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Introducing laws via public bids


#1

Yes, precisely. That’s why the only approach that might make sense in short to medium term is a system based on individuals bidding. That is, have individual people each estimate the value or cost of laws for themselves. I’m not convinced if the simplest possible system of just simply bidding would work, but I’ll outline it here regardless. Basically, have a platform for the law proposals and bids as well as negative bids. The bids should be in the form of monthly or yearly payments.

The basic premise of the system would be that when positive bidders are offering more money, in total than negative bidders are requesting, then negative bidders will each receive what they asked for, annually and positive bidders will pay for that. In this case, the law becomes eligible for enforcement. If not, no money moves and law doesn’t become eligible for enforcement.

The cost of enforcement also needs to be included in the system somehow. It’d probably work to have positive bidders each define how much of their bid will be applied towards enforcement and how much towards bidding for eligibility.

One potential problem in this system is that if the bids are unbounded, it’s likely that many, if not nearly all, laws would end up uneligible due to a small number of individuals basically vetoing them by applying ridiculous negative bids. I’m not entirely convinced that this would be a problem in practise, but if it is, one potential solution would be to just ignore the highest (for exampel) 5% of negative bids for the specific law. This would discourage people from trying to milk the system as well. However, this would also lead to basically ignoring the costs for laws that only affect under 5% of the population negatively, so better make sure the percentage is set as low as you can without rendering the system useless.

Another thing that could potentially work is to make the identities of the people placing highest negative bids public. In this case the deciding rule should probably be based on the difference from the average or median negative bid. This would allow bidders to at least know who they need to convince. Of course, this is moot if all identities and bids are public anyway, which is worth considering also.

Another potential problem is that some people will see the system merely as a way to get money for nothing. To some degree, this is actually a design goal of the system. It’s a potential way to implement basic income, afterall. However, without a very enlightened populace, it’s likely to become a problem if it becomes popular to place only negative bids. For this reason, I suspect there needs to be an upper limit for how low the sum of all of your bids is allowed to be. In other words, the system doesn’t allow you to get whatever you ask from it, there’s a limit you can’t pass. However, even with this limit, it does allow individuals to “tax” laws they don’t like while funneling the proceeds towards laws they do like.

Richer individuals are likely to see more benefit in paying for laws that help their businesses than taking the basic income for themselves, so they will voluntarily forfeit the basic income in exchange for more voting power.

Anyway, this is a very raw version of an idea of how to implement something like this. The basic premise is to crowdsource the valuation process rathan than trying to build an algorithm to solve it. It’s not quite an AI algorithm, but it is a herding algorithm based on the premise that our pre-existing independent intelligences (whether Artificial or not) are capable of learning how to do the valuation if presented with suitable incentives.


The conceptual GeoFlux currency
(Michael Hrenka) #2

That’s a fascinating system that somewhat reminds me of Robin Hanson’s system of Futarchy. I think the most dramatic consequence of such a system would be that it gets much harder to pass any law, because people would default to placing a negative bid, unless they really see such a law as very beneficial for themselves.

Perhaps the best way to limit abuse of this system is to limit the total sum of negative bids to the total sum of positive bids (or a percentage or multiple thereof) that you’ve placed. That would create actual incentives to place positive bids in a measured way.


#3

Hmmh, [quote=“Radivis, post:84, topic:924”]
I think the most dramatic consequence of such a system would be that it gets much harder to pass any law, because people would default to placing a negative bid, unless they really see such a law as very beneficial for themselves.
[/quote]

Actually, in the system as I described it is probably too easy to pass a law in as I didn’t specify minimum requirements for a law to pass. I suspect there’s a need for some kind of a minimum percentage of voters or a minimum sum of positive bids before a law has any chance to become eligible to be enforced. The system needs some kind of a framework for preparing new laws in public before they can even be bidded on. Perhaps require some percentage of the population to give the law a stamp of “properly prepared” before it’s allowed into the bidding system.

Anyway, it’s worth noting that while this system does make it hard to pass laws (I think it should be hard too), that does not necessarily mean slow. However, fast tracking a law into force would be more expensive. However, the more people there are who find a law useful, the less work each person needs to do in order to get the law enacted. Equally, if there’s only a small elite who want a certain law, I think it’s perfectly reasonable that they have to convince the rest of the society that it’s a good deal before being able to enact it.

You didn’t like the idea of including basic income in the system? Or perhaps I expressed it too ambiguously? Expressed in algorithmic way, your collection of votes would be valid if the following evaluates to true: [sum of your negative bids] - [sum of your positive bids] < [basic income upper limit]

percentage or multiple based system would allow you to take more income from the system if you vote for more laws. To some degree that might also be useful, but unbounded would create worrisome incentives.


(Michael Hrenka) #4

That seems like a quite reasonable requirement.

I find the idea to finance a basic income that way a bit weird. If people voted honestly, getting a basic income would mean that on average you suffer more from the laws that are enacted than you profit from them. That doesn’t sound like a preferable situation. Many people would consider emigrating in such a situation. Rather than a basic income, it feels like a compensation for a nasty legal system that constrains the freedoms of certain people in problematic ways. On the other hand, people who like the legal situation would pay to keep it up, rather than getting a basic income out of it. As universal method for generating a basic income, this system fails hard.

