Friday, October 21, 2016

Health and Safety Class vs. Standard Economics of Risk

For work I'm required to take a health and safety class for eight hours every week. What I take away from the class is how to cover my ass as an employer, but the instructor wants me to take it a step further. He wants me to believe in the regulation, when I simply don't.

One tactic he tried to use to get me to become a believer is storytelling. He told us about a friend who had an accident at work (of course it was all the employer's fault). As a result of the accident, her elbows were permanently damaged. Here's the crux of his argument; she could no longer pick up her child because of the accident. "You can't put a price on that," he said. The whole room nodded, except for me.

Suppose we could go back in time and shut down the entire multi-million dollar firm she worked for. Without the firm, she never hurts herself and she can pick up her child again. Should we shut down the firm? As soon as you say no, you've just put a price on her ability to pick up her child. If you say yes, you should really shut down pretty much every industry ever because accidents will always be possible. And with so many potential people for an accident to happen to, it will happen to one of them no matter how low the risk.

These people see the purpose of legislation as reducing risk to as close to 0 as possible. A more sensible task is to move risk to the level that a fully informed, sensible person would have if all the costs and benefits belonged to him.

If I as a reasonable person stand on a counter in my kitchen to get a bag of chips,
The chips are mine if I succeed
The damage is mine if I fall
I know the risk of me falling is very small (less than 1%)
I know the risk if I fall of me doing serious damage is pretty small (less than 10%)
I still stand on the counter in my kitchen to get a bag of chips,
Then that is a reasonable risk, and a risk that I should be able to take at work

look, there are lots of economists who think the health and safety regulation is good. That's not what I'm disputing. Of course there are times when an employer receives the benefits and an employee receives the risk and there's a market failure there. The real question then is what would the risk level be if the employee received the all benefits or if the employer were taking all the risk. That's the risk level to shoot for. That's the target. The risk level currently being shot for is 0, and you can see that in the pages and pages of legislation we go over that tries to prevent any possible harm.

If tragic stories keep substituting for statistical competency and the standard economic logic of risk, the world will never be as good as it could be.

Thursday, October 20, 2016

Eliezer Ydkowski's The Sequences

If you've never read Eliezer Yudkowski's Sequences, now is the time. I highly recommend it.
In this essay I pose questions. If you see what seems like a really obvious answer, it’s probably the answer I intend. The obvious choice isn’t always the best choice, but sometimes, by golly, it is. I don’t stop looking as soon I find an obvious answer, but if I go on looking, and the obvious-seeming answer still seems obvious, I don’t feel guilty about keeping it. Oh, sure, everyone thinks two plus two is four, everyone says two plus two is four, and in the mere mundane drudgery of everyday life everyone behaves as if two plus two is four, but what does two plus two really, ultimately equal? As near as I can figure, four. It’s still four even if I intone the question in a solemn, portentous tone of voice. Too simple, you say? Maybe, on this occasion, life doesn’t need to be complicated. Wouldn’t that be refreshing?

Wednesday, October 19, 2016

I'm fond of how Robin Hanson starts this blog post:
We talk as if we pick our beliefs mainly for accuracy, but in fact we have many social motives for picking beliefs. In particular, we use many kinds of beliefs as group affiliation/conformity signals. Some of us also use a few contrarian beliefs to signal cleverness and independence, but our groups have a limited tolerance for such things.
I've heard this view a number of times, I just like the way he phrased it. The whole post is good.

Tuesday, October 18, 2016

Trump's Talk vs. Bill Clinton's Actions

10 years ago current presidential candidate Donald Trump said,
I moved on her, actually. You know, she was down on Palm Beach. I moved on her, and I failed. I’ll admit it. I did try and fuck her. She was married.

I moved on her like a bitch. But I couldn’t get there. And she was married. Then all of a sudden I see her, she’s now got the big phony tits and everything. She’s totally changed her look.

Yeah, that’s her. With the gold. I better use some Tic Tacs just in case I start kissing her. You know, I’m automatically attracted to beautiful — I just start kissing them. It’s like a magnet. Just kiss. I don’t even wait. And when you’re a star, they let you do it. You can do anything. Grab ’em by the pussy. You can do anything.
Ugh, pretty terrible. But now suppose that Donald Trump makes it to the white house. It then comes out that he has been given oral sex in the Oval Office by someone other than his wife, and blatantly lied about it under oath.

