Thanks for the response.

You point out that both in markets and in EA (at least its idealised version), people are deliberately seeking out the most value for themselves or others, contrasted to much of the charity world, where people don't tend to think of what they're doing as seeking out the most value for themselves or others. That sounds roughly right, but I don't think it follows that EA is best imagined or idealised as a kind of market. Though I'm not suggesting you claim that it does follow.

It also seems worth pointing out that in some sense there are literal markets for 'normal charity' interventions — like the different options I can choose from to sponsor a cute animal as a Christmas gift for someone. And these are markets where people are in some sense choosing the best or most 'valuable' deal (insofar as I might compare charities, and those charities will do various things to vie for my donation). I think this shows that the "is this a market" test does not necessarily delineate your idealised version of EA from 'normal charity' alone. Again, not suggesting you make that exact claim, but I think it's worth getting clear on.

Instead, as you suggest, it's what the market is in that matters — in the case of EA we want a market for "things that do the most good". You could construe this as a difference in the preferences of the buyers, where the preferences of EA donors are typically more explicitly consequentialist / welfarist / cosmopolitan than donors to other kinds of charity. So I guess your claim is not that being a market in charitable interventions would make EA distinctive, but rather that it is or should be a particular kind of market where the buyers want to do the most good. Is that a fair summary of your view?

If so, I think I'm emphasising that descriptively the "...doing the most good" part may be more distinctive of the EA project than "EA is a market for..." Normatively I take you to want EA to be more like a competitive market, and there I think there are certainly features of competitive markets that seem good to move towards, but I'm also hesitant to make the market analogy, like, the central guide to how EA should change.

Couple other points:

I still don't think the Hayekian motivation for markets carries over to the EA case, at least not as you've make the pitch. My (possibly poorly remembered) understanding was that markets are a useful way to aggregate information about individuals preferences and affordances via the price discovery mechanism. It's true that the EA system as a whole (hopefully) discovers things about what are the best ways to help people, but not through the mechanism of price discovery! In fact, I'd say the way it uncovers information is just as similar to how a planner could uncover information — by commissioning research etc. Maybe I'm missing something here.^[1]

I agree that the fact people are aiming at value for others doesn't invalidate the analogy. Indeed, people buy things for other people in normal markets very often.

On your point about intervention, I guess I'm confused about what it means to 'intervene' in the market for doing the most good, and who is the 'we' doing the intervening (who presumably are neither funder nor org). Like, what is the analogy to imposing taxes or subsidies, and what is the entity imposing them?

You characterise my view as being indifferent on whether EA should be more like a market, and in favour of advocating for particular causes. I'd say my view is more that I'm just kinda confused about exactly what the market analogy prescribes, and as such I'm wary of using the market metaphor as a guide. I'd probably endorse some of the things you say it recommends.

However I strongly agree that if EA just became a vehicle for advocating a fixed set of causes from now on, then it would lose a very major part of what makes it distinctive. Part of what makes EA distinctive are all the features that identifies those causes — a culture of open discussion and curiosity, norms around good epistemic practice, a relatively meritocratic job market, and a willingness on the part of orgs, funders, and individuals to radically reassess their priorities on the grounds of new evidence. Those things have much in common with free markets, but I don't think we need the market analogy to see their merit.

1. ^{^}

   Another disanalogy might be that price discovery works through an adversarial relationship where (speaking loosely) buyers care about output for money and sellers care about money for input. But in the EA case, buyers care about altruistic value per dollar, but sellers (e.g. orgs) don't care about profit — they often also care about altruistic value per dollar. So what is the analogous price discovery mechanism?

I notice that I'm getting confused when I try to make the market analogy especially well, but I do think there's something valuable to it.

Caveat that I skim-read up to "To what extent is EA functioning differently from this right now?", so may have missed important points, and also I'm writing quickly.

