This made my day. Somehow I’m reminded of the two economists who walk right past a fifty dollar bill on the sidewalk, noting that if it was real someone would have picked it up already.
The upshot here is that so much of morality and ethics is driven by status quo bias. If something currently exists and is allowed, people will never dream of ending it based on some theoretical objection. If it’s not allowed, people will not see the benefits, think about every possible objection, and be so overwhelmed by how many there are that they’ll throw their hands up and say we can’t have this new thing. Some of the objections here, “rich people will benefit more” or “someone could rip off someone else,” can be made towards anything.
I feel like that this is the upshot of “[Self-Serving Bias](https://slatestarcodex.com/2018/01/11/self-serving-bias/),” not this article. This one is more about the urge to bring up spurious objections to knock down ideas that violate status quo bias.
This is precisely my experience when attempting to argue in favor of "loser pays" tort systems in the United States. Everyone seems to think that the first objection they think of is completely devastating to it ever being feasible, despite its use in almost every other developed country.
Maybe you could lead by arguing in favor of a system where anyone can sue someone else and pay no extra cost if they lose regardless of how valid the suit was
If they oppose this idea you can say you agree that there's a reason this is an unusual legal system and the US should consider joining other countries who have a different system
I thought this was a followup to the cryptocurrency post until I got to the end. I guess there is a pretty strong pattern to the kind of objects people raise when they aren't informed enough to object coherently, but still want to sound like they are too smart to be duped.
Yeah, but... crypto is a field where many similiar objections do prove to be justified at an alarming rate. So at the very least it's worth spending some thoughts on whether prediction markets are closer to the "store" landscape or the "crypto" landscape, and why.
+1 thought this was about crypto for most of it as well.
Meanwhile, the line between people who are actually smart enough to not get duped and people who are more accidentally walking examples of survivor bias is thin.
It has nothing to do with being smart, asshole. It's about being vulnerable. I suppose you're not vulnerable in any way.... wait, you use social media. If I wanted to, I could investigate and own you within a week. But I'm not an asshole.
I do notice that, unlike prediction markets, there is in fact a thriving arbitrage market based on buying stuff at low prices in one store and selling them at high prices in other stores. These mispricings get corrected slowly, if at all. Unsure what implications this has, though of course physical goods and prediction market shares aren't really commensurate in many ways. It's probably easier to have perfect information in a market that deals in information, rather than goods.
I'm 90% sure the small Hispanic grocery store in my neighborhood buys all of their non-specialty merchandise from big box stores and marks it up. People pay for the convenient location and the fact that there will be a Spanish speaking worker to assist them.
Which is exactly what groceries do. You don’t want to drive all the way to a farm or a wholesaler in order to talk to some warehouse guy or farmer with poor customer service skills and buy 100 cabbages because that’s the smallest lot he will sell them in.
You want to talk to a friendly service-oriented person who is willing to sell you exactly one cabbage and provide a clean, well-lit environment that’s located near your house.
This is a pretty easy service to provide, which explains why groceries have such low margins generally, but still, groceries and markets and supermarkets exist because there is value in them. Likewise, the Hispanic grocery is just extending this another step, providing a few specialty goods not found elsewhere and providing goods sold at wholesale much more conveniently to people who can’t or don’t want to speak English while shopping.
Well, you could learn Mexican or Honduran or whatever. I speak English and Spanish (Colombian, regular Spanish, and Chilean) fluently, Italian passably, can fake my way in French and am learning Russian and Japanese ATM.
They're doing the same thing on eBay and Amazon. If you're aware of it and it bothers you and you're not particularly altruistic or have disposable income, don't shop there.
There's actually a mystery novel, based around economics, in which one of the main plot points revolves around how much prices of goods can vary from place to place: https://en.wikipedia.org/wiki/The_Fatal_Equilibrium
TL;DR it depends on the price of the goods in question; if the cost of going from 1 store to another and back to compare prices is greater than your savings, it makes sense for consumers to just buy at the store that's closest to them or whatever. A 3rd party might be able to extract some of this value, but it would probably require a lot of work, and wouldn't be worthwhile for the stores to either do it themselves, or put a bunch of effort into equalizing prices.
[Epistemic status: am largely uninformed layperson wrt all subject matter, likely talking out of ass and misinterpreting theory; but Scott did explicitly ask for normies to also Notice Confusion, so]
Oh, for sure - some $100 bills on the ground are geotemporally bounded, some take more than $100 worth of effort to pick up, some involve other opportunity cost/moral-ethical tradeoffs that make them still not worth it. But they do exist if one goes looking! I just found the repeated "prediction markets obviously work/avoid X complication because EMH" to be a bit flippantly Proves Too Much, which the comparison to buying actual physical goods at stores makes explicitly absurd. (If funny.) Like I found it kinda weird that Scott gives Goldman Sachs credit for being the preeminent snatcher-of-$100-bills, but then doesn't (seem to?) follow through to the implication that *if there really were* scalable returns of infinite $100 bills...the Goldman Sachii of the world would already have flushed prediction markets full of enough cash to solve the volume issues, and then there'd stop being easily-identifiable mispricings. That they haven't suggests there's other barriers at play, and I really don't think trivial inconveniences like CFPB rulings would get in the way when the potential prize is $infinity.
Some arbitrage examples off the top of my head:
*I know a company infamous for a deeply underpriced loss-leader produce item, which some enterprising customers then turn around and sell elsewhere at market rate. Lack of identifiable packaging creates fungibility, and all that. Low-margin but longstanding practice.
*Certain entire consumer goods markets have become effectively captured by professional resellers and turned into near-commodities, with 3rd-party exchange middlemen companies set up to profit off the authentication and transaction costs. (A true monetization of "Trust, But Verify"!) This includes sneakers and GPUs, plus an assortment of other random shit like handbags that proliferates by the year. Obviously such 3rd-party commerce has existed for ages, but modern incarnations like StockX make the "career eBay resellers" of yesteryear look quaint by comparison; the scale and ease of entry are just incomparable.
(yes, I know, commodities trading isn't quite the same as pure arbitrage...but it turns on the same foundation of profiting off different market-clearing prices. It's sorta scary how many otherwise-average people I run into in everyday life who do this as a side gig __and make hundreds or thousands of dollars off it__. Even as a mere consumer, I'm constantly struck by the wild differences in equilibrium prices for same item between even the most popular exchanges*; there are lots of $100 bills laying around there. Feels like it's mostly the...reputation, tawdriness of the activity, that keeps the markets irrational. The prediction market equivalent of not-enough-volume-to-correct-mispricing, it'd just take a lot more $/people than are currently invested.)
*[while being cognizant that there's an element of cartel pricing, because it's frequently not actually possible to buy such goods at actual MSRP in actual stores - they get snapped up immediately by resellers...]
On the very first topic, when I was a stripper, I got confused when the new hundos came out and often gave out change for one when in fact it was a $50 bill. But then it worked the other way too. Win win ITLR.
On the economic points, I'm fascinated as I am a probability and statistics expert now who advantage gambles for a living and am somewhat of a macroeconomist, but I've been up for almost 24 hours and I'll have to read it later. Good stuff, though
I mean, if you go looking, it's no longer lying on the sidewalk. Of course it's possible to make money--but it will require a similar level of work and risk as anything else. No one is saying it's impossible to make any money at all! The point of arbitrage is that's is near-0 risk and near-0 work once you have it set up.
> Like I found it kinda weird that Scott gives Goldman Sachs credit for being the preeminent snatcher-of-$100-bills, but then doesn't (seem to?) follow through to the implication that *if there really were* scalable returns of infinite $100 bills...the Goldman Sachii of the world would already have flushed prediction markets full of enough cash to solve the volume issues, and then there'd stop being easily-identifiable mispricings
I'm not sure this follows. Limitations on prediction market volume come from things like regulations, betting limits, and transaction costs. Overcoming those is possible, but might be very expensive up-front, and some of it would allow for others to compete in the prediction markets as well. And the goal, yes, is to make markets that are efficient, and thus no more profitable (percent-wise) and probably less profitable (volume-wise), than other markets. I think Scott's point is that *if* the market were less regulated and high-volume, then Goldman et. al. would be capable of swooping in with lots of money to correct obvious mispricings.
At the risk of horribly mangling overly-literal metaphors, I feel that a lot of people...don't make a habit of looking down in the first place? One of my weird tics is feeling obligated to pick up money off the ground if feasible, and there's really quite a lot of it once one develops a Knack! (Learning the sound of coin drops vs other metallic-on-surface, pattern-matching the expected metallic refraction of currency vs other metallics, etc.) Actual bills are, of course, much rarer than coins...but it only takes four quarters to make a $1, and they're easily at least four times as common on the loot table. There's always the opportunty cost of "well I make $X salary and it's not actually worth my time"...but I think it really is difficult to pencil that out to the second. Of the entire possibility-space of immediate actions one could take in the next few seconds, directly purely profiting tax-free by collecting change intuitively seems like a pretty good choice, if available?
So it goes with arbitrage, too - it's always fascinating how little people actually comparison shop, nevermind reason through that to seeing a potential profit. (I think this might be a socioeconomic class thing, with Tyler Cowen-like fine gradations of rising or lowering status...clipping coupons is gauche, fretting over tiny differences between inelastic goods is not classy, sometimes The Price Is The Point, etc. Or the general disdain for trading unless you're a Certified Businessman. Homo economicus, we are not, mostly.) Similarly as a general principle, the optimal amount of arbitrage in a mature market is not actually zero...Scott's obviously hyperbolic about "repeat for infinite profit", but the ideal target is probably something like, not enough for anyone to bother exploiting if they have a halfway-real job otherwise.* That's too much deadweight loss otherwise.
As for the other thing, maybe my heuristics are too cynical, but I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those. I think the fact they haven't, really, is a sign that it's in fact too difficult/not actually a potential meaningful profit center. (And certainly not due to them being ignorant of/about prediction markets, they are ever in the business news.) But fair enough point that not being able to corner such a market might be a big part of the nonattractiveness. One-time cash injections are a lot less attractive than recurring revenue streams, if one is going to spend high effort in the first place. (Obvious solution: they set up their own prediction market, Goldman Mean.)
*I'll always remember the GameCube RPG "Paper Mario and the Thousand-Year Door", for explicitly programming an arbitrage opportunity into the game's shops and giving the player Obvious Hints about exploiting it. You bought X at discounted price Y in Town A, and resold it for profit at overly high price Z in adjacent Town B. (Which you had to travel back and forth between anyway, as the ordinary plot progression.) Near-0 work and near-0 risk, other than clogging up one's inventory with otherwise-useless items. It felt like an object lesson - because *the infinite money still wasn't really worth it*! This wasn't a game where one had terribly much use for money overall, and it was easy to end up with more than enough just by playing normally. That feels like the proper amount of arbitrage - Not Enough To Seriously Bother. Contrast to some other JRPGs where legal money exploits were, in fact, the only viable way to fund proper minmaxing...then it did become your actual job, not a side gig. (And much less fun as a result.)
Sure, but in this case it's not at all clear to me that anything is really going wrong. In order to operate a meaningfully profitable business exploiting, say, differences in prices at different stores, you would have to do a comparable amount of work to opening a store of your own: Find efficient ways to get lots of goods, attract lots of customers, handle logistics, front a large quantity of capital, deal with taxes, etc. It seems pretty rational to me for most people not to do this (or at least, comparably rational to not starting their own business in general). And certainly businesses exist whose goal is to connect consumers more directly to manufacturers or suppliers to reduce prices this way, but you mostly see it in large purchases (flooring, furniture, etc.) most likely because that's where the profit is.
Even as far as comparison shopping goes, well, xkcd put it best: https://xkcd.com/951/
> As for the other thing, maybe my heuristics are too cynical, but I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those. I think the fact they haven't, really, is a sign that it's in fact too difficult/not actually a potential meaningful profit center.
Well, again, you have commons issues. Any one bank might only capture a small portion of the value generated, which is why I said "this argument applies if prediction markets have bet limits, regulations, etc. removed." But also, the size of prediction markets may not be that large and lobbying is expensive. Even if a bank thinks they could get an above-average return, the volume would have to justify the upfront cost.
> I'll always remember the GameCube RPG "Paper Mario and the Thousand-Year Door", for explicitly programming an arbitrage opportunity into the game's shops and giving the player Obvious Hints about exploiting it.
I'm very familiar with the game. I recently replayed it, and yes, you get a lot more items than you really need for most of the game, as well as plenty of coins and badges. Lots of money was only really useful if you want a lot of rare items or cosmetic badges. It was never even clear to me if it was more time-effective than just repeatedly killing enemies somewhere.
> I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those.
Why bother? There are plenty of legal profit opportunities, especially in a [ZIRP](https://www.readmargins.com/p/zirp-explains-the-world) (thanks for leading me to that article) world. Why risk getting slammed with millions in fines?
The job of these folks is to go after easy money. It’s not that they’re money-hungry in the sense that they’ll do anything to get rich; they (or their employers) already *are* rich. Their job is to figure out ways to enhance that with minimal downside risk.
Also…I feel you’re arguing against something Scott’s not saying, or I’m not understanding your claim. Scott isn’t, it seems to me, saying that prediction markets are, right now, obvious huge money makers to the big money folks. He’s saying that, *if* prediction markets became big enough to actually matter, which he hopes they do and is trying to make happen, *then* some objections people have in those situations don’t really hold water because Goldman-Sachs would swoop in and fix them. He’s not claiming that there are massive profit opportunities to be had in these markets *now.*
(Ah, thank you, ZIRP is a term I've been missing in my concept-space. More concise than "tech thrives under conditions of easy money and a weak general economy, such as happened after the GR and arguably right up until very recently")
Hmm, maybe it's just a difference in interpretation then...or it's me missing the point. I feel like there are some competing epistemic claims:
1) Prediction markets are not, in fact, a $100 bill in even optimistic scenarios. (But they could still be prosocial gambling.)
