Noted rationalist Eliezer Yudkowsky has written a response to my Simplistic Theory of Left and Right. With his kind permission, Eliezer speaks:

My “Human Theory of the Left” is as follows: The Left holds markets to the same standards as human beings.

Consider a small group of 50 people disconnected from the outside

world, as in the world where humans evolved. When you offer somebody

fifty carrots for an antelope haunch, that price carries with it a great

array of judgments and considerations, like whether that person has

done you any favors in the past, and how much effort it took them to

hunt the antelope, and how much effort it took you to gather the

carrots. If you offer them an unusually generous price, you’d expect

them to give good prices in return in the future. A low price is either

a status-lowering insult, or carries with it a judgment that the other

person already has lower status than you.

And that’s what the

Left sees when they look at somebody being paid $8/hour. They don’t see

a supply curve, or a demand curve; or a tautology that for every loaf

of bread bought there must be a loaf of bread sold, and therefore supply

is always and everywhere equal to demand; they don’t see a price as the

input to the supply function and demand function which makes their

output be equal. They see a judgment about how hard an employee works,

and how much they need and deserve.

So of course they hate whatever looks at a poor starving mother and says “$8/hour”. Who wouldn’t?

Ask them and they’ll *tell you*: They don’t *hate* markets. They just

think that the prices and outcomes aren’t fair, and that tribal action

is required for everyone to get together and decide that the prices and

outcomes should be fairer.

If this post gets shared outside my

own feed, some people will be reading this and wondering why I

*wouldn’t* want prices to be fair.

And they’ll suspect that I

must worship the Holy Market and believe *its* prices to be wise and

fair; and that if I object to any regulation it’s because I want the

holy, wise and fair Market Price to be undisturbed.

This

incidentally is what your non-economist friends hear you saying whenever

you use the phrase “efficient markets”. They think you are talking

about market prices being, maybe not fair, but the most efficient thing

for society; and they’re wondering what you mean by “efficiency”, and

who benefits from that, and whether it’s worth it, and whether the goods

being produced by all this efficiency are actually flowing to the

people making $8/hour.

You reply, “What the hell that is not even

remotely anything the efficient markets hypothesis is talking about at

all, you’re not even in the right genre of thoughts, the weak form of

the EMH says that the supply/demand-intersecting price for a

highly-liquid well-traded financial asset is a rational subjective

estimate of the expectation of its supply/demand-intersecting price two

years later taking into account all public information, because

otherwise it would be possible to pump money out of the predictable

price changes. The EMH is a descriptive statement about price changes

over time, not a normative statement about the relation of asset prices

to anything else in the outside world.”

This is not a short paragraph in the standard human ontology.

“So you think that $8/hour wages are efficient?” they say.

“No,” you reply, “that’s just not remotely what the word efficient

*means at all*. The EMH is about price changes, not prices, and it has

nothing to do with this. But I do think that $8/hour is balancing the

supply function and the demand function for that kind of labor.”

“And you think it’s good for society for these functions to be balanced?” they inquire.

The one is willing to consider the force of the argument they think

they’re hearing–that the market is a weird and foreign god which will

nonetheless bring us the right benefits if we make it the right

sacrifices. But, they respond, *is* the market god really bringing us

these benefits? Aren’t some people getting shafted? Aren’t some people

being sacrificed to save others, maybe a lot of people being sacrificed

to save a few others, and isn’t that worth the tribe getting together

and deciding to change things?

And you clutch your hair and say,

“No, you don’t get it, you know the market is doing something important

but you don’t understand what that thing *is*, you think the markets are

like arteries carrying goods around and they can get blocked and starve

some tissues, and you want to perform surgery on the arteries to

unblock them, but actually THE MARKETS ARE RIBOSOMES AND YOU’RE TRYING

TO EDIT THE DNA CODE AND EVERYTHING WILL BREAK SIMULTANEOUSLY LIKE IT

DID IN VENEZUELA.”

