Current Events > The US should institute randomized lotteries

(+) Yeah! (+)

The only way this works is if it is completely unconditional on current state, so best to just keep them randomized, all registered voters into the pot.

Probably the only convincing way i've seen suggested to improve equity over time.

or just do reparations

ssk9716757 posted...

or just do reparations

Reparations are always hard and costly to institute, have potentially less reach, and complex interactions might produce unintended consequences. I prefer the randomized approach, which should be guaranteed to help over time and would face signficantly less backlash because everyone would be in the pot.

Line up to throw rocks at the winners!

If you're concerned with equity, isn't this, like, literally the second least efficient approach next to just giving more money to rich people?

Pogo_Marimo posted...

If you're concerned with equity, isn't this, like, literally the second least efficient approach next to just giving more money to rich people?

The only way to achieve long term equity is to disrupt the autocorrelation of individual weath. Otherwise you will always have a system where the rich get richer and the poor stay poor.

Why not just give that money directly to people who need it instead of leaving it to chance? And why make it a lottery amount when you can spread the amount to more people?

As explained above, the goal of lotteries is to disrupt the dependence of individual wealth on prior wealth. Without that, there is always a growing equity issue.

Theres better ways than gambling

COVxy posted...

As explained above, the goal of lotteries is to disrupt the dependence of individual wealth on prior wealth. Without that, there is always a growing equity issue.

You'll need a mandatory minimum number of winners per year with a qualification that nobody can win twice.

Just like Soylent Green

COVxy posted...

The only way to achieve long term equity is to disrupt the autocorrelation of individual weath. Otherwise you will always have a system where the rich get richer and the poor stay poor.

That's... not logical. Nor is it validated by any economic studies that I'm aware of. Nor is "autocorrelation" related to this argument as far as I'm aware.

COVxy posted...

As explained above, the goal of lotteries is to disrupt the dependence of individual wealth on prior wealth. Without that, there is always a growing equity issue.

You can disrupt that with direct relief. No need to leave it to chance. Your idea can become much more effective by just adding a salary cap, and I'd argue even more effective if spent on well organized assistance programs over a cash dump.

Pogo_Marimo posted...

That's... not logical. Nor is it validated by any economic studies that I'm aware of. Nor is "autocorrelation" related to this argument as far as I'm aware.

There's a lot of studies on this. You might want to do a google scholar search.

Squall28 posted...

You can disrupt that with direct relief. No need to leave it to chance. Your idea can become much more effective by just adding a salary cap, and I'd argue even more effective if spent on well organized assistance programs over a cash dump.

Wealth is only like 1% salary. The vast overwhelming majority of wealth comes from equity & asset appreciation.

If you want to stop wealth inequality, you have to cap wealth itself. Force people to liquidate and invest wealth over a certain amount.

Why do a lottery? Just UBI will suffice.

Chet_Hanks posted...

Why do a lottery? Just UBI will suffice.

UBI sets a baseline, but doesn't solve equity (rich will still grow their wealth much faster than those at the new baseline). Helps, because the baseline is no longer abject poverty, but really help solve the issue of equity.

COVxy posted...

UBI sets a baseline, but doesn't solve equity (rich will still grow their wealth much faster than those at the new baseline). Helps, because the baseline is no longer abject poverty, but really help solve the issue of equity.

How do the rich grow their wealth much faster if their tax bracket makes them exempt from UBI?

Chet_Hanks posted...

How do the rich grow their wealth much faster if their tax bracket makes them exempt from UBI?

Wealth begets wealth. More wealth begets even more wealth.

Here's a little snippet from a relevant article:

Empirical studies of the distribution of wealth of people, companies and countries were first presented, more than a century ago, by Italian economist Vilfredo Pareto. He asserted that in different European countries and times the distribution of wealth follows a power law behavior, i.e. the cumulative probability P(w) of agents whose wealth is at least w is given by P(w) w [1]. Today, that power law distribution is known as Pareto distribution, and the exponent is named Pareto index. However, recent data indicates that, even though Pareto distribution provides a good fit to the distribution of high range of wealth, it does not agree with observed data over the middle and low range of
wealth. For instance, data from Sweden and France [2], India [3], USA [4], and UK [5] are fitted by a log-normal or Gibbs distribution with a maximum in the middle range plus a power law for high wealth range. The existence of these two regimes may be justified in a qualitative way by stating that in the low and middle class the process of accumulation of wealth is additive, causing a Gaussian-like distribution, while in the high class the wealth grows in a multiplicative way, generating the power law tail [6].