2) Prediction markets are a real $100 bill, but stuffed between the couch cushions, and this deters even ordinary people from making $800 betting on elections every few years.*
3) Prediction markets are a conditional $100 bill, but protected behind In Case Of Emergency, Break Regulations glass. And no one with power currently needs an additional free $100 that badly, yet.
4) Prediction markets are a real $100 bill, and everyone assumes it can't be real because otherwise someone woulda picked it up by now.
The sense I got from reading the draft/spoofed Store FAQ version was that the thought experiment "proofs" underlying the various arguments and counterarguments rely on doing some sleight-of-hand between these epistemic claims. But only one ought to be true, or truer-a-greater-probability. That's where I'm noticing my confusion, at any rate. (I haven't finished reading the final published version to see if it's meaningfully different, perhaps things were cleaned up some.)
*I do suspect this is a big reason why more people don't try them out, even the playmoney ones, because...not everyone actually enjoys gambling? Especially if it's weird, and sorta dubiously legal, and opportunities don't readily present themselves whenever convenient? At some point it starts sounding less like "get boundedly infinitely rich" and more like "working for a lot less than you make in your actual job, on your free time". Which makes it just another arbitrage opportunity not big enough for the median person to worry much about, eg (2), and thus I'm still skeptical. Dath ilan's markets sound wonderful, but that's starting from an entire other baseline of culture, law, tech level...
These are valid concerns (though go back and look at Note 1 on your pizza article). There will definitely be hundred-dollar bills stuffed into dark corners. Friction and information imbalance are things. I agree that perhaps Scott is being a bit too glib here.
On the other hand, as Alex Zavoluk says, that there are arbitrage possibilities occasionally laying around places does not mean that Goldman Sachs or somebody is not going to swoop down if a systematic major profit opportunity presents itself. So while I feel this is a valid objection, it’s a minor one in this context.
Not your intention, but I think this actually does highlight how fragile society is. Everything rests on most people not playing hardball with incentive structures.
You could’ve added, “the merchandise is just available for anyone to take, and it’s illegal for stores to physically hurt their customers. What’s stopping customers from waltzing in with a shopping cart, filling it up, and not paying?” And this would’ve been equally implausible until about 2 years ago.
What country do you live in, friend? I'm in Las Vegas, Nevada, USA and just went to Walmart to buy ingredients for a homemade clam chowder where I expected to spend less than $10. I ended up spending $30. A fucking quality loaf of sourdough bread costs close to $6. I'm not made of money, pal
Exactly. Except this particular inflationary period was caused by the knee-jerk response our government had to the Pandemic, where it suspended so many jobs that it had to subside people's incomes for 2 solid years, and the horrible decision it made to give business owners with a certain number of employees Pandemic Assistance Relief that is still continuing and is costing taxpayers billions of dollars. I have an acquaintance who owns a number of small businesses, and he expects his subsidy check to be about $700,000 this year. And that's just one business owner with 4 separate places of business. He is and was profitable during the Pandemic. That assistance, in general, was a travesty and was one of the root causes of our current inflationary period. https://www.usa.gov/covid-small-business-loans
I believe we are in the midst of a neon swan event. https://capital.com/neon-swan-definition-breaking-global-velocity-what-is A perfect storm of a plague (and thanks a lot, Boston University, for tinkering with COVID to the point where its mortality rate in their lab is close to 80% instead of single digits. They did it with government money, too, those bastards), supply chain collapse, massive inflation and debt on a dwindling middle class, and a potential nuclear war due to Russia's non-maintenance of their nuclear arsenal https://nationalinterest.org/blog/reboot/russias-strategic-nuclear-weapons-are-complete-duds-198528. An accident waiting to happen there. Undercover saboteurs destroying pipelines that provide natural gas and heating oil from Russia to Europe, as we prepare to enter into an unpredictable winter made more chaotic by global warming. The likelihood of the collapse of society becomes increasingly more statistically likely based on these and other underlying financial instability.
It's not even illegal for stores to physically hurt shoplifters, it's just liability fears that stop them from giving chase / physically restraining them. The more shoplifting trends upwards, the more I expect these kinds of policies might change.
You think they give a fuck? I've seen shit that is illegal from 'Security Guards' with a God complex where if this were Singapore, they'd be publicly caned.
Walmart likes to arrest people who use self-checkouts and accidentally miss an item. They do it all the time. Their scam is that they impose a fine somehow of around $200 not to press charges. Fuck Walmart. If they didn't have the kind of cat food my 17-year-old asshole cat likes, I'd never set foot in there again.
Have you been to a CVS in San Francisco lately? The one I went to had almost every shelf protected by a plastic door that an employee with a key had to unlock. It seems like the company found a solution to the shoplifting problem; it's inconvenient, but you can still buy toothpaste there.
A local pharmacy chain employee told me the most shoplifted item were sanitary napkins and tooth supplies. People are fucking poor and struggling against this horrible inflationary period we're currently suffering because during the Pandemic they were printing money and giving it away, and now the bill is due. Plus, every employer who has X numbers of employees are still cashing in from government grants. It's hopeless
That isn't even remotely true. Do modern Americans actually think the Soviet Union didn't have stores? Or that modern China, Vietnam, and Cuba don't? What a bizarre assumption.
Is it weird that I see nash equilibria everywhere since reading Hidden Games? The answer to practically all those questions is “because it’s not a Nash equilibrium”
Stores sell things for money, but we know that some groups have more money than others. Therefore, the existence of stores disproportionately benefits the already-privileged, widening inequality.
Yeah, this comment suffered from a bad case of self-editing before posting, which basically reduced it to an already-covered case. It was originally leading into not only calling Scott evil, but also calling for the abolition of money, private property, and physical bodies.
Guess what, Moon Moth. It's already happening, all of it. AI is the next Emergent Consciousness. It doesn't need money, or private property, or a physical body. Homo sapiens were a transitional species with large brains but disportionately and inconsistently controlled by the archphallium, or 'reptile brain'.
"The or primitive (reptilian) brain, or "Basal Brian", called by MacLean the
"R-complex", includes the brain stem and the cerebellum, is the oldest brain. It consists of the structures of the brain stem - medulla, pons, cerebellum, mesencephalon, the oldest basal nuclei - the globus pallidus and the olfactory bulbs. In animals such as , the brain stem and cerebellum dominate. For this reason it is commonly referred to as the "reptilian brain". It has the same type of archaic behavioural programs as snakes
and lizards. It is rigid, obsessive, compulsive, ritualistic and paranoid, it is "filled with ancestral memories". It keeps repeating the same behaviours over and over again, never learning from past mistakes (corresponding to what calls the ). This brain controls muscles, balance and autonomic functions,such as breathing and heartbeat. This part of the brain is active, even in deep sleep" I'm not crazy about my source here as it delves into metaphysics, which it shouldn't, but here it is anyway: https://lecerveau.mcgill.ca/flash/capsules/articles_pdf/triunebrain.pdf
I was more thinking of something along the lines of that bit from the Hitchhiker's Guide:
> "For instance, when the Editors of the Guide were sued by the families of those who had died as a result of taking the entry on the planet Traal literally (it said "Ravenous Bugblatter Beasts often make a very good meal for visiting tourists: instead of "Ravenous Bugblatter Beasts often make a very good meal of visiting tourists"), they claimed that the first version of the sentence was the more aesthetically pleasing, summoned a qualified poet to testify under oath that beauty was truth, truth beauty and hoped thereby to prove that the guilty party in this case was Life itself for failing to be either beautiful or true. The judges concurred, and in a moving speech held that Life itself was in contempt of court, and duly confiscated it from all those there present before going off to enjoy a pleasant evening's ultragolf.”
But if you're talking about AI, paperclips work too.
Well Scott you get the killjoy award. Don’t you understand that it’s enjoyable to shower you with passive-aggressive , neurotic, nitpicking objections? Instead of being dismissive, how about budgeting 3 hours a day for the next month to reply to each and everyone kindly and in great detail.
Noice! I love playing with DALL-e 2. Can't wait for further iterations. MetaHuman Creator is also nice. My guess is that in the next year, maybe 2, you won't be able to tell a deepfake with the human eye, even from profile (this was one way to recognize deepfakes, until now, that is). https://www.youtube.com/watch?v=qJ596eXPqHc This tutorial was made last February. That's almost a year. Imagine the logarithmic progress that a piece of software like MetaHuman and others are making. We have a year, tops, before we won't be able to recognize a real human on FaceTime or an AI-generated one.
I am crazy about DALL-e also. It's like a positive addiction. What do you like to do with it? For me, the Darwin stained glass is sort of a one-off. I have mostly not been successful at getting it to make things that look anything like what I have in mind, so now I don't try. Instead I enter phrases that aren't really clear and complete instructions, then play around with what I get, sort of surf on the randomness. My favorite results are actually the grotesque ones. I put a set of mostly grotesque DALL-e illustrations of oldies love songs up on google drive. It's here if you want to have a look: https://docs.google.com/document/d/1ICtbvkBZPgvV6dZ330dZE4eBMli8iEKV/edit?usp=sharing&ouid=105377617742016537731&rtpof=true&sd=true
Hi! So I requested permission to view your work. I'm so excited to see it!
"I have mostly not been successful at getting it to make things that look anything like what I have in mind, so now I don't try" for sure, right? But I appreciate the 'creative license' the AI generates. I like to put in styles, like 'impressionist' or 'surrealist'... My boyfriend is really into it too. Do you have an Instagram account? I hate Instagram and Pinterest but I am busy making other websites for money and not for pleasure right now (I'm a web dev/designer/UX-UI gal). Thanks for sharing!
"If something would only work if it had regulation and a legal infrastructure, assume it will develop that regulation and legal infrastructure once it gets big enough and people are sufficiently sad about it not having it (people could resist, but that would suggest it’s not so obvious to stakeholders that it needs the infrastructure in order to succeed)"
This claim needs substantially more evidence than presented in this article. In fact the converse seems equally likely based on history that good things only become big after regulatory and legal infrastructure exists.
I don’t think these claims are at all in conflict. “Big enough” means “popular enough to come to the attention of legislators,” who then enact legislation that allows it to become genuinely big. Like pretty much exactly where crypto is now.
Just think of it as being similar to the "banknote on the ground can't be real or someone would have picked it up already" thing: if regulation was needed, someone would have made some; no-one has, ergo it is not needed ;)
I think maybe the moral of the story is that selling the benefits is more important than overcoming the objections. I understand how stores improve my life by helping me get access to all kinds of cool shit and thus am willing to take the risk of being sold an inferior product every now and then. But I don’t really see how the existence of polymarket or whatever has done anything for me so I can’t muster the enthusiasm to wave away the objections. (Maybe sort of in the same way I can’t really get terribly tied in knots of worry about AI risk because I only experience AI as beneficial — it helps me make art and drive my car and has never once turned a single family member into a paperclip.)
I think you’ve undermined your own case here. You’re not taking AI risk seriously because no one has overcome your objections—or are you saying that it’s because no one has sold you on the detriments sufficiently? I mean, what could be worse than the entire world turned into paperclips receding at the speed of light?
I'm thinking that this is partly (1) the bar should be pretty high to overturn "try it and see" and (2) there's a crude and more reasonable form of most objections. The crude version is easier to make fun of.
Despite common behavior on social media, interesting objections don't have to be fatal flaws. They might be better thought of as adding some nuance. One wouldn't expect people to anticipate highways, suburbia, and smog as a side-effect of the invention of the automobile, but people will still try to anticipate second and third-order effects. (And probably get them wrong.)
We do know that some stores will try to "cheat" the unwary with misleading advertising, etc. Sometimes there are lawsuits. Often products are not as good as promised. We also know that shoplifting is sometimes a pervasive problem, and also that there are problem customers who take advantage of over-generous return policies.
Historically, the idea of self-service in grocery stores had to be invented. Before that, it was thought that the goods had to be kept behind the counter. See: https://en.wikipedia.org/wiki/Piggly_Wiggly
I think a steelman of a more reasonable store-objector is something like:
"Yes, stores will probably have real benefits, and I agree that we should try them out. But I think that even in a world with widespread stores, the practicalities will mean that customers often end up doing a fair bit of comparison shopping in order to get good prices, many people will have to drive farther to reach a smaller number of centralized stores, some people will miss the social connection of bazaars, shoplifting will be reasonably common, advertising on many products will be misleading, stores in places without repeat customers like airports will tend to have especially poor-quality wares, and many of the employees will have kind of crappy working conditions.
Claims that store introduction will lead to perfect price discovery and product distribution with maximum convenience forevermore seem importantly false to me because of these flaws, and these considerations should be accounted for when deciding how much to value store legalization over other policy interventions."
I think some people who complain about prediction markets are just doing the bad thing that this post accurately satirizes, but other people are more like the example above, mentioning a whole lot of things that are actually problems with stores in the real world (even if they're a big net gain over the previous bazaar environment) so that discussions can weigh the pros and cons accurately.
"These considerations should be accounted for when deciding how much to value store legalization over other policy interventions."
What I find frustrating about a lot of the critiques of prediction markets is that they *don't* explicitely compare predition markets to the other viable alternatives. Prediction markets have a ton of forseeable flaws (which are inherent to being a market structure), but the alternatives--like credentialed expertise--seem equally if not more flawed.
This honestly reminds me a lot of self-driving car criticism as well.
"If self-driving cars try to avoid hitting people, couldn't you cause traffic accidents by running into the middle of a busy freeway and trying to get hit?"
Yes. In fact, you can do the same thing with human-driven cars today.
Please don't.
"If self-driving vehicles are used to deliver packages, couldn't you take a gun and shoot the vehicle and steal packages from it?"
Yes. Again, this is possible today as well, and I will reiterate, please do not do that.
"What if there was a self-driving taxi with a passenger? Could you stop the taxi by force, then kidnap the passenger and ransom them for money?"
