resource allocation as a group

TL;DR=Humans work as a group – entitlement programs are a reflection of that reality and most are in the best interests of all of us

So, on facebook, someone had stated “the only reason anyone would vote democrat is the expectation of a welfare check”. I had pointed out that there are many reasons, and it’s more complicated than that, and one of their responses was “if you want to help other people be my guest but keep your stealing fingers out of our wallets”. I indicated a interest in further discourse on the subject if they were open to it, and said I’d write a blog article with my opening thoughts on the matter.

(This makes it sound worse than it is – I truly believe, at least at this point, that this person is open to trading ideas on the subject. I am of the opinion that we’ll all get further if we at least consider the ideas of people who are politically opposed to us before rejecting them. I am sure he has valid reasons for believing what he does.)

So, first of all, I will be the first to admit that “entitlement programs” are a band-aid. The right solution would be to have a better way of doing resource allocation to begin with. But, here’s my big picture overview.

We as a species are in the business of creating resources and resource pools as a group. A single individual could almost certainly not build a working power generator, for example. (You think you can? I want to see you try. No buying premade *anything* – every raw material must come out of the ground. And if you’re even doing research to discover *how* to find copper, make it into wire, etc, you’re using the work of the group to help you. If you are using knowledge of what copper looks like, or that it conducts electricity, or that you can dope silicon with phosphorus and boron and get a semiconductor that will generate electricity when light shines on it, you’re likely using knowledge you aquired from the group)

Even acquiring and cooking food would be challenging without contributions from the group. (How’d you learn to make that bow and arrow? How did you know how to create fire, or that fire would make the food more palatable and also let you get more calories from it?). We work as a team, and communicate concepts through symbolic language. It’s part of why our species is so able to thrive in what is a somewhat difficult environment.

So, hopefully by seeing that you can accept that we work as a group. My guess is your objection to entitlement programs is that they appear to compensate nonproductive members. I have a number of responses to that.

First of all, it’s difficult to know how productive a member really is. As I’ve discussed elsewhere in this blog, money has a number of flaws as a vehicle for abstracting value, so if you’re just measuring by the money that they make, you’re likely missing a lot of their contributions. We never know where lightning, in terms of a brilliant idea, will strike – and sometimes, you do literally need the idiot asking stupid questions to help the genius have the next great idea. Not all contributions to a society are obvious.

Also, because our society has a number of, hem, weaknesses, some individuals get misprogrammed in ways that make it very difficult for them to succeed via conventional measurements, through no fault of their own. However, they may still make important contributions to the system as a whole – they are somebody’s friend, somebody’s family. Very few of us are completely disconnected from the social mesh that is all of us.

Second of all, you really don’t want to lose a member (or throw them under the bus) that’s just going through a rough patch. Imagine if you will someone like Tesla, who’s very bad at making personal relationships and business decisions, but very good at creating mind-bending technologies like the induction motor. Now, imagine tesla gets sick – and dies – because of a shortage of funding and a health care system that doesn’t want to help him. Humanity as a whole has now lost the value he contributes, because we were more concerned with the valueless money in our wallet than we were in sharing out resources in order to benefit the species as a whole. Because we all basically have the same 10^11 neurons, the only way to be really mindbendingly good at one thing – like Tesla was at invention – is to be weaker in something else. The human history is full of stories of geniuses that had trouble tying their shoes. Ultimately, the money those people “stole out of your wallet” made us all richer, including you, in real value, in knowledge.

I think it’s important to look at the really big picture when considering resource allocation. First of all, it’s important to recognize that fiat money has no real value other than the value we imagine it to have. (Apologies to those of you who have been reading this blog the whole time and have to listen to me reiterate things you’ve already read). Real value is things like food and shelter and clothing – nobody really wants money itself (unless they’re using it to keep score), they want the things it can buy. It may help you accept the loss of some of that worthless paper in your wallet if you recognize that it really is worthless.. it’s just a pointer to value, it’s not the value itself.

As far as value itself, we have as much as we have. The entitlement program dollars for things like welfare are mostly going to things like food and shelter, which we in fact *have a surplus of!*. In the case of food, it’s *extra* stupid to not give it away, because *it has a short shelf-life*. If we were short on food, I could see making a case for not giving it to the “less productive” members of the tribe, but we’re *not*. Food rots. We might as well give it to everyone, because we’ve got more than enough, and more food than you can eat potentially has a *negative* value because of the need to deal with getting rid of it.

Now, you made the point that there are other types of welfare that go to people who will not spend it on things we have a surplus of like food and shelter, and I think you may have a case there, but overall, the important thing to remember is that in fact, dollars don’t matter. What matters is concrete and steel, because what we can ‘afford’ is entirely driven by concrete and steel. It’s also important to remember that not all contributions are easy to measure. One analogy to consider is if you removed all the neurons from your mind which don’t fire regularly (by denying them blood sugar since they were “dead weight”), the results would be *very bad*. Another point to consider is that the “nonproductive” members do in fact contribute by being the friends of the “productive” members and adding to their quality of life.

