If anything we should be extra skeptical of arguments made on the basis of "sacred" ideals like efficiency or fairness. Such ideas are simple in the abstract but leave a lot of wiggle room in practice, where biases and ulterior motives can sneak in under their protective cover.
If sacred things are those you sacrifice something for, I’m not sure how efficiency can be sacred. Any sacrifice is a deliberate loss of efficiency; efficiency is the opposite of sacrifice.
Alasdair MacIntyre’s book After Virtue is basically a long lament about how efficiency has become modernity’s sole sacred. More specifically, that efficiency in the form of Weberian managerialism has replaced the old notion of (Aristotelian) virtue.
Interesting. I recently read Timothy Snyder's book "On Freedom", and in one section he argued strongly against treating efficiency as sacred. I found that odd because I'd never heard anyone claim it was, so the argument against it seemed pointless.
Like much of the rest of the book, I found his arguments against the sacredness of efficiency interesting and thought-provoking, but not convincing. I highly recommend the book, even though many of the arguments seemed flawed.
Striving for efficiency can create negative externalities. Isnt it the case that the more we declare efficiency sacred, the harder we try to be always more efficient, the more unaccounted debt we accumulate?
Efficiency is measured by proxies. This creates two problems. One is that proxies are just proxies. The other is that some important parameters will not be measured at all. I call them proxy-parameters and unmeasured-parameters. It is clear that improving at only proxy-parameters is problematic for several reasons.
The problem of diminishing positive returns. In a nutshell, "striving for efficiency is good" does not imply "striving for more efficiency is better". (The more-is-better fallacy.) More conventionally: Pushing for more efficiency leads to diminishing positive returns on proxy-parameters.
The problem of invisible trade-offs. Optimization problems have trade-offs between parameters. Optimizing proxy-parameters will incur costs on unmeasured-parameters.
Combining the problem of invisible trade-offs with the problem of diminishing positive returns, we conclude that striving for more efficiency leads to increasing negative returns.
You know well that I didnt say this. But I did say that there are situations where it is "more efficient" not to strive for more efficiency. Maybe we should call this the efficiency paradox.
At one time Jon Haidt et al were considering efficiency/waste as a possible foundation for their Moral Foundations theory (Care/harm, Fairness/cheating, Loyalty/betrayal, Authority/subversion, Sanctity/degradation, Liberty/oppression).
And at one time I was trying to convince him to include it, because I thought *I* had it as a moral foundation. They seem to have decided it's not, but maybe it's just not common. I confess that I grew up with Ukrainian Jew peasant attitudes, which I've long held as fundamental to the way I look at the world - I don't know how much of that is genetic vs. cultural. (Such people, like apocryphal Scots, hate waste and inefficiency and are often perceived as, and sometimes in fact are, "cheap".)
I do certainly have what feels like an instinctive hatred for needless waste, tho as I age and have become (much) wealthier, I realize this too often leads me into wasting time to save less valuable other things. And so resist it.
(Of course, you can just say that time is valuable and so goes into the efficiency calculation - but it doesn't feel that way. I still find it hard to throw away things that other people might value - I'm happy to give them away for free - to complete strangers even, or anonymously - but not to see them wasted.)
Depends on what you're doing. Cost per output is usually the first consideration, but there are always constraints to consider and other effects to factor in.
“as efficiency already embodies all possible tradeoffs.” No, it doesn’t because biological beings and social systems are multi-dimensional. Efficiency in one dimension can be traded off against the resilience of the system as a whole. Resilience can require redundancy. It can require “good enough” efficiency because resources are needed in another system or mode of action.
That Economics does not think nearly enough about resilience—the ability to adapt to changes, including pressures and shocks—is why mainstream Economics is getting migration catastrophically wrong.
The head of a very prominent US think tank told a close mutual friend that “your essays on immigration have been read at the highest levels of both the Trump administration and the Mt Pelerin Society”. (This may increase interest in what I have to say.)
