[covidacct]

> I expect this essay to be the target of criticism. Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build? There’s an excellent chance I’ll agree with you.

What we need to build is the capacity to make investments in building backstops against low-prob, high-risk, collective risks.

For almost all of those risks, the problem isn't "what to build", it's that we know what to build and keep failing to build it (or we build it just to burn it down again whenever the next crisis hits). The problem is building sustainable capacity.

Here's my idea. Tax the living hell out of capital. Especially venture capital leveraging decades of gov't investment. Earmark the money for disaster prep.

One possible implementation: gov't gets 50% stake on every patent traceable to any federal grant and every company whose founders were funded through federal grants. I don't think that's insane. Y Combinator takes a 7% cut for 150K. The median NSF grant is substantially larger, and NSF grants are "tiny" compared to other grants, and most of that work happens in places where the funded employees can live comfortably on 25K/year. We would expect an even larger cut than 7% for substantially more investment (often millions) and all of that in low CoL areas. But Gov't gets 0%.

Governments DID see this coming, both federal and state. Governments DID build what was need to respond. California, at one time, was prepared for exactly this crisis. Same as France. The 2008 financial crisis wiped out state budgets, and then the fed govt suffered 6 years of gridlock and austerity driven by owners of capital. Government preparations for this substantial and real risk DID exist, but were liquidated so that the rest could fit in a bathtub to be drowned.

None of that would have had to happen if federal and state governments had a non-trivial stake in FAANG, or even just G.

[nopriorarrests]

Honest, no snark question -- what exactly US government did in last 30 years that should warrant providing more money to it? Is there any guarantee that another trillion dollars will be used more efficiently than blowing up another Middle East country?

[covidacct]

Here's one teeny tiny example. They made a smart investment, to the tune of billions of dollars, in computer science. And not just for the past 30 years, but continuously for the past 100 years.

That investment included a modest (6-7 figure, depending on how your count) investment in a project on digital libraries years before private capital caught on. The private investors were rewarded handsomely for their investment in that digital library, but we, the taxpayers, were not.

[_2d30]

You could make a claim about the internet which would be reasonable but that is also a miniscule portion of what the federal government has done with our money so using a teeny tiny example is more of an exception that proves the rule type of thing. The amount we spend on the Federal government and what we get back for it is crazy bad. The problem is NOT the federal government having too little money. It's a huge proportion of GDP, especially compared to when our government was vastly more effective. The problem is that the institutions that make up our government are dramatically incompetent and squander the massive amounts of funding we give it.

> That investment included a modest (6-7 figure, depending on how your count) investment in a project on digital libraries years before private capital caught on. The private investors were rewarded handsomely for their investment in that digital library, but we, the taxpayers, were not.

Definitionally, if private investors made money, so did the taxpayers:

1) The investors are taxpayers who benefitted.

2) The investors returns were taxed and all future economic activity that came from it was taxed.

3) Societally we got the "digital libraries".

[nopriorarrests]

I still do not understand the logic. Let me put it straight.

1. US Government has unlimited funding, heck, it came up with 2 trillions _during last month alone_ with some financial alchemy which I don't fully understand. But clearly it's not starving.

2. US Government has kinda poor record producing tangible results during last 30 years, in terms of advancing science, housing, whatever. I mean, can CDC quickly figure out in 2020, are the pieces of cloth on my face help to fight the virus or not? Seems it's still up for discussion.

3. Private capital, during the same time frame, gave us google search and maps, smartphones, movies on demand and god knows how much other stuff.

So, based on these 3 observable points, we should "Tax the living hell out of capital"? I still not getting it.

[covidacct]

> Private capital, during the same time frame, gave us google search and maps, smartphones, movies on demand and god knows how much other stuff

I was perhaps too coy.

https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100660...

I'm not even sure what to say about maps.

[kingaillas]

>So, based on these 3 observable points, we should "Tax the living hell out of capital"?

Sure, because the government is supposed to provide infrastructure, which in turn allows all kinds of other stuff to flourish on top.

All those examples that private capital gave - who built the internet and spent enough money to create the early market for computers?

>I still not getting it.