Tyranthraxus posted...

Wealth is only like 1% salary. The vast overwhelming majority of wealth comes from equity & asset appreciation.

If you want to stop wealth inequality, you have to cap wealth itself. Force people to liquidate and invest wealth over a certain amount.

I meant a salary cap for his idea, not in general. But sure make it a wealth cap for his idea.

In general, I don't think it's beneficial to cap it, but I don't feel like getting into it here.

Squall28 posted...

But sure make it a wealth cap for his idea.

A wealth cap just means you get to the cap (or very very close) and stop.
That "extra" wealth past that isn't magically redistributed to everyone else: it never exists.

COVxy posted...

There's a lot of studies on this. You might want to do a google scholar search.

You're the one claiming this is not only viable compared to targeted anti-poverty and socialist methods but "the only convincing way i've seen suggested to improve equity over time.".

The only means by which I could see this actually being viable is if the taxation component of the lottery system is so comprehensive and excessive that it is strictly a hard wealth-redistribution method "by any other name". Otherwise, your method randomly distribute funds in several obviously counter-intuitive ways, the first of which is back to the top 50% of wealth owners. The second most obvious issue is you're giving raw wealth to people without going through the effort to educate them on the tools and skills needed to keep, maintain, or grow wealth to begin with. The end result, as we see literally all the time with current lottery systems, is that the winners of these lotteries tend to burn through their earnings at a tremendous deficit compared to people who's wealth is derived through the exploitation of labor, resources, or property. You've accomplished nothing for the retention of wealth within the 50th percentile of individual wealth.

Furthermore, you've suggested nothing that restricts the accumulation of wealth within the top percentiles other than maybe vaguely tax them I guess? I really don't know because you haven't actually suggested anything approaching comprehensive or thoughtful, you just made this topic to be contrarian about socialism by using an "out-there/maverick" approach because you think it makes you look smart. Just like Elon Musk does constantly. And it's just as transparent on you as it is on him.

Squall28 posted...

I meant a salary cap for his idea, not in general. But sure make it a wealth cap for his idea.

In general, I don't think it's beneficial to cap it, but I don't feel like getting into it here.

Either way a salary cap doesn't help. Bill Gates salary was $1000 a year during his tenure as CEO which qualifies him for the lottery.

you know who else had a lottery?
caesar's legion

COVxy posted...

Wealth begets wealth. More wealth begets even more wealth.

Here's a little snippet from a relevant article:

What do you think this has to do with your claims? Furthermore, why not post the study?

Pogo_Marimo posted...

Dude, this is a very active subfield within economic research, and the prevailing wisdom is that random lotteries are the most robust systems to tampen down wealth inequality. I didn't just pull it out of my ass. I also cannot be expected to present you with a fucking literature review otherwise "i'm some fake maverick". Like, lol, randomized lotteries aren't exactly a new idea. The quote above is from a 2007 article exploring some aspects of them (including the measured autocorrelation of individual wealth!)

Like, spend some time reading before going off. If you had entered this topic not so aggressively, maybe we'd be having a more pleasant conversation.

(Btw, the beauty and magic of this method is how simple and hands off it is. Which is the reason you find it counter-intuitive)

Tyranthraxus posted...

Wealth is only like 1% salary. The vast overwhelming majority of wealth comes from equity & asset appreciation.

If you want to stop wealth inequality, you have to cap wealth itself. Force people to liquidate and invest wealth over a certain amount.

One big thing is limiting how much land and property a person can own as well as revamping property tax as you can be punished for high property values by higher taxes and eventually be forced to sell(if they don't just convince the government to eminent domain you, trick an elderly person or use intimidation/noise/etc to drive you ou

Companies will buy whole neighborhoods and price out or use diety methods to force holdouts out.

Unsuprised_Pika posted...

One big thing is limiting how much land and property a person can own as well as revamping property tax as you can be punished for high property values by higher taxes and eventually be forced to sell(if they don't just convince the government to eminent domain you, trick an elderly person or use intimidation/noise/etc to drive you ou

Companies will buy whole neighborhoods and price out or use diety methods to force holdouts out.