Claims inspired by the analogy which I agree with:

• Various kinds of competition between EA-oriented orgs is good: competition for hires, competition for funding, and competition for kinds of reputation
  • And I think this is true roughly for the same reason that competition between for-profit firms is good: it imposes a pressure on orgs/firms to innovate to get some edge over their competitors, which causes the sector as a whole to innovate
  • I think it is also good to have some pressures to exist for orgs to fold, or at least to fold specific projects, when they're not having the impact they hoped for. When a firm folds, that's bad for its employees in the short run; but having an environment where the least productive firms can go bust can raise the average productivity of a firm
    • If you don't allow many projects to fail, that could mean (i) that the ecosystem is insufficiently risk-tolerant; or (ii) the ecosystem is inefficiently sustaining failed projects on life-support, in a way which wouldn't happen in a free market
    • Here's a commendable example of an org wrapping up a program because of disappointing empirical results. Seems good to celebrate stuff like this and make sure the incentives are there for such decisions to be made when best
  • More concretely: I don't think we need to always assume that it's not worth starting an org working on X if an org already exists to work on X (e.g. I think it's cool that Probably Good exists as well as 80k)
• Many things that make standard markets inefficient are also bad for the EA ecosystem. You list "corruption, nepotism, arbitrariness, dishonesty" and those do all sound like things which shouldn't exist within EA
• It would be good if there were more large donors of EA (largely because this would mean more money going to important causes)
• It's often good for EA orgs which provide a service to other EA orgs to charge those orgs directly, rather than rely on grant money themselves to provide the service for free. And perhaps this should be more common
  • For roughly the same reason that centrally planned economies are worse than free markets at naturally scaling down services which aren't providing much value, and scaling up the opposite

However, there are aspects of the analogy which still feel a bit confusing to me (after ~10 mins of thinking), such that I'd want to resist claims that in some sense this "market for ways to do the most good" analogy should be a or the central way to conceptualise what EA is about. In particular:

• As Ben West points out, the consumers in this analogy are not the beneficiaries. The Hayekian story about what makes markets indispensable involves a story about how they're indispensably good at aggregating preferences across many buyers and sellers, more effectively than any planner. But these stories don't go through in the analogous case, because the buyers (donors) are buying on behalf of others
  • Indeed, this is a major reason to expect that 'markets' for charitable interventions are inefficient with respect to actual impact, and thus a major insight behind EA!
  • Another complication is that in commissioning research rather than on-the-ground interventions, the donors are doing something like buying information to better inform their own preferences. I don't know how this maps onto the standard market case (maybe it does)
• Seems to me that the EA case might be more analogous to a labour market than a product market (since donors are more like employers than people shopping at a farmers market). Much of the analogy goes through with this change but not all (e.g. labour supply curves are often kind of funky)
• I'm less clear on why monopsony is bad specifically for reasons inspired by the market analogy. My impression of the major reason why monopsonies are bad is a bit different from yours —
  • Imagine there's one employer facing an upward-sloping labour supply curve and paying the same wage to everyone. Then the profit maximising wage for a monopsonist can be lower than the competitive equilibrium, leading to a deadweight loss (e.g. more unemployment and lower wages). And it's the deadweight loss that is the bad thing
  • But EA employers aren't maximising profit for themselves — they're mostly nonprofits!
  • You could make the analogy work better by treating profits for the donor as impact. I'm confused on exactly how you'd model this, and would be interested if someone who knew economics had thoughts. But it just seems intuitive to me that the analogous deadweight loss reason to avoid monopsony doesn't straightforwardly carry over (minimally, the impartial donor could just choose to pay the competitive wage)
• Competitive Markets can involve some behaviour which is not directly productive, but does help companies get a leg-up on one another (such that many or all companies involved would prefer if that behaviour weren't an option for anyone). One example is advertising (advertising is useful for other reasons, I mostly have in mind "Pepsi vs Coke" style advertising). I don't like the idea of more of this kind of competitive advertising-type behaviour in EA
  • Edit: this is an example of imperfect competition, thanks to yefreitor for pointing out
• Companies in competition won't share valuable proprietary information with one another for obvious reasons. But I think it's often really good that EA orgs share research insights and other kinds of advice, even when not sharing that information could have given the org that generated it a leg-up on other orgs
  • Indeed, I think this mutual supportiveness is a good feature of the EA community on the whole, and could account for some of its successes

