Thoughts at Random

The main idea: the area under an assumed linear demand curve is a far better approximation of utility gains than current GDP accounting practices.  0. Posts on this blog are ranked in decreasing order of likeability to myself. This post was originally posted on 04.11.2021, and the current version may have been updated several times from its original form.   1 The Nominal 1.1 I was inspired to think of this when reading this post (h/t Astral Codex Ten ). All of the relevant critique of the post itself can be found in the comments, but it helped me realize there is something off with real GDP as a measure of standard of life. I will take the opposite view of Less Wrong though, and state that real GDP accounting overestimates gains in standard of life. 1.2 Let's take a simple economy that only produces and consumes widgets. I am not interested in nominal – real distinctions here, so I need not assume any more than one product class, and will stick to inflation not being a thi...

The main idea: require all listed firms to act as their own shares’ clearinghouses, considerably narrowing the gap between market cap and book value.  0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 18.06.2022, and the current version may have been updated several times from its original form.   1 All equity is overvalued 1.1 There’s a fundamental bias built into equity (and most other capital) markets: its far easier to cause a stock’s price to go up than down. 1.2 If you think stock X is underpriced, just go and buy it. What can you do if you think stock Y is overpriced? 1.3 You can sell, but this means that only those who hold the stock in the first place are entitled to vote on whether its overpriced or not, compared to how everyone is entitled to vote on whether its underpriced. 1.4 You can sell short. Which mechanism is based on leverage, hence very risky to a degree buying a stock that may lose value isn...

The main idea: switching government (or at least regional) borrowing to fully amortized schedules only would greatly limit the propensity to acquire leverage beyond reason.   0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 16.10.2021, and the current version may have been updated several times from its original form.   1. Problem: balloon loans 1.1 As far as I know, all borrowing taken out by governments the world over is repaid in bullet / balloon format, where the principal is fully repaid in one single payment at the end of the loan term, and only interest is payable up until that time. Some of those loans run for 50 years, just so we are clear. 1.2 At the other end of the repayment schedule spectrum, you find a fully amortized loan, whereby the borrower repays both the principal and interest on it in a series of equal repayments throughout the term of the loan (ask Excel). The issue and solution should ...

The main idea: the Left gravitates towards a Corporatist and then Socialist Oligarchy, as the Right does towards an Interventionist Autocracy run by a strong man. 0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 25.04.2022, and the current version may have been updated several times from its original form. 0.1 I have not read De Jouvenel (they stopped asking us to attend the office, can't fit long from unless on the way there and from) though I am aware of many “in a nutshell” versions digested by others. Further, I have not read C.A. Bond either (unavailable, though I remember the blog) and there go the two authorities on the HLvM model. If below one finds any silliness that would have been easily avoided by anyone who had read either of them, now you know how it got there.    0.2 This post is a fluff piece, containing analysis and commentary but no proposed solution to some issue. I try to keep this sort of ...

The main idea: a VAT-financed UBI scheme allows for the market to pick those in need as well as those who can afford to pay.   0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 10.05.2022, and the current version may have been updated several times from its original form.   1.1 The simplicity of the Universal Basic Income scheme is seductive to many but opens the plan to critiques from those who dislike the idea of wasting money on people who are in no need of it. 1.2 Which charge is true only trivially, but can be easily shot down when remembering that an UBI scheme must somehow be paid for (technological plenty does not automatically translate into an UBI, you still have to tax people). 1.3 Applying any taxation scheme such as to fund an UBI would create, once the UBI and tax net out, some who receive net payments, and others who provide net payments, despite the UBI leg itself only providing uniform ...

