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While Prosper.com caters mainly to the US market, there’s another site called GlobeFunder.com which caters to the global crowd, especially those living in the third world.

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"The first cause is poor people foolishly accepting wages that are too low for a decent living"

I doubt that people accepting such wages is usually foolish. Their choice is either to take such a low-wage job or to be unemployed. How is it irrational to choose the former?

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A couple of quotes from the third page of the paper: "Historically, the core justification for paternalism arose from skepticism about the ability of certain categories of people to make decisions in their best interest... this general rational for paternalism persists." This is what I was identifying as my first cause, but it is not often stated today because it looks like "blaming the victim" which is politically incorrect. The preferred rhetorical framework today casts the situation as predators taking advantage of victims, who must then be protected.

And then: "A number of regulations reflect the fear that even people of sound mind might not act in their long-term self-interest in certain predictable situations. For example, usury laws and laws against selling oneself into indefinite servitude protect those in desperate economic straits from accepting contracts with potentially devastating long-term consequences." I see minimum wage as a similar example although obviously the consequences are less severe. But the fear is the same, that those in poor circumstances are not acting in their own long-term self-interest and must be protected.

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To Robin: Voters have a crude awareness of the relevant biases, and as a result do use a very weak version of a general rule against paternalism in their deliberations. That weak rule was achieved largely through democratic debate. My comments were partly directed at using democratic debate to keeping existing political habits from being replaced by increased case by case analysis.But you're partly right - my longer-term hope is that futarchy would create a stronger version of the rule. I see futarchy as democratic in its early versions (operating by providing better knowledge to voters). In the more distant future when futarchy might become an automated rule, then what I want might amount to an undemocratic way of adopting the general rule. But it's also possible that by then futarchy will have overcome enough biases that I'll agree with the paternalists that case by case analysis is reasonable. Or maybe AI will produce a better alternative. So I'm a little guilty about not being explicit that I might want undemocratic means of adopting policies in the somewhat distant future (I'm not against undemocratic political approaches, I'm just trying to ensure that people be explicit when advocating them).

To Hal: I doubt many minimum wage advocates think poor people make foolish choices about wages. If they did, they'd direct at least a little of their rhetoric toward educating the poor. I think your second cause refers to a complex mixture of causes which ought to be broken down into simpler categories. For the minimum wage, I think the main cause is that people want monopoly profits to be distributed in more egalitarian ways. Alas, voters have little incentive to hold accurate beliefs about the extent of monopoly profits, and are biased toward seeing zero-sum games.

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BTW your link to the article did not work for me - maybe you have to have an account there. Here is one which does work:

http://www.hss.caltech.edu/...

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Seems like much paternalistic legislation can be seen as having three causes. First is the correction of bias; but this cause is often not given explicitly because it makes people sound foolish, which is unacceptable in a democratic state. Second is prevention of victimization and exploitation; this is often given as the main reason for the legislation. Third is benefit to special interest groups; this is often the true reason and motivation for the law being passed.

An example is minimum wage laws. The first cause is poor people foolishly accepting wages that are too low for a decent living; this is not usually stated explicitly but is perhaps an implicit justification for such laws that everyone is too polite to mention. The second cause is exploitation of labor by employers, which is the main reason given for the law in public. The third cause is benefit to labor unions, who can negotiate wages upward from a minimum wage floor; this is where much of the actual political pressure originates.

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Robin, the US Constitution is a case of restraints imposed on biased voters by paternalistic means. But insofar as a small convention of unelected landowners has already put in place a constitution which restrains the populace from appointing a permanent king, one can treat this effect as fixed, known, and divorced from its original cause; rather than regarding it as a random-variable outcome of the procedure "appoint a small convention of unelected landowners to overcome the biases of the voters". In other words, we would not necessarily be as lucky if it happened again. In this case it may be wiser to prefer the status quo. But it seems worth noting that, pragmatically, paternalistic constraints to restrain paternalistic laws seem to have a much higher success ratio than paternalistic laws themselves.

Also, McCluskey did not necessarily argue for explicit paternalistic legislation passed to restrain paternalistic laws - his point is symmetrical around trying to pass such explicit legislation, or expending the same effort to oppose such laws on a case-by-case basis without such legislation.

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You suspect a bias in case by case analysis of paternalistic laws, due to special interests, and so prefer a general rule against such laws. But unless you think voters are especially aware of this bias, relative to the other biases you doubted voter awareness about, it is not clear why voters would approve such a general rule. If you hope for undemocratic ways to get this rule, aren't you in the same position as paternalism fans who hope for similar processes to produce paternalistic rules?

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