(A long retort to Eliezer’s post Against Discount Rates.) Imagine you are a multi-billionaire who, to benefit mankind, will construct an asteroid deflector. Since your budget is limited, the deflector cannot be perfect. And trying to deflect an asteroid heading toward one place may mean increasing the risk it will hit somewhere else. So you must decide how much protection to offer different parts of the globe. Let us assume that your protection can be described by a single parameter P at each place X — roughly how much you have reduced the probability that an impact there will cause a physical effect (e.g. temperature) there above a certain threshold.
I'm not sure if I follow you -- are you saying that if you invest in financial markets and make $1000 (adjusted for inflation), then it means the world has created $1000 worth of resources (on average) that it wouldn't have created if you hadn't invested? Maybe this is really basic but it's not obvious to me why this should be true -- intuitively it seems like it could depend a lot on what kind of investment you are making.
Edit: Would another way to put it be: as an oversimplification, things people do can be divided into investment and consumption. If everyone was a perfect utilitarian that valued everyone equally with no discounting, they would only invest and not consume, since consumption benefits them now but investment benefits future generations more. But since they aren't, they consume as well as invest. By investing in financial markets, a trust fund would be increasing the fraction of the world that is investing rather than consuming, and as a side-effect the fraction of the world's resources that are controlled by the trust fund would increase. When the trust fund matures and releases its resources to the world, this cancels the side-effect but the resources created by investment still exist.
As an intuition pump, we could imagine the trust fund eventually grows to become OmniCorp which basically controls all economic activity, and does so with the goal of maximizing productivity without care for the happiness of the workers, who might consequently perceive its existence as dystopian. However, this is supposed to be good because it means that it's that much sooner that humanity can effectively use all of the resources in the galaxy, and once that happens OmniCorp will stop demanding productivity and will allow everyone to consume the resources they've produced.
Thanks! Do you mind if I ask some possibly stupid questions?
Your argument makes it sound as though an injection of cash into an economy automatically benefits the people there proportionally to how much cash was injected. But if that were true, wouldn't we want governments to just print off loads of money all the time? Yes, we can target our funds so that it is not just a random injection (e.g. by giving money to far future charities), but a government could do this as well.
I am having a hard time seeing what the difference is between a trust fund maturing and its money being distributed according to the terms of its contract, versus a far future government printing and spending the same amount of money. I know the standard answer is that the latter would cause inflation, but why would it do so any more than the former would? If you have the majority of the world's money (which would be implied by the fact that you were gaining money at a rate higher than that of the economy as a whole) and then suddenly release it, wouldn't that cause huge inflation?
Or do you think that we probably know better than a far future government what the needs of its world are?
The argument for caring about far future generations is that we can have a much greater effect on them than on current generations. Usually this point is made in terms of existential risk, i.e. that averting existential risk even by a small amount has a huge expected value since there is a chance Earth-originating life will colonize space and then survive for millions of years at a galactic scale: this is Bostrom's "astronomical waste" argument. I think the most in-depth analysis is Beckstead's thesis https://rucore.libraries.ru....
However, Robin's argument in this post is that we can also have a large effect on the future simply by investing to give in the far future. It's true that this argument has less emotional salience than averting X-risk because the people we are helping are richer (at least counterfactually). However, from a utilitarian point of view the correct way to respond to this is simply to downweight the utility of money to someone in correspondence to how rich they are. Robin discusses this issue with Toby Ord in the comments above and it seems that it is not fatal to Robin's argument, as far as I can tell.
Of course, if you're not a utilitarian, you might not find this line of argument very convincing, on the grounds that altruism should be about helping people who are worse off than you or something like that. (Personally I am not a utilitarian but this is one of many issues where I agree with the utilitarian position.)
(Sorry if I am over-explaining, not sure how much you know about this stuff.)
Robin, do you still find it plausible that investing to give in the far future is the best way to help future generations? Should EAs be looking into this more seriously?