I’m going to call this “trying too hard to find objections.” It is, perhaps, *actual* nitpicking; coming up with objections for the sake of coming up with objections.
In other words, the problem is that people are trying to find things that *sound* like they’d make good objections, without checking to see if they actually *believe* those objections. It’s a form of sophistry, which isn’t helpful, because every bad argument style is a form of sophistry.
>But there’s an even deeper heuristic, something like “try it and see!” Don’t do this with communism
Oh God would someone please do it with communism.
I dream of having an actual economic experiment, which splits a country (or even a city) down the middle and makes one half communist and one half capitalist. “But haven’t we already done this? What are East and West Germany and North and South Korea other than exactly this?” Yes, but in each of these cases, it’s “not real communism.” So we agree beforehand on the terms, how the system will be set up, how decisions will be made, etc., so that it will be very difficult to say, “That wasn’t real communism/capitalism!” Everyone involved agrees that a winner will be declared after X time using Y metrics, and we can settle this damn debate once and for all.
Yes, yes, I know it won’t work. Communists *define* communism as a system that brings justice and prosperity (I’m not kidding or exaggerating). So any actual communism with a population larger than Dunbar’s Number will be declared “not real communism” once it fails. But, if done fairly and well, this experiment should convince any reasonable person of which system is superior.
Do it with socialism, sure, I'd be up for that; indeed, one might argue such experiments have succeeded in a few places and we just call the existing countries that lean in that direction unremarkable normality now; but communism? What additional benefit does violent revolution bring?
...I mean, it's right there in the communist manifesto. Marx and Engels call out revolution as a key difference - possibly THE key difference - between communism and other, reformist, approaches to socialism.
What do you think is left if you take that bit out that, say, Norway or Finland isn't already to some extent doing?
>But, if done fairly and well, this experiment should convince any reasonable person of which system is superior.
No. Anybody who is able to identify themselves as a Communist in the 21st. Century has cultivated a highly refined ability to explain away the input of their own senses. Any person who can learn from historical examples would have never dreamed of being a communist in the first place.
Hmmm, I don’t think I am sold on this whole “buying things from a store” idea. The case for prediction markets seems stronger and I think we should prioritize that over this whole “store” thing.
Could you use a prediction market to implement a store? Like selling shares in a claim that you will not receive a certain object that you want? Then the store operator could buy shares in that claim and then give you the object, causing the prediction market claim to resolve as true.
Receipts don't actually use ink, they use thermal paper that changes color when heat is applied. The printer applies heat in the shape of glyphs to create the receipt.
I think the reasoning behind 2. isn't exactly that the item varies in value depending on how much you want or need it, but that there isn't an easier way to get it than through stores (of some kind of another). Lack of access is what drives the profit (or rather, ease of access through stores) - less than "this product is worth much more to me than to the merchant because of x reason," it's "I can produce or procure this product on my own for $3,000 (if I can produce or procure it at all), but the store sells it to me for $15."
I'm not sure what this says about prediction markets; I find them boring.
No, it's correct. Literally all trade is predicated on the idea that different people value things differently. You want the item more than you want the $15 and the store wants the $15 more than it wants the item. In other words, it's worth more than $15 to you and less than $15 to the store. Definitionally, if the two parties didn't value things differently, trade couldn't happen
In a prediction market a given event subjective probability is different for different people and that enables trade with positive expected value for both parties
Honestly, IMO there is a top-tier SSC post in here, _if you take out point 10_. With that part included, it's just a response to people having stupid opinions about a specific topic. Without it, it's a grand work of philosophical comedy, making fun of people who have stupid opinions about all sorts of stuff! (See e.g. all the commenters who assumed it was about crypto.)
I'm not sure, I think having it be about a specific thing makes it click more, and then, at least for me, it's easier to generalize from there. Also without point 10 we'd lose the amazing "I hate humor and demand that all jokes be explained in detail, what’s this about?" line.
Just personally, with or without point 10, this is a top-10 SSC/ACX post for me. Good stuff.
I'm reading this in January 2023 because Scott opened up his paid-subs-only posts as a free sampler, so I really needed the explanation once the piece was yanked out of its temporal context.
Quote: “overall I expect these kinds of objections to be overcome by creating the thing, subjecting it to market pressure, and seeing what solutions people come up with.”
…This reminds me of the situation after “die Wende” (as the Germans call it) in Eastern Europe. Approx. 1994 we had some Czech political scientists visiting. They referred to the Cold Turkey-approach to introduce capitalism, and as a side note mentioned that they did not yet have proper bankruptcy legislation in place. I was horrified: “You cannot have capitalism without proper bankruptcy laws. You will be overrun by con artists and buccaneer capitalists”. They matter-of-factly responded that sure, that was highly likely, but you could not introduce laws before people felt the need for them. People needed to experience that first, and then such laws would probably be passed quite swiftly.
..and concerning the “don’t try communism”, here is Boris Yeltsin’s comment from back in the days, when he was asked his opinion about communism in Russia: “Communism was an important social experiment. It was well worth trying it out somewhere. The only sad thing is that it was tried out in such a big country”.
You and the comments fail to address the main issue I see with buying things from stores, which is that it can't single-handedly save the economy. In a time of crushing inequality and sky-high property values, you want us to spend resources building your spherical-cow-economics castles for rich white people. It's insane to focus on growth when we have no stability.
Hey, it's the popular fully general counterargument against engaging with any positive-sum projects of societal progress that aren't guaranteed to immediately increase outcome equality!
If your proposal doesn't lead to a continuously decreasing gini coefficient along all desirable value dimensions, it's simply unconscionable
I think this whole analogy is missing something essential: that a lot of these incentives are linked to the store existing in the physical world, and a lot of the schemes in the FAQ have a failure mode of "angry customers come back and threaten call the cops / break your windows". Defection has very high cost, so people are incentivized to cooperate.
When you get to a situation where people can disappear and never be found again and never have to be in contact with the people they're scamming (eg e-commerce), suddenly scams get a lot more frequent and reputation starts to matter a lot more. Anybody trying to run an online shop the way most regular shops are run (you can acquire whatever items you want, and you can leave at any time, but you're expected to pay before you leave, with only very loose mechanisms to enforce this) would go bankrupt immediately.
So I guess the moral is "trust basic decency only as long as the people you do transactions with are within face-punching range".
(But even then, don't trust it *too* much, because shoplifting is a thing in real life as well.)
I see a fair number of complaints online both ways; e.g. artists who do work on commissions or people selling goods online complaining that X ordered such and such, refused to pay/paid late/the cheque bounced or transaction was refused, and likewise customers complaining that they ordered this and that and paid upfront and the item never arrived/was damaged or different to description and they can't get their money back.
And that's with structures and regulations in place to protect both traders and consumers. I can only imagine how dicey it would be with "invest in our prediction market now, predictions resolve in a year/five year's time, you can get rich by using your knowledge!" and then the entire thing folds its tents and vanishes into the night after soaking enough pigeons, and how do you get recompense? Is this a gambling debt? Are gambling debts recoverable? And besides, first you have to figure out who the operator is and where he scooted off to. Since prediction markets are not very common or well-established as yet, the first few available to the mass public, play with real money ones are going to be very fast and loose and the chance of getting burned will be high, because how can you tell the legit start-up from the scammer?
Rolling with your analogy, I don't mind what stores actually can do. But I object to the lazy libertarian argument that usually gets piled on top of the existence of stores, namely that anything worth having must eventually be available at a store, and therefore we can dismiss all non-store mechanisms of giving things to people, deciding which things to make, etc.
my objections to prediction markets are pretty much objections to the lazy beliefs that get piled on top of the actual market.
>If you’re wondering why people aren’t going to get an advantage in the economy by committing horrible crimes, the answer is probably the same combination of laws, ethics, and reputational concerns that works everywhere else.
I do feel like something missing from your account is 'and a massive structure of regulations and social structures specifically built around making that one specific thing safe, both of which took decades/centuries to create.'
I have a lot of my money in the stock market, but if the stock market was 100% unregulated, I would not trust it there.
Lots of things *were* very dangerous before those structures were slowly built around them, even if still positive-utility to have, and I would expect any new thing to be much safer after 50 years of this process than when it is new. But the intuition that established institutions that have gone through this process are momentarily safer than new institutions that haven't, is I think correct.
I've a feeling Substack may scold me for running too long in the comments again, so this is going to be in two parts:
(A) "But once you’re in the store you won’t be visible from the street, so couldn’t the storekeeper rob you and take all your money?"
They don't need to pull a gun on you, there is an entire branch of psychology devoted to "how do we get people to spend more and buy unnecessary goods when they're in-store?" Anyone who has ever gone into a shop intending to buy three items and walked out with a full basket of groceries or unintentional purchases has been a victim/successful subject of this. One of the simplest ways is to do things like change the layout of the store periodically. Customers get accustomed to the layout and go straight to the aisles for the goods they want. Change the layout, and they have to walk around the store to find where you put the tea-bags this time. And while they're walking around, managing the displays so that new items or 'special reduced bargain price' offers are visible means that people will tend to pick up items that they weren't intending to purchase beforehand. Even things like "steer customers to the right as they enter" and "have the smell of freshly-baked bread wafting into their faces the first thing as they come in the door" are all tricks of the trade.
(B) "If a storekeeper sells you something for $1, that means they expect to make a profit selling it to you at that price. Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?"
(C) "What if a bad store used really good advertising to attract customers, and then other customers saw it was the store that all the other customers were going to, assumed it must be good, and went there themselves, forming a self-perpetuating cycle where everyone goes to a worse store and the system never self-corrects?"
(1) Below cost selling: "Selling below cost is a practice whereby a firm sells products at less than costs of manufacture or purchase in order to drive out competitors and/or to increase market share."
(2) Loss leaders: "Loss-leader selling is a marketing practice of selling a product or service at a loss in order to attract customers to buy other products at regular prices."
(3) 'Hello money' and 'pay to play' money: "a charge made by a retailer to a supplier for introducing the supplier's goods to its stores", "demanding payment from suppliers for promotions and shelf space and/or suppliers wishing to have their products featured prominently".
(4) Sales: sales are supposed to be of goods which are marked down in price due to necessity to move stock quickly. Consumer regulation requires that goods offered for sale be of equivalent quality to full-price goods. However, many stores order in special 'sale' goods which are cheaper, flimsier and of inferior quality, and these are put out alongside any genuine sale goods, if any. The customer believes they are getting a bargain because "it's a sale, the price is reduced" but in actuality the goods are of inferior quality and only worth the 'sale' price.
Stores will sell goods at prices below their true value in order to entice in custom. Once they have captured the market, then they increase their prices again. Large chain stores may use this tactic to force the shutdown of smaller competitors in an area, who cannot compete in price. Once the large chain store is the sole remaining outlet in an area, it will then hike up prices again, as now customers are captive to it (cannot access a cheaper store because of various inconveniences).
Various jurisdictions have enacted bans on below-cost selling, which comes in and out of favour. Same with 'hello money'. In brief: if you think you're getting a bargain, you may not be. Stores often sell goods not at their real cost; either they subsidise the reduced price in order to entice and hold on to customers, then hike the prices up, or the price is subsidised in other ways (e.g. suppliers paying to have their goods stocked in the store) or it really isn't worth the money you are paying, even at a 'reduced' price (fake sale goods).
(D) "It sounds like stores avoid shoplifting by checking for receipts. But receipts are just pieces of paper with writing on them. Couldn’t unscrupulous customers fake a receipt pretty easily?"
Scams around shoplifting are numerous and ingenious. Sometimes people will shoplift goods, then come back to the store and ask for a refund on the item. No receipt? That should be a problem, but often stores have a "the customer is always right" policy and instruct sales staff never to refuse or inconvenience a customer (because otherwise the customer will go on social media and badmouth the store) so the sales person, if the fake customer makes enough of a fuss, may just hand over the money without the receipt. And that's leaving out the blatant "I don't need a receipt, I'm just walking right out the door with this item and you can't stop me" shoplifting. Some tricks of the trade below:
"Switching tags. In many cases, shoplifters will switch a higher price tag with a lower one in order to pay the lesser of the two prices. To prevent this type of shoplifting, businesses are making a greater effort to label items more strategically."
(E) "Most of the items in stores are in boxes. Couldn’t the storekeeper just sell you an empty box (or a box containing only sandbags or some other weighty objects), then accuse you of having made it up if you complained later?"
Ahem. Let me remind you of the history of Food Adulteration Acts. Grocers in particular had a very bad reputation; part of the mockery of Maggie Thatcher, back in her hey-day, was to parody her as "She was only a grocer's daughter" (both in her rise from lower middle-class origins to becoming Prime Minister, even if she was never toff enough for the Tory bluebloods, and that helping out dear old dad in the shop was where she learned to cheat the poor).
Cue a Chesterton poem called "The Song Against Grocers", relevant excerpt below:
"Towards the middle of the 19th century, the adulteration of food, often with harmful and even poisonous ingredients, became a serious problem in Britain. Agitation against it began in the early 1850s, when The Lancet commissioned analyses of samples of food and published their result. Eventually this led to the Adulteration of Food and Drinks Act of 1860, a complete failure. Public Analysts, who could test samples of food collected by inspectors, followed in 1872 but many local authorities failed to collect samples. When grocers began to be prosecuted for adulteration, their representatives started to organize and they persuaded a new Government to repeal the offending laws. Finally the Society of Public Analysts and others caused the Sale of Food and Drug Act, 1875, to be passed which proved to be a lasting and valuable measure."
Milk was a particular target for adulteration; with the proliferation of milk deliveries to the doorstep, unscrupulous dairymen could stretch out their store by watering down the milk, adding chalk, etc.
"The Making of Bread Act 1757 (32 Geo. II c. 29) was an Act of the Parliament of Great Britain, which aimed to protect the making of bread and punish those that adulterated it, for the purposes of protecting public health. It was introduced after a report accused bakers of using alum, chalk and powdered bones to keep bread white."
