UK Stupidity Tax Doubled

The UK stupidity tax (aka National Lottery) has recently been doubled in part to stem a fall in takings.  The lottery supports a lot of good causes in the country and perhaps most people playing it feel good because they are contributing to these causes.  Nevertheless it is clear that the expected benefit to the individual from playing the lottery is negative and as Daniel Bernoulli pointed out many years ago it is not rational to participate in things with an expected negative outcome.  However most of the loss in expected value does get recycled and if people enjoy the thrill of the possibility of winning then perhaps it could be argued as rational to play. 

 

Recent evidence suggests that players are perhaps doubly stupid as the anticipated delight from winning the lottery quickly fades and research has shown that lottery winners and quadroplegics are roughly equally happy one year after winning or paralysis.(1)

 

It is rather troubling that winning a fortune and losing the use of your limbs turn out to leave you similarly happy within about a year.  Clearly there is therefore a case for changing the rules of the lottery and arranging for the 'winner' to get a broken neck and that way a much higher percentage of the takings could be distributed to good causes.  If users primarily play the lottery to benefit good causes they would be pleased with this outcome.  If it can be explained that while a broken neck might be a bit disappointing, painful and debilitating in the short term then this will quickly wear off and they will be just as happy one year later as if they had won a large fortune, perhaps most people will continue to play.  Obviously it will remain very unlikely that you would be selected as the 'winner' and have to suffer a broken neck under the new rules of the lottery and indeed all former players should be honour bound to continue to play so there shouldn't be any deduction in lottery takings from this new approach.   Rather than a few people being delighted after the draw and most being disappointed this approach would probably reverse the effect and the vast majority would now be happy after the draw and only a few might be a little apprehensive.

 

We could probably further improve the outcome for all participants by making 'winning' even less likely than it was before.  Potentially there is a bit of a cost to society in terms of the care requirements of quadroplegics so making the lottery harder to win could help to reduce this cost and further enhance the solution. 

 

I still feel the participation rate might drop a little despite the fact that people are still getting the excitement of 'winning' and having a life changing event. We could probably provide some publicity albeit it would be rather distasteful to actually show the winners getting paralysed and so it may make sense to create an option to allow the winner to elect for purely ceremonial rather than actual paralysis.  This seems to be the ideal solution as the winner could get the fame and attention of winning plus the option to elect to use a wheelchair and be looked after on key occasions but otherwise continue with life as normal.

 

Now the amount of increased spending on good causes from this improvement is not trivial.  Annual sales are over £6.5 Billion and at present 50% of this is given out in prizes (2).  Changing the rules but retaining the excitement and perhaps providing some modest compensation for ceremonial paralysis could easily allow £3 Billion pounds per annum to be used to make the world better and potentially develop cures for some nasty diseases.  Undoubtedly the most pervasive of these diseases is aging and as it is the root cause of so many other problems in later life and it would appear a prime candidate for some of the additional funding as we are still quite some way from finding truly successful treatments.

Sources

1.

  http://www.ted.com/talks/dan_gilbert_researches_happiness.html

 

http://www.canada.com/vancouversun/news/story.html?id=437ad1ca-df68-4472-91ad-2c57c7da8d6f 

2 http://www.camelotgroup.co.uk/business/our-uk-national-lottery-operation/

 

UK Parliament Works - for once

Astonishingly it appears the UK parliament has done something sensible and voted not to bomb Syria in a futile show of 'strength'.   Terrible as events there undoubtedly are it is generally foolish to get involved in a war that you want neither side to win. While whatever depraved thinking resulted in the release of chemical weapons it really is most unclear what random missile strikes were likely to achieve.  It really is a major issue that world leaders can find themselves end-played by previous statements into feeling compelled to either launch missiles or appear weak and feckless. 

What Syria and the rest of the world badly needs is a global strategy that lays out acceptable behaviour and plans for the future.  The divided nations meeting in New York will almost certainly never achieve this.  However social networking software just might!  We need to actively pursue how to get this working quickly so the global consensus drives decisions rather than the interests of individual nations and their political leaders.  This may in time allow the world to change focus from the long term survival of nations which appears to take priority at the moment to the long term survival of people which we consider far more important. 

We have not done a scientific survey however our expectation remains that if you asked a sample of people whether they would prefer their country or themselves to survive for the next thousand years then their country would come a rather distant second in the poll.  The issue we have at the moment is that the vast majority do not believe living for 1000 years will be possible within their lifetime, and it all starts with belief.  

Does Summer Always Follow Spring?

