Oceans Yet to Burn

collapsedsquid

the-grey-tribe

One of the weirdest policy proposals is where you put an expiration date on cash, to encourage spending.

argumate

ooh I’ve played with that one, it also fits well with some basic income proposals

obiternihili

inflation

collapsedsquid

All the kool kids nowadays are talking about negative interest rates.

mitigatedchaos

They’re not yet talking about forming quasi-autonomous state agencies that compete for assignment of implementing government programs, with contracts that can be renewed, but

Shhhh, they aren’t supposed to know about it yet. I only know because I’m from the future.

Source: the-grey-tribe shtpost the iron hand chronofelony policy politics the invisible hand augmented reality break

mitigatedchaos

@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.

mitigatedchaos

@e8u What about Todd the Insurance Executive?

An astute observation. I actually left off that part in order to conserve length.

This entire scenario still depends on state intervention, which is why AnCaps and most Right Libertarians will not be in favor of it, even though it loosens the details of regulation to the markets and allows riskier behavior (but just prices it more).

Here’s what the State needs to do to cause this to happen:

Require mandatory insurance on certain classes of products.
Determine the rules governing the insurance so that the insurance will actually pay out.

For instance, wrongdoing on the part of the airline does not get the insurance company out of paying the insurance. (It could, however, allow them to pursue damages against the airline without breaking these necessary conditions.)

Ensure the insurance companies are sufficiently well-capitalized, so that it does not become common practice to make insurance shell companies which immediately fold rather than pay out. Criminal liability may need to be introduced here.
Create a court system in which it is reasonably feasible for regular people to actually collect the insurance payout. (It isn’t necessary that they collect the full payout, just enough that they’re willing to initiate and complete the necessary legal procedures. Some money could go into an ethical offset fund instead.)

I would say that there have to actually be enough competing insurance companies, but the market will take care of that, since this should be a reasonably profitable field. And the insurance company itself is a longer-term investment vehicle than the airline, since its practice of distributing risk changes when investors will get paid.

So, the question then is, is a system of competing insurance companies with competing insurance regulations more or less efficient and effective than a system of top-down, politically-driven regulation where government decides the details of regulations?

And that question is an empirical one. In systems as complex as economies, we can’t just assume the efficient market hypothesis. After all, this plan is in many ways in response to the existing market distortions of limited liability corporations and destruction of value being easier than creation of value.

Do it right, however, and you can also chip away at information asymmetry - the risk pricing by a moderately profitable insurance company that actually has to pay out if the product is dangerous or defective, as a share of the product’s price, communicates a lot of information that the customer previously often didn’t have.

the invisible fist the iron hand

@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

argumate

some kinds of common knowledge are a massively valuable public good, and a centralised authority is typically the most efficient way of providing it.

collapsedsquid

It’s related to that idea that we all have time and love to comparison shop between everything. It’s basically saying “you’re going to get screwed by that crucial detail you didn’t know was important beforehand.“

argumate

and that you have the time and resources and are still alive to pursue damages through the court system against those with deep pockets who have screwed you over.

adjoint-law

I’d be interested to learn more about different models for decentralized accreditation services – consumer safety, etc. You see a little of this with professional guilds and etc I guess? But I’m not sure how much money you’d need to throw at meta accreditation to get good trust levels, or how much duplication of work you get in a free market of accreditation services, etc. It really does seem like a central authority is a good way to go…?

argumate

I think the tricky part is enforcement and incentives. Structural engineers were complaining about the cladding long before buildings started burning down, and fire fighters were shocked when they tried to put out the fires, but in order for that to translate into it not being sold, purchased, and installed on buildings there needs to be someone who says “no” when the architect says “cheap!”

mitigatedchaos

The thing that gets me with the Libertarianism thing and safety regs is that, precisely because of all the losses of information in the process and limited information resources available to buyers, I feel the regulation process really does have to bottom out somewhere with “men with guns come and say no, you can’t do that.”

And I know they hate that, but their plans often effectively give out huge subsidies in the form of unaccounted-for externalities, information asymmetry, and so on, to capital.

“Make them all buy insurance” requires a strong state to come through and force the issue and also make sure that that insurance will pay out. But if you don’t do at least that, then you allow people to engage in arbitrage against peoples’ lives (more than they do now). One could argue, even, about smoothing out lifetime earnings with loans to help pay for safety, but financial markets are waaaaaay too frictional for that and the future is too unknown.

So I don’t feel too bad about the building safety codes.

