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Does anyone here have kids in school and if so how did you go about picking their school? Where is the best place to get a scientifically based 'rational' education.
I'm in Houston and the public schools are a non-starter. We could move to a better area with better schools but my mortgage would increase 4x. Instead we send our kids to private school and most in the area are Christian schools. In a recent visit with my schools principal we were told in glowing terms about how all their activities this year would be tied back to Egypt and the stories of Egypt in the old testament. I thought to my self that I didn't even think that Moses was a real person so this is going to get very interesting.
I wish they'd spend half as much time on studying science and psychological concepts that they do studying the bible...but what are you going to do?
Any ideas?
I should add that I did graduate from this same school although I did not go through grades 1-9 there...only high school, and that education was really top notch...but still an hour a day of bible class.
Sorry for the delayed reply.
This system significantly reduces risk. It is one of its biggest benefits. Have you tried doing an NPV calculation with 0 risk?
Risk is reduced by folding the blockchain over delinquent entities so that you still procure some future benefit from investors/customers.
I agree though, the benefits must out weigh the negatives...and I think they do. The hard part is convincing businesses that they have more to gain by using the system...or rather that they will be out competed if they don't use the system.
Ahh...I see...The 'stock' that consumers get in hypercapitalism isn't a stock of ownership or voting stock. It is a kind of non-voting prefered stock. Really it is more like an airline mile. It doesn't affect what dividends are paid or the cap table.
..and I'm all for profit. I think it is a great thing....I just also think there is an advantage to it being a time bound great thing. You made a profit! Awesome! Good for you! Now use it for the greater good or give it back(slowly...but still...)
I love your counter-parable. It does an awesome job of showing what massively complicated thing we are discussing. Land, money, consumables, exponentionables(your seeds), all have very different characteristics and drivers. Interest, investment, production, savings all are slightly different ways of talking about some of the same concepts.
I'm trying to get to the bottom of this statement and am having some issues:
The role of money is to make such long chains implicit; a positive real interest rate reflects that such chains are possible for most goods, and any exceptions will increase in price faster than interest accumulates.
Could you unpack it some more?
You can correct me where I'm wrong, but I think what you are getting at is that the current abstraction of money and the idea of interest paid for borrowing it is optimal enough to reward the people that put up the cash for the value that it creates? And if a good isn't one of those exponential type things, the price just keeps going up faster than the interest rate because of its implicit limitedness?
Do you think RC would be more willing to make the more productive choice if he could benefit from all of the upside that lending the seeds produces or only the amount that is agreed upon? I think what I'm trying to get at with hypercapitalism is that we want RC to seek out the best use today instead of the best use tomorrow because if he waits until tomorrow all the work that could have happened to day can never be redone.
You point out yourself that money is (in this context) is just a measure, an medium of exchange. It is NOT the same thing as the underlying value. Now, to "get more" I would want to get more value and you're promising me just more money. The point is that an economy produces some amount of value and that's all you have to redistribute. You can make money spin faster, but that will not increase the value produced -- all you'll do is increase inflation.
Do you think that the current economy is ginning at an optimal output? How much slack would you guess there is? How much GDP is currently left 'on the shelf'? Maybe you think we are very close to optimal. If that is the case then I'm tilting at windmills. If it is suboptimal, the the next questions is 'why?' Is it a lack of tech. A lack of resources? A lack of time? I'm not sure but I think it is very sub optimal.
If increasing the flow of money would not bridge the missing value, what would? I think that a lot of actors in our economy get stuck 'waiting for the check' to get started on production, finish production,procure the capital necessary to build, etc.
Is there some data/study you can point to that says that faster velocity doesn't increase production? Maybe I should run the model with mv > 1 transaction a month and see what happens.
Essentially, if I buy a loaf of bread from a baker and the baker knows he'll have to pay me "dividends" in the future, the baker will raise the price of bread to compensate for these future dividends. Your hopes remind me of "free energy" mechanisms in physics -- if only we could set up sufficiently clever loops we can get more energy that we put in! Um...
The difference is that there isn't a law of conservation of value. We regularly see massive exponential movements in the ability of human beings to produce amazing things. Would you argue that we should go back to barter because money is just a clever way of abstracting away coincidence of wants? Energy is physics. Money is an artificial construct.
Also don't ignore the fact that a consumer may be willing to pay the increased price charged because the consumer will be getting that value back in the future. I understand that this may seem like a clever loop, except that people die. So the loop breaks down and you have to have a system for legacy. The system has a consequence of corporate death as well so you don't end up with supercorps sucking in all the economic decay. Legacy and transition are in the details of the book, but basically, this isn't a system that jives with immortality...it is a system to get us there.