Late to the party, as I’m inefficiently pulling a travel trailer through the Utah parks. How do you account for massive campaign spending? Did wealthy people figure that giving Kamala Harris $1.5B was the most efficient way to achieve their priorities? They had to know that there was at least a 50% chance the investment value would drop to zero on Election Day.
I am surprised that no one has mentioned "Thinking like an economist: how efficiency replaced equality in US policy", Elizabeth Popp Berman. Also, relation between 'efficiency' and 'enshittafication'.
Picking any arbitrary foundational point of an infinite regress (causation, PSR, reason) to stand on is itself justified by “economic efficiency”— of cognitive energy, at least—but for the same reason, real world efficiency doesn’t embody the inefficient consideration of all possible trade-offs. Closer up, this idea seems simpler without time, without the constant, dynamic changes in perceived value, without the realization that all value is dependent on ever-changing perception and judgment—so this looks like the cold hard math of the ‘but thinking makes it so’ subjective / ephemeral. And it leads to the best price for a second hand couch. Oh it’s Robin Hanson’s old couch? Triple the price. It’s sacred?
I don't entirely understand economic efficiency. Does it only apply at a government-policy level? Like, let's say I'm running a tech company and we sell some product for $10 a month and we're thinking about raising the price to $20 a month. Is economic efficiency useful for this sort of micro decision?
I think lots of people consider efficiency sacred. But many misunderstand what's actually blocking efficiency. Many people consider the government inefficient. But if asked what's stopping the government from being efficient, they'll blame things like lazy employees, or corrupt politicians. They'll vote to add regulations to ensure the government does not waste money on luxuries, and that there most be lots of procurement oversight to ensure nothing untoward is happening with government contracts. But often such regulations, which voters want because they consider efficiency sacred and government waste sacrilege, create more inefficiency. Forcing every major procurement to go through a year long bidding competition wastes more money and time than is saved by stopping some rare corrupt procurement. Firing lots of employees arbitralily to reduce government spending like what DOGE is doing ends up making the government less efficient, because it still must accomplish the same tasks, but has fewer hands to work on them. And maybe those tasks shouldn't be done by the government, but ignorant voters haven't actually removed the requirement to do such tasks, e.g. FDA approving drugs, they've just made it take longer.
Similar effects happen in other types of large firms, where management treats efficiency as sacred, and tries cutting waste. But due to ignorance of what's actually waste and where the real chokepoints in the system are, create more inefficiency.
Efficiency is a more expansive value than just economic efficiency. Efficiency means accomplishing tasks or work or mission with a minimum or waste or delay or externality. In that sense, efficiency is just a stand-in for activity, with all the nonsense stripped away (or kept to a minimum).
I'm routinely astounded at people who propose other, higher values: sustainability, inclusivity, parity, equity. Even accomplishing THESE requires efficiency though... just a different kind. What the opponents of 'economic efficiency' are really against is building and improving and developing our society (according to the existing framework). Their hallowed vision lies in a different direction: sweeping the pieces off the chess board so they can be replaced by some glorious new order, which is never really described. Even for that to succeed though, efficiency is required.
I suspect that you and I are thinking a bit deeper about these issues than they are.
"Efficiency" can also be a buzzword and worse, a fig leaf.
https://hartmannreport.com/p/the-department-of-government-efficiency-fbd
If anything we should be extra skeptical of arguments made on the basis of "sacred" ideals like efficiency or fairness. Such ideas are simple in the abstract but leave a lot of wiggle room in practice, where biases and ulterior motives can sneak in under their protective cover.
"Sacred," increasingly as Robin uses it, is a buzzword and a fig leaf.
If sacred things are those you sacrifice something for, I’m not sure how efficiency can be sacred. Any sacrifice is a deliberate loss of efficiency; efficiency is the opposite of sacrifice.
Alasdair MacIntyre’s book After Virtue is basically a long lament about how efficiency has become modernity’s sole sacred. More specifically, that efficiency in the form of Weberian managerialism has replaced the old notion of (Aristotelian) virtue.