And some of the Asian countries prove you can have the building safety codes and even earthquake standards without the part that causes housing prices to quintuple.

the invisible fist the iron hand

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

The hard part about assessing the counterfactuals to Chinese repression is that a minor flare up of civil strife can easily kill fifty million people; balancing things like that against the insidious ongoing costs of poor resource allocation is hard.

mitigatedchaos

Yeeeeeah kinda hoping there’s no new Chinese Civil War that ends up killing fifty million dudes and destroying one tenth of the global GDP, sending the economy of Earth into three decade long depression.

the iron hand the invisible fist chronofelony but also serious

argumate

bookchins-revenge:

well I know you’re (possibly) a huge square and probably think tags ought to all be covered up with a nice solid layer of gray paint, but when you said you take exception to the idea covering up tags is uncool, do you mean you disagree it’s uncool for other artists to cover up people’s tags or you disagree it’s uncool for like, the authorities to cover up tags?

huge square checking in!

if a bunch of people are playing the same tagging game then yes I guess it’s tautologically uncool for one of them to break the rules of the game.

but since I’m not playing that game I’m free to say fuck your tag.

bookchins-revenge

you’re dodging the question, square boy

argumate

not at all! I admitted that there is a subset of people for whom it is uncool to cover up tags: namely those people who participate in a subculture with mutually agreed upon codes of behaviour that describe covering up tags as being uncool.

I don’t know if Banksy is such a person, but if so then their action was uncool according to the conventions of this subculture they implicitly agreed to uphold.

However, anyone outside this subculture is free to disregard its conventions and cover up or otherwise obscure, modify, or erase tags with complete impunity, disclaiming any allegations of uncoolness as being mere status grab attempts.

mitigatedchaos

Honestly, the whole tagging thing involves writing on other peoples’ walls without their permission, what right could they possibly have to object to other taggers tagging over their tags? “Oh well it’s my tag” - well it’s not your wall it isn’t, you already broke the rules of ownership, you can’t claim to be covered under them again.

One could argue on a Consequential basis or an aesthetic basis, but the vast majority of graffiti has insufficient artistic value for that. It’s mostly just people writing their names, over and over again, usually making walls and buildings look worse in expensive ways.

Every tagger caught by the state should be conscripted into removing all these worthless name tags as community service and be made to pay for the paint to do so themselves.

I bet a lot more people would be sympathetic if the act if illegally spraying paint on a building usually looked more like this:

Or even this:

Source: fed-detector the iron hand

argumate

In a way it’s heartening that crooked politicians can’t raid the treasury directly and have to engage in dodgy contract kickback arrangements via foreign banks; each extra link in the chain increases the vulnerability of the scheme and guarantees its eventual exposure.

mitigatedchaos

I’d like to add a few more links to that chain…

argumate

political cartoon of Leia strangling Jabba with lots of unnecessary labels like POLITICAL ELITE, FINANCIAL REGULATION, WIKILEAKS, PUBLIC OPINION, MILLENNIALS, TAX HAVENS, COST OF LIVING PRESSURE,

mitigatedchaos

look man, all I’m saying is I want a semi-secret anti-corruption unit to rope in and either get cooperation from or impersonate various businesses and offshore banks so that my politicians never know whether any kickback/bribe attempt is actually an elaborate sting operation,

and make my politicians pseudonymous so that would-be kickbackers can’t be sure who they’re dealing with is the real legislator they wanted to bribe or a member of the anti-corruption task force impersonating one as part of an elaborate sting operation, or replace them with think tanks which cost more money to bribe

I’m really a very reasonable person

politics policy national technocracy the iron hand

ranma-official

Socialist countries have a really bad track record of human rights abuses and a strange set of failings that are either specific to them or unusually prominent compared to the general zeitgeist, so you can draw decent conclusions like “don’t break systems a lot of people depend on, just cuz” and “freedom of press is actually really important” and “science shouldn’t be controlled by the state’s ideology ever”

instead people realize that Marx was wrong about something and the Soviet Union killed people and then go become tankies but for capitalism

isaacsapphire

I guess the real question is, “is it possible to avoid these known horrible bugs in Communism/socialism, or is it time to go look for something else and try to make that work?”

The vast majority of Communists I’ve encountered in person or online don’t seem to be trying to avoid the known problems. They either ignore/don’t know/pretend to not know about the historical issues, or they consider eg. genocide a feature rather than a bug.

ranma-official

It’s certainly possible to try avoiding these bugs, or dramatically improve the current social order, or to try and build some other system entirely, but then/instead you get people like @redbloodedamerica openly celebrating fucked up shit because capitalism is good and cool and therefore bonded labor is good and cool also, hence, tankies but for capitalism.

mitigatedchaos

Anarchists say they’re against it, but I’ve never seen them lay out how they would prevent it from happening except to claim they wouldn’t have a state - but Catalonia had death squads, perhaps not Stalin-tier death squads, but apparently it did have them. I think the way to socialism now, the way to actually convince people, is to stop telling people to embrace a Communist revolution and instead buy up a huge tract of land in a country with a weak central government and demonstrate a real, working, unoppressive, prosperous model.

I don’t actually think they have that model, so I don’t see myself supporting Communism over Boring Welfare Capitalism any time soon.

politics the invisible fist the red hammer the iron hand

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