This is the plot of batteries not included

Tyranthraxus posted...

Either way a salary cap doesn't help. Bill Gates salary was $1000 a year during his tenure as CEO which qualifies him for the lottery.

You're getting too hung up on it. I was on board with a wealth cap on his idea, and don't care for caps at all in general.

My point was you can easily make his idea more effective by restricting the upper end from getting it.

Only way I support this is if Im guaranteed to get it. If people around me are winning and not me, fuck that!

Squall28 posted...

You're getting too hung up on it. I was on board with a wealth cap on his idea, and don't care for caps at all in general.

My point was you can easily make his idea more effective by restricting the upper end from getting it.

Once you make the lottery dependent on something, then it is dependent on everything that that something is dependent on. The system is then open to a bunch of possible unintentional consequences that are hard to predict, and are idiosyncratic.

I think there are probably cases where you are correct, but there are also cases where you are incorrect. And it'll take a lot of time and money to figure out which is the case.

The beauty of randomize lotteries is that they require almost no real management or monitoring, and they are expected to work pretty robustly. No management or monitoring meaning no cost of upkeep, and the randomized aspect means that very few people will have issues (because everyone is given the same chance with the same payoff).

But would be happy to be convinced otherwise.

COVxy posted...

Once you make the lottery dependent on something, then it is dependent on everything that that something is dependent on. The system is then open to a bunch of possible unintentional consequences that are hard to predict, and are idiosyncratic.

I think there are probably cases where you are correct, but there are also cases where you are incorrect. And it'll take a lot of time and money to figure out which is the case.

The beauty of randomize lotteries is that they require almost no real management or monitoring, and they are expected to work pretty robustly. No management or monitoring meaning no cost of upkeep, and the randomized aspect means that very few people will have issues (because everyone is given the same chance with the same payoff).

But would be happy to be convinced otherwise.

What would be the cases where I am incorrect?

In your scenario, half the time the money will be wasted and go to someone of above average wealth. In my scenario, it will go to someone of below average wealth 100% of the time. It would accomplish the job twice as fast.

Hunger Games?

I thought anything that helps everyone is bad because it will just make rich people richer. Or maybe I'm mixing up TCs.

Hey, just read your article that you're referencing and it's quite wild. Wild, I should say, in that you are literally have no idea what you are reading.

Here it is:

https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.580.6357&rep=rep1&type=pdf

The author's aren't speaking about a literal fucking lottery. The economic model they are using is modelling each wealth exchange between two individual agents (People, companies, governments, ect.) in what is referred to as a "fair" or "unfair" lottery as a means of representing whether simple economic freedom and equal access to economic opportunities is sufficient to reduce inequity, or if an "unfair" system which provides benefits to the less wealthy agent produces better outcomes. The fair or unfair lottery would then be applied to 1000 agents in each simulation to test how the comparatively impacted the wealth distribution.

This is so fucking funny that you think they're talking about an actual fucking lottery.

However, and most importantly, to quote the studies conclusion:

"Our results clearly show that in many cases the system does not arrive to a steady configuration (a remarkable exception is the case f = 0.5, when the probability has its strongest bias to the poorer partner). This point is not decisive for the description of economic systems as usually they are not in a steady state neither they are conservative, but the implications could be interesting for possible physical systems that behaves in a similar glassy way. Probably the most relevant result is the fact that the loser rule appears to produce a less unequal wealth distributions than the one we call fair rule. That is valid for values of the f < 0.3, which represent situations more close to real economic systems. Thus, the loser rule behaves somehow like an unfair lottery, in the sense that the richer agent risks more in average than its poorer partner, but has less chances to win. As a consequence, this bias attenuates the inequalities induced by low f values. It seems to us that this result is an indication that the best way to diminish inequality does not pass only through equal opportunity (fair rule) but through some kind of positive action increasing the odds of poorer strata of the society."

This is basically saying that:

1. It's decidedly not a comprehensive representation of economic systems for a few reasons.
2. The Loser Rule, which may be interpreted as something like a Social Safety Net, seems to correlate with more equal distributions of wealth (especially at it's strongest effect, f = 0.5 in the model).

I really, truly hope this article isn't what inspired you to make this topic.