My current understanding of your idea is that you basically want a tax on wealth (or, specifically, on money wealth) with a very complicated scheme to distribute its proceeds directly to the population bypassing the government. Is that a reasonable approach?
It isn't really much more complicated than the fractional reserve system we have now. I have no delusions about the ease of bootstrapping such a system, but it really can be a fairly straight forward and simple system.
I would also like to point out that I think your fears of wealth accumulation are overblown. Look at empirical data. Is there, in reality, old old money dominating everything? Does the Medici family rule Europe? What happened to the Vanderbilts? The oldest rich family I can recall offhand is the Rothschilds and while they are not poor by any means, how do they do compared to Gates or Brin or Musk?
I think the empirical data is there for the r > g problem(http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X/r). I think most of use here probably fall on the side that assumes technology will keep g > r, but with no promises, I think doing something is better than nothing.
What about the traditionally most valuable kind of capital -- land, also known as real estate? What about technology? or non-agricultural commodities like oil, coal, copper, etc?
Certainly somethings have more or less carrying costs. The closer you get to stable elements, the more you can decrease these (Gold, Silver). Carbon is an element but tends to be a slippery beast that takes all kind of crazy forms that break down or change in some way. Land does have a carrying cost of some form of maintenance and most has an artificial carrying cost in the form of property taxes. Gesell had some pretty crazy ideas about land that I don't exactly buy into. I don't have many super strong ideas about it because I think(hope) we are going to be moving past the point where land is that big of a deal for most of us.
The current inflation is controlled to best of central banks' abilities. You are not controlling it any better, you're just setting a floor as to how low can it go.
Actually the theory is that we can hold inflation at 0 by printing decaying dollars when we need them and decaying them faster when there is too much. Tech is always going to bring about some deflation, but the general goal is for there always to be enough money to buy all the things that are being produced.
I'll take the standard capitalist approach -- if the robot down the block can sell me the same shirt cheaper, I'll buy it from the robot. If it can't, I'll buy it from the Vietnamese. I am not willing to pay extra for feel-good fluff.
I'm a humanist...I guess you are not...agree to disagree? We can't do that on a rationality discussion board can we? If you aren't willing to pay for the feel good fluff, do you at least want it to happen? By what means if so. If not, are you cool with the status quo going forward as long as prices always get smaller?
Here is a video where I present a more 'real world' scenario. And I mean real world in the loosest sense. In it there are 3 actors that all have their role to play and the fallout is interesting.
https://vimeo.com/user17783424/review/115279592/1bb88f885d
Ultimately It would be cool to build a super detailed economic mode. I also think it would be cool to hook it up to something like World of Warcraft.
I do need to do a better job of 'thinking evil' because we all know there will be people that try to break the system and use its weakness for gain. The retiring farmer issue is a real problem and I've tried to balance it with a loyalty that mirrors what we see in our human life cycles. It is rarely optimal for the 55 year old man to stay with the wife of his youth once she hits menopause and he is still fertile, but we see it all the time...and there is usually something awesome and beautiful about it. Someone who grew up drinking Coke II will stick with it when Coke III comes along because....well nostalgia, loyalty, familiarity. At least that is the theory to be tested.
Increase the decay rate and people move money faster and more cash comes out of the economy which keeps deflation from happening.
Things are ok if the economy recovers. In the event of a near extinction event we'll have bigger problems.
This is a great comment and I've been thinking about it for most of the day. Just wanted to let you know I'm thinking on it and will respond in a bit.
Can you explain more? Currently I don't care where an apple came from as long as two apples are the same to my perception. If I have a known reason why apple A is made in a more responsible way than apple B, I have no real incentive other than guilt to guy A over B. Under hypercapitalism you would favor A. Now B could lower their price...is that your concern?
I'm not sure where the assumption that rent rates are static comes from. Economic rent just is. It can vary all over the place. if someone comes up with a magic brain cancer pill that can only be used once, the rent extracted for that pill will likely be massive. In a perfect market for table salt, rents are going to be very very small.
As far as the model goes....I don't really have a model of actual capital and commodity products. That should probably be in the next model and it should probably include some form of competition simulation.
I'm skeptical that consumers buying based on future value is desirable, and this model doesn't address that.
Your correct...I make an assumption that if you had the chance to buy a gallon of milk and get nothing in the future vs buy a gallon of milk and get some of your money back in the future that you will almost always choose the second. A lot of people invest in Index funds even though they don't know what is actually happening inside them. I think some people will pay more attention than others, but on net, more attention will be paid and that is the goal.
Thanks for the feedback. I'm not quite sure I understand your concerns. Are you concerned that people will offer different levels of stock to different people? That is not exactly how I imagined things working. $1 spent = 1 unit of stock(point/air line mile/smoods/call them what you will it is a unit of account).
