[ExI] Leveraging temporary income

Anders Sandberg anders at aleph.se
Thu Oct 4 19:21:21 UTC 2012

On 04/10/2012 16:43, Stefano Vaj wrote:
> On 3 October 2012 23:49, David Lubkin <lubkin at unreasonable.com 
> <mailto:lubkin at unreasonable.com>> wrote:
>     More generally,
>     what can any society do with a temporary (years or decades,
>     not longer) surge of cash to create a sustainable advantage?
> Hey, is this question really asked on a transhumanist ml? :-)
> R&D.
> Sure, it remains to be seen which R&D programmes should prioritised.

R&D is also a public good to a large extent. There is no doubt that a 
good university or research facility has spillover effects nearby - you 
have a good chance of getting a few spin-off companies, the local 
intelligentia may trigger a Richard Florida-type creative class cluster, 
and you get a public with higher human capital. But the R&D results can 
be hard to harness locally: many places find that their findings produce 
useful benefits far away, but not locally. Sweden, for example, is doing 
lots of good R&D but due to a lack of entreprenurship most patents and 
companies end up abroad. If you only care about the total good, this 
might not be a problem, but I suspect the recipients of windfalls are 
not total altruists.

Typically investing in human capital has good returns: even if people go 
abroad to work, remittances to families back home are worth a lot (more 
than all foreign aid in total, in fact). Similarly for institutional 
capital: rule of law, predictable and effective regulations, higher 
trust are good things for any society, and tends to give a cumulative 
advantage. That can also be done with relatively little money - in fact, 
huge influxes of money in a society with weak institutional capital is a 
recipe for corruption.

If you are going to invest in R&D, my current pet opinion is that the 
return per dollar spent is much higher in underresearched and totally 
new areas than any mature areas. So you might want to invest in a lot of 
little wild projects in the hope that one or two takes off, rather than 
spend it all on something obviously worthwhile but well researched. It 
works for venture capitalists.

Anders Sandberg,
Future of Humanity Institute
Philosophy Faculty of Oxford University

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