Friday, July 20, 2012

Aboriginal Provinces

Summary:

North America has had a long standing problem with an oft ignored and abused collection of ethnicities that are usually known as "Aboriginals" or "Native-americans" or "Indians".  In recent times they still suffer problems due to a high rate of poverty and all of the associated characteristics that is typical of an impoverished community (aboriginal or not).  In Canada, they make up the vast proportion of the poor and so tackling the poverty issue would have the greatest impact in reducing poverty in the country.

The general idea is to turn aboriginal treaty land into small provinces.  They will run their own governments, assembled with rules each tribe/band decides themselves.  They will have their own system of taxation decided by their government.  They will be included in the Federal tax system but, as they become part of that system, they will also be included in the Equalisation Formula to ensure they receive a fair amount of tax dollars for services.  The provincial borders are as static as today's provinces allowing natives to finally use their land as security to obtain mortgages (or for their people/governments to rent out land for commercial use without fear they will "lose" land).

With an additional set of anti-poverty programs, the eventual goal is to have Aboriginals enjoy the same standard of living as the average Canadian (barring differences due to increased cost of living for more remote locations).



Long Description:

A long-standing issue with Aboriginal groups have been with land rights.  In general, a lot of times, Aboriginal bands must give up land and sell it to various corporations or government, or are otherwise forced into those situations.  As a first step to solidify the holdings of the various Aboriginal groups would be to convert treaty land up to a "territory" or "province" status.  The government of these provinces forever owns the land, thus can impose property/land tax as they see fit and never lose land in return for commercial development.

The next issue is self-governance and the implications for taxation and Federal control. As a source of data, the government had compiled statistics about spending, sources of expenditures and reasons for differences in expenditures between Aboriginals and Non-Aboriginals, which can be found here. The various Aboriginal tribes will choose their own band councils, which will be equivalent to a provincial government, in whatever manner they see fit. In turn, that government will then choose to tax residents of the province as the constituents have indicated.

However, with this system of Aboriginal lands as provinces it will mean that they are subject to the Federal tax system.  In general, the Federal tax system already tries to ameliorate heavy taxation of the poor via basic exemption and other tax reduction techniques.  Obviously, Aboriginals will enjoy these same benefits.  But, as these lands will now become a part of the provincial system of Canada, it also means they will enjoy the Equalisation Program.  Rather than a Federal Indian Affairs minister and the associated bureaucracy dictate or approve how a band might run their land, they will receive funding like the Equalisation Program, the healthcare program and so on, just like any other province and put these funds toward providing social services to the residents of the province.

Of course, it should be understood that communities with high levels of poverty have difficulty in developing economic opportunities to increase household income levels. Financial institutions are more reluctant to give business loans, foreign investment is not likely to target non-affluent neighbourhoods and crime/abuse tends to perpetuate problems unless actively combated.  Therefore, there should be a transition period in which additional anti-poverty programs are put into place to target these issues, a program which shifts down as Aboriginals finally enjoy a standard of living equal to the average Canadian.

A slew of spending on anti-poverty usually revolves around the construction of schools and universities (as shown in the data, extra funding is likely required for Aboriginal communities due to being more remote on average compared to non-Aboriginal communities), healthcare (poor health is definitely related to poor economic performance, and the spending shows that Aboriginals only receive 65% of what non-Aboriginals receive) and housing (it is hoped that the ability to obtain mortgages will resolve some of the housing situation with Aboriginals but it is also likely necessary to continue to spend a large amount of money to "get it started").

Finally, there is one point that should be addressed because it can create a serious political roadblock to the adoption of these programs (although the blog's title is politically untenable, there is effort spent here to at least make it less untenable).  The data does not reflect any higher incidence of corruption or waste on the part of Aboriginal leadership in comparison to non-Aboriginal leadership.  And secondly, looking at StatCan data here, we can see that Aboriginals work just as hard as any Canadian and rather have statistics typical of communities suffering high rates of poverty.  We should let Aboriginals succeed.

