Oceans Yet to Burn — @discoursedrome Honestly, from a business...

@discoursedrome

Honestly, from a business perspective, it’s a totally reasonable and justifiable thing to do. Many of the biggest business costs are tied to peak rather than average throughput, and the previous attempt to solve this, JIT scheduling, was drastically awful. I think the market-wisdom rationale for Uber’s surge pricing was mostly bullshit spin, but in general, you do kind of need to be able to raise prices when there’s excessive demand for an inflexible supply. So my take on it isn’t exactly “oh those capitalists sure are cartoonishly evil.”
But it’s a good example of how capitalism as a whole – and, let’s be honest, most if not all of the alternatives – is kind of horrible even when everyone is behaving reasonably. It’s economically rational for the wealthy and privileged to be charged less for most things and extended advantages others lack, and for the poor and underprivileged to be charged extra and denied opportunities. The natural effect of everyone doing the sensible thing is to exacerbate inequality in a vicious cycle, so it’s little wonder that policies that aren’t sensible have perennial appeal.

I think a lot of such issues could be managed if “we” were more clever about it. (And also had the political will.)

There are a lot more market-flexible initiatives that could be done but which simply aren’t.

We could change the overtime laws so that everyone gets overtime and it ramps up with each additional X hours over, so that businesses can push but are incentivized not to. Or a big city could auction off business start and end times over a two hour window on each side in a revenue-neutral way, spreading out the incredible load on our transit infrastructure from businesses all opening and closing at the same time.

Plans like those don’t say “you cannot,” they say “you can, however-”, which lets the effect be allocated in a more market-efficient way. Friction, rather than a hard wall.

the invisible fist policy

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argumate

All the NTSB recommendations are technically trade offs that have costs; consider American Airlines Flight 191 which crashed on take off killing everyone on board and two people on the ground after an engine separated from the wing due to improper maintenance procedures had cracked the pylon.

While 273 people may have died, the improper shortcuts taken during engine maintenance saved 200 man hours per aircraft! Why, the meddling FAA banning this procedure may have done more harm than the original crash!

mitigatedchaos

Nah it’s alright fam,

If we assume that the GDP per capita is $55,000, and that the typical passenger has 35 working years remaining, we can just have the state bill the company and its shareholders $525,525,000 and put them into debt bondage and sell off their assets if they are unwilling or unable to pay.

Now you may object to the state rolling around and charging huge sums of money as payment for accidental deaths, but I have it on good authority that everyone signed over their trusteeship to the state rather than get kicked into the ocean, entirely of their own free will. Quite remarkable, really. So I assure that this plan is entirely Capitalist.

death shtpost the invisible fist the iron hand policy politics

argumate

mitigatedchaos

@argumate

essentially privatising the FAA and NTSB, although the NTSB already seems to do really good work and it’s unlikely quality would improve with privatisation.

Though really, I wanted to use aircraft to talk about building safety. The field of aircraft is already pretty safe in general.

What I’m thinking with this building materials issue is that in addition to the Executive Todd Problem being worse (because the real estate will change hands more often than the aircraft and the builders will too), and there being no insurance requirement, a lot of problems (like asbestos, or that cladding) were either known beforehand, or would not have been that difficult to figure out if someone had bothered to check first.

Additionally, the insurance company, the builder, or the owner would be losing money for every month that problem was not repaired. So instead of fighting a long legal battle and not fixing it, it’s more likely at least one of them would fix it now, then have the long legal battle about who finally gets compensated.

That would be the plan, anyway. I have other insurance-based plans to distort the markets as well.

Source: mitigatedchaos policy the invisible fist

@argumate @collapsedsquid

The thing I like about the idea of mandatory safety insurance is that it introduces a new actor with new incentives into the problem.

Let us return to aircraft.

The State has determined that every airline company must carry two million dollars in insurance per passenger per flight, to be paid out in the event that the plane is destroyed and they die. It has set certain rules, for instance that the insurance company must be sufficiently well-capitalized and it can’t just waive paying out because the company did something stupid.