You could see that as compensation for the research and deliberation effort that’s involved in voting for a new law rationally.


#5

What else is basic income good for? I mean, isn’t that precisely why it’s needed?

If the system is perfectly fair in all respects, I don’t see basic income as a necessary component. The only situation I can see where basic income makes sense is when there are people whose basic livelihood is otherwise impaired by the system. I’m completely baffled as to why you see this as failing hard.


(Michael Hrenka) #6

It feels quite artificial to cover all reasons for a basic income under the umbrella of “constraints of freedoms caused by the legal system”. The legal system isn’t responsible for everything.

Ok, let me summarise some arguments for a basic income:

  1. Enable people to exist under any condition, even if they can’t get any job – the more we automate (especially once strong AI appears), the harder it will become to get a job that actually pays enough to live of it
  2. Strengthening demand, so that companies can sell their goods, even in a highly automated economy. This can only work, the the basic income has at least some redistributing effects
  3. Supporting entrepreneurial activities, which probably contribute to further innovation
  4. Increasing the speed of automation, which is slowed down politically by negative public views of automation – this requires a universal basic income that is coupled to total economic performance, so that everyone becomes a shareholder of an automated economy.
  5. Getting rid of unnecessary bureaucracy
  6. Getting rid of negative incentives to seek further employment in low income sectors, caused by extremely high marginal tax rates in the case that people get social payments
  7. Helping in fixing excessive economic inequality by providing a canonical funnel for redistributing societal incomes and wealth – of course, this also only works if the basic income has redistributive effects

Overall, my lines of argumentation come down to optimising the performance of the economy by introducing a suitable universal basic income. That’s of course not the only overall reason. It’s also good to protect people’s right to live with a universal basic income. Human rights don’t necessarily always coincide with economic utility, so it’s important to emphasize that positive human rights should be granted, too.

How do you define “fair”? Is the overall performance of the system a component of “fairness”? I don’t see how a system without universal basic income could compete with one that incorporates a universal basic income – at least in the long run.


#7

Yes, that’s why I removed the word “legal” from my sentences and only left “system”.

In other words, it’s there as a backup in case the system fails for someone.

In these cases the basic income is compensating for a failure in the system of ownership. Which is based on the legal system but functions as a layer on top of it.

These are failures of the legal system.

A system is fair when it’s possible for everyone to live comfortably without basic income. However, I do think basic income is good to have as a fallback since lasting fairness is probably a pipe dream in a system that’s constantly changing. That’s the reason I suggested the basic income component for the system I described.

However, you didn’t reply to the point I was most interested in hearing an answer to. Why do you think my suggestion fails as a way to provide universal income?


(Michael Hrenka) #8

When you bring the point of dynamics into consideration, then things get complicated. Because static fairness doesn’t seem to be achievable, the system needs to operate on a dynamic basis. But that would require evaluating the individual value of laws dynamically, too, so bids for laws would need to be able to be changed dynamically.

Because your system doesn’t guarantee a basic universal income, in the case of a citizen that has an overall positive view of the current legal situation. A conditional “emergency income” could be achieved for citizens who are quite unhappy with the current legal situation by placing large negative bids on laws. That might be a reasonable mechanism for fine tuning compensation for negative externalities of the legal system, but it’s way too indirect, inappropriate, and unreliable to act as reasonable basis for a universal basic income. It would be way easier, if people placed positive bids on the introduction of a universal basic income financed via some form of taxation. And that’s probably what would actually happen sooner or later in a system like that.


#9

That’s one of the assumptions I built this model around, that the bids would change with time. Perhaps quite frequently even. However, in the interest of stability, the changes in the bids should only take effect periodically, so that the market has time to react. It’s a kind of a huge negotiation process that’s big enough that no individual can account for everything.

Ah, I see, you don’t like that getting the basic income requires the individual to either try to figure out which laws are the ones that are actually responsible for the fact that he’s having trouble making ends meet or just pick them randomly. I personally view that as a last resort type of support. In other words, it’s there in case the systems built on top of this one fail and the frequency at which it happens is a valuable signal that indicates whether the system requires fixing or not.

But unreliable? I think that’s only the case if the bids have to placed blind without seeing bids from others or if the bids are final and uneditable. My vision of the system is such that there are bidding periods during which anyone can change their bids any way they want and the changes are visible to everyone. Then there are preset moments when the bids actually take effect. So it’s more like public negotiation rather than blind bidding.

Anyway, I agree that it’s likely that this system would end up creating a system on top of this one that handles basic income in some other way. The existence of the possibility to get basic income through this system would probably make it even more likely. However, I don’t think it makes the basic income feature of this system unnecessary. There’s a need to have such a system at the very core of the society, which is what this system would effectively be. Otherwise it’s very difficult to guarantee that the system will contain such a feature in any shape or form.

By the way, it just occurred to me that this system is based on the assumption of abundance. It might totally fail if we’re ever reduced to a state where we no longer have enough for the basic needs of everyone. That’s somewhat worrying, but then, I’m not sure if it’s actually possible to handle such a situation gracefully with any system.