At no point should "third party" governance ever be a solution to native problems.  If this point seems unusually stressed in comparison to previous posts it is because third party management is of such a ridiculous and illogical nature that it needs to be stressed.  It would never occur in non-Aboriginal governments no matter how terrible the situation (eg. would East Vancouver be put under a Federally-appointed third party manager?), therefore we should never propose solutions that we would never impose on non-Aboriginals.


Rationale:

The rationale should be obvious.  While these programs speak primarily about Aboriginals being lifted to the average Canadian standard of living, the anti-poverty programs would include non-Aboriginals as well.  It is merely that Aboriginals make up such a large percentage of the Canadian poor that they would logically receive the vast proportion of anti-poverty spending.

All Canadians should enjoy a government that they vote in, not a third party manager and all Canadians should enjoy a high standard of living.

Tools:

The greatest tool is of course Statistics Canada who can start to collect "province" specific spending, and collect data logically to reflect the performance, tax revenue and expenditure of native tribes. 

The second greatest tool are the residents of the new Aboriginal provinces.  They will finally have the ability to dictate their will to a local government who is beholden only to them and not the Federal or Provincial government.

It is difficult to judge the effect of various social programs but Statistics Canada can try to keep geographic data on low-income incidence and perhaps a second "absolute poverty" statistic.  Then one could compare the performance of different Aboriginal provinces versus their choice of social programs.

(It's rather strange that no government has ever requested an absolute poverty statistic and an absolute poverty statistic should indicate the year in which it was composed to reflect that more modern societies typically include a larger basket of goods as basic necessities)


What I'd like to talk about later:
Corporate Tax Revisions and Business/R&D Grants
Healthcare - Preventative Care
Nursing Home Funding
Incubator Program
Informed Voter Metrics

Wednesday, July 18, 2012

Artificial Intelligence 2

Trying to Keep Prices Reasonable

The difficulty in designing a rational AI player in a free market economy (no crime, all contracts honoured, everyone is rational) is that it may not give the results we would like, versus a script based system with a controlled economy.  Prices can move too high or too low.

The situation is discussed in a previous post, each individual runs on an artificial intelligence to attempt to maximize wealth in a rational manner.  However, the ultimate result gave rise to the following situation:

Every individual begins as a farmer.  They would stochastically (randomly) choose to try out another profession.  Those who produced common wares who had early success could build a store of wealth.  Any subsequent competitor had to price themselves against someone who had a store of wealth who could engage in a price war, take a loss over a period of time, driving competitors out of business and then engage in monopoly pricing again to rebuild the store of wealth.  This process would repeat to the point where one person would sell a single product over a long period of time worth many many turns of food production and never worry about competition.  There would also be a less successful group of "rich" individuals.  Everyone else remained very poor.

Here are some ideas (not necessarily mutually exclusive) that could be used to bring prices down so that there can be a daily market for goods (which would make street markets more interesting in game) and reduce the level of wealth disparity.


Saving Rate
Individuals have a stochastically chosen saving rate, where a given amount of disposable income is put away into savings thereby lowering the available amount of disposable income that can be used to spend.

Maximum Spending Limit
Additionally, individuals may have a budget limit which grows slowly from day to day.  The amount of wealth used to purchase goods grows slowly from day to day.  Rather than add the entire disposable income from each day to the pool, only a portion of it is added and the rest is used as savings.

The starting budget is based on disposable income gained in a day.  Subsequent budgets have disposable income "refill" the budget, and if there is still more additional disposable income, the budget only grows slightly at the margin.

Price Expectation
A person can make a snap judgement on whether they believe the price will rise or fall the next day.  Based on this they will purchase or not purchase a good, with a fuzzy decision making mechanism (ie. they have a percentage chance of purchasing or not purchasing based on the strength of their belief).

A person can also expect the price per unit of aggregate bonus (health and happiness quantified as a number and added together) to be within a certain range as an absolute number or as a percentage of their income.  So if the price per unit of aggregate bonus is 5% of disposable income, but they expect it to be 4%, then there is a low chance for the person to purchase the good.