Executive Todd has plans to reduce the maintenance on Tumblr Airlines aircraft. He will be at the company for five years. There is a 90% chance that if he does this, there will be no crash, and he gets a million dollar bonus and leaves. There is a 10% chance that a plane will crash before he leaves and he’ll only have a personal fortune of ten million dollars and a mansion on Hawaii left, which he can retire to.

So Todd orders that the maintenance should be cut.

However, Blue Hellsite Insurance, Inc., Tumblr Airlines’ insurance company, depends for its funding entirely on carefully calculating risk and then charging a bit more than that, on an ongoing basis. To do so, as part of their contract (and thanks to provisions passed in law by the State), they can set insurance agents out to inspect processes, planes, and so on.

BHI’s reaction to a plan that results in a 10% chance of a plane crash is “you WHAT?!” Whereas the risk isn’t necessarily quite so visible or quantified to all others in the organization, or else they may have motivations to ignore it for the same reason as Executive Todd.

So BHI come back and say that either Todd’s plan isn’t going to fly, or the insurance rates are going to go up.

So what was an invisible cost that could have gotten kicked down the road to a successor is transmuted into a stubborn operating cost right now.

Tumblr Airlines makes less profit (upsetting shareholders), raises ticket prices to compensate (thus pricing the risk into the market and making them less competitive), or else doesn’t go through with the plan.

The State could even require that the portion of the cost which is the risk premium is printed on the ticket, informing consumers of roughly how dangerous a given flight is. This is actually an enormous information gain by consumers, who as non-experts find it very difficult to not only judge airline safety, but obtain inside information about aircraft maintenance procedures.

the invisible fist policy the iron hand

Who captures a wage subsidy?

Basically every benefit we give to the working poor ends up being an indirect subsidy for business - see, for example, employers telling their employees how to obtain food stamps.

One of the complaints about a wage subsidy over a higher minimum wage is that it will just be captured by employers, who will pay their employees less by that amount. That’s also potentially true of a basic income, and with a minimum wage, employers may opt to gain non-monetary compensation (e.g. terrible hours).

Now, here’s where the limits of my economics education probably show a bit, in that I’m not familiar with the literature on how, empirically, this works out. (Maybe @xhxhxhx can chime in.)

I realized that this is actually related to the marginal productivity of labor - how much revenue (and thus, potentially, profit) does each additional employee bring in, across the whole economy? There are limits to this based on the amount of equipment/capital needed for a marginal employee or marginal hours, including facility size, as well as the potential customers it might bring in (e.g. why haven’t they hired additional labor already?).

The reason for this is that to determine the leverage of a low-wage employee under a wage subsidy system, we need to know how many potential jobs our wage subsidy can create, and at what quality. How easy is it for an employee to just walk right out of the store, walk right in to another store, and get a new job? Even if the pay is somewhat lower, this creates a much stronger incentive against bad hours, bad bosses, and unsafe practices, about which employees will then either demand higher pay, or just tell the employers to knock it off.

However, that increase in leverage only occurs if enough potential jobs emerge, and this is more or less an empirical question.

The greater the marginal increase in the number of jobs per marginal decrease in minimum wage prior to subsidy, the more of the subsidy that will be captured by the workers. However, if cutting the minimum wage creates no new jobs, then leverage doesn’t change much at all and employers capture the majority of the subsidy.

If the leverage is high enough, wages may even be driven higher than they were prior to the subsidy, depending on employer margins that they were exploiting leverage over against employees.

However, since employers capturing part of the subsidy is potentially true for all subsidies for the working poor, even rental vouchers or healthcare, it has to be compared with other alternatives (such as basic income).

(For my preferred implementation, the accompanying decrease in minimum wage should be lower than the wage subsidy, and the wage subsidy should be paid directly to the employee, thus at least not resulting in a decrease in effective income even if the entire subsidy is captured.)

the invisible fist the iron hand economics flagpost policy

One of the classic problems around requiring regulations is that people just don’t have, and cannot easily obtain, that much information about businesses sometimes, which is required for markets to actually work.

(Even when information is free or nearly-free, the Market pays people to sabotage it, just like it pays people to sabotage Market competition through buying politicians.)