Interesting. I recently read Timothy Snyder's book "On Freedom", and in one section he argued strongly against treating efficiency as sacred. I found that odd because I'd never heard anyone claim it was, so the argument against it seemed pointless.
Like much of the rest of the book, I found his arguments against the sacredness of efficiency interesting and thought-provoking, but not convincing. I highly recommend the book, even though many of the arguments seemed flawed.
Would it be possible that efficiency, precisely because it leaves little room for redundancy or slack, creates fragility?
Redundancy and slack are values understandable in efficiency terms.
Striving for efficiency can create negative externalities. Isnt it the case that the more we declare efficiency sacred, the harder we try to be always more efficient, the more unaccounted debt we accumulate?
I don't see why striving for efficiency would make more debt or more neg externalities.
Efficiency is measured by proxies. This creates two problems. One is that proxies are just proxies. The other is that some important parameters will not be measured at all. I call them proxy-parameters and unmeasured-parameters. It is clear that improving at only proxy-parameters is problematic for several reasons.
The problem of diminishing positive returns. In a nutshell, "striving for efficiency is good" does not imply "striving for more efficiency is better". (The more-is-better fallacy.) More conventionally: Pushing for more efficiency leads to diminishing positive returns on proxy-parameters.
The problem of invisible trade-offs. Optimization problems have trade-offs between parameters. Optimizing proxy-parameters will incur costs on unmeasured-parameters.
Combining the problem of invisible trade-offs with the problem of diminishing positive returns, we conclude that striving for more efficiency leads to increasing negative returns.
So, will not striving for efficiency lead to increasing positive returns? How does that work?
You know well that I didnt say this. But I did say that there are situations where it is "more efficient" not to strive for more efficiency. Maybe we should call this the efficiency paradox.
So how do we know when the situation is one in which we should not strive for more efficiency?
That is a good question. I like it. As far as I know Robin didnt answer that.
At one time Jon Haidt et al were considering efficiency/waste as a possible foundation for their Moral Foundations theory (Care/harm, Fairness/cheating, Loyalty/betrayal, Authority/subversion, Sanctity/degradation, Liberty/oppression).
And at one time I was trying to convince him to include it, because I thought *I* had it as a moral foundation. They seem to have decided it's not, but maybe it's just not common. I confess that I grew up with Ukrainian Jew peasant attitudes, which I've long held as fundamental to the way I look at the world - I don't know how much of that is genetic vs. cultural. (Such people, like apocryphal Scots, hate waste and inefficiency and are often perceived as, and sometimes in fact are, "cheap".)
I do certainly have what feels like an instinctive hatred for needless waste, tho as I age and have become (much) wealthier, I realize this too often leads me into wasting time to save less valuable other things. And so resist it.
(Of course, you can just say that time is valuable and so goes into the efficiency calculation - but it doesn't feel that way. I still find it hard to throw away things that other people might value - I'm happy to give them away for free - to complete strangers even, or anonymously - but not to see them wasted.)
Depends on what you're doing. Cost per output is usually the first consideration, but there are always constraints to consider and other effects to factor in.
“as efficiency already embodies all possible tradeoffs.” No, it doesn’t because biological beings and social systems are multi-dimensional. Efficiency in one dimension can be traded off against the resilience of the system as a whole. Resilience can require redundancy. It can require “good enough” efficiency because resources are needed in another system or mode of action.
That Economics does not think nearly enough about resilience—the ability to adapt to changes, including pressures and shocks—is why mainstream Economics is getting migration catastrophically wrong.
https://www.notonyourteam.co.uk/p/the-failure-of-economists
See also:
https://www.lorenzofromoz.net/p/economics-a-discipline-committing
The head of a very prominent US think tank told a close mutual friend that “your essays on immigration have been read at the highest levels of both the Trump administration and the Mt Pelerin Society”. (This may increase interest in what I have to say.)
Late to the party, as I’m inefficiently pulling a travel trailer through the Utah parks. How do you account for massive campaign spending? Did wealthy people figure that giving Kamala Harris $1.5B was the most efficient way to achieve their priorities? They had to know that there was at least a 50% chance the investment value would drop to zero on Election Day.