There can also be, which is most likely to arise in a barter system, a price expectation based on equivalent opportunity cost labour input in terms of possible food production.  That was a verbose statement but simply put: if instead of producing that good you spent the whole time farming, how much food would you have gotten?  If you made a pot, then let us picture instead of making the pot, the person had farmed and the person who mined the clay had farmed, how much food would you have had instead?  Then, convert the food into the equivalent units of wealth (perhaps based on the current average barter price).  This allows you to set a price based on "real cost of input".  However, it's somewhat problematic in that, how much of a profit margin is acceptable to a person (because a price at cost or below makes the endeavour pointless for the seller).


Assumed Bonus from Wealth
Another method to create a certain price range is for people to value holding wealth in a way where they can measure it against a purchase.  The benefit of purchasing a good is the health/happiness bonus it provides.  A shelf, for instance, could provide +1 health.  A bath gives +2 health.  A bottle of perfume gives +1 happiness.  So if holding 100 units of wealth is considered equivalent to +0.1 happiness, then spending anything over 1000 wealth for a good that gives +1 aggregate bonus would be "not worth it".  This would set a hard upper limit on prices and may not be desirable (especially since units of wealth can be defined however you wish in a developing economy, such as having units in terms of seashells or in horses or in gold coins).



Price Per Unit of Aggregate Bonus
An easy way to differentiate different goods is to think of them in terms of "price per unit of aggregate bonus".  If a good costs 120 wealth and gives 6 health+happiness,  then we can think of the price as "20/bonus".  Another good may cost 90 and gives 2 bonus, thus it has a price of "45/bonus".  We would purchase the 120 wealth good.

This helps to differentiate between goods and their bonus values, which helps to deal with unreasonable prices in a market with many different goods.

Item Goal List
There are issues with attempting to figure out reasonable pricing especially when some items are legitimately much more expensive than others.  One such example is housing versus household goods.  Another may be raising a horse versus buying daily food.

There should be a priority to the list of goods that an individual wishes to purchase.  Then money is set aside for each category, perhaps according to a budget.  Then, we attempt to find the lowest price for a good in that category.  Then, finally, we apply a rule to guess at whether that price should be accepted or not (with respect to price expectation and reasonable maximum price).

This way, an individual can intelligently "save up" for a big-ticket item, rather than always balk at the price of a house because milk is so much cheaper.


Trying to Make Luxuries Cost More Than Common Variants

Another issue that arose from the free market that was not discussed was the heavily depressed prices of luxuries which occurred for two main reasons.  Luxuries lasted forever but common wares had to be constantly repurchased (therefore driving up demand for common wares and driving down demand for luxuries).  Second, the lack of disposable income due to high common ware prices hampered the luxury market to the point of oblivion.

Product Stratification
For luxury goods, unlike common goods, you could possibly have more than one of the same type and gain bonuses from all of them. 

As an example, imagine a category of goods as "dining tables".  The health/happiness bonus from "dining tables" is based on the best table a person owns (best is based on aggregate bonus).  If one owns twenty "common" dining tables, then they can only receive a single bonus from the best common dining table.  But, if a person owns a luxury dining table, after a set amount of time it becomes an antique dining table.  At this point, it always gives a bonus whether it is the table in use (then it gives its full bonus) or not used (then it gives a highly reduced bonus).  This makes it useful to buy another luxury good of the same category once an old one as achieved "antique" status.  To limit the bonus, only one luxury item can be trying to achieve antique status at a time.

Shopping Algorithm
The current algorithm attempts to fulfil a need through a common item before ever considering a luxury item.  They should be considered side by side, with a pricing analysis that takes into account the bigger bonus possible from a luxury item (for instance, the price per unit of aggregate bonus discussed above).

Saturday, July 14, 2012

Artificial Intelligence 1

As a secondary topic close to my heart, I like to touch on artificial intelligence and a concept I have been toying with for some time has been a video game in which you lead a particular group of people from the stone age to the early modern age (before industrialism comes into play) in a real-time strategy format.

The idea is to have a fairly low level game play, akin to Dwarf Fortress, where you lead people with a growing population and technological capability.  As the game progresses, more of your society is automated to allow you to focus on the "bigger picture" thereby maintaining the same APM (actions per minute by the user, a metric used to measure how much a user has to be moving about clicking the mouse to play the game competently) when the player has ten people in the nomadic stone age period and even when he is leading armies of thousands of soldiers in the early modern age.

