Viliam's Shortform

by Viliam22nd Jul 202014 comments
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Moving a comment away from the article it was written under, because frankly it is mostly irrelevant, but I put too much work into it to just delete it.

But occasionally I hear: who are you to give life advice, your own life is so perfect! This sounds strange at first. If you think I’ve got life figured out, wouldn’t you want my advice?

How much your life is determined by your actions, and how much by forces beyond your control, that is an empirical question. You seem to believe it's mostly your actions. I am not trying to disagree here (I honestly don't know), just saying that people may legitimately have either model, or a mix thereof.

If your model is "your life is mostly determined by your actions", then of course it makes sense to take advice from people who seem to have it best, because those are the ones who probably made the best choices, and can teach you how to make them, too.

If your model is "your life is mostly determined by forces beyond your control", then the people who have it best are simply the lottery winners. They can teach you that you should buy a ticket (which you already know has 99+% probability of not winning), plus a few irrelevant things they did which didn't have any actual impact on winning.

The mixed model "your life is partially determined by your actions, and partially by forces beyond your control" is more tricky. On one hand, it makes sense to focus on the part that you can change, because that's where your effort will actually improve things. On the other hand, it is hard to say whether people who have better outcomes than you, have achieved it by superior strategy or superior luck.

Naively, a combination of superior strategy and superior luck should bring the best outcomes, and you should still learn the superior strategy from the winners, but you should not expect to get the same returns. Like, if someone wins a lottery, and then lives frugally and puts all their savings in index funds, they will end up pretty rich. (More rich than people who won the lottery and than wasted the money.) It makes sense to live frugally and put your savings in index funds, even if you didn't win the lottery. You should expect to end up rich, although not as rich as the person who won the lottery first. So, on one hand, follow the advice of the "winners at life", but on the other hand, don't blame yourself (or others) for not getting the same results; with average luck you should expect some reversion to the mean.

But sometimes the strategy and luck are not independent. The person with superior luck wins the lottery, but the person with superior strategy who optimizes for the expected return would never buy the ticket! Generally, the person with superior luck can win at life because of doing risky actions (and getting lucky) that the person with superior strategy would avoid in favor of doing something more conservative.

So the steelman of the objection in the mixed model would be something like: "Your specific outcome seems to involve a lot of luck, which makes it difficult to predict what would be the outcome of someone using the same strategy with average luck. I would rather learn strategy from successful people who had average luck."

A toy model to illustrate my intuition about the relationship between strategy and luck:

Imagine that there are four switches called A, B, C, D, and you can put each of them into position "on" or "off". After you are done, a switch A, B, C, D in a position "on" gives you +1 point with probability 20%, 40%, 60%, 80% respectively, and gives you -1 point with probability 80%, 60%, 40%, 20% respectively. A switch in a position "off" always gives you 0 points. (The points are proportional to utility.)

Also, let's assume that most people in this universe are risk-averse, and only set D to "on" and the remaining three switches to "off".

What happens in this universe?

The entire genre of "let's find the most successful people and analyze their strategy" will insist that the right strategy is to turn all four switches to "on". Indeed, there is no other way to score +4 points.

The self-help genre is right about turning on the switch C. But also wrong about the switches A and B. Neither the conservative people nor the contrarians get the answer right.

The optimal strategy -- setting A and B to "off", C and D to "on" -- provides an expected result +0.8 points. The traditional D-only strategy provides an expected result +0.6 points, which is not too different. On the other hand, the optimal strategy makes it impossible to get the best outcome; with best luck you score +2 points, which is quite different from the +4 points advertised by the self-help genre. This means the optimal strategy will probably fail to impress the conservative people, and the contrarians will just laugh at it.

It will probably be quite difficult to distinguish between switches B and C. If most people you know personally set both of them "off", and the people you know from self-help literature set both of them "on" and got lucky at both, you have few data points to compare; the difference betwen 40% and 60% may not be large enough to empirically determine that one of them is a net harm and the other is a net benefit.

(Of course, whatever are your beliefs, it is possible to build a model where acting on your beliefs is optimal, so this doesn't prove much. It just illustrates why I believe that it is possible to achieve outcomes better than usual, and also that it is a bad idea to follow the people with extremely good outcomes, even if they are right about some of the things most people are wrong about. I believe that in reality, the impact of your actions is much greater than in this toy model, but the same caveats still apply.)

