Wednesday, 29 April 2015

Zero is Magic

I wrote before about how public debt and deficit are not problems and in fact we should probably be making a point of never paying back our public debts. If you can borrow at 3% and invest at 10% you would have to be a moron to ever pay down the debts you are accumulating.

So I'm pretty sure that grade eight math tells us not to pay down our public debt, but what about magicthink? Well, you see, zero is magic. Zero borrowing, and zero accumulation of savings is just obviously the right place to be. I mean, the difference between one dollar in debt, versus balance, versus one dollar of savings is a dollar and a dollar, but doesn't something magical happen at zero that changes things?

Surely no one would agree with the idea of a government that takes all the tax money it received and hordes it, collecting interest to add to the stack and getting richer and richer and richer. But advocating paying down the debt and advocating hording money for hording money's sake are actually exactly the same thing. So actually nearly everyone advocates exactly that. That's a bit of a conundrum.

Unless zero is magic. Good thing it is.

Monday, 27 April 2015

r > g
We hope that you choke

Capital in the 21st Century came out in 2013 and was thought of as a bit of a bombshell for economics, but not much has changed. Oh course a couple of years is not very long to turn the ship of economics around. If a physicist proved there was no dark matter in 2013, physicists would still be busy reproducing the results and studying them. I'm sure that's what's happening in many university economics departments right now.

We generally interact with scientific discoveries by using the technologies they enable, and technology is its own proof. The cell phone based on some theory of electromagnetics works doesn't stop working when the scientists figure out that the theory was wrong. Similarly, we interact with economics through public policy, which is its own proof, but public policy isn't actually good at proving itself right or wrong. If you can talk to your friend across town on a small handheld device then you know something about the cell phone is right. Historians can argue about whether our public policy was right a hundred years from now without finding any answer.

Economics isn't science. It's loosely based on reality, but its assertions are almost entirely made to be non-falsifiable. Of course non-falsifiability only goes so far. As science advances, our ability to test the reality of things advances. Non-testable common sense assertions like, demand drives prices up and supply drives them down, become testable when we gain a better ability to gather data.

This is where economics proves itself to be philosophy. Philosophers don't react well when their thought-to-be metaphysical assertions are physically tested and shown to  be false. Other things being equal, sometimes an increase in price means more units sold because people simply assume that a higher price must mean a better product. Sometimes an increase in supply means an increase in desirability as people begin to see other people having a thing. Basically the whole supply and demand thing is just not right.

Of course economists will deny this by retreating into abstraction. If psychology makes people want to buy things that are more expensive, then we have to factor that out when we talk about supply and demand laws. But economics is merely psychology without experiments, generalized. Factoring out psychology means that economics ceases to exist.

The laws of supply and demand sound pretty true, after all, I'm sure I do value things that are rarer or harder to acquire more than I value things that are abundant. But that is just one of many systems I use to place value on things. If the laws of supply and demand are merely the observation that one of the many ways of valuing things is thinking about their rarity then they are an observation worthy of six-year-olds playing with LEGO. But they are more than that, they are an unproven - and unstated - claim that rarity is the most or  one of the most significant factors in determining value. If that were true then the leaders of our nations would all be trans.

Capital in the 21st Century isn't really an economics text, it's a text about data which has no place in economics as the public experiences economics. The whole book has been boiled down to a three symbol expression by numerous reviewers: r > g. The rate of return on capital is greater than the rate of growth. That's not theory or a guess or even a law, it's just how things are. And if that's how things are, then those who support capitalism are doing one of three things:

1. Arguing that Piketty is simply wrong, in which case they better have some data of their own.

2. Arguing that g is so high under capitalism that it is the right system for the time being - but implicitly agreeing that we ought to be thinking about when to stop and what to do when we stop.

3. Saying that serfdom, the actual endgame of capitalism, is a good thing.

In university economics departments people are probably hashing out (1). In extremely esoteric philosophy discussions people are working on (2). But the majority of the economics thinking we deal with on a day to day basis is based firmly on (3).

Austerity, selling off public assets to pay down debt, tax cuts - these are the policies that hasten us towards serfdom. They are put in place by people who are convinced that they will be the lords rather than the serfs, and advocated by people who are convinced they will be among the well treated and trusted serfs.

Tuesday, 14 April 2015

How to Address Problem Gambling

Not long ago I mentioned that government gambling revenues are a sickness without much elaboration. I don't think this actually requires a lot of elaboration. Gambling may be something people enjoy doing, but it is also something that ruins people's lives. Outlawing gambling is a pointless idea that will serve organized crime and increase violence, but promoting it is against societal interest. If people have fun gambling, it's okay that they are having fun, but we don't become a better society by actively trying to make more people have fun gambling.

People often think about how taxes incent individual behaviour. If you take cigarettes that makes people less likely to smoke cigarettes or more likely to smoke fewer rather than more. The flip side of that, however, is that it makes the government want people to smoke cigarettes to get revenue. It shouldn't, but since we vote for politicians who spend money to promote wedge issues instead of voting for politicians who actually represent our interests, more revenue means more money to buy votes which is what politicians want.

Income tax and sales tax are good taxes because no matter how much income tax there is, people will still want income, and no matter how much sales tax there is, people will still buy things. Having governments interested in there being more income and more sales isn't really that destructive since those things are kind of proxies for broader productivity.

Anyway, previously on this blog I have set out social policies for the seemingly intractable problem of reducing problematic sex work while promoting good sex work. Today, I'm going to tell you how to deal with gambling.

