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0 pointssokoloff1y ago0 comments

But they got 99 shares of government contribution for each share they put up for a 100x multiplier while the art patrons got 9 shares of government contribution for a 10x multiplier.

Setting aside the emotional content and looking only at the math, it’s not at all obvious to me that the project with 100 donors was somehow shorted.

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5 comments · 3 top-level

spencerflem1y ago· 2 in thread

Many people would consider fixing pipes a more important project despite the fact that the wealthy contributors could front a lot more cash for their pick.

sokoloffOP1y ago

Great. Now, suppose the 10 wealthy people are in favor of the pipes project and the 100 average people are in favor of an art museum.

Is the art museum or the pipes project more important?

spencerflem1y ago

You're missing the point, which is that the group with a lot more money to start have their voices heard more.

It matters some that their multiplier is different , but in absolute numbers its still more to the program that benefits fewer people. The "utility function" is not accurate because the wealthy's utility starts out with a massive advantage.

So yes, I think it would still be unfair if you switched it given the poor majority genuinely would rather have art than lead free pipes.

The problem is that their voices are counted less due to not starting with money.

But regardless, that would be a silly thing to switch because that's not a situation that ever comes up, while the original framing is a genuine problem in our society right now.

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jwarden1y ago

Yes good point. We'd have to actually flesh out the assumptions about marginal utility of wealth for low-income vs. the high-income group (as well as assumptions about individual utility functions), to demonstrate that this outcome was not optimal. I didn't do that in this article because it gets too mathy.

However, the optimality of QF does assume wealth equality. When you drop that assumption and assume diminishing marginal utility of wealth, you can show that QF is not optimal.

But I think you are right that the example in this article doesn't necessarily show that clearly. The example leans heavily on intuition (or emotional appeal). I think I will try to improve that section.

sdenton41y ago

A core problem of capitalism is that it only solves the problems of people with money... This is more of the same.

Consider that any of those 100 people might have a kid who would be the next Einstein, if only they hadn't been lead-poisoned. But these hundred people also have rent to pay and food to buy, and can only set aside $100 to deal with the lead-pipes problem. The existing distribution of wealth is not a good measure of the importance of the problems that these different individuals are experiencing. And the existing distribution of wealth is thus not a great way to prioritize solving problems for maximum societal benefit.

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