
On the diminishing marginal utility of Stuff - cstross
http://www.antipope.org/charlie/blog-static/2012/09/on-the-diminishing-marginal-ut.html
======
thenomad
One of the irritating things about money is that its value, and the extent to
which you can top out your use for it, very much varies according to your
passions.

For example, both Charles Stross and I are creatives with a passion for
telling stories - but the media we strongly prefer have pretty dramatic
effects on the utility of money for both of us.

He mentions having already effectively topped out on the utility of cash for
him - as a novelist, there's a limited extent to which more money helps him
fulfil his passion.

By contrast, the utility of cash for me tops out around the $300m / yr mark,
that being the cost of making and marketing a top-end feature film every year.
Below that, there is definitely utility in every dollar as far as Doing What I
Like goes - although of course diminishing returns still apply.

And for some people - like Elton Musk, whom he mentions - there is effectively
no top end in sight. If your passion is to get to Mars, you really don't hit a
point where more money wouldn't be helpful.

------
DanBC
Some people don't actually have that money. It's all a money merry-go-round of
debt and credit and weird financial instruments and shell companies in tax
havens. It doesn't take much for it to all go wrong.

([http://www.forbes.com/sites/forbeswomanfiles/2012/06/19/the-...](http://www.forbes.com/sites/forbeswomanfiles/2012/06/19/the-
queen-of-versailles-one-familys-shocking-riches-to-rags-saga/))

Or the money isn't liquid. It's in a huge private funpark, or IP rights that
aren't making much at this moment.

Michael Jackson 'nearly bankrupt'
(<http://news.bbc.co.uk/1/hi/entertainment/4342255.stm>)

For a small (tiny?) number of people their estimated worth or their position
on some 'rich list' is equivalent to HN karma, or reddit karma - meaningless
but strangely compelling.

William Gibson[1] has a nice take on the super rich. Those weird families
cloning each other and living in space colonies or engaging in high concept
'pranks' against their enemies.

[1] Bad form to mention the competition?

------
wpietri
If you meet somebody who literally cannot get enough food, it's pretty easy to
recognize that there's something wrong. If their desire to eat wrecks
relationships, causes harm to their health, makes it so that all they can talk
about is the next meal, you say: that's not right.

But when it's money, it's much harder to recognize that insatiability is a
sign of pathology.

That's not to say that all hyper-rich people are pathological. For some it is
indeed a favorite game (Buffet) or a tool for big plans (Musk) or the result
of doing something they loved (Page and Brin).

But having worked in the financial industry, I have met people for whom the
desire to amass incredible wealth is a sign of deep, deep problems.

------
lowboy
> Another example: the late Steve Jobs. Doubtless he received the best medical
> care that money could buy—but it wasn't enough to save him because a cure
> for his pancreatic cancer didn't exist at any price.

I'm not a Jobsologist, but didn't he eschew traditional treatment in favour of
alternative medicine for something like 9 months?

~~~
adrianhoward
It was actually not quite as bad as it was represented in the press. The
cancer was diagnosed in 2003. He avoided surgery for nine months and had
surgery in 2004 - when it was still stage 1. That surgery was apparently
successful. The cancer had certainly not metastasised in any detectable way at
that point.

From stuff his family has said, and from what his biographer said about his
interviews with Jobs, the primary driver for the delay was an almost phobic
fear of surgery rather than "alternative medicine will cure me". This is
surprisingly common from conversations I've had with some cancer treatment
folk. I knew a family member who unfortunately had similar feelings :-/

The kind of cancer Jobs had was a rare and slow growing pancreatic cancer.
Normally if you get diagnosed with pancreatic cancer you are in surgery later
that bleeding day if at all possible. For pNET tumors longer delays of weeks
or even months aren't unknown (not recommended either mind - but not
_insanely_ stupid).

(as a separate point - I love how all the reporting around Job's cancer was
that it was a "rare cancer" presented in the the "ohhh rare and scary
sense"... if you have to get pancreatic cancer a pancreatic neuroendocrine
tumor like Jobs's is the one you want to get).

The alternative medicine didn't make it worse in of itself.

The delay in surgery may have made it worse - but it's not certain. The five
year survival rate for that cancer, when treated by surgery, is still only 61%
at stage 1 (see
[http://www.cancer.org/Cancer/PancreaticCancer/DetailedGuide/...](http://www.cancer.org/Cancer/PancreaticCancer/DetailedGuide/pancreatic-
cancer-survival-rates)). Steve lasted nearly nine years.

Was the 9 month delay in surgery a sensible thing? Almost certainly not. But
the real story was a long way from the "Killed by alternative medicine" line
that hit the press. Even if Jobs had had surgery the day he was diagnosed, it
would most likely have ended the same way.