"In 1820, German-born chemist Friedrich Accum, known as Frederick Accum to his colleagues in London, published a monograph written to make your stomach turn. In early nineteenth-century Britain, an increasingly urban population relied on food vendors and a growing industrial complex to provide their daily bread. Accum revealed to them that their flour contained alum, their Gloucester cheese lead, and tea (good old British institution tea!) contained cherry leaves, acting as a rather unwanted, very strong laxative."
If all you are getting cheated by your store-owner is with an empty box, be grateful!
(F) "Aren’t storekeepers incentivized to murder competing storekeepers, or to burn down their stores?"
Fortunately, 'retail wars' is only a metaphor (as yet):
(G) "Wouldn’t the existence of stores inherently favor rich people? After all, they would have more money which they could use to buy things from the stores."
Yes, this is why we have rankings of stores from poshest to cheapest. Does *your* store have a Royal Warrant?
All of the above is in the service of "yes, people can raise objections and yes, there were and are damn good grounds to raise objections and get regulations passed, because when it's the Wild West with no guard rails, someone is going to get taken for a ride. Stores are a great thing, but they are trying to part us from as much of our money as they can possibly manage, and we do need regulation and to exercise common sense and be aware of how they're trying to manipulate us. Same goes for crypto and prediction markets - open up prediction markets and you are going to have a lot of people losing their shirts and some unscrupulous types trying to use prediction markets as a scam".
I have no idea if this thing survived or went up in a puff of smoke, their website is unavailable:
Can you guess I once had a job working in a supermarket? 😀
This was decades back, and I would rather crawl over broken glass on the floor of Hell than go back to work in retail. One of the many fun and wonderful memories I have from that time is when there were a rash of robberies in the area, and one of the managers instructed me (and presumably the other staff) that if someone pulled a knife (we weren't yet at the point of easily available guns) and threatened to stab me, then I should lock the till, throw the key someplace it couldn't be got, and be stabbed rather than hand over the money.
Needless to say, I wasn't being paid anywhere near enough to make it worth my while to be stabbed on the job, even if it was only a flesh wound. Any time I hear companies going on about how "our employees are our greatest asset", I remember this as what employers *really* think of their staff: my money is worth more to me than your miserable hide, peon!
And the people I was working for then, I was and remain damn sure that *if* anything had happened, and *if* I had been dumb enough to choose stabbing over handing over the cash, they would have done nothing for me. Oh, you have to take time off to go to the hospital to get stitched up? Well, since you're not working the hours, dock your pay for that! And before the ambulance arrives, make sure you wash the floor after bleeding all over it!
There's an Irish expression (though I don't know if it's solely Irish rather than British Isles) that "so-and-so is so mean, they wouldn't give you the steam off their piss". My former employers were that type.
I am fan of prediction markets, and I am excited to see what they do in the future.
My biggest critique of the Prediction Market FAQ is that it relied too heavily on Econ 101, supply-and-demand equilibrium analysis. It was really more of a "Markets FAQ" than a "Prediction Markets FAQ". If someone "buys" that markets work in general, than the FAQ is convincing. If someone doesn't buy that markets work (which is apparently a really large amount of people?), then it fell flat.
What I would like to see is arguments that are more couched in the empirical evidence than the theoretical justifications. Personally, the reason that I am excited about prediction markets working in the future, is that *they already work right now*! Besides the obvious examples like Manifold markets which explicitely brand themselves as prediction markets, sports betting and the stock market are both very well-understood and well-analyzed. They provide the most compelling evidence for the potential of prediction markets--much more compelling than any theoretical analysis could be.
Markets where perfectly informed participants are free to perform transactions or not with any of a number of competing equally informed and unconstrained counterparts work very well.
Real-world markets typically fall short of one or more of the ideals above, and people's experiences and expectations suffer accordingly.
"sports betting and the stock market are both very well-understood and well-analyzed"
And the function of those is to make money. If someone has investments, I don't think he'd be very happy if "well, I lost all my money but at least the price of those stocks was properly recalibrated". But that's what is being sold here in prediction markets: even if you lose all your money, somebody will benefit, and we'll have found out the real true facts of a particular situation.
Are prediction markets about truth, or about making money? Because if people can't make some benefit off them, they won't use them. And if the enticement is 'you can make money by being better calibrated than everyone else', then the focus has shifted from "finding truth" to "making money".
And when the goal of something is to make money, people will do all sorts of things to make money, and you can forget about 'finding the best answer via the wisdom of crowds'. If somehow it was possible to make money by buying "No" on "Will the sun come up tomorrow?", somebody would indeed buy "No", regardless of knowing full well the answer is "Yes".
I think the whole point here is to create a structure where the goals of making money and finding truth are aligned so that the powererful motivator of making money can be harnessed towards the benificial finding truth.
If you know of a scenario where where buying no for the sun coming up tomorrow will be a good investment then please share it. The idea is that the prediction market is inherently robust against those scenarios
11. The theory is that it's more profitable in the long run for stores to do legitimate business of exchanging money for goods than to rob or scam people, and so it's irrational for shopkeepers to do those things; but most times I've walked into a store, by the time I left I had no money left in my pockets and gained nothing of value to show for it. Why doesn't my experience match the theory?
Reputation takes time to build, and markets can stay irrational longer than you can stay solvent. Meanwhile, theory suggests there should be good stores out there, and indeed other people have better experiences. How are you selecting which stores to visit? Consider adjusting your criteria; or perhaps stores are simply not for you.
This is why I'm pretty comfortable with prediction markets, but very uncomfortable with a lot of ideas involving implementing prediction markets for real-world decisionmaking on a societal level. Once you implement those, the rest of society can't opt out of decisions being made in that way, and if you get a regulatory capture situation where anyone twists the mechanism to their own purposes, then you have a situation where powerful people have a major stake in seeing that the situation persists.
If a storekeeper sells you something for $1, that means they expect to make a profit selling it to you at that price. Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?
Fwiw, part of the profit embedded in that $1 price is that the product is there on the shelf, the store exists and has lights on so you can see it, and employees to help you find it/buy it. That service isn't worthless to you. So sure, it might only be "worth" 50 cents but if you're going to begrudge the purveyor of the profit, then good luck finding that 50 cent thing to buy. And just because there are folks out there that practice price gouging doesn't change that the service part of pricing has value to the consumer too.
Scott you promised you'd be nicer to communists but the rhetoric has since, if anything, gotten worse. I'm trying at every opportunity to get leftists interested in rat adjacent ideas, sometimes that means defending you personally, this really makes it hard. At least say "authoritarian communism", "soviet style communism", something, throw us a bone!
The kurds in northern syria had a pretty good thing going, it was a fairly clean experiment as they were protected from outside invasion by an alliance with the US. One major cause of authoritarianism in burgeoning socialist environments is a right wing takeover following a US backed coup, many many examples of that. In particular Allende presided over a largish economy and was strongly committed to a robust democratic structure in his socialist designs, nothing like this has ever been allowed to get off the ground, so there's not much direct evidence to go on. But I'd like to point out that the supposedly socialist authoritarian regimes of today all started out authoritarian, and most of those have become more capitalist while not becoming less authoritarian, and the liberal democracies which have implemented socialist reforms have failed to become more authoritarian, while some that have not actually have done. I'm fairly well married to the opinion that giving too much power to too few authorities is what causes authoritarianism, not the redistribution of resources to poor people.
The problem is that command economies are fundamentally authoritarian. If the government has to decide how much of everything must be produced, there’s no other way to do that than authoritarianism. Any other approach fails very quickly.
Not sure if that's entirely true but I agree it's a bad idea, thankfully it's not a fundamental aspect of a communistic society and actually not even the authoritarian communism we both think is bad. Redistribution is all you need
Look, if we don’t have public ownership of the means of production, we don’t have socialism or communism. If you’ve got trade and profit and stock exchanges and high taxes and wealth redistribution, that’s capitalism with a welfare state.
Public ownership doesn't equal a command economy, and if you consider any type of authoritarianism to be public ownership of the means of production, questionable imo, your definition of ownership should he loose enough to admit many different forms of that.
It's pretty hard to steal right now IRL in person. It's pretty easy online. I don't do it but a bunch of people have tried to scam me, especially the poor Nigerians. The average Nigerian makes $2 USD a day, but they can make $60K USD from scamming, so I fucking hate it, but I get it. My poor mom got romance scammed by a Nigerian for $30K USD about 5 years ago so I wanted to go after them (well, the ONE) but he's a fucking Igbo warlord and I live in my mom's basement, basically, so he's got me outresourced ATM LOL I speak some Yoruba but can't get the hang of Igbo, GDI
I didn't read the article on prediction markets. Right as you were getting to lampshading the joke, I was debating whether to drop a comment asking if you'd been getting into edibles and posting while striding through whatever galaxies you were visiting at the time.
What I found missing here is that in order for (1) and (3) to work for whatever a "store" (quotes omitted from here on) actually is, this means:
- a storekeeper must give up their anonymity in order to operate a store, otherwise law enforcement cannot punish the storekeeper (they can, however, shut down the store, but see the next point)
- setting up a store must have non-zero cost associated with it, otherwise escaping a bad reputation becomes too easy (who bothers cross-referencing the name of a storekeeper with the owners of other stores that were shut down by the police/government in the past?)
Both trivially apply to stores, but they don't trivially apply to conceivable store equivalents; neither in a technical nor moral (as in: people have demanded that either point must not apply in $context) sense. Especially the second point is often seen as an anti-pattern, and I would tend to generally agree - as much as I like solving problems by putting a (fair) price tag on things, proposals in the spirit of charging for emails to combat spam are generally extraordinarily stupid.
Part of the incessant nitpicking I think is just pure status quo bias - the west had become a vetocracy. As a result, the only things that actually can be built are ones that either use power to bypass the veto points or build on virgin terrain where no vested interests have yet accreted to oppose everything. Lots of institutions exist now that we would never allow to be created if they were put up for a vote.
I was involved in the criminal prosecution of a liquor store owner who hired someone to burn down the liquor store across the street.
The hired mook and his friend tried four times, did some damage, but never managed to actually burn down the rival store. The cops caught the mook, who ratted out the owner.
> If you’re wondering why people aren’t going to get an advantage in the economy by committing horrible crimes, the answer is probably the same combination of laws, ethics, and reputational concerns that works everywhere else. It’s possible to create systems where these safeguards fail, but you have to try pretty hard.
> If something would only work if it had regulation and a legal infrastructure, assume it will develop that regulation and legal infrastructure once it gets big enough and people are sufficiently sad about it not having it (people could resist, but that would suggest it’s not so obvious to stakeholders that it needs the infrastructure in order to succeed)
The problem is when advocates also demand that existing regulations be dismantled in order to let their project go through (prediction markets and *especially* crypto.)
This made my day. Somehow I’m reminded of the two economists who walk right past a fifty dollar bill on the sidewalk, noting that if it was real someone would have picked it up already.
I wrote my own take on that one:
https://progressandpoverty.substack.com/p/the-martian-and-the-economist
This was really good!
The coin at the end reminds me of this https://xkcd.com/795/
I'm a macroeconomist, and I approve of this remark
The upshot here is that so much of morality and ethics is driven by status quo bias. If something currently exists and is allowed, people will never dream of ending it based on some theoretical objection. If it’s not allowed, people will not see the benefits, think about every possible objection, and be so overwhelmed by how many there are that they’ll throw their hands up and say we can’t have this new thing. Some of the objections here, “rich people will benefit more” or “someone could rip off someone else,” can be made towards anything.
I feel like that this is the upshot of “[Self-Serving Bias](https://slatestarcodex.com/2018/01/11/self-serving-bias/),” not this article. This one is more about the urge to bring up spurious objections to knock down ideas that violate status quo bias.
Isn't that a fully general argument for things never changing?
In regulatory contexts where everything is forbidden unless explicitly allowed this is pretty close to what is observed.
This is precisely my experience when attempting to argue in favor of "loser pays" tort systems in the United States. Everyone seems to think that the first objection they think of is completely devastating to it ever being feasible, despite its use in almost every other developed country.
Maybe you could lead by arguing in favor of a system where anyone can sue someone else and pay no extra cost if they lose regardless of how valid the suit was
If they oppose this idea you can say you agree that there's a reason this is an unusual legal system and the US should consider joining other countries who have a different system
Sometimes I think that status quo bias is the only bias and every other bias exists merely to support it.
I run into this [over and over](https://www.facebook.com/37618178/posts/10105828177717307/).
I thought this was a followup to the cryptocurrency post until I got to the end. I guess there is a pretty strong pattern to the kind of objects people raise when they aren't informed enough to object coherently, but still want to sound like they are too smart to be duped.
I thought this was about the cryptocurrency post too!
Yeah, but... crypto is a field where many similiar objections do prove to be justified at an alarming rate. So at the very least it's worth spending some thoughts on whether prediction markets are closer to the "store" landscape or the "crypto" landscape, and why.
Seems to apply equally well there.
+1 thought this was about crypto for most of it as well.
Meanwhile, the line between people who are actually smart enough to not get duped and people who are more accidentally walking examples of survivor bias is thin.
It has nothing to do with being smart, asshole. It's about being vulnerable. I suppose you're not vulnerable in any way.... wait, you use social media. If I wanted to, I could investigate and own you within a week. But I'm not an asshole.
A friend lost $250K USD when his crypto spec got called in early. I would've just dissed them and paid nothing, but he's a stand-up guy, apparently
I do notice that, unlike prediction markets, there is in fact a thriving arbitrage market based on buying stuff at low prices in one store and selling them at high prices in other stores. These mispricings get corrected slowly, if at all. Unsure what implications this has, though of course physical goods and prediction market shares aren't really commensurate in many ways. It's probably easier to have perfect information in a market that deals in information, rather than goods.
