I greatly enjoyed Charles Mann’s recent book The Wizard and the Prophet. It contained the following stat, which I find to be pretty damning of academia: Between 1970 and 1989, more than three hundred academic studies of the Green Revolution appeared. Four out of five were negative. p.437
To put the point differently could a German have made a difference near the end of WWII by donating to the German government a whole bunch of money he'd saved up previously? It seems to me the answer is no since the German government had literally directed the entire manpower of the country at that time to the war effort and there was no additional resources they could have purchased with that savings.
So sure, that money saved earlier might have produced real value, e.g., it let someone live and eat while going to school to be a lawyer rather than work, but if the country has no spare economic capacity (people are starving so everything else goes to the war) that might not be immediately redeemable. So one needs to take into account what fraction of your saved money will go to increasing the total production at the time you care about.
Ignore my concerns. I realize in any plausible case for anything like global warming the real limitation on future efforts is unlikely to be total global economic production but the willingness of people to endure certain tax burdens.
So yah, if we were talking about a total war with the aliens then the concern that not every dollar invested gets turned into additional capacity does matter (as temporarily there is no free capacity one can use your savings to buy) and we may want to start building our spacefleet early but short of that it's not an issue.
Well, I have several different intuitions here. One is that "financial investments create savings" is essentially equivalent to "the actions that investments cause people to take don't induce any negative externalities on average, or at least not enough to override the value of the investment". And I'm not sure how many negative externalities to expect in a generic market process. I feel like I've heard about negative externalities more often than I've heard about positive externalities, so maybe that means they are more common.
Another intuition is that "doing things with money is just changing the incentive structure, not directly creating resources, so the question is whether investment is something that incentivizes people to create resources". The idea of getting people to create more resources just by changing the incentive structure feels really confusing to me right now and I would want to understand it better before I could feel confident in predicting anything about it. One way I was trying to understand it (in my last comment in the For Discount Rates thread) was in terms of creation versus consumption: maybe the point is that putting money into the stock market encourages people to create resources rather than consume them, at their own expense in favor of future generations. But I'm not sure whether this explanation is correct or if it is something I just made up.
I certainly haven't made up my mind here and am trying to find out more, I think it could potentially be really important if you are right about this. Though my impression is that X-risk is still a bigger concern (and I didn't take your post to be saying anything about generic investment versus X-risk prevention as a way to help future generations). But maybe at some point that will change, so that the best far-future EA cause would be to make generic investments. If so it would be good to know that.
It seems like you're not engaging with the core issue here: what is the societal level benefit you're hoping additional savings will produce? Obviously any given individual benefits from having more savings, but equally obviously any given individual having more savings does not increase the actual resources available to deal with climate change. It just puts a larger share of them in that person's hands.
If you must you can time your savings to match your theory of the business cycle. In that case I'm talking about a longer term average of saving rates.
I don't know if you are saying that you agree with me or that you just think I didn't find a particularly good post to comment on. The Mann quote illustrates the standard economists position in the debate (about how much to care about the future), and you write "I side with economists here".
My response was that you are discussing how much we should care about the future, while this post is mainly about two different ways to help the future, assuming that you care.
Economists agree that there is very much such a thing as real savings. It is the usual case. Where are you guys getting this strange idea that typical apparent savings is illusory, and doesn't actually produce real future resources?
I'm not deleting comments, and I don't understand what is going wrong with this comment system. I saw your comment in my admin system but not on the blog itself. I replied there, but I guess that doesn't show up here either.
Do you have a blanket rule against long comments Robin? I just wrote a long (700 word) comment about why you should side with philosophers over economists regarding objective discount rates, it looks like it has gotten eaten. I can try to summarize the key points but I think something will be lost in any compression.
Then the question is whether or not investing in index funds creates savings, no? You can't make reality behave in a certain way by defining words in a certain way...
So "cash under the mattress" is not savings, then? ;)
There are two ways I can think of in which money today can increase the resources available in the future:
1) Buy physical natural resources that are available today, such as barrels of oil or forested land, and prevent them from being consumed or destroyed in the present.
2) Make investments that grow the economy and improve technology, so that it becomes easier in the future to access and consume resources.
But the economy tends to grow on its own, independent of foundations putting money in safe passive investments. All that seems to do is put resources in the hands of foundations instead of someone else...
