Wednesday, December 31, 2008

The Economics of Charity Exhaustion

As faithful readers of this blog might note, there have been more posts lately than usual. I've been going through all of the unfinished posts, some of which had a few paragraphs written, some with a sentence or two, and some nearly finished. This one only had a title, based on some thought that I had about a year ago.

The basic economic case for charity is hard to make. Economics presumes that people are rational, and make rational choices. When we give something away to someone, we don't usually do so with the expectation of getting a return on it; charity is not an investment. The reward for our behavior must then be something else - social or psychological causes are the first refuge of economics in these cases. The easier answer would be that people are not wholly rational, and sometimes do things just because, but that is not a very useful assumption on which to base a science.

The psychological reason for charity is that it makes people feel good. The social reason is that it makes people feel less bad, and can be used as leverage (bragging rights). In this model, charity is a service. Giving food, money, coats, or time is a way of paying a person or organization in order to alter your mood. Of course, many people involved in charity don't see this as a good comparison, because that means that charity is no better (on a personal level) than spending money on personal things, like videogames, movies, beer, etc. The only real difference is that there's social pressure which can only be relieved by giving.

In a small scale economy, charity can in fact act as a form of investment. If we lived in a village of 150 people, my act of charity might enable another person to become a more productive member of our village, which in turn improves the lives of everyone. It could also improve the giver's life more than the amount it cost him to give. This is why I'm usually more than ready to help out my friends - the return on investment within a social circle is pretty good. The thing is, in a large scale economy, where you're unlikely to see a stranger more than once, the personal material reward for charity is pretty much nothing.

From the point of view of the society, charitable giving is usually pretty worthwhile, because the collective needs to be maintained. The need for collective giving is so strong, in fact, that it's not even voluntary anymore - it's why we have taxes. From this, a cynical person might respond to any request for charity with, "Isn't that what we pay taxes for?" but it should be understood that this makes that cynical person look like an asshole. This was one of the big problems with Katrina - a lot of the charitable giving had people wondering "Isn't this what FEMA is supposed to be doing?"

So charity goes above and beyond the "mandatory charity" which is provided by our taxes. The reason for giving beyond that amount is either psychological or social. But as a consequence of this, the distribution of charity does not have a real basis in rationality. When we give (if we give), we only do so until the point where a subsequent dollar spent doesn't give us a psychological or social benefit equal to a dollar. Because social or psychological pressure mounts over time, this is why people are more likely to give several small donations instead of one large one. This is also the reason for donations to be spread among a number of charities instead of just going to a single one. On top of that, this means that there is a limited amount of charity in the world per year, which can only be increased by the application of social or psychological pressure.

Tuesday, December 30, 2008

The Industrial Society and its Future, pt. 3

First part, second part.

3) Is technology making us less human?

I've put off writing this part for a long time, because this question has another underlying question to it, which is "What does it mean to be human?". There's another reason too - this is probably the strongest argument against the proliferation of technology.

We are far divorced from our ancestors. We neither hunt nor gather. Sex is decoupled from reproduction. Culture takes place on an unimaginable scale. World population was, ten thousand years ago, around one million. We lived in tribes back then. And now ...

Let me quote Kaczynski:
47. Among the abnormal conditions present in modern industrial society are excessive density of population, isolation of man from nature, excessive rapidity of social change and the break-down of natural small-scale communities such as the extended family, the village or the tribe.
This is true, for a given value of normal. Most of human evolution geared us for pack (tribal) behavior under a dramatically different set of circumstances that one might call normal. Building cities, driving cars, and reading newspapers might then be considered inhuman. But that definition would only be embraced by people who want us to go back to basics and give up the technologies that we need to live our lives. The definition of humanity is sort of a transformational target - we adjust what it means to be human based on what our goals are.

But we're also working against some of our base desires. We now have the technology to alter those base desires in a number of different ways, and that ability only increases with time. If our base desires define us as human, then altering them probably pushes us away from our humanity. We also work against our base instincts all the time, but this is somehow considered more human than alterations at the chemical or genetic level.

I don't think that the loss of humanity is such a great tragedy, so long as it does not come with a loss of morality. It will be possible to make people, or intelligences, without any immoral desires. It will also be possible to make intelligences without the physical needs of humans. To me, the loss of humanity is a price that must be paid for rising to a more abstract and ideal form of intelligence and rational thought.

