like capital, land and labour. Insofar as these resources are already being well allocated, and there are few, or no, effective altruist projects that still need funding, my proposal to improve how those resources are allocated through fundraising cannot work. That would be the case if the charities GiveWell and others identified were fully or nearly-fully funded, or there was nobody out there who could be convinced to fund them. But last I checked, for some reason, their recommendations still had ‘room for more funding’, which is why GiveWell recommends giving to them. And the organisation I work for has found it fairly easy to convince folks to do so.

I actually think Alyssa and I agree more than it looks. We both think that finding the most useful things to do with money is hard work. We both think there are a lot of resources out there that would like to find something better to do. Hopefully that means that, once you identify a great project, a small amount of money dedicated to fundraising should convince a lot of donors and fill its funding gap. And once that work is done, we will indeed be back hunting for the best charities to give to.

[1] Once a distaste for charities spending a lot of money on fundraising is entrenched among donors, I don’t see how it can be undermined by any particular charity or donor ‘defecting’ from the norm.

[2] A simple reason such a tower couldn’t work would be that you would quickly stop finding willing donors. There aren’t many people easily convinced to fund fundraising for fundraising.

Update: I should have included something like the anecdote below – now helpfully provided by Nick Beckstead – to explain why I am much less skeptical than Alyssa about the fundraising multiplier working on the margin. This implies a multipler of at least 3 for a generic, simple and scalable fundraising operation:

“A data point: I have a friend who worked as a street fundraiser (aka a “chugger” or “charity mugger”). He told me he took home about 10% of what he raised, and about 20% of what he raised went to the company that did street fundraising. They would raise funds for a wide variety of different charities, about which they and the people they fundraised from knew very little. (Charities would contract with the street fundraising org, and pay about 30% of the amount the street fundraising org raised, on a commission basis, to that org.)

If what my friend has told me is true, it seems it would not be hard to make a charity that consisted simply of funding street fundraising for a charity like AMF, assuming the charity wanted to cooperate. You might have trouble getting your fundraising charity non-profit status, but that isn’t too relevant from the perspective of this argument. I think you’d have a hard time street fundraising for a charity that did street fundraising for a charity like AMF, so you could probably only get one layer of meta in this way. But it would require fairly limited marketing skills (just enough to get some people to donate to your meta-charity) and may even have very limited downside risk (my understanding is that the street fundraisers can easily raise money for many conventional causes, and the charity pays on a purely commission basis in any case).

Assuming cooperation from the object-level charity, it seems the main limiting factors for something like this would be: 1) dollars from people willing to donate to your pure fundraising charity, 2) your ability to raise those dollars, and 3) running out of the object-level charity’s room for more funding. There’s probably some unknown challenges I’m not thinking of, but I suspect (just barely) that they wouldn’t be decisive.”

GD Star Rating