Events in Egypt have clearly not gone to plan and it now looks to be a serious mess.  This provides further evidence that democracy is not the pinnacle of organisation that it is sometimes held up to be.  Hopefully the social networking revolution will provide us with better alternatives in the not too distant future.

Perhaps part of what went wrong here is that the people and the church really didn't understand their roles in the play.  The standard western script requires that the church is subservient to the state and the role of the sheeple in a democracy is to return the elite to power.  In general the government should be  left to run the state. The church is there to help in times of crisis and operate as a sheepledog to round up and restore order when there are too many straying and wandering from the path of obedience to the elite.

In the case of Egypt the government elite boils down to the military as they control the extremely generous slush fund provided by the US..  For some reason nobody explicitly explained this arrangement to the Egyption people and so it seems the military decided to abort the play half-way through the first act.  It appears the Muslim Brotherhood was favouring its own supporters.  Hardly a suprising turn of events in any democracy but clearly not acceptable to he military.

It seems they considered it was outrageous of the Egyptian people to not recognise that the military's candidates were supposed to be elected and that democracy was to be conditional on electing the right winner?   So democracy ended, at least for now, with the coup that wasn't a coup coup.

It clearly further exacerbates the pain when your economy is based largely on tourism and understandably this tends to underperform when violence and insecurity is rife.  It is hard to be optimistic for the immediate future.  The greatest civilization of the past may be one of the least civilized places to be at present and an uncivil war seems a real possibility.  

However all things are relative and for Egypt at present perhaps the only crumb of comfort can be that they are not Syria and are at least being left to sort out their own problems without the rest of the world queuing up to getting involved.

Two Person Planet Problem

Summary

A two person service and knowledge economy stabilises below 50% of capacity with zero progress.

Problem

Imagine a planet with two people(X and Y) and many things fully automated so it is largely a service and knowledge economy.  There are two full-time jobs requiring each person to do some work for the other.

Both jobs are open at the start and the planet is fair. To avoid stagnation the jobs will be re-advertised and applied for each period.  There is a concern that both jobs paying the same provides little incentive to work hard and secure the better job.  It seems better to have one good job and one perfectly acceptable but not quite so good job.  All changes are consensual and must be agreed by both – however if there is a disagreement the holder of the good job gets the casting vote.

Initially, wealth on the planet is shared equally and both are equally and highly talented so neither is better suited to the better job.  Being fair and reasonable but recognising that necessary job skills will be acquired through practice they flip a coin to assign the jobs.  X wins the flip and gets the better job.   This is a stable small planet and both jobs require the same amount of capital so they agree that each will own the assets required for their jobs.  As a further simplification we assume that capital equipment is permanent and there is no requirement for investment to support innovation and there is no bank.

Y is disappointed at losing the flip but it was fair and agreed up front and his job is OK.  The planet operates like earth, except there are no taxes.  Consequently one person’s expenditure must equal the other person’s income.  Income allows spending at the various automated services and vending machines on the planet and is collected by the other and they are required to spend sufficient to pay the others wages. 

The time comes for re-advertising the jobs.  While it might seem fairest to swap jobs, X points out that they are now both experienced and better able to do their existing jobs so it makes sense to continue with the current division of labour.  Y accepts this is true but is unhappy that they will be making less than X.  Both are quicker at their tasks through practice and seeing improvement opportunities.  More time passes and both continue to learn and make improvements.  Each year there is also a transfer of wealth from Y to X because X can ensure his expenditure never exceeds his income.

At the first period end it was just noted that Y owed X for the difference between their incomes.  However as debt builds up over time X insists that Y sell some of his assets to X and X decides that it’s now appropriate to charge rent on the assets he owns that Y uses.  As X possesses the good job Y has to agree.  This situation remains unstable as Y will end up with no assets and X will own everything.  Recognising this will happen and being farsighted and firmly in a leadership role now X decides that some of his job is rather tedious so Y can now work longer than X to allow him to pay the rent.

This is annoying for Y as they started equal but progress continues and while Y is seeing less opportunities, X is continuing to find ways to improve work.  There is now much less than two full time jobs – however Y still works full-time and X works less and less.

‘Equilibrium’ arises once X owns 100% of the assets and does no work.  In practice X doesn’t completely trust Y so still does some work and has concerns that if he is unreasonable Y may rebel.   X is often comfortable with about 90% of the wealth and doing 10% of the work.  X finds time for charitable causes.  