In general I think we should be more forward looking. I don't see much of a negative in causing people to consider the future implication of their actions. We are limiting anyone's freedom. You can still buy from the less attractive vendor if you want.
You are on to something here and I think you are tracking pretty well with what I'm putting forward. There is a tension between 'do I keep spending money with grocery store A that I have a long history with and get significant dividends from' or 'do I go with the new upstart where my money is getting in earlier in the game and who probably has more long term potential'.
Hypercapitalism put forward the idea of limited corporate lifespans where the law of diminishing returns eventually catches up with the growth potential of an existing corporation. I've run these models too but don't have them out in public yet.
The theory is that this increases the turnover of corporations and allows for more 'fresh starts'. In a sense it is like natural selection for ideas and commerce, but hopefully we do a better job of transferring knowledge from one generation to the next than nature did for billions of years.
Bubbles are an interesting thing to think about. They mostly happen because of the complexity that arises in the market. When the housing bubble burst, it was such a big deal because the people that had made the profits on the way up had taken the money and run. There wasn't a systematic way to smooth the risk. We have the computing power to day to track all of that so that when a bubble happens we can smooth risk and fallout and ask, 'Ok, now what did we learn.'
Think about the late '90s tech bubble. How much did we learn? A ton! Billion dollar companies are ridding the wave that started back then. But what about the people that were hurt in the process of generating the wave? Today it is tough luck. But it doesn't have to be that way.
I am not tied to the name. The public facing name I've proposed for this kind of money is 'Art', but I'm hoping to engage some actual PR and Marketing people to help come up with some thing better.
I love it. Can I steal it? :)
It is still a little obtuse for the man on the street, so I'm looking for even better ways to make it understandable.
Thanks for the feed back! I'm glad to be having real conversations about this stuff instead of just letting it rattle around in my head.
A converse argument is, if whatever project you are considering is not economically viable if capital costs ~ 8-12%/year, maybe it was not really such a great idea.
Let's look at the data. TTP(Time to profitability)
Tesla - 10 years FedEx - 4 years Amazon - 9 years Turner Broadcasting - 11 years ESPN - 5 years (http://www.inc.com/drew-hendricks/5-successful-companies-that-didn-8217-t-make-a-dollar-for-5-years.html)
This is another example where we ignore time. Of course we want our companies to make money. And we want people working on their best ideas. But how many other billion dollar companies failed because their owner flew to vegas to bet the last $5k on blackjack and lost? The market will eventually settle things out even over time. If no one buys what your are selling, your creditors will eventually catch on. But what if the trade off is over 3 years you learn enough to turn a profit or, if you fail, your creditors get to fold your entity and profit from all the places you spent their money?
This could be a serious problem if we are depleting massive amounts of non-replenishable resources, but in endeavors where the resources are renewable, your only limited resource is time.
You either believe we are in an upward trajectory or a downward one. The data suggests upwards and I'd suggest it is more important to learn as much as possible as fast as possible than to make sure that creditors make money at only 1 degree of separation.
Well, yes and no. My understanding of capital is that it is just wealth used to generate more wealth. For example, if I am a plumber by trade and I need a backhoe to repair a sewer line, the backhoe is capital that I need to complete my project and create wealth. If I don't own a backhoe, I'll probably opt to rent one, and this would arguably be preferable to owning one as it is not every day that I need to dig up a sewer line. Obviously, if someone owns a backhoe, they will expect payment (rent) in exchange for my using the backhoe. By the same token, if I am a real estate developer and I need $100M to develop a project, I would expect to have to pay interest (rent) to use that money. I don't see the difference between paying to use someone else's backhoe and paying to use someone else's money. In both cases, I am paying for capital that I need to complete my project, and I don't really see a problem with that arrangement.
Take a second read of Gessell's parable and try to put aside the availability bias that we all currently pay interest.
Why is it obvious that someone would demand payment for use of a backhoe? If the backhoe is in use to you and returning cash to you then of course you would not take it out of service to rent to someone else unless they offered a premium. But if it is sitting idle in a work yard rusting, all you want back when you loan it out it your resource in the same condition you lent it in. This may have the cost of maintenance, oil, grease, etc. In a perfect market this is all you would be able to get for your backhoe and you'd be glad to get it. The potential for a backhoe is how many ditches it can dig, not how much money it can make for other people digging ditches. If you charge someone two ditches for them to dig one ditch, that is 'economic rent' that we seem to have some differences on. Of course it is profit for the renter, but we still only have one ditch.
The use of money only demands interest because it doesn't have a carrying cost. The banker doesn't need to part with it because $1 dollar will still be $1 tomorrow. If $1 were worth $0.80 tomorrow, some banker somewhere would be more than happy to give it to you today in exchange for you repaying $1 tomorrow. He might even be willing to give you $1.10 that he has no use for today in exchange for $1 tomorrow.