I should also make it really, really clear that this has nothing to do with any kind of state run lottery and it's impacts on equality. None. Zero. Nothing.

Pogo_Marimo posted...

This is so fucking funny that you think they're talking about an actual fucking lottery.

You just used the word lottery in your explaination of what they did...

A lottery is always a probabilistic redistribution of wealth. Not sure what you thought a lottery was.

Pogo_Marimo posted...

The fair or unfair lottery would then be applied to 1000 agents in each simulation to test how the comparatively impacted the wealth distribution.

This is so fucking funny that you think they're talking about an actual fucking lottery.

Uhh... That sounds like an actual fucking lottery to me. What do you call that if it's not a lottery?

Open up homesteading again.
That's where generational wealth begins.

https://gamefaqs.gamespot.com/a/user_image/7/9/0/AAEhCpAADiwW.jpg

nottery

Tyranthraxus posted...

Uhh... That sounds like an actual fucking lottery to me. What do you call that if it's not a lottery?

No, the term "lottery" is an abstraction to describe how the model mathematically "solves" the 6 million different ways that wealth gets transferred in every day life, from simple purchasing of commodities to the sale of major businesses. Basically, two agents of typically unequal amounts wager an amount of "wealth", then a "lottery" decides which one loses wealth and which one gains wealth. In the "fair" lottery, the amounts gained and lost are purely proportional to the amount wagered, while in the "unfair" lottery the "Loser Rule" ensures if the person with less wealth loses the "lottery", they lose less than the proportional wealth wagered. It's a simple model to see how wealth (Or possibly other naturally phenomena) distributes itself over time and the effects of outside intervention on the less well-off agent, and is not an actual robust economic model.

That's a bit of a simplification because they are variables that are tuned in their models and yadda yadda yadda. Just replace "lottery" with "RNG" and you get the same meaning.

A lottery is a probabilistic redistribution of wealth.

Please get on the same page before aggressing.

Pogo_Marimo posted...

No, the term "lottery" is an abstraction to describe how the model mathematically "solves" the 6 million different ways that wealth gets transferred in every day life, from simple purchasing of commodities to the sale of major businesses. Basically, two agents of typically unequal amounts wager an amount of "wealth", then a "lottery" decides which one loses wealth and which one gains wealth. In the "fair" lottery, the amounts gained and lost are purely proportional to the amount wagered, while in the "unfair" lottery the "Loser Rule" ensures if the person with less wealth loses the "lottery", they lose less than the proportional wealth wagered. It's a simple model to see how wealth (Or possibly other naturally phenomena) distributes itself over time and the effects of outside intervention on the less well-off agent, and is not an actual robust economic model.

That's a bit of a simplification because they are variables that are tuned in their models and yadda yadda yadda. Just replace "lottery" with "RNG" and you get the same meaning.

But are the poor betting against the rich or are the rich and the poor both betting against the house? Because if it's the latter, then it's a regular lottery.

There's little fundamental difference between mega millions, a scratch off ticket, bingo, or casino slot machines.

Tyranthraxus posted...

But are the poor betting against the rich or are the rich and the poor both betting against the house? Because if it's the latter, then it's a regular lottery.

Conceptually those cases are identical if you assume the house is composed of tax.

Also, the dyadic nature of what that one paper did, is not how they are always constructed. Like, these details aren't super important (though matter for some of the dynamics). What matters most is that there's a random perturbation to wealth across time. This typically lowers growth on the rich end, and increases growth at the poor end, leading to more equitable wealth distributions.

COVxy posted...

You just used the word lottery in your explaination of what they did...

A lottery is always a probabilistic redistribution of wealth. Not sure what you thought a lottery was.

I simply cannot stress enough how funny it is that you thought the studies use of the term "lottery" was analogous to a state-run lottery like the Mega-Millions, and even beyond that, you then somehow thought that the study was advocating this as a means improving economic equity. Because even under the miscomprehension that they were talking about a state-run lottery, the study's conclusion explicitly says that a purely fair and truly random "lottery" was likely significantly worse at producing an equitable distribution of wealth compared to a system that targets the poorer performs directly.

And then you were so smug about it while also conveniently obfuscating your "source". I won't lie I had to do three or four google searches to finally find that study.

"This is a very active sub-field in the study of economics" lmao. I'm sure it is buddy. I'm sure it is.

