I've been thinking about competitive governance, trying to dissect what,
exactly, its desirable properties might be, and how to achive them. It strikes
me that there are two separate desriable properties that governments have under
competition, which, for lack of a better word, I'll call incentives and
Good incentives encourage governments to do useful things. Whereas constraints
prevent them from doing harmful things, or cause governments to cease to exist
if the do harmful things, or at least limit the harm that they can do.
There are a lot of things that I wish would happen, but don't have the time to
actually do myself. I complain about such things all the time to basically
anyone who will listen. Such efforts are all well and good, and sometimes
actually pay off, but additionally, I'd like to materially support people who
might actually do these things.
This post, which I'll try to keep up-to-date, if I remember, documents the
projects which I wish some talented go-getter would take on, and in which I
would invest money in if given the opportunity.
If you are one of these aforementioned go-getters,
Email-based messaging: The only reason we use anything but email to
communicate is because email is missing features that could easily be added.
Deliver us from multi-messaging app hell!
RSS-based social networking: RSS could easily serve as the basis for
standards-based social networking, and would be useful even without taking a
significant market share.
Bitcoin-based NFTs: NFTs are getting lots of creative people both excited and
paid. Let them suckle at mama Bitcoin's sweet and bountiful bosem instead of
Ethereum's shrivled, insecure, bitter, centralized tit. This can't be done on
the Bitcoin L1, so should be pursued as an L2. The key here is figuring out
how to avoid needing a new token.
Bitcoin-based smart contracts: Much like the NFT item above. Let the degens
feast at the Bitcoin board, not at the Ethereum kiddy table. Must avoid
needing a new token. The best path forward is to fork Liquid, add smart
contract functionality to Elements, and run it as Bitcoin-pegged federation.
Self-hosted block game: There should be a Minecraft-like game that can be
programmed and modded from within the game.
Tax the land, pay the people.
The Terrestrial Dividend consists of a tax and a dividend. Revenue is generated with a tax on the unimproved value of land and distributed as a cash dividend to all citizens.
If You're in Favor of Wealth Redistribution
If you are in favor of wealth redistribution, you should want to raise as much money as possible, as fairly as possible, and get as much as possible into the hands of those who need it.
The Terrestrial Dividend accomplishes all of these goals.
If You are Against Wealth Redistribution
If you are not in favor of wealth redistribution, you should want revenue generation to be as efficient as possible, and to minimize the negative economic impact of distribution. Additionally, you should want wealth redistribution to be done in such a way that if it is harmful, incentives align to reduce it.
The Terrestrial Dividend accomplishes all of these goals.
The Terrestrial Tax
The Terrestrial Tax is economically efficient. The supply of land is fixed, so a tax on the unimproved value of land does not prevent the production of more land. A tax on widgets, on the other hand, reduces the incentive to produce widgets.
The Terrestrial Tax is progressive. Land is owned by the wealthy, so the wealthy would pay a much greater share of the tax. Due to the fixed supply of land, the tax cannot be passed on to tenants.
The Terrestrial Tax respects privacy. The government does not need to know who owns what land, or what they are doing with it. The tax can be collected with anonymous payments, and only in the case of non-payment must the government involve itself.
The Terrestrial Tax cannot be avoided. It is impossible to hide land or disguise use of land.
The Terrestrial Tax encourages productive economic activity. Since the tax is levied on the unimproved value of land, under-utilized land is a liability, and will be brought into productive use or sold, not held as a speculative asset.
The Terrestrial Tax is simple. Income, sales, value-added, and corporate taxes require enormously complex and err-prone reporting. The details of these taxes are the source of endless political litigation. Under the Terrestrial Tax, the only complexity is in fairly valuing the unimproved value of land, clearly an easier task.
The Terrestrial Tax is legible. The negative effects of a too-low or too-high tax rate can be observed and the rate corrected.
The Terrestrial Dividend
The Terrestrial Dividend is beneficial. Cash is more useful in all circumstances than in-kind payments of the same value. The people who need help will get the most benefit possible.