I made a LessWrong post summarizing my epistemic state: https://www.lesswrong.com/p...
To put the point differently could a German have made a difference near the end of WWII by donating to the German government a whole bunch of money he'd saved up previously? It seems to me the answer is no since the German government had literally directed the entire manpower of the country at that time to the war effort and there was no additional resources they could have purchased with that savings.
So sure, that money saved earlier might have produced real value, e.g., it let someone live and eat while going to school to be a lawyer rather than work, but if the country has no spare economic capacity (people are starving so everything else goes to the war) that might not be immediately redeemable. So one needs to take into account what fraction of your saved money will go to increasing the total production at the time you care about.
Ignore my concerns. I realize in any plausible case for anything like global warming the real limitation on future efforts is unlikely to be total global economic production but the willingness of people to endure certain tax burdens.
So yah, if we were talking about a total war with the aliens then the concern that not every dollar invested gets turned into additional capacity does matter (as temporarily there is no free capacity one can use your savings to buy) and we may want to start building our spacefleet early but short of that it's not an issue.
Well, I have several different intuitions here. One is that "financial investments create savings" is essentially equivalent to "the actions that investments cause people to take don't induce any negative externalities on average, or at least not enough to override the value of the investment". And I'm not sure how many negative externalities to expect in a generic market process. I feel like I've heard about negative externalities more often than I've heard about positive externalities, so maybe that means they are more common.
Another intuition is that "doing things with money is just changing the incentive structure, not directly creating resources, so the question is whether investment is something that incentivizes people to create resources". The idea of getting people to create more resources just by changing the incentive structure feels really confusing to me right now and I would want to understand it better before I could feel confident in predicting anything about it. One way I was trying to understand it (in my last comment in the For Discount Rates thread) was in terms of creation versus consumption: maybe the point is that putting money into the stock market encourages people to create resources rather than consume them, at their own expense in favor of future generations. But I'm not sure whether this explanation is correct or if it is something I just made up.
I certainly haven't made up my mind here and am trying to find out more, I think it could potentially be really important if you are right about this. Though my impression is that X-risk is still a bigger concern (and I didn't take your post to be saying anything about generic investment versus X-risk prevention as a way to help future generations). But maybe at some point that will change, so that the best far-future EA cause would be to make generic investments. If so it would be good to know that.
Fair enough! Though I think it would be worthwhile for you to address/consider this issue in the future.
It seems like you're not engaging with the core issue here: what is the societal level benefit you're hoping additional savings will produce? Obviously any given individual benefits from having more savings, but equally obviously any given individual having more savings does not increase the actual resources available to deal with climate change. It just puts a larger share of them in that person's hands.
If you must you can time your savings to match your theory of the business cycle. In that case I'm talking about a longer term average of saving rates.
When I write a post, I'm mainly interested in discussing the main topic of that post. Not all topics that are related to the topic of that post.
I don't know if you are saying that you agree with me or that you just think I didn't find a particularly good post to comment on. The Mann quote illustrates the standard economists position in the debate (about how much to care about the future), and you write "I side with economists here".
My response was that you are discussing how much we should care about the future, while this post is mainly about two different ways to help the future, assuming that you care.
Economists agree that there is very much such a thing as real savings. It is the usual case. Where are you guys getting this strange idea that typical apparent savings is illusory, and doesn't actually produce real future resources?
I'm not deleting comments, and I don't understand what is going wrong with this comment system. I saw your comment in my admin system but not on the blog itself. I replied there, but I guess that doesn't show up here either.
Do you have a blanket rule against long comments Robin? I just wrote a long (700 word) comment about why you should side with philosophers over economists regarding objective discount rates, it looks like it has gotten eaten. I can try to summarize the key points but I think something will be lost in any compression.
Then the question is whether or not investing in index funds creates savings, no? You can't make reality behave in a certain way by defining words in a certain way...
So "cash under the mattress" is not savings, then? ;)
There are two ways I can think of in which money today can increase the resources available in the future:
1) Buy physical natural resources that are available today, such as barrels of oil or forested land, and prevent them from being consumed or destroyed in the present.
2) Make investments that grow the economy and improve technology, so that it becomes easier in the future to access and consume resources.
But the economy tends to grow on its own, independent of foundations putting money in safe passive investments. All that seems to do is put resources in the hands of foundations instead of someone else...
Real savings creates real future resources. That is what economists mean by savings.