Obviously I don't think the government should be making money from gambling, but leaving it totally unregulated for the private sector isn't a great idea. The first part of the solution is product labeling. If someone offers a gambling option it must feature a prominent label that clearly displays both the odds of coming out on top over 100 plays as a percentage, and the average dollars returned per dollar spent. A big sign that clearly says, "Every dollar you put into this, we give you 50 cents back."

Next, crack down on loans given by gaming establishments. That's not to say I'd pass a law against giving theses loans, I don't think such a law would be terribly effective. No, they can give the loans all they want. However, I would pass a law that says that any such loan is non-repayable. If you want to extend people credit, that's fine, but if they use any gaming service you provide they simply don't have to pay back the loan. Even if they trick you and circumvent a protection you have in place against allowing people you loan money to to use your gambling product. If you loan someone money, and they manage to somehow gamble with you, even if that was their intent when they took the loan, they money is theirs, you have no legal standing to reclaim it, and they can avail themselves of the police and the courts to protect themselves if you try to pressure them into paying you back. This law would explicitly set a legal test for determining if two organizations - one lender and one gaming outfit - are materially connected, that being whether a reasonable person would see them as connected. Basically, if the you can say "Come on!" then judge can say, "Yup, you got them."

Finally, let's keep the casinos we have and the lotteries we run going. However, they will keep going on a zero-profit model. The games will all pay out 1 to 1. Casinos would still operate at a profit by selling drinks and food and that can be used to defer some of the administration losses from the lottery products.

That's a combination of policies that would really screw with gambling in the province. The incentive to open private gambling establishments would be minimal because they'd be in direct competition with zero profit establishments and wouldn't be able to engage safely engage in usury.

Of course getting rid of those gambling revenues would be extremely painful in for the government in the short run, and would be extremely painful for the people of the province assuming we have a deluded government that thinks that paying down public debt is a good idea. Unlike the sex workers idea, this is totally impractical and implausible.

But I can dream.

Friday, 10 April 2015

Dead or on Parental Leave

Look, there's got to be some reason I stopped posting, and those are the two most likely I could come up with.

It's not even really that I have less time on my hands than I did when I was working, my baby has been napping pretty well so I have a fair bit of time on on hands each day. I've been playing King's Bounty: Dark Side, which I wouldn't be doing if I didn't have time to play King's Bounty: Dark Side. I've been cooking for more elaborately than is necessary. I've been watching a shocking amount of I Wanna Be The Guy fangame streams.

It's more that the time I do have isn't spent thinking about the sort of thing I would write about. When you spend your whole day around a baby it makes everything seem much more immediate. Spreadsheets and philosophy seem a little less important, because you can think whatever you want but life is really about food and diapers.

Anyway, I've had my little thought break. Next week I'll be back to write about how rotten capitalism is,


Thursday, 2 April 2015

Blackrock Mountain

I don't play hearthstone very often, so I'm not sure why I bought the new adventure, but I did. I'm kind of glad I did, though, because I've already had a lot of fun with it. Maybe not $24.99 worth of fun, but fun nonetheless.

First of all, the Mage challenge is pretty spectacular. Your opponent is the dark iron arena headed by High Justice Grimstone. His hero power summons a 1/1 taunt for one mana, which is overpowered but not overpowering. His deck, however, is entirely composed of legendary creatures, which he plays against his own interests.

The fight outside the challenge wasn't very tough, I beat it with a low-budget ramp druid I had lying around. The mage challenge, however, gives you a deck of 30 Unstable Portals. You don't even get to play with the new mage card in your challenge deck. So it's random legends against your completely random creatures. I lost my first game to him getting lorewalker cho which furnished him with some portals of his own that gave him some very nice answers to the other cards I got. I won the second game, and then played several more times. It's like Momir for Hearthstone. Among the funnier things that can happen is him playing Millhouse Manastorm allowing you to blow off all of your portals at once for a handful of undercosted nonsense.

I didn't feel like beating my head excessively against the heroic challenges today, but I checked out what they were. The Grim Guzzler is the first event in the adventure. In it the opponent has a zero mana hero power that they are forced to use every turn that puts a random minion from your deck and their deck into play. Obviously this is easy to beat by building a deck with about eight to ten very big minions and then all spells. I did this with a druid to get the Ironbark Protectors.

Well on heroic the Grim Guzzler summons one creature for you but two for itself. Now this seemed like a challenge heavily dependent on owning the big legendaries. Deathwing - remember there are not Battlecry triggers when you don't play the creature from your hand - Ysera, Mal'Ganis, and so on.

The only eight cast legendary I own is Kel'Thuzad. He's obviously a heck of a thing to get into play, but if the other things I'm getting aren't up to the task then I'm in trouble. But while going through the first three encounters, I got an interesting Rogue spell. It doesn't look very playable, and it strikes me that it's too bad it's a rogue card because it would be much more at home as a late-game control on control card: Gang Up.

Why would I need Deathwing when I could just have more Kel'Thuzads?


Now you might think my hand has at least one confusing inclusion, but at I had to play 29 spells to leave space for just one minion, meaning that I couldn't be too choosy. It hardly mattered, essentially I needed to play Gang Up on my second turn and then let the game win itself.

In case you are wondering what happens when you have four Kel'Thuzads and your opponent takes away one, the answer is that you now how six. The reason I don't have a screenshot of six Kel'Thuzads above is because I lost a Brawl that game. Hardly seemed fair.