More generally, if the claim is that this market analogy should be a or the central way to conceptualise what EA is about, then I just feel like the analogy misses most of what's important. It captures how transactions work between donors and orgs, and how orgs compete for funding. But it seems to me that it matters at least as much to understand what people are doing inside those orgs — what they are working on, how they are reasoning about them, why they are working on them, how the donors choose what to fund, and so on. Makes me think of this Herbert Simon quote. 

Hopefully some of that makes sense. I think it's likely I got some economics-y points wrong and look forward to being corrected on them.

Thanks for that link! Since writing this post I have become aware of a bunch of exciting BOTEC-adjacent projects, especially from speaking with Adam Binks from Sage / Quantified Intuitions.

I'm curious about how far you and Tom have come in working on this.

I'm not actively working with Tom on this project, but I could put you in touch.

I think Ajeya and Kelsey are among the very best communicators (and researchers) on issues around AI alignment (e.g. 1, 2); so it's cool that you've joined forces for this. Excited for future posts!

Looking forward to reading this. In the meantime, I notice that this post hasn't been linked and seems likely to be relevant:

Coherence arguments do not entail goal-directed behavior by Rohin Shah

Came here to share this also! What a great story.

Sorry if I missed this in other comments, but one question I have is if there are ways for small donors to support projects or individuals in the short term who have been thrown into uncertainty by the FTX collapse (such as people who were planning on the assumption that they would be receiving a regrant). I suppose it would be possible to donate to Nonlinear's emergency funding pot, or just to something like the EAIF / LTFF / SFF.

But I'm imagining that a major bottleneck on supporting these affected projects is just having capacity  to evaluate them all. So I wonder about some kind of initiative where affected projects can choose to put some details on a public register/spreadsheet (e.g. a description of the project, how they've been affected, what amount of funding they're looking for, contact details). Then small donors can look through the register and evaluate projects which fit their areas of interest / experience, and reach out to them individually. It could be a living spreadsheet where entries are updated if their plans change or they receive funding. And maybe there could be some way for donors to coordinate around funding particular projects that they individually each donor couldn't afford to fund, and which wouldn't run without some threshold amount. E.g. donors themselves could flag that they'd consider pitching in on some project if others were also interested.

A more sophisticated version of this could involve small donors putting donations into some kind of escrow managed by a trusted party that donates on people's behalf, and that trusted party shares donors on information about projects affected by FTX. That would help maintain some privacy / anonymity if some projects would prefer that, but at administrative cost. I'd guess this idea is too much work given the time-sensitivity of everything.

An 80-20 version is just to set up a form similar to Nonlinear's, but which feeds into a database which everyone can see, for projects happy to publicly share that they are seeking shortish-term funding to stay afloat / make good on their plans. Then small donors can reach out at their discretion. If this worked, then it might be a way to help 'funge' not just the money but also the time of grant evaluators at grantmaking orgs (and similar) which is spent evaluating small projects. It could also be a chance to support projects that you feel especially strongly about (and suspect that major grant evaluators won't share your level of interest).

I'm not sure how to feel about this idea overall. In particular, I feel misgivings about the public and uncoordinated nature of the whole thing, and also about the fact that typically it's a better division of labour for small donors to follow the recommendations of experienced grant investigators/evaluators. Decisions about who to fund, especially in times like these, are often very difficult and sensitive, and I worry about weird dynamics if they're made public.

Curious about people's thoughts, and I'd be happy to make this a shortform or post in the effective giving sub-forum if that seems useful.