I was wondering about this a year ago - would it be possible to invest money, while giving half the interest to tax payers, the eventual goal being an elimination of taxes?
This type of stuff - investments and whatnot - has always made my mind boggle though.
ShardPhoenix, I wonder if your statement "Either way, you won't have access to anything like 10^100 times what a dollar will buy you today, which suggests that 2% real gains over 12000 years are impossible" will end up next to a list of Lord Kelvin quotes in some future history of misplaced skepticism...
But regardless, it's not possible for anyone to meaningfully have $10^100 (or even $10^50) as measured in today's money and by today's standards of what having wealth actually means. There aren't enough resources in the accessible universe. For example, $10^50 would be enough, at today's prices, to buy a sphere of gold about 10^14 light years wide, if I calculate correctly. That amount of resources doesn't exist, so any attempt to actually spend this kind of money on material goods is just going to cause massive inflation and effectively destroy the supposed gains.
You can define this inflation out of existence by picking the right "basket" of goods to measure it with (eg only considering intellectual property, which is presumably much less limited), but you'd have to completely ignore the cost/availability of physical materials, which seems like a case of moving the goalposts.
Either way, you won't have access to anything like 10^100 times what a dollar will buy you today, which suggests that 2% real gains over 12000 years are impossible.
Shard, I think it is fine to comment on old posts. Interest rates need not equal growth rates, and some people then could have comparable wealth to today without the average wealth being at that level.
"The scenario where future folk exist, have comparable per-capita wealth, and usually pay their debts is far from "arbitrary"; I consider it the default reference scenario."
If by "comparable" you mean "comparable to the present", then I'd say that the scenario where future people have wealth comparable to the present, and yet an investment has been able to grow to $10^50, is not only not "default", it's obviously impossible.
In fact, I'd say it's pretty clear that maintaining a 2% real growth rate (by modern measures of wealth) over 12000 years is also impossible, which undermines the basis of your argument.
I don't actually disagree with that idea that we don't care as much about future people as ourselves, however - that seems pretty clear to me too.
I'm not sure if I follow you -- are you saying that if you invest in financial markets and make $1000 (adjusted for inflation), then it means the world has created $1000 worth of resources (on average) that it wouldn't have created if you hadn't invested? Maybe this is really basic but it's not obvious to me why this should be true -- intuitively it seems like it could depend a lot on what kind of investment you are making.
Edit: Would another way to put it be: as an oversimplification, things people do can be divided into investment and consumption. If everyone was a perfect utilitarian that valued everyone equally with no discounting, they would only invest and not consume, since consumption benefits them now but investment benefits future generations more. But since they aren't, they consume as well as invest. By investing in financial markets, a trust fund would be increasing the fraction of the world that is investing rather than consuming, and as a side-effect the fraction of the world's resources that are controlled by the trust fund would increase. When the trust fund matures and releases its resources to the world, this cancels the side-effect but the resources created by investment still exist.
As an intuition pump, we could imagine the trust fund eventually grows to become OmniCorp which basically controls all economic activity, and does so with the goal of maximizing productivity without care for the happiness of the workers, who might consequently perceive its existence as dystopian. However, this is supposed to be good because it means that it's that much sooner that humanity can effectively use all of the resources in the galaxy, and once that happens OmniCorp will stop demanding productivity and will allow everyone to consume the resources they've produced.
We economists are almost always talking about real resources, instead of just money.
Thanks! Do you mind if I ask some possibly stupid questions?
Your argument makes it sound as though an injection of cash into an economy automatically benefits the people there proportionally to how much cash was injected. But if that were true, wouldn't we want governments to just print off loads of money all the time? Yes, we can target our funds so that it is not just a random injection (e.g. by giving money to far future charities), but a government could do this as well.
I am having a hard time seeing what the difference is between a trust fund maturing and its money being distributed according to the terms of its contract, versus a far future government printing and spending the same amount of money. I know the standard answer is that the latter would cause inflation, but why would it do so any more than the former would? If you have the majority of the world's money (which would be implied by the fact that you were gaining money at a rate higher than that of the economy as a whole) and then suddenly release it, wouldn't that cause huge inflation?