I don't know so much if there is a 'problem' with the arrangement we have now(look how far it has brought us), but I also don't think it is 'the best' way.
From a practical standpoint there is no shortage of money in the world, availability of capital is not a binding constraint.
If money is so available, maybe the issue is that people don't know how to ask for the money because they didn't have the money to pay for the education where they teach you how to ask. :)
If she were rewarded for buying from someone who'd get better tomorrow, she will also get punished for buying from someone who'd get worse. In other words, you are asking the buyer to assume some risk associated with the future prospects of the seller. I don't see why this is a good thing, given that the ability of the buyers to influence these prospects is very limited.
Some risk, yes. But in the models I've run, the risk is fairly small and is mitigated by the fact that shitty wine maker spends some of your cash with awesome barrel maker and awesome seed provider. The recursiveness of the system time shifts out some of your risk.
If shitty wine maker goes out of business, because we have a public ledger we can 'fold the blockchain' and connect where the money went to where the money came from and fill in a void that, in the current economy, causes all kinds of volatility.
As a buyer I don't want to have a little bit of risky investment forced into every purchase I make.
I think you do, you just don't know it yet :) Your choice would be between more than what you get now or way more than you get now. If I told you that your risk was between getting back 3% or 300% of what you spent over the next 50 years, even in the worst case you've gained 3%. You could of course choose to keep using your old money.
Err.. would you mind unrolling this reasoning? This sounds to me like a claim that if the lottery revenues are increasing you stand a better chance of getting a winning ticket.
If you buy a lottery ticket that is good for all future drawings, and they double the number of drawings, you do have a better chance of winning. Your economic potential isn't a lottery ticket that expires. If people have more to gain by holding their cash than spending/investing it, the chance that they will invest/spend with you goes down. If they there is a cost for holding cash they will seek ways to at least break even. Maybe you break even today, but with your experience, you turn a profit tomorrow.
What's "non-artificial capital"? Money itself is "artificial" to start with, the current fiat currencies for certain.
A bulldozer is natural capital(non-artificial). A tree is natural. You are natural. A computer is natural. All those things are subject to entropy and have a natural carrying cost. Items whose value derive from law, psychology, math, or ideas are artificial. Money is artificial, but if you don't make the map the territory something is going to go wonky and you're going to have a 'correction'.
"Cash" is, generally speaking, some store-of-value with the following characteristics: constant nominal value, bearer form, fully liquid.
And I'd contend that the store of value part is convenient, but ultimately misguided. It was a shortcut we needed to use to get from horse drawn carriages to databases. But we don't need to completely preserve the 'store of value' anymore. We can let it decay just like the world around it.
You can think of inflation as "entropy" for cash.
Yes, but I'll contend that controlled inflation(demurrage) is better than the random inflation we deal with now.
Not in your sense, I don't. I think a $1 t-shirt from a sweatshop in Vietnam is good value, for example.
As good a value as a $1 shirt made by a robot down the block? No fossil fuels burned in shipping, no slave labor. Surely there are better and worse ways of doing things.
Why? In the locally standard expectations a UFAI will have zero interest in human economics and the particulars of their arrangement. All it wants is atoms and energy.
I don't contend it will solve the problem, just that it might buy us some time if it can get some decent utility out of humans providing the atoms and energy while it ramps up to do it itself. Maybe it is just second. It is just a theory.
Would an intelligence not subject to the availability bias ever choose to not use a form of exchange where it benefited from all uses of the exchanged material in the future vs. exchanging resources for only the perceived present value? I think it is a question worth asking.
Question to skilesare: what is the hypercapitalist take on rising interest rates? My impression is that hypercapitalism encourages negative interest rates. Am I understanding that correctly? Or, is hypercapitalism a reaction to negative interest rates?
I think rising interest rates should be a natural phenomenon arising for money getting more expensive. I also think that there are not many good reasons for money to get expensive. Money is a tool and a score keeper. It isn't anything real. There should always be enough money in circulation to buy all the things that can be produced. If you've ever felt that you didn't make something because money was too expensive then...money was too damn expensive.
This is an issue in an agrarian economy where most of your gdp is made up of actual limited resources. As we move toward automation, maker bots, massive computing power, etc the amount of our economy that is made up of people paying for the production of 'limited only by means and imagination' products and services will only increase.
Interest(and note that interest is not the same thing as return on investment) should be zero or negative until every person on this planet is making a heart wrenching decision on the order magnitude of spending their time curing cancer or solving world hunger.
To make money this available you have to have a means of destroying it when you approach these situations to control inflation. That is where the decay factor comes in. You can print it when you need it and burn it when the world gets stumped for progress.