I’d have to see examples, but I assume this is mainly convenience charges.
I think almost all store profit is a convenience charge.
But specifically, I know someone who makes a living buying at thrift stores and reselling online.
> I think almost all store profit is a convenience charge.
Er…maybe! I mean, there’s probably more to it than that, but certainly going to Kroger is easier than making arrangements with individual farmers.
Sorting through clothing donations is just straightforwardly work.
There's also the "reselling Trader Joe's stuff in places that don't have a Trader Joe's", right?
I'm 90% sure the small Hispanic grocery store in my neighborhood buys all of their non-specialty merchandise from big box stores and marks it up. People pay for the convenient location and the fact that there will be a Spanish speaking worker to assist them.
That’s not arbitrage, that’s an actual service.
Which is exactly what groceries do. You don’t want to drive all the way to a farm or a wholesaler in order to talk to some warehouse guy or farmer with poor customer service skills and buy 100 cabbages because that’s the smallest lot he will sell them in.
You want to talk to a friendly service-oriented person who is willing to sell you exactly one cabbage and provide a clean, well-lit environment that’s located near your house.
This is a pretty easy service to provide, which explains why groceries have such low margins generally, but still, groceries and markets and supermarkets exist because there is value in them. Likewise, the Hispanic grocery is just extending this another step, providing a few specialty goods not found elsewhere and providing goods sold at wholesale much more conveniently to people who can’t or don’t want to speak English while shopping.
Well, you could learn Mexican or Honduran or whatever. I speak English and Spanish (Colombian, regular Spanish, and Chilean) fluently, Italian passably, can fake my way in French and am learning Russian and Japanese ATM.
They're doing the same thing on eBay and Amazon. If you're aware of it and it bothers you and you're not particularly altruistic or have disposable income, don't shop there.
Markets can stay irrational longer than individuals can stay solvent.
There's actually a mystery novel, based around economics, in which one of the main plot points revolves around how much prices of goods can vary from place to place: https://en.wikipedia.org/wiki/The_Fatal_Equilibrium
TL;DR it depends on the price of the goods in question; if the cost of going from 1 store to another and back to compare prices is greater than your savings, it makes sense for consumers to just buy at the store that's closest to them or whatever. A 3rd party might be able to extract some of this value, but it would probably require a lot of work, and wouldn't be worthwhile for the stores to either do it themselves, or put a bunch of effort into equalizing prices.
[Epistemic status: am largely uninformed layperson wrt all subject matter, likely talking out of ass and misinterpreting theory; but Scott did explicitly ask for normies to also Notice Confusion, so]
Oh, for sure - some $100 bills on the ground are geotemporally bounded, some take more than $100 worth of effort to pick up, some involve other opportunity cost/moral-ethical tradeoffs that make them still not worth it. But they do exist if one goes looking! I just found the repeated "prediction markets obviously work/avoid X complication because EMH" to be a bit flippantly Proves Too Much, which the comparison to buying actual physical goods at stores makes explicitly absurd. (If funny.) Like I found it kinda weird that Scott gives Goldman Sachs credit for being the preeminent snatcher-of-$100-bills, but then doesn't (seem to?) follow through to the implication that *if there really were* scalable returns of infinite $100 bills...the Goldman Sachii of the world would already have flushed prediction markets full of enough cash to solve the volume issues, and then there'd stop being easily-identifiable mispricings. That they haven't suggests there's other barriers at play, and I really don't think trivial inconveniences like CFPB rulings would get in the way when the potential prize is $infinity.
Some arbitrage examples off the top of my head:
*I know a company infamous for a deeply underpriced loss-leader produce item, which some enterprising customers then turn around and sell elsewhere at market rate. Lack of identifiable packaging creates fungibility, and all that. Low-margin but longstanding practice.
*That classic pizza arbitrage story from years ago, anyone coulda done it, but logistics made true profit difficult and of course it Felt Bad: https://themargins.substack.com/p/doordash-and-pizza-arbitrage
*Certain entire consumer goods markets have become effectively captured by professional resellers and turned into near-commodities, with 3rd-party exchange middlemen companies set up to profit off the authentication and transaction costs. (A true monetization of "Trust, But Verify"!) This includes sneakers and GPUs, plus an assortment of other random shit like handbags that proliferates by the year. Obviously such 3rd-party commerce has existed for ages, but modern incarnations like StockX make the "career eBay resellers" of yesteryear look quaint by comparison; the scale and ease of entry are just incomparable.
(yes, I know, commodities trading isn't quite the same as pure arbitrage...but it turns on the same foundation of profiting off different market-clearing prices. It's sorta scary how many otherwise-average people I run into in everyday life who do this as a side gig __and make hundreds or thousands of dollars off it__. Even as a mere consumer, I'm constantly struck by the wild differences in equilibrium prices for same item between even the most popular exchanges*; there are lots of $100 bills laying around there. Feels like it's mostly the...reputation, tawdriness of the activity, that keeps the markets irrational. The prediction market equivalent of not-enough-volume-to-correct-mispricing, it'd just take a lot more $/people than are currently invested.)
*[while being cognizant that there's an element of cartel pricing, because it's frequently not actually possible to buy such goods at actual MSRP in actual stores - they get snapped up immediately by resellers...]
On the very first topic, when I was a stripper, I got confused when the new hundos came out and often gave out change for one when in fact it was a $50 bill. But then it worked the other way too. Win win ITLR.
On the economic points, I'm fascinated as I am a probability and statistics expert now who advantage gambles for a living and am somewhat of a macroeconomist, but I've been up for almost 24 hours and I'll have to read it later. Good stuff, though
> But they do exist if one goes looking!
I mean, if you go looking, it's no longer lying on the sidewalk. Of course it's possible to make money--but it will require a similar level of work and risk as anything else. No one is saying it's impossible to make any money at all! The point of arbitrage is that's is near-0 risk and near-0 work once you have it set up.
> Like I found it kinda weird that Scott gives Goldman Sachs credit for being the preeminent snatcher-of-$100-bills, but then doesn't (seem to?) follow through to the implication that *if there really were* scalable returns of infinite $100 bills...the Goldman Sachii of the world would already have flushed prediction markets full of enough cash to solve the volume issues, and then there'd stop being easily-identifiable mispricings
I'm not sure this follows. Limitations on prediction market volume come from things like regulations, betting limits, and transaction costs. Overcoming those is possible, but might be very expensive up-front, and some of it would allow for others to compete in the prediction markets as well. And the goal, yes, is to make markets that are efficient, and thus no more profitable (percent-wise) and probably less profitable (volume-wise), than other markets. I think Scott's point is that *if* the market were less regulated and high-volume, then Goldman et. al. would be capable of swooping in with lots of money to correct obvious mispricings.
At the risk of horribly mangling overly-literal metaphors, I feel that a lot of people...don't make a habit of looking down in the first place? One of my weird tics is feeling obligated to pick up money off the ground if feasible, and there's really quite a lot of it once one develops a Knack! (Learning the sound of coin drops vs other metallic-on-surface, pattern-matching the expected metallic refraction of currency vs other metallics, etc.) Actual bills are, of course, much rarer than coins...but it only takes four quarters to make a $1, and they're easily at least four times as common on the loot table. There's always the opportunty cost of "well I make $X salary and it's not actually worth my time"...but I think it really is difficult to pencil that out to the second. Of the entire possibility-space of immediate actions one could take in the next few seconds, directly purely profiting tax-free by collecting change intuitively seems like a pretty good choice, if available?
So it goes with arbitrage, too - it's always fascinating how little people actually comparison shop, nevermind reason through that to seeing a potential profit. (I think this might be a socioeconomic class thing, with Tyler Cowen-like fine gradations of rising or lowering status...clipping coupons is gauche, fretting over tiny differences between inelastic goods is not classy, sometimes The Price Is The Point, etc. Or the general disdain for trading unless you're a Certified Businessman. Homo economicus, we are not, mostly.) Similarly as a general principle, the optimal amount of arbitrage in a mature market is not actually zero...Scott's obviously hyperbolic about "repeat for infinite profit", but the ideal target is probably something like, not enough for anyone to bother exploiting if they have a halfway-real job otherwise.* That's too much deadweight loss otherwise.
As for the other thing, maybe my heuristics are too cynical, but I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those. I think the fact they haven't, really, is a sign that it's in fact too difficult/not actually a potential meaningful profit center. (And certainly not due to them being ignorant of/about prediction markets, they are ever in the business news.) But fair enough point that not being able to corner such a market might be a big part of the nonattractiveness. One-time cash injections are a lot less attractive than recurring revenue streams, if one is going to spend high effort in the first place. (Obvious solution: they set up their own prediction market, Goldman Mean.)
*I'll always remember the GameCube RPG "Paper Mario and the Thousand-Year Door", for explicitly programming an arbitrage opportunity into the game's shops and giving the player Obvious Hints about exploiting it. You bought X at discounted price Y in Town A, and resold it for profit at overly high price Z in adjacent Town B. (Which you had to travel back and forth between anyway, as the ordinary plot progression.) Near-0 work and near-0 risk, other than clogging up one's inventory with otherwise-useless items. It felt like an object lesson - because *the infinite money still wasn't really worth it*! This wasn't a game where one had terribly much use for money overall, and it was easy to end up with more than enough just by playing normally. That feels like the proper amount of arbitrage - Not Enough To Seriously Bother. Contrast to some other JRPGs where legal money exploits were, in fact, the only viable way to fund proper minmaxing...then it did become your actual job, not a side gig. (And much less fun as a result.)
> Homo economicus, we are not, mostly.
Sure, but in this case it's not at all clear to me that anything is really going wrong. In order to operate a meaningfully profitable business exploiting, say, differences in prices at different stores, you would have to do a comparable amount of work to opening a store of your own: Find efficient ways to get lots of goods, attract lots of customers, handle logistics, front a large quantity of capital, deal with taxes, etc. It seems pretty rational to me for most people not to do this (or at least, comparably rational to not starting their own business in general). And certainly businesses exist whose goal is to connect consumers more directly to manufacturers or suppliers to reduce prices this way, but you mostly see it in large purchases (flooring, furniture, etc.) most likely because that's where the profit is.
Even as far as comparison shopping goes, well, xkcd put it best: https://xkcd.com/951/
> As for the other thing, maybe my heuristics are too cynical, but I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those. I think the fact they haven't, really, is a sign that it's in fact too difficult/not actually a potential meaningful profit center.
Well, again, you have commons issues. Any one bank might only capture a small portion of the value generated, which is why I said "this argument applies if prediction markets have bet limits, regulations, etc. removed." But also, the size of prediction markets may not be that large and lobbying is expensive. Even if a bank thinks they could get an above-average return, the volume would have to justify the upfront cost.
> I'll always remember the GameCube RPG "Paper Mario and the Thousand-Year Door", for explicitly programming an arbitrage opportunity into the game's shops and giving the player Obvious Hints about exploiting it.
I'm very familiar with the game. I recently replayed it, and yes, you get a lot more items than you really need for most of the game, as well as plenty of coins and badges. Lots of money was only really useful if you want a lot of rare items or cosmetic badges. It was never even clear to me if it was more time-effective than just repeatedly killing enemies somewhere.
> I figure if the wizards who brought us such novelties as mortgage derivative junk bonds see a potential $not-literally-infinite-but-very-large-if-only-for-some-annoying-regulations...they'd do the shenanigans to bend or break those.
Why bother? There are plenty of legal profit opportunities, especially in a [ZIRP](https://www.readmargins.com/p/zirp-explains-the-world) (thanks for leading me to that article) world. Why risk getting slammed with millions in fines?
The job of these folks is to go after easy money. It’s not that they’re money-hungry in the sense that they’ll do anything to get rich; they (or their employers) already *are* rich. Their job is to figure out ways to enhance that with minimal downside risk.
Also…I feel you’re arguing against something Scott’s not saying, or I’m not understanding your claim. Scott isn’t, it seems to me, saying that prediction markets are, right now, obvious huge money makers to the big money folks. He’s saying that, *if* prediction markets became big enough to actually matter, which he hopes they do and is trying to make happen, *then* some objections people have in those situations don’t really hold water because Goldman-Sachs would swoop in and fix them. He’s not claiming that there are massive profit opportunities to be had in these markets *now.*
(Ah, thank you, ZIRP is a term I've been missing in my concept-space. More concise than "tech thrives under conditions of easy money and a weak general economy, such as happened after the GR and arguably right up until very recently")
Hmm, maybe it's just a difference in interpretation then...or it's me missing the point. I feel like there are some competing epistemic claims:
1) Prediction markets are not, in fact, a $100 bill in even optimistic scenarios. (But they could still be prosocial gambling.)
2) Prediction markets are a real $100 bill, but stuffed between the couch cushions, and this deters even ordinary people from making $800 betting on elections every few years.*
3) Prediction markets are a conditional $100 bill, but protected behind In Case Of Emergency, Break Regulations glass. And no one with power currently needs an additional free $100 that badly, yet.
4) Prediction markets are a real $100 bill, and everyone assumes it can't be real because otherwise someone woulda picked it up by now.
The sense I got from reading the draft/spoofed Store FAQ version was that the thought experiment "proofs" underlying the various arguments and counterarguments rely on doing some sleight-of-hand between these epistemic claims. But only one ought to be true, or truer-a-greater-probability. That's where I'm noticing my confusion, at any rate. (I haven't finished reading the final published version to see if it's meaningfully different, perhaps things were cleaned up some.)
*I do suspect this is a big reason why more people don't try them out, even the playmoney ones, because...not everyone actually enjoys gambling? Especially if it's weird, and sorta dubiously legal, and opportunities don't readily present themselves whenever convenient? At some point it starts sounding less like "get boundedly infinitely rich" and more like "working for a lot less than you make in your actual job, on your free time". Which makes it just another arbitrage opportunity not big enough for the median person to worry much about, eg (2), and thus I'm still skeptical. Dath ilan's markets sound wonderful, but that's starting from an entire other baseline of culture, law, tech level...
