by jwarden on 6/9/25, 2:33 PM with 96 comments
by gbacon on 6/9/25, 4:04 PM
I am far from denying that in our system equilibrium analysis has a useful function to perform. But when it comes to the point where it misleads some of our leading thinkers into believing that the situation which it describes has direct relevance to the solution of practical problems, it is time that we remember that it does not deal with the social process at all and that it is no more than a useful preliminary to the study of the main problem.
by nkmnz on 6/9/25, 5:23 PM
> Three art patrons each contribute [money] to the local public art museum. [...] They each expect to experience [money] worth of individual utility from enjoying the [...] art.
> [...] utility of saved lives is experienced only once by each of the cancer patients – the three contributors don’t experience that utility (other than feeling good about those lives being saved, but that’s not the kind of utility we’re trying to maximize).
This approach of intellectual unsoundness - i.e., accepting the social and individual utility of enjoying the arts, but denying any such utility for enjoying the saved lives – is present throughout the article. And I haven't started with the author comparing random cases of contributions that differ in multiple dimensions where using a ceteris paribus approach would immediately show that his arguments are shallow...
by nlitened on 6/9/25, 5:33 PM
by gs17 on 6/9/25, 3:55 PM
Well, yes, but those many more people getting more utility didn't contribute. If the same contribution was spread out over 10x the people each contributing $10, they'd get 10x the funding.
Their complaint here is really that ideal QF would also require assuming people actually get involved with it. I agree it has issues, but this isn't what I'd lead with. Coordination seems like a much larger threat to the concept.
by efitz on 6/9/25, 3:54 PM
It’s a much simpler idea to just have citizens vote for what they want their tax money spent on, by voting for candidates who will represent their interests.
by crmd on 6/9/25, 5:36 PM
by bee_rider on 6/9/25, 5:03 PM
But, to start chipping away… For the wealth inequality section, I gather the goal is to let people provide a signal based on how much they are willing to spend. Shouldn’t that be corrected for their wealth, because that shows how much they value the thing? If the art patrons are all 1B-aires, and the anti-lead-pipe folks are 100k-aires (just to make the math easier), we could do:
Art:
10*(sqrt(1M/1B)^2) = 1/100
Pipes:
100*(sqrt(100/100k)^2) = 1/10
Now we’ve got some measure of everybody’s preference, and can allocate the budget appropriately. Whatever the overall budgets is, 10x more for pipes than art seems… well, at least a lot closer to reasonable than ~100x more on art than pipes
by cleak on 6/9/25, 2:54 PM
by Sweepi on 6/10/25, 12:57 PM
"If the wealth equality assumption does not hold, QF is anything but optimal. Consider these two examples:
Ten wealthy art patrons each contribute €1,000,000 to the local public art museum.
Total Contributions: 10×€1,000,000=€10,000,000
QF allocates: (10×sqrt(1,000,000))2=€100,000,000
Subsidy: €90,000,000
Total Contributions: 100×€100=€10,000
QF allocates: (100×sqrt(100 ))2=€1,000,000
Subsidy: €990,000.
Intuitively, I thought: Well, the "hundred lower‑income individuals" got there money 99x, while the "Ten wealthy art patrons" only got 9x. (1/11 for having 1/10 participants). Isn't that working as intended?
Especially if you have a progressive income/wealth tax.
by cogman10 on 6/9/25, 5:53 PM
QF assumes that you can know for sure who is an individual. Yet how would you know that with crypto funding?
Let's say I'm malicious and I want to pillage a QF. What stops me from setting up a bogus social project/company, registering it, and then taking my $1000 and splitting it into 1000 wallets with $1 a piece which all contribute to my scam project?
If I know a QF fund is getting setup, it'd be pretty easy to create 1000s of wallets, vary the money in them, and have them all fund my scam. I can even automate some trading between these wallets to make the source of the funds look somewhat organic.
Pillaging these funds seems like it's almost a trivial endeavor assuming you can get your own scam company associate with them. And the more money you have, the easier it'd be to pillage.
by nivertech on 6/10/25, 5:47 AM
There is another method of funding public goods re-surfaced by crypto folks: DAC (Dominant Assurance Contracts) which is more like SiTG (Skin in The Game), and I think many blank check companies / SPACs use some elements of it
BTW, that’s why economists can’t predict sh*t: they trying to use simple curves / closed form solutions, instead of using ABM (Agent-Based Modeling) or even more advanced simulation methods
by jovial_cavalier on 6/9/25, 3:51 PM
by jongjong on 6/9/25, 9:27 PM
It's incredible how, whenever people try to come up with some centralized framework, ideology or plan to improve things, they make things worse and the cost falls on someone else's shoulders.
I've been feeling the effects of this deeply flawed philosophy in my life literally every day yet I had no say on it.
by YossarianFrPrez on 6/9/25, 6:48 PM
However, compare these two problems: a) not enough people who can afford to do so engage in philanthropy, and b) philanthropic funding isn't quasi-democratically distributed. I have to imagine that (a) is a much, much bigger issue than (b).
I guess one could argue that because there isn't an analog of "a market" for public goods (c.f. "The Use of Knowledge in Society") somehow we aren't funding the important public goods "efficiently"? And maybe we should think about this more? Yet it's not clear that efficiency (in the economic sense) should be the goal or even applies. This is because markets are great at distilling people's the preferences for fungible goods they want to buy and fungible services they want to use when faced with multiple options for procuring some of each. But a) the vast majority of people don't have that same type of preference for which public goods should be funded, and b) public goods typically aren't fungible. (I.e., funding one scientist gives you a very different research output from funding another in the same subfield.)
by jongjong on 6/9/25, 8:52 PM
> So how about non-excludable goods that are rivalrous in nature? This intersection represents common goods such as fish, timber or coal. Everyone has access to these resources but there is an inherent competition when it comes to collecting them due to potential overuse or congestion.
These are excludable in many countries. There are often regulations which prevent you from making a living selling fish or timber. There is a significant financial and time hurdle which needs to be cleared to obtain a boat + license to fish commercially. In terms or logging and coal mining, you are excluded based on lack of access to land + equipment + license. Not everyone legally has access to these in all countries. Also, it's not even possible to obtain a loan to do these in most countries. It's literally impossible to get started if you do not have the financial means.
I would also question the 'non-excludable and non-rivalous' quadrant. Not everyone has access to clean air. Many people are trapped in urban centres with low air quality and cannot afford to leave. Some literally cannot leave because they may be in prison, on probation or it's a condition of bankruptcy. Clean air is rivalous since there are a limited number of jobs available in places where the air is clean. Privacy is certainly excludale; e.g. prison and clearly it is rivalous as we have to fight to protect it constantly.
by hoppp on 6/9/25, 6:38 PM
There are also issues plaguing the ecosystem like delayed or missing payments
by j2kun on 6/9/25, 4:03 PM
Sounds like a contradiction to me. Nothing about cryptocurrency should be considered a public good, even if wealthy donors are struggling to efficiently donate money to its development.