Negative interest rates that we see today are a reality to deal with. Hypercapitalism manages this by flipping bankers to a form of vc where they make their profits off of the long term success of the people they lend money too instead of the interest charged. I think this is a better way.
The map is not the territory. Money that doesn't decay isn't representing something real. And when this happens someone ends up holding the bag.
Positive interest is beneficial to bankers.
Give this parable a read: http://www.altruists.org/f245
I'm new here, tell me more about this thread?
Potential absurdity bias maybe? Tim Cook has a ton of apple stock and I don't see many kidnaping attempts. Someone tried to blackmail David Letterman a few years ago and that guy is in jail. This is certainly in the realm of possibility, by I think highly unlikely. Now if you want to talk about your deadbeat brother in law hitting you up for a loan....again...maybe that is an issue worth addressing, but I bet your 3000 sq ft house says more about that than your blockchain activity.
You certainly wouldn't want to try this without some significant rule of law.
...and besides, I do think privacy is important and you have to have a mechanism for it. Hypercapitalism has a mechanism.
Yes, exactly. Most economic theory assumes 'in the moment' and a bit of God like reach. In the real world we have to deal with time and space.
For most of us working stiffs, when we go to the store to buy milk we are charged an large amount of economic rent to buy it cold, in a container, near our home. Despite the fact that you really need to drive an hour or more to find a cow. Given infinite time and teleportation, we'd hit the farm and get it for much, much less. You only have to look to digital assets to see how this plays out. This isn't a bad thing. We want the farmer, the pasteurizer, the delivery man and the grocery store to stay in business, but we also want them to do it better, faster, cheaper next time. General market dynamics cause this to happen a rate. I want it to happen at a faster rate.
The wine buyer is not rewarded for buying from a wine maker that will make a better wine bottle tomorrow though. Think for a bit on if she was.
I'm not sure if the velocity of money is a result or a cause of economic activity, but my reason tells me that if it is flowing faster, 'I' have a better chance at having some flow to me. P(making 100k at mv 6) < P(making 100k at mv 12)
Can you name a form of non artificial capital that is a cash equivalent? Maybe gold? Any non elements that aren't subject to entropy? Ultimately, yes, I think all artificial forms of 'store of value' should have an artificial form of entropy added to them because that is the way the world works.
I bet if you don't know what good value is that you at least know bad value when you see it.
I talk more about the full output of labour in this paper: https://www.dropbox.com/s/k97dzssxc58ux1s/hypercapitalismwpv1.1.pdf?dl=0
...as for the robots. I'm a little serious. If agi emerges into a world where economic nodes are dependent upon each other and it has more to gain from cooperation than dominating, it might buy us a few years to find a balance.
This is a tough one because most of the readily available literature on competition and market take a specific approach. Specific in the sense of time. Of course at the instant we don't want people favoring more expensive things...unless there is a damn good reason to. If you add in time though things get very interesting. This system alters the proposition to current market decision + future potential. You wouldn't pay more just to pay more, but you might buy a Tesla instead of a Honda accord because you think that Tesla had better long term earning potential and you are getting in on the ground floor.
Most of the things we buy aren't commodities. There is some trade off on features vs cost. This system does tip the scales toward things that may be more expensive, but only if there is a long term advancement that can be leveraged.
In the instance where we actually deal with a commodity, more emphasis will be placed on the long term repetitive production of that commodity. If the commodity can't be renewed it will be less favored. Thus I'd expect a vector away from depletable goods and toward renewable alternatives.
These assumptions are harder to work into a model.
See my answer below:
http://lesswrong.com/r/discussion/lw/m38/publishing_my_initial_model_for_hypercapitalism/ca33
I mean that some of us are better at generating some kinds value than others. (Division of Labor)
A wine maker who has been in the business for 25 years can make a better bottle of wine than I can. If he wanted to make the same bottle of wine that I can, he could do it more easily.
This is a great question. Privacy is important. How important is it? I'm not sure.
For example, I have some Apple stock. I don't hold it anonymously because I want to them to know where to send the dividends. People tend to quickly lose interest in privacy when they have something to gain from not being private.
On the other hand there are certainly some times where you want privacy. The system allows for this by having privacy pools that you can pay through that preserve privacy. It isn't as optimal as knowing exactly where the money came from, but if we can optimize 80% of transactions and 20% still need to be private, we can gain a lot of ground.
There are also some cryptographic solutions to the privacy issues that could solve the issue of privacy.
Hmm...I'll have to look into this more. There certainly is a difference between 'rent' and 'economic rent'. I'm really don't think I'm misusing economic rent.
You can call it profit if you want. In the model, some nodes have a better ability to extract profit than others. Or we can call it 'make moneyness'.
The economic rent is in the fact that there wasn't an apple tree on your the walk to the store.