If the government is supposed to supply education, health, and infrastructure, then it needs to be paid for somehow. Corporations don't care since there is no immediate monetization possible (plus tragedy of the commons aspects) and the free market simply assumes this stuff appears out of the thin air (externalize the cost somewhere else).

[ssivark]

> Private capital, during the same time frame, gave us google search and maps, smartphones, movies on demand and god knows how much other stuff

That's an extremely lazy and superficial analysis.

Where did the foundational ingredients for each of those things come from? Computers, networks, video compression, touchscreens, materials, ... heck, even pagerank, and a large fraction of the breakthroughs in ML/AI (till very recently) have come from academia -- through publicly funded research. Companies are very good at solving the "last mile" to apply technologies towards making products, but don't typically have the vision or the wherewithal to pursue deeper innovations.

[manigandham]

Public funds for research is a tiny fraction of the funds that the government spends. There are trillions wasted elsewhere that shows that overall it is terrible with spending money productively.

[kingaillas]

All the same, the reason you have maps on your smartphone can be traced to GPS satellites and ultimately the space program itself, funded by the government.

Yeah yeah, SpaceX exists now, decades after all the very tough and very expensive initial work.

[mnky9800n]

Just to address "producing science".

Science is incremental, often is done with out clear end products, and value can only really be measured much later typically in terms of wide spread effect. Like the internet existed decades before everyone used the internet. And only because tax dollars supported it.

Thus if you want more output, they only true solution is to fund much more science than is funded today.

[nopriorarrests]

If some machine takes your money and produces 98% war and 2% science, maybe - just maybe - the only true solution to fund more science is not to put more money into said machine, but change configuration first.

[mnky9800n]

That's true but the machine we currently use doesn't produce 98% war.

[aey]

There is 0 evidence to suggest that private corporations wouldn’t have figured out the same thing. Or those same people sitting around at MIT wouldn’t have built the same thing without darpa.

It’s not like “communication“ is an industry that is starving for investment or talent.

The government sucks at spending money. Giving to the banks is the least stupid thing to do. The banks at least have some way to propagate it down to large funds and eventually to smaller funds that have some sense in what is a worthwhile investment or not.

[ajross]

Aren't the last 30 years sort of the problem though? How about we check the 30 years before that: medicare, social security, the tail end of the new deal, the rapid cleanup of acid emissions which were wrecking forests all up and down the east coast... Seems like, starting in the 80's, you would have looked at this and said hey, this government knows what it's doing, we should let it do more stuff.

Instead we basically did the opposite, starving federal programs everywhere possible (virtually every entitlement or program that existed in the 80's is smaller today on a per-person-PPP basis). And now we're seeing the results in a crisis that demands an agile and powerful government response.

So I'd sort of flip this around: what was it we did in the last 30 years that destroyed our confidence in our own government? Because it used to work.

[robotresearcher]

> How about we check the 30 years before that: medicare, social security, the tail end of the new deal,

And Vietnam, depressed inner cities, social strife, crime and unemployment...

[nopriorarrests]

You might be right, I honestly don't know. But if this is the case, maybe first you need to reform the government (in what exact way? and how the reform should be done, politically?) and after first task is accomplished you can feed it with some trillions of dollars?

Otherwise, "tax the living hell out of capital" will just cause some more big BOOM sounds somewhere in middle east, and deplete private capital from making more investments at the same time.

[ajross]

How about "tax the living hell out of capital" on a spending-neutral basis? Pay off the debt. Stimulate local economies. Increase the EITC ceiling. Hell, write a simple UBI statute.

There are lots of easy (and easily verifiable) ways to spend government money on things people value. That you think there aren't is sort of the triumph of modern conservatism in a nutshell.

[jimnotgym]

It could give that money back to people and let them spend and invest it? More people free to quit working for someone else and to instead work on 'building' sounds like exactly what Marc is advocating. We have our smartest maths graduates trying to make automated trading algorithms skim an extra .0000001% off a trade, which you could argue is not helping humanity progress. Maybe with UBI they will quit that and work on something more long-term? For Marc's dream to come true it seems like reducing the concentration of wealth and power is the first step.

[freeone3000]

Food stamps, medicare, TANF, and welfare improve the daily lives of millions. And this money is accountable to the person who spent it, to the person who voted to spend it, to who raised it.