Another problem is you never really know what skills, worthless now, will be very valuable in the future, and some skills take a lot of work to hone, which appears “nonproductive” insofar as money is concerned. For example, when the first pioneers began playing with computers, it was not at all obvious how much more value we would be able to generate for humanity with these machines. Many of them went broke trying to build computers before the transistor was invented – but they generated *huge* value in terms of figuring out what sorts of things you needed to think about and do in order to build a programmable computer. It’s potentially possible that my “nonproductive” studying of writing music may turn out to have huge value someday – maybe first contact will happen and my music, not commercially viable for Earthlings, will be *very* in desire as a trading material by ET. You really never know. But – assuming we *do* have enough food, water, and shelter – you want people to explore the unknown fringes and the potentially dry holes, because some of them will turn out ultimately to have water. If there is no social ‘safety net’ there is a lot of incentive *not* to take risks – and the risks are where the rewards are. And in any case, you really don’t want the people who have skills that are not valuable now but will be valuable in the future to starve to death, losing us access to those skills.

As a digression, the transistor itself is a good argument for my case. It was invented by a *government monopoly*, by some engineers who were also amatuar scientists playing around trying to build a better signal amplifier. Without the transistor, we wouldn’t even be having this discussion, and it’s unlikely the “free market” ever would have found it. The Internet is another great case of this.. ARPA designed a flexible network protocol to allow computers to talk to each other. Without the “entitlement” money going to the ARPA engineers, we wouldn’t have a Internet at all. (For better or for worse) – and when the Internet went up against the networks and protocols designed by the “free market” it *stomped all over them*. It was, quite simply, better and more flexible.

It’s also worth noting that that money “being stolen out of your wallet” in fact came from the group. You didn’t print it yourself, and you didn’t create the value yourself that it can be used to buy. (otherwise, you wouldn’t need to buy it, because you already would have it). Instead, the group gave it to you in exchange for the value you created for the group. It’s a pointer to the idea of group resources, and as such, it is reasonable for the group to decide what to do with it. I agree that the current system of give it to you, take it back, give it to you again or give it to someone else is very clumsy and at odds with the way humans emotionally react to things. Hopefully we’ll implement something better – although it is worth noting that what we’re currently doing has gotten us a long long way.

I apologize if I have misidentified your argument against things like welfare – if I have, please speak up so I can respond to what your real issue with it is.

Now that you’ve read this, perhaps you might be interested in some cautionary notes on Resource Allocation System Implementation

4 Responses to “resource allocation as a group”

  1. Alderin Says:

    The problem that people have with adding taxes to help the group, has many sides.
    One, the money isn’t going to the group we individuals would expect, it is going into a very large and at least partially corrupt organization that determines where the money goes after the fact. How many tax-paid bureaucrats’ salaries are paid by that money to limit and manage its outflow to those it is supposed to be helping?
    Two, while we know that some of the happiest societies, with the best “social programs”, have 50%+ income taxes, suddenly applying such a tax on the US economy would severely upset the near equilibrium that many many people operate on (“paycheck to paycheck”). ANY increase in taxes threatens that equilibrium, which threatens to drastically reduce the taxed individual’s standard of living, including possible loss of home. In actuality, most people who feel that threat would not actually have it happen, but the reaction is the same. Also, even though money is a pointer, for many people it is a pointer to time spent gaining it, and an increase in cost looks like an increase in time spent working with subsequent time lost for pursuing self-directed objectives. The idea that “sure, I’ll survive, but I’ll have to find a THIRD job to make ends meet. Probably won’t be allowed to sleep for months at a time.” It is extrapolation toward the worst case, but it is reasonable enough to pull some deep emotions.
    Third, you already touched on, give it, take it back and give it to another. It doesn’t feel fair, it triggers our territorial instinct: that’s MINE! Even though we try to teach our kids to share, sharing is OPTIONAL, taxes aren’t. Forced sharing feels like stealing (just ask Robin Hood’s “victims”. 🙂 ) Possession is 9/10 of the law, right? Humans have a pretty deep seated sense of ownership or possession, this pattern has served us well for many millenia, and only recently have the resources we’ve built as a species surpassed the need for such patterns. It is VERY HARD to rationally think your way out of instinct.

  2. Ram Says:

    Entitlements from tax-collected pool of money is not significantly different from Forced Charity. Very Christian-like. My +1 to entitlements from that perspective.

    People who often talk about ‘equal opportunities’, forget to think about ‘equal effort to utilize the opportunities’. Blanket and systemic entitlements rarely take the ‘effort’ aspect into consideration. Strictly speaking, an entitlement is not a benefit per se. It actually is an ‘opportunity’ to build on. A head start. A steroid. However, the missing piece is, effort to utilize the opportunity. There should an upper limit to how much of this steroid can one draw in a lifetime. And there should be a pre-requisite to become eligible for entitlements.

    1. You try your best.
    2. You fail to make it.
    3. You get up to ‘x’ units of steroids to help you try again/harder.
    4. If you make it now, pay back the ‘x’ units as soon as you can.
    5. Either way, you are on your own after you received your allocated amount of ‘help’.

  3. Jackie Britton Lopatin Says:

    To Alderin above: I hear what you’re saying about increased taxes upsetting the equilibrium, but what if the people living paycheck to paycheck no longer have to budget money for health insurance? That could make a huge difference for everyone, including the employers of the paycheck-to-paycheck people since a great deal of the expense in making their product would be reduced.

    What if dentists didn’t have to be totally bottom-line oriented businesspeople but could simply draw a salary for working on X number of mouths per week? Imagine the difference if people could get a small cavity filled before it becomes a large cavity or even a root canal? A person with an attractive smile has an easier time getting hired than a person with a messed up mouth. And so on.

  4. Swipes Says:

    I’ve obviously heard this lecture before, enough so I can hear this post clearly in your voice. I do love getting to watch you give it to newbies though especially the ones you start to reach. Hopefully I’m sometimes the idiot with the right questions to help your genius as you can sometimes be mine.

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