Economic rent isn't always bad. Otherwise we'd have an apple tree infestation problem.
Maybe a better question is what do I know and how do I know it? :)
Money was different than it is now 40 years ago. It was different 30 years before that. I know this because wikipedia tells me that Nixon took us off the gold standard in the early 70s and that standard was established at Bretton Woods in the 40s. Because of this I apply a very high probability to the likelihood that our money will operate differently in the future then it does now.
I guess the problem I'm trying to solve is, if we are likely going to be using a new kind of money in the future, do I want that to be a good kind of money or a bad kind of money. I want it to be a good, human centered kind of money that help us solve hard problem and makes the world a better place.
I think I know that our money is 'bad' (sub-optimal may be a better word) because I look around our world and I see the following things:
A crappy income tax An inability to get money out of politics ultra poor people Ultra rich people Wasted human resources (see the entire finance industry) Corporations sitting on billions in cash when they could be ending cancer
I think changing our money can solve some of these issues because I've read the literature on what drives people to make economic decisions. If we can implement a system that rewires the drivers in a positive directions, we can solve some of these problems.
I think hypercapitalism is the answer because I've written some simple models that shows it is more efficient that regular capitalism. I left 10 other solutions on the cutting room floor before I put this together.
I think it is semantics that depend on your assumptions:
http://www.investopedia.com/terms/e/economicrent.asp
Profits are economic rent are the same in a lot of instances. If all markets were perfect their would be neither profit nor economic rent. Can you think of a situation where profit is not economic rent?
- A slow down in the velocity of money.
- How to make money with negative interest.
- How to optimize for creating 'good' value.
- How to restore the dignity of labor(reconciling leftist 'full value of labor' with the reality of market dynamics)
- How to make the robots not kill us.
Oh...and I think economic rent is a fairly standard term. This is the amount that people pay for a thing above its cost because of a disadvantage they are under. Some economic rent is good, some is bad. You can argue that it is 'value' though if someone is willing to pay it. If they weren't getting that value out of it they wouldn't pay it.
I guess I need a better way to intro the concept. Would you be willing to help me work through that?
Does this video help at all? Maybe I need to have this as text? Maybe simplify it first?
I took your advice and posted this over in discussion:
http://lesswrong.com/r/discussion/lw/m38/publishing_my_initial_model_for_hypercapitalism/
If you do any driving the HPMOR podcast is a pretty good use of drive time.
Any suggestions on how to think about it a deeper level? I'm new around here just trying to get my head around some of these ideas.
A couple points, if your one year decay rate is 12% and you have $1 billion in the system you will decay $120 million that will flow back to the system. Yes it will matter how close you are to the nodes of activity. That is the point. This updates our decision function when engaging in commerce. The question isn't is this the most affordable apple, it is is this the best apple made by the best process in a way that will lead to the most value for future apples.
I still have othe options to entice the mining of my transactions. Potentially more attractive than fees.
I'd be more than happy to engage the existing banking system and with unlimited capital I wouldn't involve Bitcoin. The cost from 0 to transaction 1 on btc is 1000x less than 0 to 1 on the banking system. State of Texas wants 20 million in reserve to even sniff your banking application.
If a citizen creates a legal entity, doesn't he get his second account?
The wine seller creates a legal entity "wine shop" and transfers the money from it into his citizens account whenever the shop get's any money.
Yes...this is possible. I would expect a legal entity to pay it's employees. The Legal Entity also benefits for what is paid out to employees. The string of accounts and how many lengths away an account is will be a short term concern but not a long term concern. In addition wine buyers can hold the wine maker responsible for making this decision if they feel it is defrauding them in some way. The theory is that the market will tend toward vendors that use cash to invest further in the industry vs. immediately shifting money out of the industry.
Of course you can transfer a few satoshi. On the other hand that doesn't stop you from paying bitcoin fees. The bitcoin blockchain is incapable of doing cheap micropayment transactions.
I can put together some transactions I guess...but I promise it is possible. Input 0xA $5.02 0xSystem $.04
Output 0xB $5.00 0xDecayAuthority $.02 0xMinerFee $.04
Later that day
Input 0xDecayAuthority $15.04
Output(This will have 10 outputs) 0xA' .02 0xn1....-n99 $14.98 0xMinerFee $.04
That sounds like a corporation could issue a citizen account to someone who already has an account.
When I first wrote this I was envisioning a system that anyone could implement with possible a number of entities setting up different currencies.
In general if you do have to trust a government to enforce rule of law, why use the expensive bitcoin system where trust relies on the blockchain?
Only because the banking system is more expensive and because there is a significant amount of technology that allows the actual transfer of real value on BTC. I'd prefer to have proprietary system, but that takes more time and more money. This system is based on the existence of a public ledger and BTC has one of those.