[camgunz]

The US funds billions in research, this one time it even resulted in the internet. Probably a good idea to keep doing that.

[eli_gottlieb]

Well, there were those research efforts that came close to a SARS vaccine until their funding got cut: https://www.nbcnews.com/health/health-care/scientists-were-c...

By the way, the formal name for COVID-19's virus is SARS-COV-2.

[jtolmar]

Taxing the hell out of capital is a good idea, but our current political reality makes it hard to maintain any public service that's not extremely visible.

These are emergency preparedness problems so funding them means setting aside a pile of money and resources until the emergency actually happens. That pile of money makes an attractive target for capital, who can afford to fund campaigns to privatize those services and then get the emergency stockpile as a reward. That sort of maneuver has to go through a vote, but most voters get their understanding of the world through capital-owned media, so that's not much of an obstacle.

Edit: More and more, I think we need worker-owned news.

[oxymoron]

A global capital levy is Piketty's central proposal in _Capital in the 21st Century_.

[timhigins]

Sure, govts. should tax the FAANGs of the world more, but having a "stake" in them means govt. interests suddenly align with corporate interests, meaning regulation for the public good gets sidelined. Net neutrality anyone?

[ajross]

Net neutrality was killed without this policy and with no government stake in the tech industry. I don't follow.

[nerfhammer]

It also potentially means the state partly owns the free speech platforms, which may have some risks.

[SpicyLemonZest]

The federal government continued to spend trillions of dollars a year during this period of austerity you're referring to. Any liquidation of emergency stocks was not motivated by financial need.

[covidacct]

Federal and state governments are different.

[nerfhammer]

It is remarkable how uniformly lethargic the entire political spectrum of the West has been with respect to this crisis until it was too late, while we're seemingly also universally unwilling to build housing or infrastructure across the West, while many Asian countries seem to actually be doing a much better job of all of these things. Instead we sit around and bicker about everything and wait.

[mkl]

Many Asian countries have recent experience with SARS, which led them to get their pandemic game together in advance of this one.

[nerfhammer]

The West had 2+ months extra lead time during which it mostly didn't even try to do anything, across the political spectrum.

[kortilla]

That’s not an idea for building, that’s just an idea for the government getting more money. The government clearly doesn’t actually need the money when it cares to do something (based on the stimulus bill and the last decades of deficits).

[covidacct]

From my original post:

Governments DID see this coming, both federal and state. California, at one time, was prepared for exactly this crisis. The 2008 financial crisis wiped out state budgets

[jtbayly]

BS. If they were prepared, where did everything go? CA had lower income so they burned all the PPE and shut down hospitals?

[blarglechien]

I don't know about California but the same kinda shit happened in France. In 2007 our health minister had a bad time because she orderer massive amount of tests, masks, and hydro-alcoolic solutions. It was during SRAS, and at the time for 'nothing'.

All those item were needed 3 weeks ago, but the stock were never fully replenish since. Most of those things are perishable.

WTF.

[nerfhammer]

They scrapped it in 2011

https://www.latimes.com/california/story/2020-03-27/coronavi...

FWIW CA's tax system is pro-cyclical, because they do tax the richest 1%'s more, but the result is that 1%'s don't make any capital gains in recession years so state tax revenues get obliterated during recessions.

[battery_cowboy]

Storing shit and maintaining it costs money.

[kortilla]

Well they didn’t really see it coming if they sacrificed it over everything else.

[pazimzadeh]

The people should have a share of the proceeds if their tax dollars funded the work.

I don't think printing money is the answer, if I'm understanding you correctly.

[kortilla]

They do get a share already through taxation and it doesn’t matter. Money isn’t a good incentive for the government to care.

[pazimzadeh]

I don't follow. I'm talking about giving people shares or proceeds from projects that were funded with the people's wealth.

[kortilla]

What people? The government (of the people by the people for the people) already receives all of the tax revenue from successful companies. I don’t see a reason to double dip here.

[manigandham]

How many large companies have come from federal grants? How much would that tax actually generate? If the govt can print money in emergencies as needed, what would the taxes have done?

I don't see how concentrating more money in the organization that is the worst at spending it will produce any more value.

Modern govt isn't failing from lack of funds, it's how those funds are spent that is the problem.