X likes to be seen to be doing some work.  They’ve earned everything having got a good job all these years earlier and improving continuously at a good rate whereas Y stalled for some reason.  Everything that happened seems quite fair, reasonable and agreeable – yes he had a little bit of luck at the start – but that didn’t even merit mention in his memoirs.  Y is not happy with the arrangements but nothing legal could be done about it – those were the rules on this new fairer planet.  At times Y is happier than X as being fully employed provides a sense of purpose.  The situation could just as easily have been reversed if Y had been lucky.

The above model partly depicts why you get heavily concentrated wealth on your planet.  Similar arrangements have proved predictable and unchanging over centuries with wealthy families cleverly following the Micawber principal.  Y may be equally familiar and keen on the principal but the rules of mathematics make it impossible for him to comply with it.  However when X is idle and Y is fully occupied the results that Micawber predicted don’t always arise.  Y may actually be happier than X.

Wealth distribution is a taboo topic in economics so let’s consider progress instead.  X is typically highly educated, capable and with some experience of working in their earlier years but at some point they determine they have enough and start to focus on playing golf or whatever.  Y typically feels exploited and demotivation is probable.  Neither is fully committed to progress and at economic equilibrium there will probably be zero growth as if X isn’t working at all then he/she won’t be improving productivity and Y will be conditioned that improvements just result in substitution of other duties.  X may well consider there is no problem.  Equilibrium however arises at less than 50% of theoretical capacity as X does nothing and Y isn’t motivated to make improvements.

The above arrangements will remain stable until X agrees to change it.  That will only happen if X decides making progress quicker is important.  At that point they will re-engage with work and may also decide to incentivise Y.

This may not happen while progress consists of larger televisions or smarter smartphones.  If however progress is a cure for a disease X is suffering from then the focus will be greater.  In the case of humans, aging is a degenerative disease that you all suffer from in time.  It does seem quite reasonable that within the next 50 years the effects can be delayed, perhaps by 20 or 30 years.  If that happens it creates a further 20 to 30 years of development on further slowing or reversing the effects.

Once X decides that a longer, healthier life trumps a shorter leisurely one you reach a tipping point and progress accelerates as finally there is some genuine alignment on the planet.  Humanity isn’t there yet – but you must be getting close to starting to find parts of the elixir of life.  X’s behaviour has could always be partly to blame for killing people by delaying the cures for diseases – however unless X recognises this his behaviour is unlikely to change voluntarily. 

Irrespective of whether or not the cure is found in time for specific individuals focussing on this is likely to make living more fun.  Saving humanity has been an enduring theme of your movies and why it shouldn’t be even better in real life is unclear. 

Returning to the “dismal science” what is the solution to the problem?

You have tried shared ownership of assets and that worked poorly.  Suggesting everyone gets paid the same is also unsatisfactory as it seems to lead to apathy.  Other options are to define standards of behaviour and impose penalties on X or Y for failure to comply.  Perhaps giving Y the right to choose if X is entitled to certain healthcare treatments is an option or a second currency required to consume certain things that X wants and that must be earned by actual work that cannot be delegated. 

There does appear to be a requirement to ensure X remains incentivised to do things for Y.  Typically X is not totally idle but may pursue activities of little benefit to Y.  For example X might start investigating space tourism or other similar ventures while Y still has basic needs unmet.  Limiting concentration of wealth does infringe on core freedoms.  X can also use the credit cycle to accelerate the concentration of wealth.  With 2 people neither credit expansion nor fiat money are to blame for the result.  It’s too late to regulate salaries once the distribution of wealth is unbalanced and if you remove the rules about salaries and let each spend as they please then the Nash equilibrium requires both to spend zero.

We think consensus on the objectives and ensuring everyone is playing as full a part in it as they can is part of the way forward and there need to be consequences for deviations.  A platform is required to allow that consensus to form.

Twin Tragedies?

Two recent tragedies were heavily reported.  A bomb exploded in Boston and 3 people were killed.  A building collapsed in Dhaka and over 700 died. 

Signals were ignored in both cases.  Concerns were raised that the bombers were a threat and cracks appeared in the building before it collapsed.  Based on the evidence we have, and we have a great deal more than you, it appears that both events were sadly inevitable as no creatures in this universe have freewill.  However this doesn’t mean reflection and analysis should or can be avoided to try and prevent future similar events.

The Boston bombing suggests you don’t yet know how to stop bombs.  Five trillion dollars has been spent on the war on terror and the problem isn’t solved.  You do know how to construct buildings that don’t fall down yet you are failing to ensure this happens in many areas.