The assumption that the business man doesn't do anything with his money is unrealistic. It also doesn't make sense to assume a 3 person economy. It would make more sense to run a model economy with 10,000 participants and assumptions about how the market participants interacts with each other via an open python script. Including a miner who gets his $0.04 for every transaction.
Yes. This was my first computer model. I did a second one that added a government and taxation. Next step is to write some much more detailed monte carlo simulations that have many more actors that make rational and irrational decisions and do their best to sink the economy.
Thanks for the comments they really do help me see what needs reinforcement and what ideas are weak.
You don't say anything about how is supposed to have the power to enforce that statute.
I say a lot about it in my book. The system relies on Rule of law: https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/the_pattern_language/law_rule_of_law.md
And yes, we limit citizens to one account and legal entities, and governments have different kinds of accounts with different restrictions.
https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/hyper_capitalism/citizen_accounts.md https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/hyper_capitalism/legal_entity_accounts.md https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/hyper_capitalism/state_accounts.md
Have you done any math to show that they add up?
I've run a computer model in a closed system. I present the results here: https://vimeo.com/user17783424/review/115279592/1bb88f885d
Also in a system like Bitcoin where it costs $0.04 to do a transaction, are you sure you can transfer $0.0000032 effectively?
Yes. It can just be a few satoshi's to an output with the rest(the bigger values) going somewhere else. If the amounts are too small they can be kept off chain.
Economic systems work by their agents trying to maximize returns. That means if there a way in your system to maximize returns in a way you didn't anticipate the calculation based on the ways you anticipate is worthless.
Thus the need to experiment and try to blow the thing up. I agree 100%.
Great point. I need to flesh out the exact process. The high level solution is that we can 'fold the blockchain.' Since we have a record of where money flowed, when an entity fails, we can fold the inputs and connect them to the outputs.
N1 sends cash to N2. N2 wastes it on a bad idea spending money at N3,N4, and N5. The great thing about 'money' is that N3,N4, or N5 have a new chance to do something 'valuable' with it. If N2 fails, we can 'fold the blockchain' and pass through the benefits from 3,4,5 back to 1.
Money doesn't disappear...it generally flows some where else where the next person in the economy has a chance to create a recursive value engine.
In the short run, the system is not very different than today. Short term profit motives are virtually unaffected. In the long run there is a value incentive and reward for proactively finding value. The theory is that it is possible to do both.
I've been working through the sequences and have been trying to apply things to my current project that has to do with remaking money. I'd appreciate any feedback. Did I miss anything major? Am I on the right track to fix my thinking?
http://www.hypercapital.info/news/2015/4/9/hypercapitalism-what-you-think-about-money-is-wrong
I've tried to set up a system where tax avoidance is reduced or eliminated. Because the transaction system will reject transactions that don't pay the fee when they use their cash, they are stuck with the decision to participate in the system or not. Once the cash is in the system, they must pay the tax or the tax will be taken from them(using btc multi-sig where the decay charging authority is held accountable to only charge the fee on delinquent accounts.
N2 can certainly set up Nx and move all cash over there. Lets use a real example.
N1 spends $100 with N2. N2 wants to avoid the decay(but the system always charges at least one day of decay during a transaction) So they move the cash to Nx. The transaction occurs and $0.003 cents goes back to N1. Now the cash is in Nx. What are they going to do with it here. If they let it sit for 30 days they will be auto charged a decay fee of about $0.10. This flows to N2.
Even if N2 is proactive and sends it back to N3 immediately, $0.0000032 will flow back to N1. A small amount to be sure, but overtime these small amounts add up.
And if Nx uses the cash to develop something that brings in far more cash than went in, the amounts get much bigger.
That is besides the point because we want to avoid the situation entirely where N2 tries to devalue N1s benefits by passing to a shell corporation Nx
Nothing can keep someone from just passing cash and on and on and on to cash it owns except rule of law and accountability. Accountability can be observed in the blockchain and bad actors identified. Rule of law comes later. (I try to cover this in STH. Statutory Theft - https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/the_pattern_language/sth_statutory_theft.md )
Re: Fees - I don't have a great solution to this other than offering miners a share of future pref payments for any mined items that they charge no fee for. This involves them taking risk, but also provides substantial long term rewards.
All of this goes much deeper than the original question which I think now is best framed as 'does having a backflow of cash based on amount spent enhance the information we can get out of an economic system over the standard capitalistic model of today.' If we add too many things in we end up in a conjecture bias situation.
Once I answer the first question in the affirmative, then I can move on to whether the implementations of the system are rational or not. If achieving the prior is a priority, there likely exists an implementation that can achieve it. At least I think.