And what they hear you saying is “The markets

are wise, and their prices carry wisdom you knoweth not; do you have an

arm like the Lord, and can your voice thunder like His?”

Because,

they know in their bones, when a corporation pays an employee $8/hour,

it means something. It means something about the employer and it says

something about what the employer believes about the employee. And if

you say “WAIT DON’T MESS WITH THAT” there’s a lot of things you might

mean that have short sentences in their ontology: you could mean that

you believe $8/hour is the fair price; you could mean you believe the

price is unfair but that it’s worth throwing the employees under the bus

so that society keeps functioning; you could believe that maybe the

market knows something you don’t.

And all of those things, one

way or another, are saying that you believe there’s some virtue in that

$8/hour price, some virtue transmitted to it by the virtue you think is

present within the market that assigns it. And that’s a cruel thing to

say to someone getting $8/hour, isn’t it?

Just look at what the market does. How can you believe that it’s wise, or right, or fair?

And they can’t believe that you *don’t* think that–even though you’ll

very loudly tell them you don’t think that–when you are being like “IF

YOU WANT THEM TO HAVE MORE MONEY THEN JUST GIVE THEM MONEY BUT FOR GOD’S

SAKE DON’T MESS WITH THE NUMBER THAT SAYS 8.”

This by the way

is another example of why it’s an important meta-conversational

principle to pay a lot of attention to what people say they believe and

want, and what they tell you they *don’t* believe and want. And that if

nothing else should give you pause in saying that the Left is

anti-market when so many moderate leftists would immediately say “But

that’s not what I believe!”

Maybe we’d have an easier time

explaining economics if we deleted every appearance of the words “price”

and “wage” and substituted “supply-demand equilibrator”. A national

$15/hour minimum supply-demand equilibrator sounds a bit more dangerous,

doesn’t it? Increase the Earned Income Tax Credit, or better yet use

hourly wage subsidies. Establish a land value tax and give the money to

poor people, while being careful not to establish new paperwork

requirements that exclude busy or struggling people and being careful

about phaseout thresholds. Or if you really insist on looking at things

in the simplest possible way, then take money away from rich people and

give it to poor people. It’ll do less damage than messing with the

supply-demand equilibrators.

I feel like I’m at a banquet

watching people trying to eat the plates and they’re like “No, no, I

understand what food does, you’re just not familiar with the studies

showing that eating small amounts of ceramic doesn’t hurt much” and I’m

like “If you knew what food does and what the plates do then you would

not be TRYING to eat the plates.”

I honestly wonder if we’d have

better luck explaining economics if we used the metaphor of a terrifying

and incomprehensible alien deity that is kept barely contained by a

complicated and humanly meaningless ritual, and that if somebody upsets

the ritual prices then It will break loose and all the electrical plants

will simultaneously catch fire. Because that probably *is* the closest

translation of the math we believe into a native human ontology.

Want to help the bottom 30%? Don’t scribble over the mad inscriptions

that are closest to them, trying to prettify the blood-drawn curves.

Mess with any other numbers than those, move money around in any other

way than that, because It is standing very near to them already.

People like Bryan Caplan see people in 6000BC wearing animal skins as

the native state of affairs without the Market. People like Bryan keep

trying to explain how the Market got us away from that, hoping to foster

some good feelings about the Market that will lead people to maybe have

some respect for its $8/hour figure.

If my Human Theory of the

Left is true, then this is exactly the wrong thing to say, and eternally

doomed to failure. To praise that which would offer $8/hour to a

struggling family, is directly an insult to that family, by the humanly

standard codes of honor. If you want people to leave the $8/hour price

alone, and you want to make the point about 6000BC, you could maybe try

saying, “And that’s what Tekram does if you have no price rituals at

all.”

But don’t try to tell them that the Market is good, or wise, or kind. They can see with their own eyes that’s false.