~~~
lowboy
That does clear things up a bit. Thanks!

------
sneak
He seems to make the implicit assumption that you can only spend money on
goods, and not services.

I have all the Stuff I could need or want (save maybe an rMBP instead of my
Air, or a new camera or something), but if I had more money I would almost
certainly spend it on things like airfare, hotels, seed-stage investments, and
the like.

There's a lot more one can do with money than "buy stuff to fill up one's
house" or "fund research".

------
jseliger
WRT this: "I have three answers." I would add a fourth answer: the
stupendously rich have a lot of assets in stock and so on that's not really
about the money, per se, but about control. It doesn't seem like Zuckerberg,
or Gates before him, deeply cared about having 1x billion + z billion; they
cared about having control over Facebook and Microsoft, which happens in the
form of stock ownership.

However, I don't see this as the motivating factor for the person Stross
mentions in his last paragraph, so, to the extent the post is mostly about
that paragraph, I don't have a great answer.

~~~
mdonahoe
Perhaps that falls into the "playing a game" part of the theory.

Mitt Romney wants to see "Achievement Unlocked: President of the United
States"

------
kghose
It starts off interesting, but ends a bit abruptly. If possible, I would like
a little more at the end about your thinking about all this, some philosophy
etc. (Unless it was all a political jab).

PS. Mitt wants what ALL politicians want. A roof over his head, food on the
table, running water and unlimited power.

~~~
icebraining
I think it's very unfair to portray all politicians that way. For example,
where I live, we have three parties which have been sharing the powers since
the transition to democracy (38 years ago), three others which don't go above
7% of the votes, and _thirteen_ others which don't get a single seat in the
Parliament.

Do you really think that the leaders of those parties are after unlimited
power? Or any power at all - the PM's maid has probably more power than them.

Or for another example, take the current leaders of Communist Party USA, and
all the power they have.

Any of those would have a much greater chance at power if they joined the
bigger parties.

------
asparagui
An well written little essay that buries the lede on the last paragraph. ;-)

~~~
andrewcooke
what do you mean? lede is the first paragraph
(<http://en.wikipedia.org/wiki/Lede_(news)>) so you seem to be saying

"An well written little essay that buries the first paragraph on the last
paragraph. ;-)"

and why (what?) is the "first paragraph on the last paragraph"? did you mean
"in"?

"An well written little essay that buries the first paragraph in the last
paragraph. ;-)"

and it should be "a", right?

"A well written little essay that buries the first paragraph in the last
paragraph. ;-)"

but i still don't understand what you're trying to say.

~~~
waqf
Had you read your own reference, you would have found a definition of "burying
the lead" which might have assisted you.

~~~
andrewcooke
ah, ok, thanks (not an american speaker; never heard that expression)

------
MatthewPhillips
Interesting essay until it revealed itself only to be an elaborate pot-shot on
a politician he apparently doesn't like.

~~~
wazoox
I'm wondering who in his right mind can like this particular politician.
Mormonism (as recently said in Sam Harris' last post) is as crazy a religion
as you get; and it all goes downhill from there. Geez, even Clint Eastwood
admitted in cover words that he wasn't taking his party's candidate seriously.