The Terrestrial Dividend is fair. All citizens receive equal-sized cash payments. There is no need to exclude certain recipients, since the wealthy will already pay more tax than they receive as dividend.
The Terrestrial Dividend is efficient. Cash payments avoid the overhead of defining the details of and administering in-kind benefits.
The Terrestrial Dividend is what people want. People prefer cash over in-kind benefits of the same value.
The Terrestrial Dividend is unobtrusive. It is not means tested, nor does it require an application. The poor are the least equipped to fill out applications and submit documentation of income, so this ensures that even the very worst off have the best chance of receiving benefits.
The Terrestrial Dividend is legible. The negative effects of a too-low or too-high dividend can be observed and the amount corrected.
The Terrestrial Tax and Dividend are good policies on their own, but even better together due to aligning incentives.
If you want to increase the amount of the dividend, you should want to increase the value of all land, so that the dividend can be increased.
If you want to reduce the amount of the tax, you should want to increase the value of all land, so the tax rate can be reduced without reducing the divided.
Under the Terrestrial Dividend, everyone should care about reducing government overhead and waste, because it comes out of their own pockets.
Also, everyone should care about removing bad policies and implementing good ones, because they increase the value of all land and make everyone better off.
Tax the land, pay the people.
Federated blind mints have attractive privacy, scaling, and security properties
that are highly complementary to those of Bitcoin and the Lightning Network.
I originally became interested in blind mints while thinking about Lightning
Network wallet usability issues. When Lightning works, it is fantastic, but
keeping a node running and managing a wallet present a number of challenges,
such as channel unavailability due to force closes, the unpredictability of the
on-chain fee environment, the complexity of channel backup, and the involved
and often subtle need to manage liquidity.
All of these problems are tractable for a skilled node operator, but may not
be soluble in the context of self-hosted wallets operated by non-technical
users, hereafter normies. If this is the case, then normies may have no
choice but to use hosted Lightning wallets, compromising their privacy and
exposing them to custodial risk.
Chaumian mints, also known as Chaumian banks, or blind mints, offer a
compelling solution to these problems, particularly when operation is
federated. Chaumian mints, through the use of blind
signatures, have extremely
appealing privacy properties. The mint operators do not know the number of
users, their identities, account balances, or transaction histories.
Additionally, mint transactions are cheap and can be performed at unlimited
Mint implementations, typified by eCash,
have hitherto been centralized, and thus, like all centralized, custodial
services, expose users to custodial risk in the form of operator absquatulation
and mismanagement. To fix this, mint operation can be federated, with all
operations performed by a quorum of nodes controlled by different parties.
Despite these interesting properties, Chaumian mints have largely been
forgotten. This post gives an
excellent overview of the phenomenon. I believe that Chaumian mints are
currently severely underrated in general, and in particular deserve
consideration as a potential avenue for improving custodial Lightning Network
Compared to a naïve hosted Lightning Network wallet, a service operated as a
federated Chaumian mint offers excellent privacy, usability, security, and
Privacy: Privacy leaks from a Lightning mint come in two forms, internal
and external, when a mint operator or an outside actor, respectively,
observes sensitive information.
Blind signatures protect against internal privacy leaks, making them a strict
improvement in that respect over custodial Lightning wallets.
When compared to a single-user Lightning network wallet, Lightning mints also
protect against external privacy leaks. If the activity of a single-user
Lightning Network wallet can be observed, which is possible but non-trivial,
all such activity is preemptively that of the owner of the wallet. However,
similar to a standard custodial Lightning Network wallet, any observable
Lightning Network activity of a Lightning mint is the aggregate activity of its
users, who thus form an anonymity set. If the number of users, and thus the
anonymity set size, is large, external privacy leaks are also prevented.
Usability: Compared to a self-managed Lightning Network wallet, and similar
to a standard custodial Lightning Network wallet, Lightning mint wallets offer
superior usability. A user need not be concerned with the details of node
operation or channel management, and can deposit to and withdraw from their
account with standard Lightning Network invoices.