Instituting Total Surveillance

The biggest problem with a police state is getting it up and running without people complaining. Here is the solution.

Imagine the work involved in setting up a surveillance system in a small city. You would have to install cameras on the street corners, and run cable into the grid so that they could communicate home and be powered. You would have to worry about people vandalizing them, especially if you didn't have enough cameras so that the cameras could watch each other (and even then, disguising yourself from a camera is not hard). Sure, in the coming decades resolution-per-unit-per-cost will continue to drop, which makes the whole enterprise cheaper, and mass production invokes economy of scale anyway, but we're looking at pretty serious costs here.

Now think about the potential surveillance at your local retail store. The tills are computerized, which means that all transactions are recorded. If you pay with a credit or debit card, your transactions are associated with your name, and which means that you are also being associated with a specific place and time. You are also being watched by security cameras.

Government intrusion into personal space is not generally accepted, but corporate intrusion usually is. The reason for this is that people are voluntarily putting themselves under surveillance when they go shopping (or go on the internet, or use their phones, etc.). The obvious solution is for the government to co-opt the businesses. But they can't do this through strongarm tactics - they need to do it with the carrot instead of the stick.

Modern surveillance equipment needs software to run. This software costs money. If the government gave the software away to companies with the caveat that it would phone home to the government database every once and awhile. The businesses win, because they save money. The government wins, because they get better national security. The only loser here is people who don't want the government knowing what they're shopping for.

You could also do similar things with cell phones, credit cards, and the internet. The government cuts a deal with a company, who makes that deal part of customer relations. Because this is an opt in sort of program, nobody can complain. Of course, because operating costs are lower for those who opt in, those businesses who don't will have to make up for the lost profit with either higher prices or by catering to those who don't want to be watched. What it also means is that those businesses eventually won't be able to operate on economies of scale, which pushes the price for privacy even higher.

So now we're at the point where the government has huge databases, and maintains an automated file on everyone in the country. Automation is the key here, because most people are too boring to watch, and because it keeps the cost of watching people down. And here's where we run into the two biggest arguments against doing this; the government is evil and stupid. I don't believe either of those things, but if they were evil and stupid, then letting them have files on everyone would be a very bad idea.

Friday, December 12, 2008

Threats to the Nation

We were talking in class today about the threat that artificial intelligence might pose to the world, and I'm pretty firmly of the opinion that it absolutely doesn't matter.

This is mostly because of what I know about nuclear weapons escalation. The Russians and the Americans kept building bigger and more destructive bombs. The end of that was pretty much when the Russians built Tsar Bomba, which had a mushroom cloud six time higher than Mt. Rushmore. The fireball was five kilometers in diameter, with blast damage 1000km away. Even more than that, the bomb that they tested was at half of the yield it was capable of, because the fallout from the 100MT test would have been too much, and there was no bomber on the planet that could drop it and get far enough away from the blast. So after that, the governments decided to move to more strategic capability for bombs. The governments have had the power to destroy the world for a long time now, and they haven't done it.

The other threat from nukes is that some rouge nation or group will get a hold of one and detonate it in the middle of some city. A dedicated group of individuals can do some pretty awful things, and it becomes easier for them to do it with every passing year. You can buy a gene sequencer online for about $5000 dollars and create the next smallpox. You can hijack a plane and fly it into some buildings for much cheaper. And when/if nanotechnology comes to fruition, that'll prove a much bigger problem for security because it'll be so much harder to stop.

The cost barrier for AI means that the first ones will come from academia, corporations, or a government. To say that the people who are smart enough to build something that can think will be stupid enough to give it unfettered access to the outside world is illogical. On top of that, making an AI that wants to kill everyone will surely have to be a mistake. So the odds of it ever being a threat is minimal, especially since once the first AI are around they can defend against new ones.

Sunday, December 7, 2008

In Defense of Nuclear Weapons

The only way to win a nuclear war is to not start one.

Now, it is my basic belief that the world leaders know this. In the history of nuclear weaponry, only two have been used in an offensive capacity. Those two were obviously "Little Boy" and "Fat Man", used at the end of WWII against the Japanese. Think about this in perspective; it has been sixty years since a nuclear weapon has been used. With every passing year, the threat of total annihilation becomes less and less plausible.