I did ask it in the stupid questions thread. :)
I think that both can be true and yet still have real results. Take humans, reproduction, and marriage. Typically a man is fertile for more years than a woman. We see in marriage a tension between men staying loyal to the wife of their youth and moving on to a more fertile partner. I don't have statistics in front of me, but over history the tendency is to stay loyal. Patrimonialism has a profound evolutionary basis and my theory is that you can use that built in bias to form a sustainable system where legal entities have life spans instead of immortality. If the life span is too short, than it is useless.
As far as the fees go, Bitcoin's fees are non-zero but very close to zero and many alternate payment schemes can be constructed. Typical CC transactions are 3%...much higher than the about .05 needed for a BTC transaction. There are also ways to convince miners to mine your transactions even though no BTC Fees are provided.
Great Question. The 'bits' in the system I'm proposing are based on a system wide demurrage or 'decay rate' of currency. Simply switching to a different node doesn't change the decay on cash you hold. There isn't an incentive to create a new node. On the positive side, existing customers have a loyalty factor. N1 will be more likely to buy the same commodity from N2 than from a random Nx. This behavior has a limited life though because diminishing returns eventually catch up and suddenly the benefit from being one of the first contributor to Nx is greater than the loyalty to N2.
This gives a lifespan to legal entities and increases the turnover thus increasing the likelihood of more fit entities emerging(if you assume that entities can cross generationally share information).
You basically get the the attractiveness of youth, the steadiness of adulthood, and the slow decline to oblivion. (and with this an increased incentive to figure out immortality by creating enough value to outrun the diminishing returns)
Numenta's stuff made a lot of sense. They kept things simple by removing the recursion of HTMs...and I think that is probably the key to the whole thing working.
All that being said, their latest product Grok seems to have some success in the network monitoring space. http://numenta.com/grok/
On Intelligence was my first intro to the idea of Bayesian thinking.
This was really helpful and gives me some great stuff to look at.
Thank you.
My theory is that actors in an economy spend cash on things and some of those things produce lasting value in the economy and some don't. Each actors probability of making a valuable choice that leads to overall growth is unknown. If we reward those that make a valuable voice with fresh cash, they then have the opportunity to succeed or fail again. If we do this over and over the 'right' probabilities will emerge and we will see who the 'best spenders' are by who has the biggest rewards flowing back.
We optimize for value creation and in the long run have a system with better and better information.
I guess the stupid question is does it follow from Bayes that if you keep measuring the same probability over and over that you will converge on the 'actual' probability.
Have you considered that one of your base assumptions that you can 'store value' is false?
All value us future value. You can't store it. You can make a bet on a piece of capital. Gold has been a decent bet, but far from stable. Bitcoin is just another bet.
Also, btc has a significant long term risk as well. The system is terrible for an interstellar economy. You can't have a blockchain when you have to wait light years for payment confirmations. Maybe this isn't a big deal in the short run, but if you're looking really long term, it is an issue.
A couple of other things to consider in your favor, bitcoin is going to have significant uses in the short term that don't involve holding it. It is a transfer medium and a protocol. Having a stake in the protocol will be very valuable.
That person is me. Check out hypercapital.info. I'd like to think it is more than just randomness though...in this system you knowledge and group wisdom leads to who wins the lotteries.
Question updated. Any more clear?
Lets think about it as information theory. If there are 5 different types of 'information' that different people are listening for, then we need to reduce the entropy in 5 different channels to get the right information signals. This is much more complicated than trying to just reduce the entropy around 1 thing.
Maybe language isn't the best term, but all 5 of the information sets are important in different amounts to different human beings. So your utility function is going to get messy.
That is interesting....what do you mean 'on its own'. Are there some other things that affect the application of Bayes to a system?
Let me think about reforming the question now that I'm not on an iphone.
We have an economic system with N actors. Each actor has its own utility function that it uses to attempt to spend/invest money in areas that will grow. The system as a whole doesn't know these functions and the nodes can't see them internally. They just make a judgment and spend/invest. If they spend in an area that grows, more money comes to them via an agent in the system that redistributes cash as it flows to the originators of cash in a node.
For example, If N1 pays a dollar to N2 for a bottle of wine, N1 gets a share in N2. As cash flows through N2, little bits get funneled back to N1. So if N2 becomes the next big wine maker, many bits will flow to N1 and it will be rewarded for sending money to N1 early in time.
Does it follow from bayes theorem that if I keep passing cash through this system, that over time, the success rate will ocellate around the actual success rate of each nodes utility function? In this scenario, if you fail you get your cash back slowly over time,if you succeed you get it back more quickly.
I'm anticipating that a set of actors in this situation would end up in an economy where the level of wealth for each node converges on their true ability to create value.
If I'm totally misinterpreting, I'd love some pointers to good info to read.