First Impressions
Note that this book can be read on a 'pay what you want' basis at
equilibriabook.comThe blurb presents this book for the reader to exploit inefficiencies in our economy rather than fix them, but I guess that's OK since if people exploit them then Adam Smith's invisible hand will fix them. The question is, can you actually exploit inefficiencies. Yudkowsky gives stock prices as an example of an efficient market, but I'm not so sure. Keynes thought that stock prices were governed by what he called a <a href='>
Beauty Contest, in which people value shares based on what they think everyone else thinks their value is. But the market can stay irrational longer than you can stay solvent, so you can't benefit from this irrationality.
Except that if you think shares are overpriced, you can start a business and hope that your shares in it will eventually be overpriced too. It's a risky business of course, but the expected gain should justify it. That's the expected gain in money though. The trouble is that some people end up very rich, but most people don't see that as a big gain in utiliy, so the expected gain in utility is probably negative. (In
The People's Economics I discuss how this problem might be overcome by nonprofits owning businesses)
The monetary policy of Japan is mentioned as an inefficiency which there is no way to exploit, but again I feel that while there may be no simple way to exploit it via the financial markets, there may be a more difficult (and probably risky) way to exploit it.
Yudkowsky then tells of how he tackled his wife's seasonal affective disorder by putting up 130 LED light bulbs. Surely though the medical establishment should already have thought of that? I'm not so sure. In Steven Pinker's
The Better Angels of our Nature he describes how the cost of lighting has plummeted. Until a few years ago that amount of light would have been prohibitively expensive, so it's hardly surprising that no one tried it to treat SAD.
So I'm not convinced about Yudkowsky's arguments so far, but it's entertaining reading, so I'll see what he has to say in the rest of the book.