In reality it has to be a mixture right? So many parts of my day are absolutely in my control, at least small things for sure. Then there are obviously a ton of things that are 100% out of my control. I guess the goal is to figure out how to navigate the two and find some sort of serenity. After all isn't that the old saying about serenity? I often think about what you have said as an addict. I personally don't believe addiction to be a disease, my DOC is alcohol, and I don't buy into the disease model of addiction. I think it is a choice and maybe a disorder of the brain and semantics on the word "disease". But I can't imagine walking into a cancer ward full of children and saying me too! People don't just get to quit cancer cold turkey. I also understand like you've pointed out, and I reaffirmed that it is both. I have a predisposition to alcoholism because of genetics and it's also something I am aware of and a choice. I thought I'd respond to your post since you were so kind as to reply to my stuff. I find this forum very interesting and I am not nearly as intelligent as most here but man it's fun to bounce ideas!

In reality it has to be a mixture right?

Yeah, this is usually the right answer. Which of course invites additional questions, like which part is which...

With addiction, I also think it is a mixture of things. For example, trivially, no one would abuse X if X were literally impossible to buy, duh. But even before "impossible", there is a question of "how convenient". If they sell alcohol in the same shop you visit every day to buy fresh bread, it is more tempting than if you had to visit a different shop, simply because you get reminded regularly about the possibility.

For me, it is sweet things. I eat tons of sugar, despite knowing it's not good for my health. But fuck, I walk around that stuff every time I go shopping, and even if I previously didn't think about it, now I do. And then... well, I am often pretty low on willpower. I wish I had some kind of augmented reality glasses which would simply censor the things in the shop I decide I want to live without. Like I would see the bread, butter, white yoghurt, and some shapeless black blobs between that. Would be so easier. (Kind of like an ad-blocker for offline world. This may become popular in the future.)

Another thing that contributes to addiction is frustration and boredom. If I am busy doing something interesting, I forget the rest of the world, including my bad habits. But if the day sucks, the need to get "at least something pleasant, now" becomes much stronger.

Then it is about how my home is arranged and what habits I create. Things that are "under my control in long term", like you don't build the good habit overnight, but you can start building it today. For example, with a former girlfriend I had a deal that there is one cabinet that I will never open, and she needs to keep all her sweets there; never leave them exposed on the table, so that I would not be tempted.

Thinking about relation between enlightenment and (cessation of) signaling.

I know that enlightenment is supposed to be about cessation of all kinds of cravings and attachments, but if we assume that signaling is a huge force in human thinking, then cessation of signaling is a huge part of enlightenment.

Some random thoughts in that direction:

The paradoxical role of motivation in enlightenment -- enlightenment is awesome, but a desire to be awesome is the opposite of enlightenment.

Abusiveness of the Zen masters towards their students: typically, the master tries to explain the nature of enlightenment using an unhelpful metaphor (I suppose, because most masters suck at explaining). Immediately, a student does something obviously meant to impress the master. The master goes berserk. Sometimes, as a consequence, the student achieves enlightenment. -- My interpretation is that realizing (System 1) that the master is an abusive asshole who actually sucks at teaching, removes the desire to impress him; and because in this social setting the master was perceived as the only person worth impressing, this removes (at least temporarily) the desire to impress people in general.

A few koans are of the form: "a person A does X, a person B does X, the master says: A did the right thing, but B did the wrong thing" -- the surface reading is that the first person reacted spontaneously, and the second person just (correctly) realized that X will probably be rewarded and tried to copy the motions. A more Straussian reading is that this story is supposed to confirm to the savvy reader that masters really don't have any coherent criteria and their approval is pointless.

(There are more Straussian koans I can't find right now, where a master says "to achieve enlightenment, you must know at least one thousand koans" and someone says "but Bodhidharma himself barely knew three hundred" and the master says "honestly I don't give a fuck"... well, using more polite words, but the impression is that the certification of enlightenment is completely arbitrary and maybe you just shouldn't care about being certified.)

Quite straightforward in Nansen's cat -- the students try to signal their caring and also their cleverness, and thus (quite predictably) fail to actually save the cat. (Joshu's reaction to hearing this is probably an equivalent of facepalm.)

Stopping the internal speech in meditation -- internal speech is practicing of talking to others, which is mostly done to signal something. The first step towards cessasion of signalling is to try spending 20 minutes without (practicing) signalling, which is already a difficult task for most people.

Meditation skills reducing suffering from pain -- this gives me the scary idea that maybe we unconsciously increase our perception of pain, in order to better signal our pain. From a crude behaviorist perspective, if people keep rewarding your expression of pain (by their compassion and support), they condition you to express more pain; and because people are good at detecting fake emotions, the most reliable way to express more pain is to actually feel more pain. The scary conclusion is that a compassionate environment can actually make your life more painful... and the good news is that if you learn to give up signaling, this effect can be reversed.