These are valid concerns (though go back and look at Note 1 on your pizza article). There will definitely be hundred-dollar bills stuffed into dark corners. Friction and information imbalance are things. I agree that perhaps Scott is being a bit too glib here.
On the other hand, as Alex Zavoluk says, that there are arbitrage possibilities occasionally laying around places does not mean that Goldman Sachs or somebody is not going to swoop down if a systematic major profit opportunity presents itself. So while I feel this is a valid objection, it’s a minor one in this context.
Not your intention, but I think this actually does highlight how fragile society is. Everything rests on most people not playing hardball with incentive structures.
You could’ve added, “the merchandise is just available for anyone to take, and it’s illegal for stores to physically hurt their customers. What’s stopping customers from waltzing in with a shopping cart, filling it up, and not paying?” And this would’ve been equally implausible until about 2 years ago.
Is it that society is fragile or is it that robust things look fragile if you look at them the right way?
I mean, society has continued to exist for some time in many different circumstances despite the fragility it seems to have.
What country do you live in, friend? I'm in Las Vegas, Nevada, USA and just went to Walmart to buy ingredients for a homemade clam chowder where I expected to spend less than $10. I ended up spending $30. A fucking quality loaf of sourdough bread costs close to $6. I'm not made of money, pal
I also live in the US, but I don't see how your comment is relevant to mine?
I assume maybe you're saying society no longer exists or is on its way out because we're in the middle of an inflationary period?
Exactly. Except this particular inflationary period was caused by the knee-jerk response our government had to the Pandemic, where it suspended so many jobs that it had to subside people's incomes for 2 solid years, and the horrible decision it made to give business owners with a certain number of employees Pandemic Assistance Relief that is still continuing and is costing taxpayers billions of dollars. I have an acquaintance who owns a number of small businesses, and he expects his subsidy check to be about $700,000 this year. And that's just one business owner with 4 separate places of business. He is and was profitable during the Pandemic. That assistance, in general, was a travesty and was one of the root causes of our current inflationary period. https://www.usa.gov/covid-small-business-loans
I mean sure...but society still exists and functions. I wouldn't be surprised if most inflationary periods are caused by dumb decisions somewhere.
Actually this seems like a decent example of how what seems fragile maybe isn't?
Despite the massive amounts of money wasted, society doesn't seem on the verge of collapse.
I believe we are in the midst of a neon swan event. https://capital.com/neon-swan-definition-breaking-global-velocity-what-is A perfect storm of a plague (and thanks a lot, Boston University, for tinkering with COVID to the point where its mortality rate in their lab is close to 80% instead of single digits. They did it with government money, too, those bastards), supply chain collapse, massive inflation and debt on a dwindling middle class, and a potential nuclear war due to Russia's non-maintenance of their nuclear arsenal https://nationalinterest.org/blog/reboot/russias-strategic-nuclear-weapons-are-complete-duds-198528. An accident waiting to happen there. Undercover saboteurs destroying pipelines that provide natural gas and heating oil from Russia to Europe, as we prepare to enter into an unpredictable winter made more chaotic by global warming. The likelihood of the collapse of society becomes increasingly more statistically likely based on these and other underlying financial instability.
It's not even illegal for stores to physically hurt shoplifters, it's just liability fears that stop them from giving chase / physically restraining them. The more shoplifting trends upwards, the more I expect these kinds of policies might change.
You think they give a fuck? I've seen shit that is illegal from 'Security Guards' with a God complex where if this were Singapore, they'd be publicly caned.
Walmart likes to arrest people who use self-checkouts and accidentally miss an item. They do it all the time. Their scam is that they impose a fine somehow of around $200 not to press charges. Fuck Walmart. If they didn't have the kind of cat food my 17-year-old asshole cat likes, I'd never set foot in there again.
https://www.yahoo.com/lifestyle/one-reason-never-self-checkout-193940833.html Sorry the source is gross Yahoo! news but I'm too tired to find a legit article. But it's true.
Have you been to a CVS in San Francisco lately? The one I went to had almost every shelf protected by a plastic door that an employee with a key had to unlock. It seems like the company found a solution to the shoplifting problem; it's inconvenient, but you can still buy toothpaste there.
Interesting, and sad. It's like city areas where everyone has bars on their windows - sign of a broken society.
My solution is, don't own anything and have vigilant neighbors.
A local pharmacy chain employee told me the most shoplifted item were sanitary napkins and tooth supplies. People are fucking poor and struggling against this horrible inflationary period we're currently suffering because during the Pandemic they were printing money and giving it away, and now the bill is due. Plus, every employer who has X numbers of employees are still cashing in from government grants. It's hopeless
https://www.usa.gov/covid-small-business-loans
These "stores" sound like a really bad idea based on all of those objections.
Communism doesn't have stores, so it must be good.
Let's try communism.
The communism that can be tried is not the real communism.
That’s amazing.
Thank you! :-)
Yay! If only communism, like democracy, didn't eventually digress into Fascism. Damn
Should we assume you meant "capitalism" instead of "democracy"?
both
"Communism doesn't have stores"
That isn't even remotely true. Do modern Americans actually think the Soviet Union didn't have stores? Or that modern China, Vietnam, and Cuba don't? What a bizarre assumption.
Is it weird that I see nash equilibria everywhere since reading Hidden Games? The answer to practically all those questions is “because it’s not a Nash equilibrium”
However!
Stores sell things for money, but we know that some groups have more money than others. Therefore, the existence of stores disproportionately benefits the already-privileged, widening inequality.
see point 8?
I'm guessing this is satirizing people raising objections that were specifically addressed in the post.
Yeah, this comment suffered from a bad case of self-editing before posting, which basically reduced it to an already-covered case. It was originally leading into not only calling Scott evil, but also calling for the abolition of money, private property, and physical bodies.
Guess what, Moon Moth. It's already happening, all of it. AI is the next Emergent Consciousness. It doesn't need money, or private property, or a physical body. Homo sapiens were a transitional species with large brains but disportionately and inconsistently controlled by the archphallium, or 'reptile brain'.
"The or primitive (reptilian) brain, or "Basal Brian", called by MacLean the
"R-complex", includes the brain stem and the cerebellum, is the oldest brain. It consists of the structures of the brain stem - medulla, pons, cerebellum, mesencephalon, the oldest basal nuclei - the globus pallidus and the olfactory bulbs. In animals such as , the brain stem and cerebellum dominate. For this reason it is commonly referred to as the "reptilian brain". It has the same type of archaic behavioural programs as snakes
and lizards. It is rigid, obsessive, compulsive, ritualistic and paranoid, it is "filled with ancestral memories". It keeps repeating the same behaviours over and over again, never learning from past mistakes (corresponding to what calls the ). This brain controls muscles, balance and autonomic functions,such as breathing and heartbeat. This part of the brain is active, even in deep sleep" I'm not crazy about my source here as it delves into metaphysics, which it shouldn't, but here it is anyway: https://lecerveau.mcgill.ca/flash/capsules/articles_pdf/triunebrain.pdf
I was more thinking of something along the lines of that bit from the Hitchhiker's Guide:
> "For instance, when the Editors of the Guide were sued by the families of those who had died as a result of taking the entry on the planet Traal literally (it said "Ravenous Bugblatter Beasts often make a very good meal for visiting tourists: instead of "Ravenous Bugblatter Beasts often make a very good meal of visiting tourists"), they claimed that the first version of the sentence was the more aesthetically pleasing, summoned a qualified poet to testify under oath that beauty was truth, truth beauty and hoped thereby to prove that the guilty party in this case was Life itself for failing to be either beautiful or true. The judges concurred, and in a moving speech held that Life itself was in contempt of court, and duly confiscated it from all those there present before going off to enjoy a pleasant evening's ultragolf.”
But if you're talking about AI, paperclips work too.
exactly
Well Scott you get the killjoy award. Don’t you understand that it’s enjoyable to shower you with passive-aggressive , neurotic, nitpicking objections? Instead of being dismissive, how about budgeting 3 hours a day for the next month to reply to each and everyone kindly and in great detail.
PS I was crapping around with DALL-e and got it to make quite a nice Darwin-and-the-finch stained glass image. It’s here: https://photos.app.goo.gl/2XNbUJxh84hbFgYz5
I like the stained glass chaffinch!
Nice image!
Noice! I love playing with DALL-e 2. Can't wait for further iterations. MetaHuman Creator is also nice. My guess is that in the next year, maybe 2, you won't be able to tell a deepfake with the human eye, even from profile (this was one way to recognize deepfakes, until now, that is). https://www.youtube.com/watch?v=qJ596eXPqHc This tutorial was made last February. That's almost a year. Imagine the logarithmic progress that a piece of software like MetaHuman and others are making. We have a year, tops, before we won't be able to recognize a real human on FaceTime or an AI-generated one.
I am crazy about DALL-e also. It's like a positive addiction. What do you like to do with it? For me, the Darwin stained glass is sort of a one-off. I have mostly not been successful at getting it to make things that look anything like what I have in mind, so now I don't try. Instead I enter phrases that aren't really clear and complete instructions, then play around with what I get, sort of surf on the randomness. My favorite results are actually the grotesque ones. I put a set of mostly grotesque DALL-e illustrations of oldies love songs up on google drive. It's here if you want to have a look: https://docs.google.com/document/d/1ICtbvkBZPgvV6dZ330dZE4eBMli8iEKV/edit?usp=sharing&ouid=105377617742016537731&rtpof=true&sd=true
Hi! So I requested permission to view your work. I'm so excited to see it!
"I have mostly not been successful at getting it to make things that look anything like what I have in mind, so now I don't try" for sure, right? But I appreciate the 'creative license' the AI generates. I like to put in styles, like 'impressionist' or 'surrealist'... My boyfriend is really into it too. Do you have an Instagram account? I hate Instagram and Pinterest but I am busy making other websites for money and not for pleasure right now (I'm a web dev/designer/UX-UI gal). Thanks for sharing!
"If something would only work if it had regulation and a legal infrastructure, assume it will develop that regulation and legal infrastructure once it gets big enough and people are sufficiently sad about it not having it (people could resist, but that would suggest it’s not so obvious to stakeholders that it needs the infrastructure in order to succeed)"
This claim needs substantially more evidence than presented in this article. In fact the converse seems equally likely based on history that good things only become big after regulatory and legal infrastructure exists.
I don’t think these claims are at all in conflict. “Big enough” means “popular enough to come to the attention of legislators,” who then enact legislation that allows it to become genuinely big. Like pretty much exactly where crypto is now.
Just think of it as being similar to the "banknote on the ground can't be real or someone would have picked it up already" thing: if regulation was needed, someone would have made some; no-one has, ergo it is not needed ;)
Oh, if only the world actually worked that way…
I think maybe the moral of the story is that selling the benefits is more important than overcoming the objections. I understand how stores improve my life by helping me get access to all kinds of cool shit and thus am willing to take the risk of being sold an inferior product every now and then. But I don’t really see how the existence of polymarket or whatever has done anything for me so I can’t muster the enthusiasm to wave away the objections. (Maybe sort of in the same way I can’t really get terribly tied in knots of worry about AI risk because I only experience AI as beneficial — it helps me make art and drive my car and has never once turned a single family member into a paperclip.)
I think you’ve undermined your own case here. You’re not taking AI risk seriously because no one has overcome your objections—or are you saying that it’s because no one has sold you on the detriments sufficiently? I mean, what could be worse than the entire world turned into paperclips receding at the speed of light?
Turning the world into bad quality paperclips?
I had thought this was about crypto until it was about prediction markets.
I'm thinking that this is partly (1) the bar should be pretty high to overturn "try it and see" and (2) there's a crude and more reasonable form of most objections. The crude version is easier to make fun of.
Despite common behavior on social media, interesting objections don't have to be fatal flaws. They might be better thought of as adding some nuance. One wouldn't expect people to anticipate highways, suburbia, and smog as a side-effect of the invention of the automobile, but people will still try to anticipate second and third-order effects. (And probably get them wrong.)
We do know that some stores will try to "cheat" the unwary with misleading advertising, etc. Sometimes there are lawsuits. Often products are not as good as promised. We also know that shoplifting is sometimes a pervasive problem, and also that there are problem customers who take advantage of over-generous return policies.
Historically, the idea of self-service in grocery stores had to be invented. Before that, it was thought that the goods had to be kept behind the counter. See: https://en.wikipedia.org/wiki/Piggly_Wiggly
Self-checkout is a similar recent innovation.
Interesting. I am totally using this the next time someone gripes that Wal-mart is destroying jobs with self-checkout.
I think a steelman of a more reasonable store-objector is something like:
"Yes, stores will probably have real benefits, and I agree that we should try them out. But I think that even in a world with widespread stores, the practicalities will mean that customers often end up doing a fair bit of comparison shopping in order to get good prices, many people will have to drive farther to reach a smaller number of centralized stores, some people will miss the social connection of bazaars, shoplifting will be reasonably common, advertising on many products will be misleading, stores in places without repeat customers like airports will tend to have especially poor-quality wares, and many of the employees will have kind of crappy working conditions.
Claims that store introduction will lead to perfect price discovery and product distribution with maximum convenience forevermore seem importantly false to me because of these flaws, and these considerations should be accounted for when deciding how much to value store legalization over other policy interventions."
I think some people who complain about prediction markets are just doing the bad thing that this post accurately satirizes, but other people are more like the example above, mentioning a whole lot of things that are actually problems with stores in the real world (even if they're a big net gain over the previous bazaar environment) so that discussions can weigh the pros and cons accurately.
And for the latter type of person, there’s the Prediction Market FAQ.
"These considerations should be accounted for when deciding how much to value store legalization over other policy interventions."