Security: The security of a Lightning mint is weaker than that of a
self-hosted wallet. A quorum of federation members can abscond with funds.
However, compared to a standard custodial Lightning Network wallet, security is
greatly improved. Additionally, federation members might be located in
different jurisdictions, making the mint robust to regulatory interference.
Furthermore, members might be entities with online reputations, such as
anonymous Bitcoin Twitter users with an established history of productive
shitposting, providing further assurances against mismanagement and fraud.
Scaling: Mint operations are extremely lightweight, similar to Lightning
Network transactions, so scaling properties are similar to the Lightning
Network itself. Additionally, users need not manage their own channels, so a
well-capitalized federation can open channels efficiently, lowering the
per-transaction channel management overhead.
Interoperability and market dynamics: Additionally, my hope is that such
systems will be developed with a standardized protocol for communication
between wallet interfaces and mint backends. This would allow users to use
different backends with the same local wallet interface, encouraging
competition in the market.
For more discussion of Chaumian mints and their applicability to Bitcoin, see
fedimint.org. Elsirion, the author, is also at work on
MiniMint, a federated Chaumian mint with Bitcoin and eventually Lightning
To close with a bit of speculation, I believe that Chaumian mints were never of
particular interest or importance because they were limited to interoperating
with the fiat currencies of the time. With the ascendance of Bitcoin, mints now
have access to a powerful, decentralized, and uncensorable currency , made
economical and fast by the Lightning Network.
I believe this layering of Chaumian mints on top of Bitcoin and the Lightning
Network will, in the fullness of time, be demonstrated to be enormously
powerful, and make Chaumian mints themselves worthy of renewed study and
As an unrepentant degenerate and fan of microeconomics, it should come as no
surprise that I find the online sexual economy endlessly fascinating.
Most of what happens there isn't surprising to me, with the exception of
pricing for online sexual services, which is much higher than I would have
As an example, take private, one-on-one cam shows. Browsing
reddit.com/r/sexsells, the going rate seems to
be between $2.50 and $5.00 per minute, or $150 to $300 per hour.
This is mysterious to me.
Looking at ads on eros.com, offline prostitutes seem
to charge $300 an hour. This isn't the amount advertised for a one hour
session, but the marginal difference in price between a one hour and two hour
session, and thus a reasonable estimate of the hourly rate, when preparation
and travel are factored out.
Given that private cam shows are legal, can be done at home, and require
minimal equipment; while offline prostitution is physically dangerous, illegal,
unpleasant, and highly taboo, it seems strange that they are priced roughly
A priori, I would have expected a price difference of 10× or more, like $300
per hour offline and $30 per hour on cam.
The PS5 was released about a week ago, and, predictably, it is impossible to
get one. All retailers, online and IRL, are sold out. Of course, consoles are
available on Ebay at ruinous prices, so at least the scalpers are doing well.
Economists, of course, are wringing their hands and mumbling about Vickrey
auctions. What Sony should do, they mutter, is to hold a daily auction for
PS5s, and let the market decide the price.
The economists are, of course, quite right. If Sony auctioned off PS5s there
would be no lines, no scalpers, and no uncertainty. You could put in a bid at
the price that you wanted to pay, and then simply wait until demand had died
down for your bid to be filled. As a bonus, Sony would make more money for
producing something that people wanted to buy, and more capital to ramp up
Unfortunately, the economists don't get their say here, because of their arch
enemy, non-economists. Non-economists, or, normal people, as they are otherwise
known, as far as I can tell, don't understand that there is such a thing as an
inescapable trade-off. They want everyone to get a PS5, everyone to pay MSRP
for it, there to be no scalpers, nobody to ever make a profit from demand
exceeding supply, and all things to be fair, based on confused and
self-contradictory conceptions of unfairness.
So, companies can't hold auctions for scarce goods, and have to set an MSRP,
produce whatever they can, and hope for the best.
I wonder though, if there might be some way for a company to hold an auction
for their products, but in a way that would be perceived as fair.
Here is one possible setup for such an auction, using Sony as the example
company, and the PS5 as the example product:
Sony sets the MSRP of the PS5, $499.