[+][comment deleted]3mo 1

I was thinking about which possible parts of economy are effectively destroyed in our society by having an income tax (as an analogy to Paul Graham's article saying that wealth tax would effectively destroy startups; previous shortform). And I think I have an answer; but I would like an economist to verify it.

Where I live, the marginal income tax is about 50%. Well, only a part of it is literally called "tax", the other parts are called health insurance and social insurance... which in my opinion is misleading, because it's not like the extra coin of income increases your health or unemployment risk proportionally; it should be called health tax and social tax instead... anyway, 50% is the "fraction of your extra coin the state will automatically take away from you" which is what matters for your economical decisions about making that extra coin.

In theory, by the law of comparative advantage, whenever you are better at something than your neighbor, you should be able to arrange a trade profitable for both sides. (Ignoring the transaction costs.) But if your marginal income is taxed at 50%, such trade would be profitable only if you are more than 2× better than your neighbor. And that still ignores the fixed costs (you need to study the law, do some things to comply with it, study the tax consequences, fill the tax report or pay someone to do it for you, etc.), which are significant if you trade in small amounts, so in practice you sometimes need to be even 3× or 4× better than your neighbor to make a profit.

This means that the missing part of economy are all those people who are better at something than their neigbors, but not 2×, 3×, or 4× better; at least not reliably. In an alternative tax system without income tax, they could engage in profitable trade with their neighbors; in our system, they don't. And "being slightly better, but not an order of magnitude better at something" probably describes a majority of population, which suggests there is a huge amount of possible value that is not being created, because of the income tax.

Even worse, this "either you are an order of magnitude better, or go away" system creates barriers to entry in many places in the society. Unqualified vs qualified workers. Employees vs entrepreneurs. Whenever there is a jump required (large upfront investment for uncertain gain), fewer people cross the line than if they could walk across it incrementally: learn a bit, gain an extra coin, learn another bit, gain two extra coins... gradually approaching the limit of your abilities, and getting an extra income along the way to cover the costs of learning. The current system is demotivating for people who are not confident they could make the jump successfully. And it contributes to social unfairness, because some people can easily afford to risk a large upfront investment for uncertain gain, some would be ruined by a possible failure, and some don't even have the resources necessary to try.

To reverse this picture, I imagine that in a society without income tax, many people would have multiple sources of income: they could have a job (full-time or part-time) and make some extra money helping their neighbors. The transition from an employer to an entrepreneur would be gradual, many would try it even if they don't feel confident about going the entire way, because going halfway would already be worth it. And because more people would try, more would succeed; also, some of them would not have the skills to go the entire way at the beginning, but would slowly develop them along the way. Being an entrepreneur would not be stressful the same way it is now, and this society would have a lot of small entrepreneurs.

...and this kind of "bottom-up" economy feels healthier to me than the "top-down" economy, where your best shot at success is creating a startup for the purpose of selling it to a bigger fish. I suppose the big fish, such as Paul Graham, would disagree, but that's the entire point: in a world without barriers to entry, you wouldn't need to write motivational speeches for people to try their luck, they could advance naturally, following their incentives.

1) There was this famous marshmallow experiment, where the kids had an option to eat one marshmallow (physically present on the table) right now, or two of them later, if they waited for 15 minutes. The scientists found out that the kids who waited for the two marshmallows were later more successful in life. The standard conclusion was that if you want to live well, you should learn some strategy to delay gratification.

(A less known result is that the optimal strategy to get two marshmallows was to stop thinking about marshmallows at all. Kids who focused on how awesome it would be to get two marshmallows after resisting the temptation, were less successful at actually resisting the temptation compared to the kids who distracted themselves in order to forget about the marshmallows -- the one that was there and the hypothetical two in the future -- completely, e.g. they just closed their eyes and took a nap. Ironically, when someone gives you a lecture about the marshmallow experiment, closing your eyes and taking a nap is almost certainly not what they want you to do.)

After the original experiment, some people challenged the naive interpretation. They pointed out that whether delaying gratification actually improves your life, depends on your environment. Specifically, if someone tells you that giving up a marshmallow now will let you have two in the future... how much should you trust their word? Maybe your experience is that after trusting someone and giving up the marshmallow in front of you, you later get... a reputation of being an easy mark. In such case, grabbing the marshmallow and ignoring the talk is the right move. -- And the correlation the scientists found? Yeah, sure, people who can delay gratification and happen to live in an environment that rewards such behavior, will suceed in life more than people who live in an environment that punishes trust and long-term thinking, duh.