Or do you think that we probably know better than a far future government what the needs of its world are?
The argument for caring about far future generations is that we can have a much greater effect on them than on current generations. Usually this point is made in terms of existential risk, i.e. that averting existential risk even by a small amount has a huge expected value since there is a chance Earth-originating life will colonize space and then survive for millions of years at a galactic scale: this is Bostrom's "astronomical waste" argument. I think the most in-depth analysis is Beckstead's thesis https://rucore.libraries.ru....
However, Robin's argument in this post is that we can also have a large effect on the future simply by investing to give in the far future. It's true that this argument has less emotional salience than averting X-risk because the people we are helping are richer (at least counterfactually). However, from a utilitarian point of view the correct way to respond to this is simply to downweight the utility of money to someone in correspondence to how rich they are. Robin discusses this issue with Toby Ord in the comments above and it seems that it is not fatal to Robin's argument, as far as I can tell.
Of course, if you're not a utilitarian, you might not find this line of argument very convincing, on the grounds that altruism should be about helping people who are worse off than you or something like that. (Personally I am not a utilitarian but this is one of many issues where I agree with the utilitarian position.)
(Sorry if I am over-explaining, not sure how much you know about this stuff.)
Why would one be preoccupied with helping future generations when by most calculations they will be far better off than are we?
Sure it is still plausible.
Robin, do you still find it plausible that investing to give in the far future is the best way to help future generations? Should EAs be looking into this more seriously?
I was wondering about this a year ago - would it be possible to invest money, while giving half the interest to tax payers, the eventual goal being an elimination of taxes?
This type of stuff - investments and whatnot - has always made my mind boggle though.
Just a note to let ShardPhoenix know that this reader read his comment even though the post is old.
ShardPhoenix, I wonder if your statement "Either way, you won't have access to anything like 10^100 times what a dollar will buy you today, which suggests that 2% real gains over 12000 years are impossible" will end up next to a list of Lord Kelvin quotes in some future history of misplaced skepticism...
Boy, there's a universe I'd like to live in.
Any tycoon has need for at most 100 yachts. But every beggar would treasure just one.
But regardless, it's not possible for anyone to meaningfully have $10^100 (or even $10^50) as measured in today's money and by today's standards of what having wealth actually means. There aren't enough resources in the accessible universe. For example, $10^50 would be enough, at today's prices, to buy a sphere of gold about 10^14 light years wide, if I calculate correctly. That amount of resources doesn't exist, so any attempt to actually spend this kind of money on material goods is just going to cause massive inflation and effectively destroy the supposed gains.
You can define this inflation out of existence by picking the right "basket" of goods to measure it with (eg only considering intellectual property, which is presumably much less limited), but you'd have to completely ignore the cost/availability of physical materials, which seems like a case of moving the goalposts.
Either way, you won't have access to anything like 10^100 times what a dollar will buy you today, which suggests that 2% real gains over 12000 years are impossible.
Shard, I think it is fine to comment on old posts. Interest rates need not equal growth rates, and some people then could have comparable wealth to today without the average wealth being at that level.
Oops, didn't notice that this post was so old.
"The scenario where future folk exist, have comparable per-capita wealth, and usually pay their debts is far from "arbitrary"; I consider it the default reference scenario."
If by "comparable" you mean "comparable to the present", then I'd say that the scenario where future people have wealth comparable to the present, and yet an investment has been able to grow to $10^50, is not only not "default", it's obviously impossible.
In fact, I'd say it's pretty clear that maintaining a 2% real growth rate (by modern measures of wealth) over 12000 years is also impossible, which undermines the basis of your argument.
I don't actually disagree with that idea that we don't care as much about future people as ourselves, however - that seems pretty clear to me too.
Do you have a description of all the factors to weigh that isn't over-simplified?
Peter, since my response is off-topic, I'll respond on the SL4 list.