It is the automation that is of most interest to me, intellectually, versus the grunt work of developing the whole game (graphics engine, game engine etc).

So in that vein I wanted to discuss a bit about trying to automate the economy to allow the user to handle less "industries".

The Game Economy

In the game, the player controls a group of people.  The technology tree is split into three categories (fantasy, steampunk and mundane) to represent different paths for the player to take.  No matter the path the general idea is that technology gives the user access to produce a new type of product or to automate their economy in some way.

A society is then composed of a number of industries, a standing military and the government coffers (which includes non-money items such as a stockpile of weapons in case of war).  So for instance, once you move beyond the stone age an early settlement might be represented by:

Oat Industry: 6 workers producing 50 oats a year
Horse Industry: 2 workers producing 1 horse a year
Military: no standing soldiers

A user would then think to open up a new industry/modify a current industry, assign labour to it and watch the output level change.  The user could also train people into standing soldiers or reserve soldiers, trading labour time to increase the military skill of people (all the way to putting a person in the military permanently).

An Automated Economy

As an experiment, I attempted to create a "perfectly rational" person who decided on his own what to produce, whether to change his labour and at what price to sell his products.

The AI experiment had the following format:

A constant population of 100 individuals all of whom start off as farmers who produce "food".
Four types of raw materials exist.
Four types of "common wares" exist, each requiring one of the four types of raw material to produce.
Four types of "luxury wares" exist, each requiring one of the four types of raw material to produce.

The decision model of each person, using nothing more than a script-AI, was the following:

Attempt to purchase enough food to eat for the turn.  If he produces food, then reserve that much food for this purpose.
Attempt to purchase raw material for my job if I have a job. (Always choose the lowest price)
Attempt to purchase common wares with left over money; I only need one of each type. (Common wares break down after awhile)
Attempt to purchase luxury wares with left over money; I only need one of each type. (Luxury goods break down after awhile)

Produce as much of my product as possible (farmers always have max production, others might run out of raw material)

At the end of the day change the price of my product if necessary (all prices are in food, mirroring ancient Egypt):

If I couldn't sell all of my daily production of product, lower the price.
If I sell exactly my daily production of product, keep price constant.
If I sell out my daily production of product, raise the price.
Depending on how profitable I am, I can choose to switch my job.

The outcome was usually that one person would become incredibly rich, a few select people selling wares would become rich and everyone else would be in abject poverty.  This isn't exactly an outcome that is useful for the player, as anybody would much rather run the economy themselves and it would still be more efficient.

There are a few ideas to help mitigate the problems.

General Improvements

Individuals should have a list of products they may wish to produce.  They then swap labour time, at the margin, between the most profitable output and the least profitable output.  When switching into an industry where it requires materials to produce the product (such as requiring clay to create pottery), then the individual may decide to acquire the material themselves rather than purchasing it.

Structural Differences

Early and ancient economic systems were not capitalist or free market arrangements and after seeing the result of some of the issues with low number of products and constant population (both of which were characteristic of ancient societies), it might be that automation technology should more closely match ancient solutions rather than using modern free market solutions (which work substantially better in a modern society).

For instance, the first farming arrangements in which people did not simply stash items for the whole human herd, was to have family stashes with a "big man" who tried to distribute output fairly.  Tribal arrangements were an evolution of the "big man" to a permanent seat of authority who arranged the redistribution (this would be represented by the player deciding how to distribute goods and how much to keep for public purposes).

Ancient Egypt, a more complex society than tribal arrangements, had state-run farming alongside estates who were tasked with running more farms who had to pay a harvest tax.  The food then was used to pay for the Pharaoh's staff and then it was used to pay for public works (such as the pyramids), as a sort of "yearly stimulus".