Humanity would clearly do better overall to expend resources doing  things you know how to do and that definitely contribute to human safety before committing to more speculative ventures.  It would have cost a tiny fraction of $5 Trillion to build a safe factory in Bangladesh and this would have saved over 230 times more lives than were lost in Boston.  In doing so and moving away from the war on terror to the war on poverty it seems quite possible that you will get closer to solving the problem of stopping bombs going off in US cities.  For some reason you are unable or unwilling to do so.  These tragedies were not identical but like twins they share a common cause in resource misallocation.

It seems to us that terrorism is just one of the many spin-off costs of suppression of opportunities for the young.  Suicide is another one that we find quite troubling and have written on previously.  The youth unemployment rate is probably a reasonable proxy for the level of suppression and that indicates that as technology advances suppression is increasing.  You will need to focus on creating more opportunities to train people to build safe buildings and remove the protectionism that is so endemic in most professions if you want a better world.  Global leaders should do this now.

Mars Mission Stupidity

http://www.bbc.co.uk/news/science-environment-22146456

The Universal Council was amused by the number of alleged volunteers for a one way trip to Mars.  We appreciate thinking about inter-planetary missions is good for broadening your minds.  Indeed we sometimes illustrate our thinking with small, fair and simple planets.  We are also fairly sure this ultimate TV reality show abomination won’t actually happen for various reasons.  Humans are not quite ready to start messing up another planet and should perhaps be applying their focus to the many known issues closer to home.

 

We have also chuckled at your scoffing lemmings for allegedly organising their own suicide by jumping of cliffs.  We can’t decide if this makes them more or less advanced than humans who are just allowing their own deaths to happen due to a lack of focus and alignment on figuring out the causes and cures for aging and diseases.  It is irrational that you are incapable of organising and putting more effort into this.

We do still anticipate that decent treatments for aging will be developed within the next 50 years.  Consequently volunteering for a one way ticket to Mars is a particularly stupid and ill-considered thing to do.  However we are not particularly surprised at the large number of volunteers that are allegedly willing to volunteer for such a mission.  Stupid and ill-considered actions still seem to be part of the very essence of being human and we hope you will mature as a species fairly quickly in the coming years.  If part of natural selection is that a few people become dead famous by going to Mars then that wouldn’t hugely bother us.  It’s the cost of the mission that could be better invested on earth to save the lives of many that irks.

We won’t detail the issues with living on Mars here (water food, air, healthcare etc).  Our thinking is that for most would be participants a similarly ‘out of this world’ experience could be achieved at a great deal lower cost by taking a one way ticket to a typical slum.  Using the surplus funds from not going to Mars and holding a competition to develop sanitation, healthcare, education and fun in two or perhaps more of these areas is likely to provide a good deal better entertainment than you would get on Mars.  Six billion US dollars which is the alleged cost of sending 4 people there could certainly transform thousands of lives if it was spent on other projects. 

Yet Again

Another massacre of innocent life took place in the US recently.  The knee-jerk political action is to consider changes to gun control legislation.  Tragic as these events were I think you are choosing to live in denial if you think gun control is the answer.  There have now been many somewhat similar incidents, usually perpetrated by young or middle-aged men, and ending up with many dead.  While the circumstances of each have been different it’s a reasonable generalisation to state that none of the perpetrators were in a particularly happy state of mind when they carried out these awful acts.

It’s also reasonable to assume there are probably thousands more people in a very unhappy state that manage to control their unhappiness and frustration and avoid taking innocent life in a trail of carnage.  Indeed suicide is a shockingly high cause of death in young men generally.  You may need to look a bit deeper than gun control and challenge the whole structure of society and your present approach to living if you are going to actually address this issue.

Arguably, the so called ‘war on terror’ is not an unrelated problem, yes there was a religious and nationalistic element to the Sept 11 attacks, whereas other shootings have been more local.  However in all cases you tend to have isolated and marginalised usually young men that think they are facing a bleak future and so they can either be persuaded or decide themselves to carry out these acts.

The Universe may well be deterministic and consequently all these events may have been unavoidable since the beginning of time.  However the time has now come to change approach and you need to set a new agenda to be fair and reasonable to every member of society and seek to ensure everyone who wants to be is accepted and well integrated into your social groups.  You also need to look at sharing work, wealth and leisure such that everyone gets a reasonable amount of each.  While in general free markets help with linking effort and results there is clear evidence that this is not entirely working at present.  You should look at introduction of some group decision making software to agree what you think the best approach to dealing with this is.  Do not be in any doubt this is an issue and it needs to be addressed now.  There are many very clever people on your planet, however the plain fact remains that the collective result of all their endeavours is not actually particularly clever.  Recognition of this fact is the first step on the road to fixing it.  Other planets have managed why can’t this one?