Sony produces PS5s, and every day holds an auction for that day's production.
Losing bids roll over to the next day's auction.
Every time a PS5 is sold for more than the MSRP, the difference is added to
a reserve pool.
Every time a PS5 sells for less than the MSRP, that difference is subtracted
from the reserve pool.
Auctions continue whenever the reserve pool has a positive balance, or demand
is higher than supply.
Essentially, any time someone pays over MSRP for a PS5, they ensure that
eventually, someone will get a PS5 for less than MSRP. If someone rich or
impatient buys a PS5 for $1000, two less impatient people can eventually buy
PS5s for $250.
I think, perhaps, this would be perceived as fair. But, with real people, you
From Scott Alexander on
the Amish health care system:
The Muslims claim Mohammed was the last of the prophets, and that after his
death God stopped advising earthly religions. But sometimes modern faiths
will make a decision so inspired that it could only have come from divine
revelation. This is how I feel about the Amish belief that health insurance
companies are evil, and that good Christians must have no traffic with them.
The post is about the advantages of the Amish health care system, which seems
to have much lower costs and equal effectiveness when compared to conventional
American health insurance centered health care.
The post is gripping (well, at least if you're interested in why American
health care is so expensive), so I recommend reading it. But briefly, the Amish
seem to have much lower costs with the same quality of care due to:
- Bargaining collectively.
- Getting a discount because they have a reputation for paying their bills on
- Not going to the doctor for little things.
- Not suing doctors, and thus not getting excessive medical care because a
doctor is trying to avoid a malpractice lawsuit.
- Aid and cost sharing being run as nonprofits.
- Keeping administrative expenses low.
- Not taking risks with their health.
- Avoiding excessive spending, because costs are shared by the community.
I wonder if much of this could be replicated with, not an insurance plan, but,
something else… an "uninsurance plan":
The uninsurance company would not directly or indirectly cover any medical
expenses. This would make it very cheap.
The uninsurance company would bargain collectively on behalf of its members.
Uninsurance members that did not pay their medical bills in a timely fashion
would be kicked from the plan and be ineligible to rejoin.
Uninsurance members would be forbidden from suing for medical malpractice
except in cases of gross negligence. (Unsure about this one, since it seems
to open up members to abuse, but if it's a net benefit, why not?)
Provide members with a health savings account. Health savings accounts are
tax-advantaged savings accounts that allow members to pay for qualifying
medical expenses from the account. Although the Amish don't have HSAs, giving
members access to an HSA should be cheap, and so shouldn't increase the cost
of uninsurance. Additionally, since it is the member's own money, it doesn't
introduce any perverse incentives.
Give members access to the negotiated price lists up-front, to allow and
encourage them to comparison shop. This might be tough, because health care
providers keep these prices secret, so they can play hard ball with insurance
companies that they negotiate with. But, being able to see what you're going
to pay for something is a prerequisite to trying to save money and shop
around, so this would be ideal.
The uninsurance company would be run as a nonprofit, or public benefit
Since the uninsurance plan is not insurance, it would be uncomplicated to
supplement it with an additional insurance, cost-sharing, or risk pooling,
scheme to cover unexpected costs, similar to Amish Hospital Aid. This
additional scheme would not be run by or affiliated with the uninsurance
plan, in order to avoid increasing costs for non-participants.
I suspect that such a plan would be very cheap, to make a number up, perhaps no
more than $10 per month. If it were only $10 per month, and members got an HSA,
they might want to join just for that. And, if they got insurance-negotiated
rates when paying out-of-pocket while being uninsured, the would almost
certainly be willing to pay for it.
Such an uninsurance plan would encourage consumers to plan ahead, shop around,
and save for medical expenses in their HSA, maybe giving them health care
approaching that of the Pennsylvania Dutch.
VXX is a dangerous chimeric creature; it is structured like a bond, trades like a stock, follows VIX futures and decays like an option. Handle with care.
And, currently being algo traded by a program written in Excel VBA.
Strange times indeed.