Generally the idea would be that the automation might be closer to what a player would wish to do rather than more realistic.  That is, a player assigns farmland to certain estates who then automate the process of food production, tweaking different levels of food according to imperial decree to meet your harvest tax and then they pocket the difference (with some corruption perhaps).  This frees the player from having to zone out land for farming, expanding farms, collecting people to work the farms and distributing the food to the workers (picture how one might expand an industry in a real time strategy game or Dwarf Fortress, where you build workers, then build farms, then create stockpiles and so on).  The player simply receives a sum of food which can then be used to pay for public works and the military.

Monday, July 2, 2012

Criminal Justice Equality

Summary:

In order to achieve greater equality before the law, the justice system should provide an equal level of defence and prosecution for every case in the justice system as much as possible.  It should also strive to be as accurate as possible, whatever the method may be.  The proposed concept here is to always use assigned defence lawyers, banning the use of private defence lawyers, equalising the pay between prosecution and defence and the use of judge panels rather than jury trials.

Long Description:

Currently the justice system guarantees a person accused of a crime a lawyer but it is well known that assigned defence lawyers will likely be lower quality than private defence lawyers.  In fact, it is usually the case that defence lawyers assigned by the court system are likely to be the worst lawyers, or the most inexperienced lawyers and very rarely would they be high quality lawyers working for such low pay.

In order to remedy this problem, the justice system should not create a divide between those who can afford expensive high quality lawyers and those who cannot.  Instead, the Crown/State should assign all individuals a random defence lawyer who are paid on the same scale as crown prosecutors.  It might be possible to share the same pool of lawyers for defence and prosecution but they may also have to split the pools.  It is only important that the pay scale is similar between the two jobs in order to promote the same level of quality between the two tasks.

Additionally, jury trials are likely to be less accurate in adequately examining evidence in difficult legal cases than judge panels.  They would also be more prone to be swayed by emotional arguments which should have no bearing on determining guilt or innocence (but that may determine the severity of the sentence).  While jurors typically pay a high level of attention in trials, they necessarily lack specialised knowledge to understand evidence leading to a situation where defence/prosecution will bring in conflicting views by experts.

It would be preferable to have a standard pool of experts on particular fields of evidence to offer their opinion and statistical information (such as the statistical accuracy) of evidence, rather than ones chosen by either the prosecution or defence.  Additionally, it would be more helpful for there to be a judge panel rather than a jury.

The judge panel could be composed of several variants, the effectiveness of each could be determined via pilot projects (although such a scheme would temporarily lead to imbalanced levels justice):

* A main judge and several part-time judges
* Multiple full judges, the number depending on the level of the court (for instance the Ontario Supreme Court would have 3-5 judges)
* A judge and number of professional jurors who have specialised knowledge in analysing evidence and understand some sort of sentencing science (it would be a new field of study in trying to determine the effectiveness of different types of sentencing on people)



Rationale:

There are three main reasons for this type of justice reform:

  • Every citizen is afforded the same level of legal representation in the criminal court system (and hopefully this would expand to the civil court system)
  • Sentencing becomes more scientific which will be a step above the established case precedence style of sentencing (which gave us consistency, a point which should not be overlooked) or at least scientific data should be collected on sentencing
  • Eliminating the need for jurors, which is a waste of labour hours in the work force and is an expensive loss for the economy

Tools:

First, the system in place for determining the pay scale of crown prosecutors (or state attorneys) will be extended to a second pool of lawyers, the defence lawyers (crown-appointed defenders might be a good name).  As a phase-in period the salary of defence lawyers can be capped until it matches the highest levels of crown prosecutors before a full ban on private criminal defence lawyers.  Defence lawyers are an important aspect of society and so they should be held to a high standard.

Data should be kept on convicted criminals, the sentence received and the recidivism rate, as well as the type of crime committed.  The data itself will be collected on every convicted individual but the published data would necessarily require aggregation to make it anonymous and conform to privacy principles.

The most important metric is keep data on wrongful conviction rates by different styles of justice system.  It is more important to eliminate false positives (wrongful convictions) than it is to improve the rate of catching criminals.


What I'd like to talk about later:
Corporate Tax Revisions and Business/R&D Grants
Healthcare - Preventative Care
Nursing Home Funding
Incubator Program
Informed Voter Metrics