8127Joined Sep 2014


Topic Contributions

Cool idea! For us at least a dead tree book would be massively preferred over an ebook; I think many parents are willing to allow their kids near-unlimited physical book time but tightly curtail screen time.

An employee-owned firm seems to be basically equivalent to a firm that gives employees shares (common) and then indefinitely prevents them from selling them (rare). The latter step seems pretty harmful to the employees; they could always keep the shares if they wanted to, but the ability to sell is quite valuable. It allows them to diversify their portfolio, rather than having their savings and job tied up in the same firm. It also allows them to liquidate the shares to fund a large purchase (e.g. a house) if they wanted to. Given how desirable these things are, I'd be surprised if banning employees from selling their shares was net beneficial to them, and without the restriction the shares they sold would typically be to third party investors, so you would naturally end up with a traditional firm again. Similarly, employees at many public companies could, if they wanted to, buy stock in their employer - e.g. a firm with 10% margins, 20x PE, paying 30% of revenue as wages, could be entirely bought out by the employees in a few years... but wisely they chose not to do so!

You correctly identify the fact that coops struggle to raise capital for investment, but I think the solutions you suggest are sort of 'cheating'. It's true that, if a firm only has to pay workers and suppliers because the government is covering the capital, then it will probably be able to pay those groups more than a traditional firm that has to split its revenue three ways between workers, suppliers and capital. But the traditional firm, if it received similar sized subsidies (e.g. an exemption from payroll and sales taxes) would also pay workers more and lower prices for customers. When deciding on which form of economic organization is superior for the economy as a whole, we cannot fairly compare one which needs external support to one which is self-funding.

Finally, I roll to disbelieve on the idea that coops are more productive than traditionally organized firms. There is a reason these coops have over time been out-competed by normal firms, and have become smaller as a percentage of the economy. I haven't read all the research you referred to, but I think a common problem is the mis-identification of comparison firms. Because traditional profit-orientated firms will re-invest and expand so long as marginal product is positive, their average productivity can look lower than that of firms whose growth has been artificially constrained by the coop structure, even though this growth is in fact a good thing!

A practical example of the failure of coops comes from the ACA/Obamacare insurance coops. These received generous funding from the federal government. However, despite the advantages they had over the for-profit (and tax paying) regular insurance companies, they almost all failed within a few years due to incompetence at underwriting. They often had to be rescued by the for-profit firms to prevent leaving people without health insurance.

It seems a little strange for a secondary donor to give to an org with the objective of increasing their funding diversity if the idea is this is good because it increases stability. If the org's primary donor collapses, the secondary donor could fund them regardless of whether or not they had in the past.

This is not a fully convincing counterargument, as it could still be reassuring to the staff of the org that they have a credible signal of security, and it encourages the secondary donor to do due diligence ahead of time.

Separately, I think it would be useful to think about the magnitudes here. Suppose you are a small org that gets 90% of your funding from one donor. For what $X are you indifferent between an incremental $100 from your primary donor and $X from a new secondary donor?

Yes, economists chose to use the term 'trust' but I think a better term for what they are really discussing is 'trustworthyness'; I suspect they made the substitution for optics reasons.

Given that Kelsey reports on EA for a living, it does seem plausible that basically every causal interaction people have with her should begin with 'Do you agree this conversation is on background', which seems unfortunate. 

I don't see how the third comment is objectionably 'harsh'? It is a straightforward description of how many conventional financial firms operate, relevant to the topic at hand, combined with (accurately) calling the parent comment nonsense. Is the objection that it contains a swear word? If that is the rule it should probably be made explicit. (Also, 'harsh' does not appear in Guide To Norms, with good reason, as the truth can be harsh!)

My guess is it will be hard to maintain a significant distinction between normal posts and these posts, so de facto if this policy succeeds it will be by just lowering standards.

The thought is to tailor the intuition pump for your audience

I would expect this would make the problem worse, because these attacks come from people looking for stuff to quote, and if you are saying different things to different people they can quote the stuff you said in one context to people in another.

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