This is part of my interest in substituting mandatory insurance schemes for explicit regulations, provided the insurance regulations are themselves well-designed. The customer may not know much about the safety of the business, but the insurance company, which has a long-standing relationship with the business, does.

And the less the insurance company knows about the business, the more money it charges for insurance, offsetting some of the risk of harm and potentially communicating risk information to customers.

the invisible fist policy politics the iron hand

wirehead-wannabe

dataandphilosophy

Things I wish existed: apartment buildings with a “mandatory savings clause.” Add in whatever is needed to make it palatable, but fundamentally make people contribute to a savings account each month an amount equal to their rent (increase or decrease by factors required), and that savings account can’t be withdrawn from such that it would fall below min(“months paid in * amount per month”, 24) before the person retires or leaves the apartment building.

Why on earth would this be a good idea? Wealthy people may be assholes in many ways, but they aren’t going to be obviously dealing drugs in the corridors, they will be more considerate about loud music and parties, and they generally prefer being around other wealthy people for this and other reasons. Traditionally, we’ve kept poor people out of places by actually charging them money, but this results in low savings, insecurity, and much more being spent on wasteful housing than needs to be spent. This method allows for individuals to live cheaply without having to suffer the injury of dealing with low-income people

wirehead-wannabe

@athrelon

mitigatedchaos

This is a good idea, but it won’t happen because it isn’t market-competitive. Only a Rationalist apartment building owner actively trying to help the country would do this.

Source: dataandphilosophy policy the invisible fist

oligopsonoia-deactivated2017053

bogleech

Conservatives have so much fucking nerve talking about how “ENVIRONMENTAL REGULATIONS ARE OUT OF CONTROL” when absolutely no-one feels inconvenienced by them or has ever even encountered them in their personal lives unless they’re the CEO’s of a megaconglomerate bitter that they couldn’t rip up a national park and buy like their fifth house boat

zenosanalytic

Yeah, it’s literally the Kochs saying “It’s so UNFAIR that when the oil pipelines we own but don’t maintain bust and flood a town with toxic sludge, that WE have to pay to fix it.” and “An employee we forced to clean chemical storage tanks without the proper gear for 15 years developed cancer, and they’re allowed to sue us over it? TYRANNY!!”

thehumanarkle

How is it never occurred to me to put it like this before?

oligopsonoia oligopsonoia

this honestly comes off as pretty silly and out-of-touch, because there are of course plenty of people who get laid off in industries that are subject to environmental regulations, and while it’s certainly possible to make an empirical case that, say, coal regulations have little to do with the decline of coal jobs, it’s at least plausible that there is some effect.

of course the solution to this is that you need a full employment economy so that losing any particular job doesn’t mean losing a job, period, but until you do so (and obviously there are general capitalist interests against having a genuinely full employment economy outside of wartime) there will be entirely understandable resistance among certain fractions of labor against things (environmental regulations, immigration, labor-saving machinery) that are extremely good in themselves

mitigatedchaos

I would argue against immigration being a general good in itself, but…

Wage subsidies with low minimum wage would get us pretty close to full employment without harming workers (in terms of net income) or crashing the economy (it has support from economists).

Admittedly I’m kind of a broken record, here, but it seems like something that could actually happen without a revolution and without potentially ruining everything.

Source: bogleech policy the invisible fist the red hammer

slartibartfastibast

Source: resistdrumpf the invisible fist the iron hand flagpost policy my politics national technocracy politics

Suppose we have hired a contractor to build a bridge. We issue partial payment for the project in the form of a financial instrument (presumably in a mutual fund or something else that bears interest) which only pays out in X years from now if the bridge does not collapse by then. We then monitor the price of this instrument, particularly the sales by those holding it, in order to obtain information about the quality of the bridge. This allows us to obtain this information without incentivizing anyone to deliberately sabotage the bridge project (assuming we prohibit short-selling).

Huh.

policy flagpost the iron hand the invisible fist

ranma-official

theonion:
“SAN FRANCISCO—In an effort to reduce the number of unprovoked hostile communications on the social media platform, Twitter announced Monday that it had added a red X-mark feature verifying users who are in fact perfectly okay to harass....

Source: theonion queue

See, that’s what the app is perfect for.

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Who captures a wage subsidy?