Which is the bigger Trump blunder? The inappropriate talk, or the oral sex? Obviously, the oral sex in the white house. But Bill Clinton already did that (right around the same time the Trump tape was recorded). Many liberals who are outraged over Trump's "locker room talk", run to Clinton's defense at the first word of Monica Lewinsky.

If what Trump said disqualifies him from being president, why in the world wasn't Bill Clinton disqualified 10 years ago?

Monday, October 17, 2016

Worst Year Ever

What was the worst year in history? I find it remarkable how many people give 21st century examples. I suspect this has more to do with us having better information on more recent tragedies. It also may be that we're more sensitive to more familiar environments. So the mongol conquests of the 13th century just doesn't seem as important as a world war of the 20th century.

The best answer:
Some 65.5 million years ago, the Chicxulub asteroid struck what would one day be Mexico’s Yucat√°n Peninsula. It ended up incinerating all life for hundreds to thousands of miles and causing a perhaps mile-high tsunami that wiped the East Coast of North America as clean as a billiard ball. And that was just the first day of a very bad year—it got worse.

Sunday, October 16, 2016

The Cause vs. A Factor that Plays Into

This part of War and Peace always stuck with me,
When an apple ripens and falls - what makes it fall? Is it that it is attracted to the ground, is it that the stem withers, is it that the sun has dried it up, that it has grown heavier, that the wind shakes it, that the boy standing underneath it wants to eat it? No one thing is the cause.
And yet people search for the cause within complex social systems - the cause of the financial crisis - the cause of the iraq war - the cause of gender wage gap - the cause of the falling crime rate. Really everyone should stop saying the cause and start saying, "one of the factors that play into."

On the same note, I hear about the reason we have such and such law, which usually means why such and such law makes sense. But laws are not passed because they make sense for society, but because they made sense for individuals in government found it to their personal benefit to pass such laws.

For example someone might say, "we have farm subsidies to make sure we have food."

Which is a dumb reason, but whatever, people say it.

My point is that that's not the reason at all. What they should say is, "we have farm subsidies because many individuals in government including Franklin D Roosevelt thought it would be in their own political interest to pass such laws." Why was it in their own political interests to pass farm subsidies? For lots of reasons that don't need to be the same for any two political actors. Maybe one thought it was a good idea for society, and another thought it was a good idea for their political contributions, and another because his cousin is a farmer who benefits, and another just went along with the party because he had his own legislation he wanted to pass so he went along with the others hoping his legislation would have a better chance if he didn't seem combative.

Saturday, October 15, 2016

How does the Free Market ensure Companies won't abuse their Workers?

I received my highest rated answer on Quora yesterday. I wasn't that many upvotes, but taking into consideration the popularity of the question I feel like I fared pretty well. Here's the question:
Libertarians, in a free market how do we ensure that companies don't abuse their workers?
My answer:
How does government ensure that companies don’t abuse their workers? Even where there are laws, it still happens. The non-free market does not ensure that companies don’t abuse their workers, so why is that a standard that libertarians must live up to? 
The question is never how markets are going to make things perfect, it’s how the net impact of markets compare to the net impact of government. Remember that. 
Why don’t so many companies abuse their workers today? You might think it’s because we have laws, but that’s not true.  
I worked in both Arizona and Indiana where my employers gave me breaks. Why? There are no laws at any level of government that say a working adult needs to be given any break at all. A little less than half of states are like this, absolutely no legal obligation for employers to give working adults break (look it up), but it almost always happens anyway. 
Low pay is another form of abuse. Have you considered that less than 4% of the population makes minimum wage. The other 96% of all workers are paid more with absolutely zero legal obligation to do so. There are no laws telling employers to pay their workers $50,000 a year, and yet it’s the median income. That’s just the normal supply and demand market wage, no government necessary. 
Why do we have decent working conditions? General economic growth lifted the wages of almost everybody. After people started earning enough, they started substituting some higher wages for better working conditions. 200 years of economic growth is why I got breaks in Arizona and Indiana. General economic growth is the hero that saved us all from 18th century level working conditions, not the government. The government simply codified it after it already started happening. 
No system is perfect, but those mechanisms that keep employers from abusing workers today would still remain in play in a libertarian society. And if libertarians are right that their society will yield more growth, then even fewer employees will be willing to put up with an employer who abuses them, because there are lots of other places they can go where they don’t have to put up with that nonsense.