Most left of center economists, unfortunately, clearly do not agree with you on this.
And they are now a majority of the profession by a substantial margin, no?
They put a lot of weight on efficiency, but yes are often willing to make others things a higher priority
Agreed completely.
Personally I view “growth”, approximately as defined by Tyler Cowen in his Subborn Attachments, as the more sacred thing.
Efficiency usually contributes to growth and is correlated quite highly, of course.
Agreed completely.
Personally I view “growth”, approximately as defined by Tyler Cowen in his Subborn Attachments, as the more sacred thing.
Efficiency usually contributes to growth and is correlated quite highly, of course. But growth seems more intuitively sacred.
And certainly in a real-world with old age benefits promised by government that are clear, disastrous Ponzi schemes without it.
I am surprised that no one has mentioned "Thinking like an economist: how efficiency replaced equality in US policy", Elizabeth Popp Berman. Also, relation between 'efficiency' and 'enshittafication'.
Picking any arbitrary foundational point of an infinite regress (causation, PSR, reason) to stand on is itself justified by “economic efficiency”— of cognitive energy, at least—but for the same reason, real world efficiency doesn’t embody the inefficient consideration of all possible trade-offs. Closer up, this idea seems simpler without time, without the constant, dynamic changes in perceived value, without the realization that all value is dependent on ever-changing perception and judgment—so this looks like the cold hard math of the ‘but thinking makes it so’ subjective / ephemeral. And it leads to the best price for a second hand couch. Oh it’s Robin Hanson’s old couch? Triple the price. It’s sacred?
I don't entirely understand economic efficiency. Does it only apply at a government-policy level? Like, let's say I'm running a tech company and we sell some product for $10 a month and we're thinking about raising the price to $20 a month. Is economic efficiency useful for this sort of micro decision?
All systems analysis depends on how you model your boundaries, if you aren't modeling everything.
Robin has applied it beyond government policy to individuals making decisions like how large a building should be:
https://www.overcomingbias.com/p/marginal-charityhtml
I think lots of people consider efficiency sacred. But many misunderstand what's actually blocking efficiency. Many people consider the government inefficient. But if asked what's stopping the government from being efficient, they'll blame things like lazy employees, or corrupt politicians. They'll vote to add regulations to ensure the government does not waste money on luxuries, and that there most be lots of procurement oversight to ensure nothing untoward is happening with government contracts. But often such regulations, which voters want because they consider efficiency sacred and government waste sacrilege, create more inefficiency. Forcing every major procurement to go through a year long bidding competition wastes more money and time than is saved by stopping some rare corrupt procurement. Firing lots of employees arbitralily to reduce government spending like what DOGE is doing ends up making the government less efficient, because it still must accomplish the same tasks, but has fewer hands to work on them. And maybe those tasks shouldn't be done by the government, but ignorant voters haven't actually removed the requirement to do such tasks, e.g. FDA approving drugs, they've just made it take longer.
Similar effects happen in other types of large firms, where management treats efficiency as sacred, and tries cutting waste. But due to ignorance of what's actually waste and where the real chokepoints in the system are, create more inefficiency.
Efficiency is a more expansive value than just economic efficiency. Efficiency means accomplishing tasks or work or mission with a minimum or waste or delay or externality. In that sense, efficiency is just a stand-in for activity, with all the nonsense stripped away (or kept to a minimum).
I'm routinely astounded at people who propose other, higher values: sustainability, inclusivity, parity, equity. Even accomplishing THESE requires efficiency though... just a different kind. What the opponents of 'economic efficiency' are really against is building and improving and developing our society (according to the existing framework). Their hallowed vision lies in a different direction: sweeping the pieces off the chess board so they can be replaced by some glorious new order, which is never really described. Even for that to succeed though, efficiency is required.
I suspect that you and I are thinking a bit deeper about these issues than they are.
https://jmpolemic.substack.com/p/leviathan