And not only has M.A.D. (mutually assured destruction for those of you too young to remember the Cold War) ensured that there hasn't been a nuclear war between nuclear capable nations, it has also ensured that there hasn't been any war between nuclear capable nations. I am convinced that one of the primary reasons that the Cold War never resulted in an actual land invasion was the threat of nuclear weapons.

On top of that, no one has used nuclear weapons in wars against non-nuclear nations. We could have glassed pretty much all of Vietnam, North Korea, Afghanistan, and Iraq and still had enough arsenal left over to destroy everything else. Afghanistan went to war with both the United States and the U.S.S.R. and didn't get bombed!

To summarize:
1) No one uses nuclear weapons
2) Nuclear weapons help deter non-nuclear war

What's not to love?

(If someone who doesn't care about their own existence or feels that the destruction of their enemies is more important than their own survival gets a hold of nuclear weaponry, that could be bad, because M.A.D. does not apply. Luckily, nuclear weapons take a lot of science and funding to build.)

Understanding workforce

One hundred years ago 60% of the American workforce worked on a farm.  Today, it's .6%.  One hundred years ago, there were scientists who openly questioned the existence of the atom.  Forty years later it was weaponized, and ten years after that started being used as a source of power.  The last hundred years have seen the rise of interchangable parts, assembly lines, division of labor, just-in-time manufacturing, and reasearch and development.  They have also seen the invention of the automobile, airplane, telephone, television, plastics, computers, and pretty much everything upon which this country now depends.

The corollary to the expression, "Those who do not learn from history are doomed to repeat it" is this; "Those who do not look to the future will end up stuck in the present".  The reason that there are so few jobs in agriculture today as compared to a hundred years ago is that a number of devices were invented to automate the process of planting, tending, and harvesting crops.  The same thing happened in manufacturing; devices and processes were invented that made a single person much more productive.  It also served to reduce the education required to create a complex thing like a car.  Before Henry Ford came along, it took someone with years of training a long period of time to make any single complex item, whether that was a car, shoe, or desk.  By dividing production into a series of unique steps, all but a few of the artisans could be cut out of the equation.  What few artisans were employed were the ones who helped to set up the system that made the cars, shoes, desks, etc.  In a free market society, prices drop as efficiency increases.

One of the best ways to increase efficiency is through automation.  Machines are, in general, cheaper than people.  The biggest tradeoff is usually in start-up costs.  For simple (usually minimum wage) jobs, the start-up cost for a worker meaning training, which is not terribly expensive.  For a machine, that start-up cost is usually the expense of purchase and installation, if not also the expense of R&D.  The trade-off in price comes over extended periods of time; workers require a constant influx of cash, while machines usually do not (maintenence is usually very cheap compared to wages).  This obviously means that people are more flexible than machines.  If you're talking about something like making a hundred thousand of anything, flexibility does not count for a whole lot.  This is why we use machines.

Of course, machines can replace more than just physical labor.  The term "computer" used to be used just like the term "driver"; it meant "one who computes".  During WWII, we had whole rooms full of people whose job it was to crunch numbers.  You needed to be good with math in any job that even remotely required numbers, because it would be grossly ineffecient to have cashiers and the like spending five or ten minutes puzzling over the price of everything that you had bought.  With the invention of the calculator, the baseline for education in a number of jobs fell, just like it had with the invention of the assembly line.  The same is also happening now with the written word; handwriting has little relevance to any job, nor does spelling (which almost any computer will correct for you).

I've often been asked the question, "So once machines can do everything, what will happen to all of the people who were working at those jobs?"  Kurzweil would say that those people will find new jobs that are created by this automation.  I'm not sure that I agree with that.  What historically happened was that those who worked on the farms got pushed into the factories, and later on those who worked in the factories got pushed in the service industry.  Neither of these require much in the way of education.  Let's say that there's an invention that obsoletes a large section of the service industry; the natural consequence of that is that unskilled labor (being in greater supply) would drop in price.  The problem with that is that minimum wage is fixed, because of the cost of being a person is fixed (or at least has a minimum).  If we have a large supply of people looking for work, employers will choose workers as far to the left of the bell curve as possible.  What would happen to the uneducated masses whose labor is too expensive?

There are two options.  The first is that they'll become wards of the state, in which case the employers and workers will be indirectly paying their wages anyway.  The other option is that the uneducated masses are eliminated.  I'm not talking about eugenics; I'm talking about aggressive education.