The main idea: taxing the self-declared value of a set number of tradable residency permits is the most efficient way to implement income taxes on foreign residents.    0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 06.04.2022, and the current version may have been updated several times from its original form.  1.1 I am a VAT kind of guy, and would ideally like to see all taxes scrapped in favour of a combination of a no-exeptions VAT and a property (not just land) tax. Importantly, this would mean no income tax. 1.2 But income taxes would still be called for, albeit only to be applied on foreign residents. How to make such taxes as efficient as possible?  1.3 Why, the way you establish any market-efficient interface, set the quantity and let the market set the price (yep, rationing works, price controls do not). 1.4 A set number of transferable residency permits are issued (ideally only once), and i...

The main idea: a corporatist system where only corporations of a certain minimal market cap would be allowed to operate any economic activity at all would be a great improvement over straight socialism. 0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 26.09.2022, and the current version may have been updated several times from its original form.   1 The system 1.1 The efficient implementation of a truly corporatist economic system requires publicly-listed firms acting as clearinghouses of their own shares, as discussed previously . 1.2 Now that one’s market cap is an actionable datum, you can put all the weight of the world on it. Only firms of at least X value are allowed to operate and serve the market. The X would be such as to allow the operation of no more than a couple dozen firms in the whole country. The end. 1.3 X would be enforced by establishing the appropriate lower limit to the price the firm ...

The main idea: allowing the private provision of some public services by peculiarities in contract design.  0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 27.11.2022, and the current version may have been updated several times from its original form. 0.1 This is an expanded and translated version of what I’ve written elsewhere for the specific application of city parking. I think it generalises pretty well. 1 The problem 1.1 Assume you wish to provide a service that is beleaguered by positive externalities to the degree that no private provider would ever fund the service, as they could only capture a small part of the true value it would provide. 1.2 An immediate example would be a rail line between two major cities, which increases the property values in both by orders of magnitude more than you can ever charge by way of ticketing. As I’m using this as just an example, ignore the obvious solution of sellin...

The main idea: tell people what their house is worth, and tax that value, but also offer to buy at that price. 0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 13.04.2023, and the current version may have been updated several times from its original form.  1.1 I am rather fond of the concept of taxing the self-assessed value of something, usually implemented by requiring owners to declare a value at which they must sell the object to anyone, and upon which value the tax is applied. Indeed, I’ve relied on this mechanism myself here . 1.2 But there is a rather obvious drawback of this approach: it effectively transfers the actual ownership of the object away from the owner and, indeed, away from anyone. Well, anyone except the state which pays no tax, in practice making all sectors on which it is applied fall under de facto government ownership. 1.3 But a minor improvement may easily take care of this issue: instead o...

The main idea: graph total military personnel and per-personnel expense, and arrange your forces perpendicular to where your adversary graphs.  0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 03.05.2023, and the current version may have been updated several times from its original form.  1.1 Here’s a dirt-simple and entirely conjectural (but hopefully fecund) model of military force planning: collect, for a series of countries of interest, the total size (in personnel) of all military branches (active duty, reserve and paramilitary), as well as the total military budget (ideally on a PPP basis). 1.2 Now calculate the total spending per personnel, and you’ll have decomposed military strength into two poorly-correlated factors, quality (a proxy for which is the per-personnel expense) and quantity (a proxy for which is total personnel). Graph this on a log basis. As an example, I use Wikipedia numbers to chart th...

The main idea: the impact on externalities on driving up the optimal size of property / political units.  0. Posts on this blog are ranked in decreasing order of likeability to myself. This entry was originally posted on 27.07.2022, and the current version may have been updated several times from its original form. 0.1 This post is a fluff piece, containing analysis and commentary but no proposed solution to some issue. I try to keep this sort of stuff to a minimum as commentary for commentary’s sake is not the point of this blog.  1 Is it the individual? In defence of zoning, or why you can’t own a piece of a city 1.1 The bane of private property owners are externalities, stuff you do where you only reap some of the benefit or bear some of the cost. Look it up. A reliable way to eliminate externalities is to internalise them, i.e. have the same owner own all bits of property affected by each-other’s externalities, at which point the owner is able to rationally calculate the ...