(I'm European BTW; as you know, something like 80 or 90% of Europe would vote
Obama without thinking twice about it according to the polls).

~~~
VaedaStrike
Harris is really not the best source for information on the craziness of
Mormonism, both he and Dawkins can't get their facts straight on several key
issues.

I'm a 'Mormon' and it's obvious everytime they open their mouths on the
subject that they are as unaware on the nuances of the theme as creationists
are with the nuance of Natural Selection.

~~~
wazoox
The fact that Mormonism as a religion is quite crazy fortunately doesn't tell
much about Mormons. Everyone is stupid in her/his own personal way :-)

------
gojomo
Steven Randy Waldman of the blog Interfluidity has a great post which makes
the case that "Wealth is about insurance much more than it is about
consumption."

<http://www.interfluidity.com/v2/3487.html>

It's a great insight, and the thought experiment to "[c]onsider a libertarian
Titanic" is illustrative.

(Though, it's a unfair slur to label the scenario 'libertarian', as that word
does not mean 'everything is reduced to dollar purchases' except in a
caricature promoted by critics. Just calling the scenario a 'pay-to-play
Titanic' would be descriptive without extra partisanship.)

~~~
zurn
This makes me think actual insurance would work better:

"If there is drought terrible so terrible that there simply isn’t enough for
everyone, the right to live at all may be rationed by price, survival of the
wealthiest."

Sustenance insurance ought to be much easier to get than staggering wealth.

------
anonymouz
The examples he give seem to be more about "money can't buy everything"
instead of diminishing marginal returns.

Under diminishing marginal returns of Stuff, I would have expected something
akin to "Gadget A generation n+1 is only an incremental improvement over
Gadget A generation n, we should aim to build Gadget B instead".

------
RivieraKid
This is one of the major reason for mandatory wealth redistribution (= taxes
etc.). It makes poor people significantly better at the expense of making rich
people slightly worse off. The society as a whole benefits from this.

------
keiferski
Money/stuff has a diminishing _buying_ power, i.e. you can only purchase and
consume so many things. But it doesn't have diminishing _creative_ power.

For all the billionaires out there with too much money, look up the Medici
family.

------
reasonattlm
Expanding on the part about wanting to buy therapies but not being able to - a
place where rich and poor are in a similar boat, but it isn't the same boat,
as suitable wealth means you can start to do something about the environment
of research, not just live in its shadow:

[http://www.fightaging.org/archives/2012/08/ultimately-
self-i...](http://www.fightaging.org/archives/2012/08/ultimately-self-
interest-will-emerge-as-a-driving-force.php)

[Of] the world's high net worth individuals, most [do] very little in the way
of funding research into aging or the conditions of aging. [Or any other
medical technology for that matter]. It is their inaction that is opposed to
their own self-interest: they are all aging to death at the same pace as the
rest of us, after all. When it comes to access to medical technology the world
is remarkably flat: the poor struggle in this as in everything else, but the
wealthy have no more ability to buy a way out of aging (or heart disease, or
cancer, or any of the other conditions that attend aging) right this instant
than does anyone else. What they do have is a far greater ability to create a
near future in which rejuvenation biotechnologies exist and are just as widely
available as any present day clinical procedure.

It is in the self-interest of everyone who can significantly speed up the
development of ways to reverse aging to set forth and do exactly that - but
very few are making the effort. [Consider Ellison's medical foundation, or
Thiel's funding of SENS as some of the few, lone examples]. At some point it
will become evident to the public and the world at large that aging to death
whilst surrounding by wealth is insanity in an age in which those resources
could be used for the development of age-reversing medicine: ways to repair
mitochondrial DNA, break down accumulated metabolic byproducts that clog up
cells, clear out senescent cells, restore declining stem cell activity, and so
forth. But as yet this is not obvious enough to those people who matter.

\---

Expanding on the part about vision versus the drive to gain greater amounts of
money: it's a challenge and a rare thing to be both a zealot and very wealthy.
The roads to being these things are both long and quite different; either is a
process more than a thing you are:

[http://www.fightaging.org/archives/2012/02/one-wealthy-
zealo...](http://www.fightaging.org/archives/2012/02/one-wealthy-zealot-would-
make-a-20-year-difference.php)

My suspicion is that it is not just longevity science that looks in vain for
wealthy zealots, but that in general any grand cause that people can feel very
strongly about also lacks wealthy zealots. It seems to me that there is in
fact little overlap between the small population of zealots for a cause,
people willing to devote their working life and significant resources to a
grand project, and the small population of very wealthy people, those with a
net worth of $100 million and up.

We can speculate as to why this might be. For example, I might try to argue
that the sort of person who can successfully run the long and unlikely process
of becoming very wealthy is the sort of person who doesn't think about what
they can do with money. They are not doing what they do for money, and the
process is their passion. Someone who was a zealot for a cause would have
stepped off that process long before reaching the possibility of attaining a
very high net worth. Having a mere seven figure net worth for most people
enters the territory of being able to prioritize volunteering over working, or
funding a small mission in their favored charity. The temptation to break off
and work on doing good rather than continually doubling down and doubling down
on the process is ever there.

Or to put it another way, the passion for the process that will make a person
wealthy takes up the much the same mental space as the passion for a cause:
there are only so many hours in the day, and only so much attention that a
person can give to any one set of information. So you are unlikely to see a
person who has (a) accomplished the necessary devotion to work and process for
a shot at becoming very wealthy, but also (b) put in the necessary work and
process to become a zealot.

Or to put it yet another way, neither becoming exceedingly wealthy nor
becoming a zealot are things that just happen one day out of the blue. They
are each a fair way down their own different paths of effort, realization, and
specialization.

