Don't encourage prisoners dilemmas

by Yair Halberstadt1 min read16th Feb 20217 comments

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PoliticsGame TheoryEffective AltruismWorld Optimization
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Donating money to political causes is a waste of resources

A lot of money is donated towards political causes. Most of these causes though are pretty much zero sum games. The democrats and republicans both raise vast amounts of money, but only one of them will win the election. Most of this money is thus wasted.

This is classic game of prisoners dilemma. Everybody ends up better off if each side raises just the minimum needed to disseminate their views*,  leaving more money to donate to researching malaria / feeding the poor / non-political charity of your choice.

But each side gains by raising a little bit more money. So the mountains of wasted resources build up. I'm not blaming anyone for this - prisoners dilemmas are really hard to break out of. But one obvious rule is "don't encourage them".

However most countries give tax back off political donations just like other charities. Tax back is a policy that has to be weighed on it's own merits, but even if you support it in general (which I think I do), what is the point of the government encouraging citizens to pour their money into promoting zero sum games?

Lets rethink Tax Back

How can we put this into policy

I think a simple rule that might be workable is:

There's some various rules the government has on what's a valid charity. Let's keep those for now. However let's separate being eligible for tax back from being a valid charity.

Every charity applying to be eligible for tax back presumably has a mission statement. Something like: 

  • We aim to conserve unicorns
  • We aim to make Ralph Wiggum president

etc.

Consider a charity whose aims were the exact opposite if the mission statement, the anti-charity:

  • We aim to destroy unicorns
  • We aim to stop Ralph Wiggum being president

If the anti-charity would also be a valid charity (presumably the destroying unicorns wouldn't and stopping Ralph Wiggum being president would), then neither the charity or the anti-charity is eligible for tax back.

Of course most charities are likely to phrase their mission statements in vague terms to avoid this problem "We aim to make sure presidents are good at their job". For that reason tax back should be judged every year by records of what the charity actually did with their money last year, and decide whether or not a charity which put their money into opposite places would also be a valid charity.

Footnotes

* More Formally:

Assume there are two parties in an election r, and d. Assume an election has one result v: the fraction of the vote that voted r. Assume that, all else being equal v is a function f of spending from both sides, rs and ds.

v = f(rs, ds).

Assume f is continuous, non decreasing in rs, and non increasing in ds.

Then for any pair (rs1, ds1), let v1 = f(rs1, ds1). There exists a pair (rs2, ds2) such that either rs2 = 0 or ds2 = 0, and v1=f(rs2, ds2).

In other words, making some pretty safe assumptions (although f is not continuous, the electorate is large enough it can be approximated as continuous), it's possible to get exactly the same result in the election, whilst having one side spend 0 money. The proof is trivial, and can trivially be extended to more complex election schemes.

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At least in the US, donations to political parties, political campaigns, political action committees, etc, are already not tax deductable (which I take is what you mean by "tax back"). In fact, the amount that a person can donate to such an entity is even limited. See https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/are-your-political-campaign-contributions-tax-deductible-11380/. In the US, tax deductible donations are for 501c3 organizations (named for the section of the internal revenue code in which they are described), and such organizations are already forbidden from engaging in partisan politics and severely limited in the amount of lobbying they can do. 

The standard proposed here has broader implications than party politics. To pick two hypothetical organizations, the Tough On Crime Institute would be the opposite of the Criminal Justice Reform Association, so by this standard, neither should get tax back. My initial reaction is that I don't want that result, I want both organizations out there making their cases stronger, not weaker. But I could be talked out of this.

I'm also not sure why the Against Unicorns Foundation wouldn't be a legally valid charity. It might not be a very popular one, but an argument can certainly be made that destroying unicorns prevents them from suffering, and preventing animal suffering is generally regarded as good and specifically listed as a charitable purpose in section 501c3. I don't think regulators would or should question the validity of that purpose. So by this standard, the Unicorn Conservation Society would also not get tax back? This doesn't seem right.

At least in the US, donations to political parties, political campaigns, political action committees, etc, are already not tax deductable (which I take is what you mean by "tax back").

Turns out it's the same in the UK. That's embarrassing! However I was just as much talking about political charities which aren't technically a political party.

My initial reaction is that I don't want that result, I want both organizations out there making their cases stronger, not weaker. But I could be talked out of this.

I think I agree with this insofar as political charities tend to work by disseminating the strongest argument for their case, and letting the correctest side win out. I think in practice that's not what they're doing - it's more about how they can use the political system to achieve their aims, at which point I think it's back to a prisoners dilemma.

I'm also not sure why the Against Unicorns Foundation wouldn't be a legally valid charity. It might not be a very popular one, but an argument can certainly be made that destroying unicorns prevents them from suffering, and preventing animal suffering is generally regarded as good and specifically listed as a charitable purpose in section 501c3.

As I said, I think the thing to do is look at where the money was actually spent. If it was spent protecting a unicorn conservation area, I'm pretty certain destroying a unicorn conservation area would not be a valid charity.

However I think you make some great points! Definitely have to think about them.

Disagree that these are zero-sum, except on a uselessly-abstracted level.  Politics is variable-sum, depending on the specific dimensions and distances of the candidates.  Often, there being more than 2 potential runners further complicates it.  Charities are multiple dimensions - the opposite of "conserve unicorns" might be "transplant unicorns to mars", or "increase pegasus population", not just "reduce unicorns".  

Headline doesn't follow from the text body. Political donations are not obviously a PD situation, and this essay does not prove that they are.

Specifically: Even in the case cited, political spending is an all-pay auction, not a PD There are externalities to having people donate: civic engagement, better targeting of message, etc. Because of those (and the incentives of the parties) the parties might prefer High/High spending to Low/Low spending.

Donating money to political causes is a waste of resources if you are a prole. If you are not a prole then donating money is just another euphemism for bribery, and just another cost of doing business. 

This adds a lot of complication, and in the real world, nothing is cleanly and perfectly opposite. Imagine two art museums bidding on a painting. Are they putting their money in opposite places, or are they working together to increase the amount of art displayed in public. (bidding also increases production)

Also, political donations are actually quite small, comparitively speaking. A different prisoners dilemma operates. Not saying the other effect is absent, just smaller.

A set of Democrats  would each like the democrats to win, but they also want a bigger TV. They would each prefer everyone to donate, but their donation on its own won't make a big difference, so they buy a new TV. 

At first I was convinced by your argument, but then I tought to apply it also to the voters.

Both parties would be probably better with a lower turnout (less undecided voters to convince, less effort required to campaign); but it does not seem correct to conclude that we should not encourage voting. An high level of engagement of the local popolation in politics is supposed to be a good thing for democracies, even if it requires more work.

I do not think that donations to political parties should be tax deductable. But I hesitate on the abstract principle "Do not encourage prisoners dilemmas". Sometimes it is good that everyone makes more effort, because that effort produces something valuable. Two rival pencil companies "play" in opposition to each other (in the estreme case in which the pencil demand is totally inelastic, it would be a zero sum game, because if more people buy pencils from company A, then less people buy pencils from company B). But this does not mean that the state's regulations should encourage monopolies: monopolies are (generally) not good.

Depending on your utility function, there are situations in which you should wish to encourage a prisoner dilemma between two factions, if this yields benefits to you or other people.

Maybe your principle applies when the relevant model really has no third party which gains from A and B fighting. But I can not think to many such situations in the society (even in wars, there is someone (weapon sellers?) who profits if the belligerants fight harder).