[10] The Race to the Bottom

Title Card

YouTube Link

Status

Recording

Transcription

Air Date

Nov 14, 2023

Target: 30-45 minutes

Script

Intro

<<dual screen, background visible>> Shift+1

ZFi: GM and welcome to Moloch Traps, our new podcast here at From Aa to Zzz. I’m ZFi, this Zombie Shepherd, and we’re excited to be bringing you this new show in collaboration with BanklessDAO and its Audio/Visual team. To be clear, opinions in this series expressed by either of us are our own opinions and do not reflect the opinions of BanklessDAO at large.

This week, we will continue to study and discuss excerpts from the "Meditations on Moloch" essay, written by Scott Alexander. The essay provides examples of multi-polar traps and delves into various instances from history, biology, and economics to illustrate how competition often results in collective harm.

In today’s episode we’ll discuss the idea of the Race to the Bottom. Let’s start with Alexander’s words on this.

Segment 2 — The Race to the Bottom

ZFi:

(reading from Meditations)

10. The “race to the bottom” describes a political situation where some jurisdictions lure businesses by promising lower taxes and fewer regulations. The end result is that either everyone optimizes for competitiveness – by having minimal tax rates and regulations – or they lose all of their business, revenue, and jobs to people who did (at which point they are pushed out and replaced by a government who will be more compliant).

But even though the last one has stolen the name, all these scenarios are in fact a race to the bottom. Once one agent learns how to become more competitive by sacrificing a common value, all its competitors must also sacrifice that value or be outcompeted and replaced by the less scrupulous. Therefore, the system is likely to end up with everyone once again equally competitive, but the sacrificed value is gone forever. From a god’s-eye-view, the competitors know they will all be worse off if they defect, but from within the system, given insufficient coordination it’s impossible to avoid.

Segment 3 —  Open Discussion

<<dual screen, full frame>> Shift+2

Zombie Shepherd notes:

In the late 1970s, Most American manufacturing began migrating to Asian countries in a race to the bottom on labor and production costs. Companies are beholden to shareholders, not employees or customers, quality of product and workers’ rights are thrown to the wind in the name of profits. It was a way to escape American labor rights, regulation, and environmental laws in favor of countries that did not have or enforce the same regulations.

another thing that comes to mind is currency debasement race to the bottom that the US is having against China and forcing the value of all other currencies down. the only real hedge against that is an alternative money like Bitcoin and Ethereum

California and New York are outliers. They have intense regulations and high rent prices which should cause them to lose to their neighboring states or even move to states like Texas with lower regulatory barriers. Yet companies often choose to stay in NY or California likely because of a perceived value possibly making them akin to Bevelin goods. As the regulations and rent rise so to does the demand. We are seeing a reversal in this trend between California and Texas. New York is very intense on crypto regulations so they’re actually preventing certain industries from even trying to start there.

ZFi notes:

Conclusion

<<dual screen with background visible>> Shift+1

Zombie Shepherd: (start and then hand off as appropriate)

Summary

What would YOU do? @listener?

Before we go on, there’s a slightly different form of multi-agent trap worth investigating. In this one, the competition is kept at bay by some outside force – usually social stigma. As a result, there’s not actually a race to the bottom – the system can continue functioning at a relatively high level – but it’s impossible to optimize and resources are consistently thrown away for no reason. Lest you get exhausted before we even begin, I’ll limit myself to four examples here.

Outro

Zombie Shepherd: 

Thanks for watching today’s episode of Moloch Traps. We hope you enjoy this series. As always, none of what we say is legal or financial advice, and we encourage listeners to do their own research in these areas before making any related decisions.

If you find our content informational, educational, or entertaining, and would like to support us, please collect these episodes on Hey. 18% of proceeds go back to BanklessDAO, 2% supports Tape for hosting our videos, and the rest helps to make From Aa to Zzz productions possible.

To stay on top of our weekly series, subscribe to us on the BanklessDAO YouTube. Don’t forget to like and comment while you’re there!

We’ll see you next time, frens!