I'm still not sure what you think a lottery is.

COVxy posted...

A lottery is a probabilistic redistribution of wealth.

Please get on the same page before aggressing.

No, a lottery in the statistical sense is a defined distribution of probabilities typically used in economic and behavioral studies. For instance, the "lottery" for three players to "win" might be Player A 30%, Player B 40%, Player C 30%, to put it casually. It is a set of rules to resolve problems probabilistically in a model or simulation.

You do this all the time. You use terms that are above your own means of comprehension as a way to discourage disagreement from the opponent. I know you do this because you are literally in the middle of fumbling your way through this process right now while I critique your fundamental misunderstanding of your own source material. For instance, this post:

COVxy posted...

Also, the dyadic nature of what that one paper did, is not how they are always constructed. Like, these details aren't super important (though matter for some of the dynamics). What matters most is that there's a random perturbation to wealth across time. This typically lowers growth on the rich end, and increases growth at the poor end, leading to more equitable wealth distributions.

Now, dyadic is an imposing word, isn't it? It's not particularly relevant though, other than to hide the fact that it is your rhetorical cover to distance yourself from your previously referenced study I thoroughly refuted (Oh yes, that study isn't ACTUALLY proof of what I was arguing, other than the fact that I specifically referenced it as such, because it's dyadic in nature!) The "dyadic nature", implied to mean it's examination of economic exchanges between two agents, of your source wasn't the issue. The issue was your fundamental understanding of what the study was actually representing and concluding: Normal economic exchanges resolved using probability and their impact on wealth distribution over time, and, that perfectly random and "equitable" outcomes in economic exchanges worsen equitable wealth distribution while strong intervention in favor of the poorer agent improves equitable wealth distribution.

As well, the lovely snippet of the study you posted in #19 was literally the least relevant paragraph in just about that entire study. Here's the summary in layman's terms so others can understand how little relevance it had to "random lotteries being the best solution for wealth equity".

"Pareto was the first significant guy to study wealth distribution. The model he created isn't a great model but people still use it all the time. We will not use Pareto's model because it is bad. We're using a different model using more modern concepts."

It is quite literally the least interesting part of the entire methodology, as it just acknowledges something that everybody already knew back in 2007, let alone today. Why did COVxy think it was a good snippet to post from the study, rather than the conclusion, abstract, or anything else that was evenly mildly relevant to the discussion? Probably because this paragraph featured stuff like:

"i.e. the cumulative probability P(w) of agents whose wealth is at least w is given by P(w) w [1]."

"For instance, data from Sweden and France [2], India [3], USA [4], and UK [5] are fitted by a log-normal or Gibbs distribution with a maximum in the middle range plus a power law for high wealth range."

Looks like some serious stuff at a glance, guy must know what he's talking about with this "US should institute randomized lotteries" business.

So here's a little warning about the way COVxy talks about subjects on this board in general. He constantly dips into proof by verbosity in order to shield his own opinions or statements from criticism and to inflate the perceived value of his own statements. You might be mistaken in thinking that someone who uses words like "perturbations" and "dyadic" really knows what they're talking about, but sometimes it is important to realize it is an act. He was reluctant at all to provide evidence for his claims, despite how convincing we're supposed to believe all these studies he's read is. Do you wonder why that is? I don't, but I also know that there is no field of economics that thinks randomly giving away money to people is a superior economic policy to targeted, rational programs that address the fundamental issues that cause wealth inequality in the first place.

Even if you were a child you would realize, mathematically, that every instance of a lottery winning going to someone in the 1st percentile of wealth is money that is negatively impacting the goal of wealth equity in the first place, which begs the question of why people in the 1st percentile qualify for this Equity Lottery in to begin with. But hey, if I'm wrong, then either God strike me down or COVxy post an actual study supporting this bizarre and obviously inaccurate statement.

Lol. You don't understand what you are talking about.

The point of the instituted lottery in that paper is to examine the effects of a lottery based system, with slight alterations in the rules, and manipulation of parameters within the rules, on the wealth distribution in an agent based simulation of wealth accumulation.

It is not about "normal" functioning.

Also my quote was to indicate that wealthy wealth and poor wealth grows at different rates. Which is exactly what that paragraph states. I didn't send the whole article because it was irrelevant to the question that poster asked.

Just like...calm yourself.