Let's say that with advances in technology we can squeeze agriculture down to .1% and manufacturing down to 5%.  This is not unreasonable.  That means that the rest of the nation's workforce would be allocated into management, service, sales, transportation, construction, administration, "defense", advertising, science, and various others.  Some of these require extensive training (administration, advertising, management, science) while others do not ("defense", sales, service, transportation).  The maxim that I'm working by is "the human can be replaced".  By looking at those things that humans are better at than machines, we can chart a general course for workforce outlook in the next twenty years.

The big question, in my mind, is "What the hell are we going to do with all of that labor?".  When you make a process more effecient, the waste usually just goes away; if product A initially takes x of product B to make, then reducing that to x-1 means that the price for both product A and product B falls.  It also makes the price fall on any product derived from product A falls.  If we were in a simple system where demand for product A is constant and there's no outside demand for product B, then this might mean that production of product B drops off.  But this doesn't work with people, for the simple reason that labor is always there to be used, and it has a definite floor price.  Also, unlike other markets, it is incapable of responding to supply and demand.  People won't start (stop) breeding because there are (no) jobs for their children, and even if they did it would take about 18 years for the workforce to feel the effects of that.  People do sometimes die because they don't have jobs, but that's pretty rare considering the support systems we have set up.

So where does this excess of labor go?  We could likely feed, clothe, and house the entire population with only 20% of the workforce.  We can put the other 80% to work doing useless stuff, or creating entertainment, or squeezing even more effeciency out of everything else.  This is essentially what we're doing now.  More on this later.

Thursday, December 4, 2008

The Industrial Society and its Future, pt. 2

Continued from this post.

2) Prosperity: Does technology make us more prosperous? Is this prosperity evenly distributed among people, or does it make some of us richer while making others poorer?

First, I think I need to debunk a claim that I hear a lot.  It goes like this; while the standard of living has risen as compared decades & centuries ago, it doesn't matter whether things get better because people adapt to anything no matter how good or bad it is.  Since it's all relative, the progress that technology brings is sort of like running on a treadmill (if not worse, because of the loss of humanity/freedom/purpose etc).  Okay, so why is that bullshit?

The essence of why I dislike this philosophy is that it equates the position of the king to that of the slave, and not just in a metaphorical sense.  That is literally what these people are saying.  Part of the appeal of that argument is that it is counter-intuitive, and that it justifies a lot of Very Bad Things by virtue of the idea that people will simply adjust.  It's idiotic to think that people suffering from a lack of sanitation, or malnutrition, or disease, and people who live in the suburbs, feel similarly about their lives.  I won't deny that there are problems associated with the middle and upper class, but these are problems on the order of "I'm bored" or "What am I doing with my life?" instead of "I just shat out some blood" or "My mother died of AIDS".

So with that out of the way, I think that I can safely say that people today are (per capita) better off today than they were x years ago, where x is an abstract number of years.  Diseases are more easily diagnosed and cured, labor is less intensive, etc.

"But Ben!" you might cry, "We still have vast percentages of the population without access to water!  Two billion people live on two dollars a day! Every year 10 million children die before age five!"  I get it.  "Modern" society sort of left a lot of the world behind.  In fact, things are worse, because our huge companies came in and built huge factories where they pay slave wages, while at the same time our giant combines are harvesting so much food that local farmers can't make a living, forcing them into those same factories.  There's pollution, and the raping of the planet.  I get that.  For that I have two responses; the first is to say that this is more of a social failing than a technological failing; if we really wanted to, we could fix almost all of the big problems.  We really want that though, because there's nothing in it for us, and it would require a lot of sacrifice.  The second is to say that technology will find solutions to all the problems that it creates.  We can scrub the air of carbon, clean up the planet, and perfect robotic assembly to the point where sweatshops will become cost-ineffecient.

The distribution of goods is uneven.  Baring a perfect implementation of communism, it will always be that way.  The problem seems to be that the richest 1% of the world controls x% of everything, where x is some huge number that keeps getting higher.  This deals a little bit with the earlier issue of freedom, but when so few people control so much it makes it harder for someone to ascend, and if the rich control everything then there's no one to stop them from taking away our freedom.  The part of checks and balances is being played by the government, which stumbles through its lines and stammers like this were a high school production.  But again, I would say that the root cause is societal rather than technological.  One could argue that technology has made it harder to overthrow a government, as modern surveillance has made it difficult to plot assassinations, but then we would get into some tangent about what the problem means for revolution are.