What I find frustrating about a lot of the critiques of prediction markets is that they *don't* explicitely compare predition markets to the other viable alternatives. Prediction markets have a ton of forseeable flaws (which are inherent to being a market structure), but the alternatives--like credentialed expertise--seem equally if not more flawed.
This honestly reminds me a lot of self-driving car criticism as well.
"If self-driving cars try to avoid hitting people, couldn't you cause traffic accidents by running into the middle of a busy freeway and trying to get hit?"
Yes. In fact, you can do the same thing with human-driven cars today.
Please don't.
"If self-driving vehicles are used to deliver packages, couldn't you take a gun and shoot the vehicle and steal packages from it?"
Yes. Again, this is possible today as well, and I will reiterate, please do not do that.
"What if there was a self-driving taxi with a passenger? Could you stop the taxi by force, then kidnap the passenger and ransom them for money?"
Please see the previous two responses.
>I’m having trouble explaining what I mean here.
I’m going to call this “trying too hard to find objections.” It is, perhaps, *actual* nitpicking; coming up with objections for the sake of coming up with objections.
In other words, the problem is that people are trying to find things that *sound* like they’d make good objections, without checking to see if they actually *believe* those objections. It’s a form of sophistry, which isn’t helpful, because every bad argument style is a form of sophistry.
>But there’s an even deeper heuristic, something like “try it and see!” Don’t do this with communism
Oh God would someone please do it with communism.
I dream of having an actual economic experiment, which splits a country (or even a city) down the middle and makes one half communist and one half capitalist. “But haven’t we already done this? What are East and West Germany and North and South Korea other than exactly this?” Yes, but in each of these cases, it’s “not real communism.” So we agree beforehand on the terms, how the system will be set up, how decisions will be made, etc., so that it will be very difficult to say, “That wasn’t real communism/capitalism!” Everyone involved agrees that a winner will be declared after X time using Y metrics, and we can settle this damn debate once and for all.
Yes, yes, I know it won’t work. Communists *define* communism as a system that brings justice and prosperity (I’m not kidding or exaggerating). So any actual communism with a population larger than Dunbar’s Number will be declared “not real communism” once it fails. But, if done fairly and well, this experiment should convince any reasonable person of which system is superior.
Do it with socialism, sure, I'd be up for that; indeed, one might argue such experiments have succeeded in a few places and we just call the existing countries that lean in that direction unremarkable normality now; but communism? What additional benefit does violent revolution bring?
I don’t think you have to have violent revolution to have communism. That’s just the usual means to get there.
...I mean, it's right there in the communist manifesto. Marx and Engels call out revolution as a key difference - possibly THE key difference - between communism and other, reformist, approaches to socialism.
What do you think is left if you take that bit out that, say, Norway or Finland isn't already to some extent doing?
Revolution is how to *get* to communism. It’s not what *distinguishes* communism. If you can get to communism in another way, what’s the problem?
And…er…Norway and Finland are capitalist countries with large welfare states. They’re not anything remotely like communisms or even socialisms.
Right?
>But, if done fairly and well, this experiment should convince any reasonable person of which system is superior.
No. Anybody who is able to identify themselves as a Communist in the 21st. Century has cultivated a highly refined ability to explain away the input of their own senses. Any person who can learn from historical examples would have never dreamed of being a communist in the first place.
I didn’t say “any reasonable communist.”
Hmmm, I don’t think I am sold on this whole “buying things from a store” idea. The case for prediction markets seems stronger and I think we should prioritize that over this whole “store” thing.
Could you use a prediction market to implement a store? Like selling shares in a claim that you will not receive a certain object that you want? Then the store operator could buy shares in that claim and then give you the object, causing the prediction market claim to resolve as true.
Receipts don't actually use ink, they use thermal paper that changes color when heat is applied. The printer applies heat in the shape of glyphs to create the receipt.
I think the reasoning behind 2. isn't exactly that the item varies in value depending on how much you want or need it, but that there isn't an easier way to get it than through stores (of some kind of another). Lack of access is what drives the profit (or rather, ease of access through stores) - less than "this product is worth much more to me than to the merchant because of x reason," it's "I can produce or procure this product on my own for $3,000 (if I can produce or procure it at all), but the store sells it to me for $15."
I'm not sure what this says about prediction markets; I find them boring.
No, it's correct. Literally all trade is predicated on the idea that different people value things differently. You want the item more than you want the $15 and the store wants the $15 more than it wants the item. In other words, it's worth more than $15 to you and less than $15 to the store. Definitionally, if the two parties didn't value things differently, trade couldn't happen
In a prediction market a given event subjective probability is different for different people and that enables trade with positive expected value for both parties
Honestly, IMO there is a top-tier SSC post in here, _if you take out point 10_. With that part included, it's just a response to people having stupid opinions about a specific topic. Without it, it's a grand work of philosophical comedy, making fun of people who have stupid opinions about all sorts of stuff! (See e.g. all the commenters who assumed it was about crypto.)
I'm not sure, I think having it be about a specific thing makes it click more, and then, at least for me, it's easier to generalize from there. Also without point 10 we'd lose the amazing "I hate humor and demand that all jokes be explained in detail, what’s this about?" line.
Just personally, with or without point 10, this is a top-10 SSC/ACX post for me. Good stuff.
I'm reading this in January 2023 because Scott opened up his paid-subs-only posts as a free sampler, so I really needed the explanation once the piece was yanked out of its temporal context.
Quote: “overall I expect these kinds of objections to be overcome by creating the thing, subjecting it to market pressure, and seeing what solutions people come up with.”
…This reminds me of the situation after “die Wende” (as the Germans call it) in Eastern Europe. Approx. 1994 we had some Czech political scientists visiting. They referred to the Cold Turkey-approach to introduce capitalism, and as a side note mentioned that they did not yet have proper bankruptcy legislation in place. I was horrified: “You cannot have capitalism without proper bankruptcy laws. You will be overrun by con artists and buccaneer capitalists”. They matter-of-factly responded that sure, that was highly likely, but you could not introduce laws before people felt the need for them. People needed to experience that first, and then such laws would probably be passed quite swiftly.
..and concerning the “don’t try communism”, here is Boris Yeltsin’s comment from back in the days, when he was asked his opinion about communism in Russia: “Communism was an important social experiment. It was well worth trying it out somewhere. The only sad thing is that it was tried out in such a big country”.
You and the comments fail to address the main issue I see with buying things from stores, which is that it can't single-handedly save the economy. In a time of crushing inequality and sky-high property values, you want us to spend resources building your spherical-cow-economics castles for rich white people. It's insane to focus on growth when we have no stability.
Hey, it's the popular fully general counterargument against engaging with any positive-sum projects of societal progress that aren't guaranteed to immediately increase outcome equality!
If your proposal doesn't lead to a continuously decreasing gini coefficient along all desirable value dimensions, it's simply unconscionable
How about “people are fearful of change in general”
I think this whole analogy is missing something essential: that a lot of these incentives are linked to the store existing in the physical world, and a lot of the schemes in the FAQ have a failure mode of "angry customers come back and threaten call the cops / break your windows". Defection has very high cost, so people are incentivized to cooperate.
When you get to a situation where people can disappear and never be found again and never have to be in contact with the people they're scamming (eg e-commerce), suddenly scams get a lot more frequent and reputation starts to matter a lot more. Anybody trying to run an online shop the way most regular shops are run (you can acquire whatever items you want, and you can leave at any time, but you're expected to pay before you leave, with only very loose mechanisms to enforce this) would go bankrupt immediately.
So I guess the moral is "trust basic decency only as long as the people you do transactions with are within face-punching range".
(But even then, don't trust it *too* much, because shoplifting is a thing in real life as well.)
I see a fair number of complaints online both ways; e.g. artists who do work on commissions or people selling goods online complaining that X ordered such and such, refused to pay/paid late/the cheque bounced or transaction was refused, and likewise customers complaining that they ordered this and that and paid upfront and the item never arrived/was damaged or different to description and they can't get their money back.
And that's with structures and regulations in place to protect both traders and consumers. I can only imagine how dicey it would be with "invest in our prediction market now, predictions resolve in a year/five year's time, you can get rich by using your knowledge!" and then the entire thing folds its tents and vanishes into the night after soaking enough pigeons, and how do you get recompense? Is this a gambling debt? Are gambling debts recoverable? And besides, first you have to figure out who the operator is and where he scooted off to. Since prediction markets are not very common or well-established as yet, the first few available to the mass public, play with real money ones are going to be very fast and loose and the chance of getting burned will be high, because how can you tell the legit start-up from the scammer?
* handwaves wildly*
Something something smart contracts!
"Why think, when you can just do the experiment?"
- Cosma Shalizi's mother
Rolling with your analogy, I don't mind what stores actually can do. But I object to the lazy libertarian argument that usually gets piled on top of the existence of stores, namely that anything worth having must eventually be available at a store, and therefore we can dismiss all non-store mechanisms of giving things to people, deciding which things to make, etc.
my objections to prediction markets are pretty much objections to the lazy beliefs that get piled on top of the actual market.
>If you’re wondering why people aren’t going to get an advantage in the economy by committing horrible crimes, the answer is probably the same combination of laws, ethics, and reputational concerns that works everywhere else.
I do feel like something missing from your account is 'and a massive structure of regulations and social structures specifically built around making that one specific thing safe, both of which took decades/centuries to create.'
I have a lot of my money in the stock market, but if the stock market was 100% unregulated, I would not trust it there.
Lots of things *were* very dangerous before those structures were slowly built around them, even if still positive-utility to have, and I would expect any new thing to be much safer after 50 years of this process than when it is new. But the intuition that established institutions that have gone through this process are momentarily safer than new institutions that haven't, is I think correct.
I've a feeling Substack may scold me for running too long in the comments again, so this is going to be in two parts:
(A) "But once you’re in the store you won’t be visible from the street, so couldn’t the storekeeper rob you and take all your money?"
They don't need to pull a gun on you, there is an entire branch of psychology devoted to "how do we get people to spend more and buy unnecessary goods when they're in-store?" Anyone who has ever gone into a shop intending to buy three items and walked out with a full basket of groceries or unintentional purchases has been a victim/successful subject of this. One of the simplest ways is to do things like change the layout of the store periodically. Customers get accustomed to the layout and go straight to the aisles for the goods they want. Change the layout, and they have to walk around the store to find where you put the tea-bags this time. And while they're walking around, managing the displays so that new items or 'special reduced bargain price' offers are visible means that people will tend to pick up items that they weren't intending to purchase beforehand. Even things like "steer customers to the right as they enter" and "have the smell of freshly-baked bread wafting into their faces the first thing as they come in the door" are all tricks of the trade.
https://www.shopify.com/ie/retail/retail-psychology
https://storebest.ie/the-psychology-of-retail-store-design/
(B) "If a storekeeper sells you something for $1, that means they expect to make a profit selling it to you at that price. Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?"
(C) "What if a bad store used really good advertising to attract customers, and then other customers saw it was the store that all the other customers were going to, assumed it must be good, and went there themselves, forming a self-perpetuating cycle where everyone goes to a worse store and the system never self-corrects?"
(1) Below cost selling: "Selling below cost is a practice whereby a firm sells products at less than costs of manufacture or purchase in order to drive out competitors and/or to increase market share."
(2) Loss leaders: "Loss-leader selling is a marketing practice of selling a product or service at a loss in order to attract customers to buy other products at regular prices."
(3) 'Hello money' and 'pay to play' money: "a charge made by a retailer to a supplier for introducing the supplier's goods to its stores", "demanding payment from suppliers for promotions and shelf space and/or suppliers wishing to have their products featured prominently".
(4) Sales: sales are supposed to be of goods which are marked down in price due to necessity to move stock quickly. Consumer regulation requires that goods offered for sale be of equivalent quality to full-price goods. However, many stores order in special 'sale' goods which are cheaper, flimsier and of inferior quality, and these are put out alongside any genuine sale goods, if any. The customer believes they are getting a bargain because "it's a sale, the price is reduced" but in actuality the goods are of inferior quality and only worth the 'sale' price.
Stores will sell goods at prices below their true value in order to entice in custom. Once they have captured the market, then they increase their prices again. Large chain stores may use this tactic to force the shutdown of smaller competitors in an area, who cannot compete in price. Once the large chain store is the sole remaining outlet in an area, it will then hike up prices again, as now customers are captive to it (cannot access a cheaper store because of various inconveniences).
Various jurisdictions have enacted bans on below-cost selling, which comes in and out of favour. Same with 'hello money'. In brief: if you think you're getting a bargain, you may not be. Stores often sell goods not at their real cost; either they subsidise the reduced price in order to entice and hold on to customers, then hike the prices up, or the price is subsidised in other ways (e.g. suppliers paying to have their goods stocked in the store) or it really isn't worth the money you are paying, even at a 'reduced' price (fake sale goods).
(D) "It sounds like stores avoid shoplifting by checking for receipts. But receipts are just pieces of paper with writing on them. Couldn’t unscrupulous customers fake a receipt pretty easily?"
Scams around shoplifting are numerous and ingenious. Sometimes people will shoplift goods, then come back to the store and ask for a refund on the item. No receipt? That should be a problem, but often stores have a "the customer is always right" policy and instruct sales staff never to refuse or inconvenience a customer (because otherwise the customer will go on social media and badmouth the store) so the sales person, if the fake customer makes enough of a fuss, may just hand over the money without the receipt. And that's leaving out the blatant "I don't need a receipt, I'm just walking right out the door with this item and you can't stop me" shoplifting. Some tricks of the trade below:
https://www.chicagocriminallawyer.com/9-common-shoplifting-techniques-authorities-watch-for/
"Switching tags. In many cases, shoplifters will switch a higher price tag with a lower one in order to pay the lesser of the two prices. To prevent this type of shoplifting, businesses are making a greater effort to label items more strategically."
(1/2)
(E) "Most of the items in stores are in boxes. Couldn’t the storekeeper just sell you an empty box (or a box containing only sandbags or some other weighty objects), then accuse you of having made it up if you complained later?"