~~~
DanBC
> _When it comes to access to medical technology the world is remarkably flat:
> the poor struggle in this as in everything else, but the wealthy have no
> more ability to buy a way out of aging (or heart disease, or cancer, or any
> of the other conditions that attend aging) right this instant than does
> anyone else. What they do have is a far greater ability to create a near
> future in which rejuvenation biotechnologies exist and are just as widely
> available as any present day clinical procedure._

This is a surprising paragraph. I'm not sure how you're defining "poor".

Illnesses of old age are a "luxury" that poor people don't have, because
poverty related illnesses kill them before they get chance to be old.

Access to chemotherapy or radiotherapy or surgery is much easier for wealthy
people than it is for poor people. (Although variations in cancer survival
rates across wealthy countries shows that it's not just cash that makes a
difference).

And rich people may not fund research into illnesses that affect them, but
pharma knows where the money is. Compare the amount of money spent researching
erectile dysfunction versus malaria.

~~~
ernesth
> Access to chemotherapy or radiotherapy or surgery is much easier for wealthy
> people than it is for poor people.

Is it? When I underwent chemotherapy, I did not pay for anything (to be
honest, I paid gas to get to the hospital, but did not pay for medics,
hospital bed, tests, blood analysis nor lost my salary for the days I could
not work). Even though the price of some of the medics that were injected in
me twice a month was greater than my monthly salary. Cancer is a disease for
which poors are very well treated in France (So yes, in some wealthy country,
cash makes no difference).

~~~
jackpirate
Yes, but what if they needed to stay working just to feed themselves and were
unable to work as hard because of the chemo?

Just because a procedure is "free" doesn't mean it doesn't cost anything :)

~~~
lurker14
Social Security and Medicaid/Medicare step in at this point.

------
mathgladiator
Ok, so I felt the article was leading up to something profound, but then it
ended with Romney. I am disappoint.

------
shalmanese
Um, of course Mitt Romney wants to buy something unavailable at any price: The
Presidency.

~~~
dsr_
Not at all. Why, I expect a thousand dollar check to each household in the US
-- not even per person, just per mailable address -- would do perfectly well.
Enclose a nice form letter: "This check is a sample of what my leadership as
President can do for you."

Finding the optimal value of the check to get a 51% popular share is left as
an exercise for the student.

~~~
lurker14
This actually happened. George Bush did it in 2008, $300 per person:

<https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008>

> 51% popular share

electoral college share, not popular share.

