Re: poly: Re: Why interest rates may stay low

 hanson@econ.berkeley.edu (Robin Hanson) writes:
>Peter McCluskey writes:
>>>4) Mass and energy at our and nearby solar systems can become a bottleneck
>>> resource, and so worth more (and priced higher) than mass far away. ...
>> Can you think of a better way to compare value between the time before the
>>first probe launch and the time when much of the galaxy is colonized than
>>to treat mass as the most stable value? ...
>> I don't forsee much trade between the leading edge and areas substantially
>>behind, so I don't know how to compare value between regions dominated by
>>bottlenecks to those with few bottlenecks.
>
>You don't need physical trade to get market comparisons. Near earth I can
>sell my asteroid for cash and then buy passage on a probe and the rights
>to a certain fraction of the system at the other end, if we survive.

 How does that clarify anything? If you observe people value 1 gram here
and now the same as the promise of 10 grams later, that gives you one ratio
with information about the combined effects of discount rates and relative
bottlenecks. Do you have a way of separating those two effects that doesn't
involve something similar to my assumptions?

>The usual reason for short variable names in math has little to do with
>scarcity of paper or chalk. It's the desire to see a larger math context in
>a single view. Why programmers tend to have a different preference is an
>interesting question.

 The problems with short variable names are very sensitive to the complexity
of the system. Mathematicians can often define their problems to make
any one answer fairly simple. Programmers rarely manage that.

>> A probe that is launched at to reach a peak speed of 0.9999c a year
>>before the 0.99999c design becomes available will fall behind the leading
>>edge after about 11000 light years. I've assumed that the designs will be
>>improving fast enough that most of the galaxy will be colonized by those
>>that wait for the faster design.
>
>Are you also assuming that those better designs are only available here?
>If not, then Carl's altered mass ratio argument applies.

 I'm assuming that the delays associated with deccelerating at the next
system and accelerating again are on the order of a year or two, and probably
enough to wipe out the advantage of launching sooner.

>We seem to be confusing each other. It seems we both agree that a large number
>of projects with huge returns later should induce huge investment now in rights
>need for those later returns (like near-solar mass). So the lack of much
>investment in this now (far below anything that would "test this upper limit
>of investment supply") suggests investors don't anticipate such huge future
>returns. From which I conclude that such huge future returns are unlikley.
>What do you conclude?

 The costs of evaluating everything that my reasoning depends on are
large (e.g. the effects and timing of the development of molecular assemblers,
and evaluating enough proposed reasons for the Fermi paradox to decide that
there are many undefended oases). Investors deciding whether to invest
substantial time in such an evaluation almost always decide based on
history that it would be better to wait until the changes involved appear
to be a decade or so away. This is rational because there have been
persistent patterns of investors who try to bet on longer term forecasts
or bet on technologies for which engineering plans can't yet be sketched
are normally wasting their time or deluding themselves.
 The fact that my hypothesis bears more resemblence to typical crackpot
theories than to ideas that have been valuable to investors in the past
certainly makes me nervous, but the lack of investor interest in them
adds virtually no information to that.

 If I didn't think that were an adequate explanation for low savings
rates, I would hypothesize that people's discount rates have been rising
recently above the long-term average that you assume is stable.
 There is a fair amount of evidence that U.S. investors have come to expect
safe returns of 10%/year or more without responding with higher savings
rates. But I don't have a clear argument for expecting this trend to
be worldwide or last long.

-- 
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