Ahem. Let me remind you of the history of Food Adulteration Acts. Grocers in particular had a very bad reputation; part of the mockery of Maggie Thatcher, back in her hey-day, was to parody her as "She was only a grocer's daughter" (both in her rise from lower middle-class origins to becoming Prime Minister, even if she was never toff enough for the Tory bluebloods, and that helping out dear old dad in the shop was where she learned to cheat the poor).
Cue a Chesterton poem called "The Song Against Grocers", relevant excerpt below:
http://www.gkc.org.uk/gkc/books/grocer.html
"He sells us sands of Araby
As sugar for cash down;
He sweeps his shop and sells the dust
The purest salt in town,
He crams with cans of poisoned meat
Poor subjects of the King,
And when they die by thousands
Why, he laughs like anything."
And it *was* a practice to sell sweepings and dust as prime articles, here is where our legislation comes in.
https://www.tandfonline.com/doi/abs/10.1179/030801882789801250?journalCode=yisr20
"Towards the middle of the 19th century, the adulteration of food, often with harmful and even poisonous ingredients, became a serious problem in Britain. Agitation against it began in the early 1850s, when The Lancet commissioned analyses of samples of food and published their result. Eventually this led to the Adulteration of Food and Drinks Act of 1860, a complete failure. Public Analysts, who could test samples of food collected by inspectors, followed in 1872 but many local authorities failed to collect samples. When grocers began to be prosecuted for adulteration, their representatives started to organize and they persuaded a new Government to repeal the offending laws. Finally the Society of Public Analysts and others caused the Sale of Food and Drug Act, 1875, to be passed which proved to be a lasting and valuable measure."
https://www.legislation.gov.uk/ukpga/1875/63/enacted
Milk was a particular target for adulteration; with the proliferation of milk deliveries to the doorstep, unscrupulous dairymen could stretch out their store by watering down the milk, adding chalk, etc.
"The Making of Bread Act 1757 (32 Geo. II c. 29) was an Act of the Parliament of Great Britain, which aimed to protect the making of bread and punish those that adulterated it, for the purposes of protecting public health. It was introduced after a report accused bakers of using alum, chalk and powdered bones to keep bread white."
https://standrewsschoolofhistory.wordpress.com/2019/02/11/death-in-the-pot-the-long-history-of-food-adulteration/
"In 1820, German-born chemist Friedrich Accum, known as Frederick Accum to his colleagues in London, published a monograph written to make your stomach turn. In early nineteenth-century Britain, an increasingly urban population relied on food vendors and a growing industrial complex to provide their daily bread. Accum revealed to them that their flour contained alum, their Gloucester cheese lead, and tea (good old British institution tea!) contained cherry leaves, acting as a rather unwanted, very strong laxative."
If all you are getting cheated by your store-owner is with an empty box, be grateful!
(F) "Aren’t storekeepers incentivized to murder competing storekeepers, or to burn down their stores?"
Fortunately, 'retail wars' is only a metaphor (as yet):
https://www.theacsi.org/news-and-resources/insights/2020/02/25/retail-wars-how-does-brick-and-mortar-stack-up-in-a-battle-against-its-online-retailer/
(G) "Wouldn’t the existence of stores inherently favor rich people? After all, they would have more money which they could use to buy things from the stores."
Yes, this is why we have rankings of stores from poshest to cheapest. Does *your* store have a Royal Warrant?
https://you-well.co.uk/is-waitrose-posh/
https://www.goodto.com/money/cheapest-supermarkets-657819
All of the above is in the service of "yes, people can raise objections and yes, there were and are damn good grounds to raise objections and get regulations passed, because when it's the Wild West with no guard rails, someone is going to get taken for a ride. Stores are a great thing, but they are trying to part us from as much of our money as they can possibly manage, and we do need regulation and to exercise common sense and be aware of how they're trying to manipulate us. Same goes for crypto and prediction markets - open up prediction markets and you are going to have a lot of people losing their shirts and some unscrupulous types trying to use prediction markets as a scam".
I have no idea if this thing survived or went up in a puff of smoke, their website is unavailable:
https://www.siliconrepublic.com/start-ups/irish-start-up-launches-bitcoin-prediction-market
This is an incredible response. Very well done.
Can you guess I once had a job working in a supermarket? 😀
This was decades back, and I would rather crawl over broken glass on the floor of Hell than go back to work in retail. One of the many fun and wonderful memories I have from that time is when there were a rash of robberies in the area, and one of the managers instructed me (and presumably the other staff) that if someone pulled a knife (we weren't yet at the point of easily available guns) and threatened to stab me, then I should lock the till, throw the key someplace it couldn't be got, and be stabbed rather than hand over the money.
Needless to say, I wasn't being paid anywhere near enough to make it worth my while to be stabbed on the job, even if it was only a flesh wound. Any time I hear companies going on about how "our employees are our greatest asset", I remember this as what employers *really* think of their staff: my money is worth more to me than your miserable hide, peon!
And the people I was working for then, I was and remain damn sure that *if* anything had happened, and *if* I had been dumb enough to choose stabbing over handing over the cash, they would have done nothing for me. Oh, you have to take time off to go to the hospital to get stitched up? Well, since you're not working the hours, dock your pay for that! And before the ambulance arrives, make sure you wash the floor after bleeding all over it!
There's an Irish expression (though I don't know if it's solely Irish rather than British Isles) that "so-and-so is so mean, they wouldn't give you the steam off their piss". My former employers were that type.
I am fan of prediction markets, and I am excited to see what they do in the future.
My biggest critique of the Prediction Market FAQ is that it relied too heavily on Econ 101, supply-and-demand equilibrium analysis. It was really more of a "Markets FAQ" than a "Prediction Markets FAQ". If someone "buys" that markets work in general, than the FAQ is convincing. If someone doesn't buy that markets work (which is apparently a really large amount of people?), then it fell flat.
What I would like to see is arguments that are more couched in the empirical evidence than the theoretical justifications. Personally, the reason that I am excited about prediction markets working in the future, is that *they already work right now*! Besides the obvious examples like Manifold markets which explicitely brand themselves as prediction markets, sports betting and the stock market are both very well-understood and well-analyzed. They provide the most compelling evidence for the potential of prediction markets--much more compelling than any theoretical analysis could be.
Markets where perfectly informed participants are free to perform transactions or not with any of a number of competing equally informed and unconstrained counterparts work very well.
Real-world markets typically fall short of one or more of the ideals above, and people's experiences and expectations suffer accordingly.
"sports betting and the stock market are both very well-understood and well-analyzed"
And the function of those is to make money. If someone has investments, I don't think he'd be very happy if "well, I lost all my money but at least the price of those stocks was properly recalibrated". But that's what is being sold here in prediction markets: even if you lose all your money, somebody will benefit, and we'll have found out the real true facts of a particular situation.
Are prediction markets about truth, or about making money? Because if people can't make some benefit off them, they won't use them. And if the enticement is 'you can make money by being better calibrated than everyone else', then the focus has shifted from "finding truth" to "making money".
And when the goal of something is to make money, people will do all sorts of things to make money, and you can forget about 'finding the best answer via the wisdom of crowds'. If somehow it was possible to make money by buying "No" on "Will the sun come up tomorrow?", somebody would indeed buy "No", regardless of knowing full well the answer is "Yes".
I think the whole point here is to create a structure where the goals of making money and finding truth are aligned so that the powererful motivator of making money can be harnessed towards the benificial finding truth.
If you know of a scenario where where buying no for the sun coming up tomorrow will be a good investment then please share it. The idea is that the prediction market is inherently robust against those scenarios
11. The theory is that it's more profitable in the long run for stores to do legitimate business of exchanging money for goods than to rob or scam people, and so it's irrational for shopkeepers to do those things; but most times I've walked into a store, by the time I left I had no money left in my pockets and gained nothing of value to show for it. Why doesn't my experience match the theory?
Reputation takes time to build, and markets can stay irrational longer than you can stay solvent. Meanwhile, theory suggests there should be good stores out there, and indeed other people have better experiences. How are you selecting which stores to visit? Consider adjusting your criteria; or perhaps stores are simply not for you.
This is why I'm pretty comfortable with prediction markets, but very uncomfortable with a lot of ideas involving implementing prediction markets for real-world decisionmaking on a societal level. Once you implement those, the rest of society can't opt out of decisions being made in that way, and if you get a regulatory capture situation where anyone twists the mechanism to their own purposes, then you have a situation where powerful people have a major stake in seeing that the situation persists.
Question number 2, rephrased: "I don't understand the concept of declining marginal utility."
If a storekeeper sells you something for $1, that means they expect to make a profit selling it to you at that price. Doesn’t that mean that you shouldn’t buy it, since it must be worth less than that?
Fwiw, part of the profit embedded in that $1 price is that the product is there on the shelf, the store exists and has lights on so you can see it, and employees to help you find it/buy it. That service isn't worthless to you. So sure, it might only be "worth" 50 cents but if you're going to begrudge the purveyor of the profit, then good luck finding that 50 cent thing to buy. And just because there are folks out there that practice price gouging doesn't change that the service part of pricing has value to the consumer too.
Scott you promised you'd be nicer to communists but the rhetoric has since, if anything, gotten worse. I'm trying at every opportunity to get leftists interested in rat adjacent ideas, sometimes that means defending you personally, this really makes it hard. At least say "authoritarian communism", "soviet style communism", something, throw us a bone!
Is there an example of communism that didn’t turn authoritarian in a community larger than Dunbar’s Number?
The kurds in northern syria had a pretty good thing going, it was a fairly clean experiment as they were protected from outside invasion by an alliance with the US. One major cause of authoritarianism in burgeoning socialist environments is a right wing takeover following a US backed coup, many many examples of that. In particular Allende presided over a largish economy and was strongly committed to a robust democratic structure in his socialist designs, nothing like this has ever been allowed to get off the ground, so there's not much direct evidence to go on. But I'd like to point out that the supposedly socialist authoritarian regimes of today all started out authoritarian, and most of those have become more capitalist while not becoming less authoritarian, and the liberal democracies which have implemented socialist reforms have failed to become more authoritarian, while some that have not actually have done. I'm fairly well married to the opinion that giving too much power to too few authorities is what causes authoritarianism, not the redistribution of resources to poor people.
The problem is that command economies are fundamentally authoritarian. If the government has to decide how much of everything must be produced, there’s no other way to do that than authoritarianism. Any other approach fails very quickly.
Not sure if that's entirely true but I agree it's a bad idea, thankfully it's not a fundamental aspect of a communistic society and actually not even the authoritarian communism we both think is bad. Redistribution is all you need
Look, if we don’t have public ownership of the means of production, we don’t have socialism or communism. If you’ve got trade and profit and stock exchanges and high taxes and wealth redistribution, that’s capitalism with a welfare state.
Public ownership doesn't equal a command economy, and if you consider any type of authoritarianism to be public ownership of the means of production, questionable imo, your definition of ownership should he loose enough to admit many different forms of that.
While reading this my guess was it's about housing policy.
It's pretty hard to steal right now IRL in person. It's pretty easy online. I don't do it but a bunch of people have tried to scam me, especially the poor Nigerians. The average Nigerian makes $2 USD a day, but they can make $60K USD from scamming, so I fucking hate it, but I get it. My poor mom got romance scammed by a Nigerian for $30K USD about 5 years ago so I wanted to go after them (well, the ONE) but he's a fucking Igbo warlord and I live in my mom's basement, basically, so he's got me outresourced ATM LOL I speak some Yoruba but can't get the hang of Igbo, GDI
https://socialcatfish.com/scamfish/nigerian-romance-scams/
I didn't read the article on prediction markets. Right as you were getting to lampshading the joke, I was debating whether to drop a comment asking if you'd been getting into edibles and posting while striding through whatever galaxies you were visiting at the time.
Can I show this to other people?
What I found missing here is that in order for (1) and (3) to work for whatever a "store" (quotes omitted from here on) actually is, this means:
- a storekeeper must give up their anonymity in order to operate a store, otherwise law enforcement cannot punish the storekeeper (they can, however, shut down the store, but see the next point)
- setting up a store must have non-zero cost associated with it, otherwise escaping a bad reputation becomes too easy (who bothers cross-referencing the name of a storekeeper with the owners of other stores that were shut down by the police/government in the past?)
Both trivially apply to stores, but they don't trivially apply to conceivable store equivalents; neither in a technical nor moral (as in: people have demanded that either point must not apply in $context) sense. Especially the second point is often seen as an anti-pattern, and I would tend to generally agree - as much as I like solving problems by putting a (fair) price tag on things, proposals in the spirit of charging for emails to combat spam are generally extraordinarily stupid.
Part of the incessant nitpicking I think is just pure status quo bias - the west had become a vetocracy. As a result, the only things that actually can be built are ones that either use power to bypass the veto points or build on virgin terrain where no vested interests have yet accreted to oppose everything. Lots of institutions exist now that we would never allow to be created if they were put up for a vote.
I was involved in the criminal prosecution of a liquor store owner who hired someone to burn down the liquor store across the street.
The hired mook and his friend tried four times, did some damage, but never managed to actually burn down the rival store. The cops caught the mook, who ratted out the owner.
> If you’re wondering why people aren’t going to get an advantage in the economy by committing horrible crimes, the answer is probably the same combination of laws, ethics, and reputational concerns that works everywhere else. It’s possible to create systems where these safeguards fail, but you have to try pretty hard.
> If something would only work if it had regulation and a legal infrastructure, assume it will develop that regulation and legal infrastructure once it gets big enough and people are sufficiently sad about it not having it (people could resist, but that would suggest it’s not so obvious to stakeholders that it needs the infrastructure in order to succeed)
The problem is when advocates also demand that existing regulations be dismantled in order to let their project go through (prediction markets and *especially* crypto.)