Later experiments showed that when the experimenter establishes themselves as an untrustworthy person before the experiment, fewer kids resist taking the marshmallow. (Duh. But the point is that their previous lives outside the experiment have also shaped their expectations about trust.) The lesson is that our adaptation is more complex than was originally thought: the ability to delay gratification depends on the nature of the environment we find ourselves in. For reasons that make sense, from the evolutionary perspective.

2) Readers of Less Wrong often report having problems with procrastination. Also, many provide an example when they realized at young age, on a deep level, that adults are unreliable and institutions are incompetent.

I wonder if there might be a connection here. Something like: realizing the profound abyss between how our civilization is, and how it could be, is a superstimulus that switches your brain permanently into "we are doomed, eat all your marshmallows now" mode.

This seems likely to me, although I'm not sure "superstimulus" is the right word for this observation.

It certainly does make sense that people who are inclined to notice the general level of incompetence in our society, will be less inclined to trust it and rely on it for the future

Paul Graham's article Modeling a Wealth Tax says:

The reason wealth taxes have such dramatic effects is that they're applied over and over to the same money. Income tax happens every year, but only to that year's income. Whereas if you live for 60 years after acquiring some asset, a wealth tax will tax that same asset 60 times. A wealth tax compounds.

But wait, isn't income tax also applied over and over to the same money? I mean, it's not if I keep the money for years, sure. But if I use it to buy something from another person, then it becomes the other person's income, gets taxed again; then the other person uses the remainder to buy something from yet another person, where the money gets taxed again; etc.

Now of course there are many differences. The wealth tax is applied at constant speed -- the income tax depends on how fast the money circulates. The wealth tax is paid by the same person over and over again -- the income tax is distributed along the flow of the money.

Not sure what exactly is my thesis here. I just got a feeling that the income tax could actually have similar effect, except distributed throughout the society, which makes it more difficult to notice and describe.

Also, affecting different types of people: wealth tax hits hardest the people who accumulate large wealth in short time and then keep it for long time; income tax hits hardest the people who circulate the money fastest. Or maybe the greatest victims of income tax are invisible -- some hypothetical people who would circulate money extremely fast in an alternate reality where even 1% income tax is frowned upon, but who don't exist in our reality because the two-digit income tax would make this behavior clearly unprofitable.

Am I just imagining things here, or does this correspond to something economists already have a name for? I vaguely remember something about tax, inflation, and multipliers. But who are those fast-circulators our tax system hits hardest? Graham's article isn't merely about how money affects money, but how it affects motivation and human activity (wealth tax -> startups less profitable -> fewer startups). What motivation and human activity is similarly affected by the recursive applications of the income tax?

To avoid misunderstanding, I am not asking the usual question: how many kids we could feed by taxing the startups more. I am asking, what kind of possible economical activity is suppressed by having a tax system that is income-based rather than wealth-based? In the trade-off, where one option would destroy the startups, what exactly is being destroyed by having the opposite option?

I would very much like to see a society where money circulates very quickly. I expect people will have many reasons to be happier and suffer less than they do now.

As you observe, income taxes encourage slowing down circulation of money, while wealth taxes speed up circulation of money (and creation of value), but I think there are better ways of assessing tax than those two. I suspect heavily taxing luxury goods which serve no functional purpose, other than to signal wealth, is a good direction to shift taxes towards, although there may be better ways I haven't thought of yet.

Not answering your question, just some thoughts based on your post

In the meanwhile I remembered reading long ago about some alternative currencies. (Paper money; this was long before crypto.) If I remember it correctly, the money was losing value over time, but you paid no income tax on it. (It was explained that exactly because the money lost value, it was not considered real money, so getting it wasn't considered a real income, therefore no tax. This sounds suspicious to me, because governments enjoy taxing everything, put perhaps just no one important noticed.)

As a result, people tried to get rid of this money as soon as possible, so it circulated really quickly. It was in a region with very high unemployment, so in absence of better opportunities people also accepted payment in this currency, but then quickly spent it. And, according to the story, it significantly improved the quality of life in the region -- people who otherwise couldn't get a regular job, kept working for each other like crazy, creating a lot of value.

But this was long ago, and I don't remember any more details. I wonder what happened later. (My pessimistic guess is that the government finally noticed, and prosecuted everyone involved for tax evasion.)

Ah, good ol' Freigeld

David Gerard (the admin of RationalWiki) doxed Scott Alexander on Twitter, in response to Arthur Chu's call "if all the hundreds of people who know his real last name just started saying it we could put an end to this ridiculous farce".

Dude, we already knew you were uncool, but this is a new low.