Clickbait Titles and Descriptions

[10] The Race to the Bottom

Title Card

YouTube Link

Status

Recording

Transcription

Air Date

Nov 14, 2023

Target: 30-45 minutes

Script

Intro

<<dual screen, background visible>> Shift+1

ZFi: GM and welcome to Moloch Traps, our new podcast here at From Aa to Zzz. I’m ZFi, this Zombie Shepherd, and we’re excited to be bringing you this new show in collaboration with BanklessDAO and its Audio/Visual team. To be clear, opinions in this series expressed by either of us are our own opinions and do not reflect the opinions of BanklessDAO at large.

This week, we will continue to study and discuss excerpts from the "Meditations on Moloch" essay, written by Scott Alexander. The essay provides examples of multi-polar traps and delves into various instances from history, biology, and economics to illustrate how competition often results in collective harm.

In today’s episode we’ll discuss the idea of the Race to the Bottom. Let’s start with Alexander’s words on this.

Segment 2 — The Race to the Bottom

ZFi:

(reading from Meditations)

10. The “race to the bottom” describes a political situation where some jurisdictions lure businesses by promising lower taxes and fewer regulations. The end result is that either everyone optimizes for competitiveness – by having minimal tax rates and regulations – or they lose all of their business, revenue, and jobs to people who did (at which point they are pushed out and replaced by a government who will be more compliant).

But even though the last one has stolen the name, all these scenarios are in fact a race to the bottom. Once one agent learns how to become more competitive by sacrificing a common value, all its competitors must also sacrifice that value or be outcompeted and replaced by the less scrupulous. Therefore, the system is likely to end up with everyone once again equally competitive, but the sacrificed value is gone forever. From a god’s-eye-view, the competitors know they will all be worse off if they defect, but from within the system, given insufficient coordination it’s impossible to avoid.

Segment 3 —  Open Discussion

<<dual screen, full frame>> Shift+2

Zombie Shepherd notes:

In the late 1970s, Most American manufacturing began migrating to Asian countries in a race to the bottom on labor and production costs. Companies are beholden to shareholders, not employees or customers, quality of product and workers’ rights are thrown to the wind in the name of profits. It was a way to escape American labor rights, regulation, and environmental laws in favor of countries that did not have or enforce the same regulations.

another thing that comes to mind is currency debasement race to the bottom that the US is having against China and forcing the value of all other currencies down. the only real hedge against that is an alternative money like Bitcoin and Ethereum

California and New York are outliers. They have intense regulations and high rent prices which should cause them to lose to their neighboring states or even move to states like Texas with lower regulatory barriers. Yet companies often choose to stay in NY or California likely because of a perceived value possibly making them akin to Bevelin goods. As the regulations and rent rise so to does the demand. We are seeing a reversal in this trend between California and Texas. New York is very intense on crypto regulations so they’re actually preventing certain industries from even trying to start there.

ZFi notes:

Conclusion

<<dual screen with background visible>> Shift+1

Zombie Shepherd: (start and then hand off as appropriate)

Summary

What would YOU do? @listener?

Before we go on, there’s a slightly different form of multi-agent trap worth investigating. In this one, the competition is kept at bay by some outside force – usually social stigma. As a result, there’s not actually a race to the bottom – the system can continue functioning at a relatively high level – but it’s impossible to optimize and resources are consistently thrown away for no reason. Lest you get exhausted before we even begin, I’ll limit myself to four examples here.

Outro

Zombie Shepherd: 

Thanks for watching today’s episode of Moloch Traps. We hope you enjoy this series. As always, none of what we say is legal or financial advice, and we encourage listeners to do their own research in these areas before making any related decisions.

If you find our content informational, educational, or entertaining, and would like to support us, please collect these episodes on Hey. 18% of proceeds go back to BanklessDAO, 2% supports Tape for hosting our videos, and the rest helps to make From Aa to Zzz productions possible.

To stay on top of our weekly series, subscribe to us on the BanklessDAO YouTube. Don’t forget to like and comment while you’re there!

We’ll see you next time, frens!

Clickbait Titles and Descriptions