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Can’t we understand the Layard “tax as truce” concept within a prisoner’s dilemma-type framework? IIRC, the key feature of the model isn’t that it is Zero-Sum, but rather that it is Negative Sum. That’s the arms-race analogy.

Suppose there are 2 choices: slack (S) or rat-race (R)
The payoff matrix is
S R
S 10, 10 6,12

R 12, 6 8, 8
Without a tax, the dominant strategy is to rat-race.

But then the government comes in and puts a tax on rat-racers, possibly redistributing the proceeds to slackers, or at least lowering the tax burden slackers would otherwise bear. So the payoff matrix becomes:
S R
S 10, 10 8,10
R 10, 8 6, 6
Now the dominant strategy is to slack.

It’s easy to write down a model where Layard’s policy recommendations are Pareto improving. I just did it in 5 minutes. Go me! But I can also write down a model which gives everyone negative infinite utility if they don’t give Layard the Nobel Prize.
As I think I read on Tyler Cowen’s site: “It’s easy to lie with statistics, but it’s a lot easier to lie without them.” (With theory, for example)

Can’t we understand the Layard “tax as truce” concept within a prisoner’s dilemma-type framework? IIRC, the key feature of the model isn’t that it is Zero-Sum, but rather that it is Negative Sum. That’s the arms-race analogy.

Suppose there are 2 choices: slack (S) or rat-race (R)
The payoff matrix is
S R
S 10, 10 6,12

R 12, 6 8, 8
Without a tax, the dominant strategy is to rat-race.

But then the government comes in and puts a tax on rat-racers, possibly redistributing the proceeds to slackers, or at least lowering the tax burden slackers would otherwise bear. So the payoff matrix becomes:
S R
S 10, 10 8,10
R 10, 8 6, 6
Now the dominant strategy is to slack.

It’s easy to write down a model where Layard’s policy recommendations are Pareto improving. I just did it in 5 minutes. Go me! But I can also write down a model which gives everyone negative infinite utility if they don’t give Layard the Nobel Prize.
As I think I read on Tyler Cowen’s site: “It’s easy to lie with statistics, but it’s a lot easier to lie without them.” (With theory, for example)

Can’t we understand the Layard “tax as truce” concept within a prisoner’s dilemma-type framework? IIRC, the key feature of the model isn’t that it is Zero-Sum, but rather that it is Negative Sum. That’s the arms-race analogy.

Suppose there are 2 choices: slack (S) or rat-race (R)
The payoff matrix is
S R
S 10, 10 6,12

R 12, 6 8, 8
Without a tax, the dominant strategy is to rat-race.

But then the government comes in and puts a tax on rat-racers, possibly redistributing the proceeds to slackers, or at least lowering the tax burden slackers would otherwise bear. So the payoff matrix becomes:
S R
S 10, 10 8,10
R 10, 8 6, 6
Now the dominant strategy is to slack.

It’s easy to write down a model where Layard’s policy recommendations are Pareto improving. I just did it in 5 minutes. Go me! But I can also write down a model which gives everyone negative infinite utility if they don’t give Layard the Nobel Prize.
As I think I read on Tyler Cowen’s site: “It’s easy to lie with statistics, but it’s a lot easier to lie without them.” (With theory, for example)

The very difficulty of coming up with the substitute may be reason to suspect it would be a truce of sorts. Let me put it the following way. When I gave up competing for relative wealth, I started competing for (hypothetically) intellectual debates or some such. Al Gore, when he lost the election, instead of relative wealth decided to compete with rugged outdoorsmanship, and after that decided to compete for top environmental advocate. You may compete along the dimension of how much you love liberty (“Give me liberty or give me death.” That is how much I love it!) or along the demention of best dressed in a philosophy department. Some may even suggest that you would try to have a better blog than others.

Now, money is an obvious competition, and physical stuff is sometimes, but note that people compete physically along different dimensions.

To this extent, we are not in the same sort of competition as with relative wealth. The problem with relative wealth is that too many people are competing on the same field so there are not enough winners. When we disperse and all compete for different things, our winning is not mutually exclusive. No matter how much better your blog is than Gore’s, he is a better environmental activist than you, and you can both be happy and prideful about it.

The very difficulty of coming up with the substitute may be reason to suspect it would be a truce of sorts. Let me put it the following way. When I gave up competing for relative wealth, I started competing for (hypothetically) intellectual debates or some such. Al Gore, when he lost the election, instead of relative wealth decided to compete with rugged outdoorsmanship, and after that decided to compete for top environmental advocate. You may compete along the dimension of how much you love liberty (“Give me liberty or give me death.” That is how much I love it!) or along the demention of best dressed in a philosophy department. Some may even suggest that you would try to have a better blog than others.

Now, money is an obvious competition, and physical stuff is sometimes, but note that people compete physically along different dimensions.

To this extent, we are not in the same sort of competition as with relative wealth. The problem with relative wealth is that too many people are competing on the same field so there are not enough winners. When we disperse and all compete for different things, our winning is not mutually exclusive. No matter how much better your blog is than Gore’s, he is a better environmental activist than you, and you can both be happy and prideful about it.

The very difficulty of coming up with the substitute may be reason to suspect it would be a truce of sorts. Let me put it the following way. When I gave up competing for relative wealth, I started competing for (hypothetically) intellectual debates or some such. Al Gore, when he lost the election, instead of relative wealth decided to compete with rugged outdoorsmanship, and after that decided to compete for top environmental advocate. You may compete along the dimension of how much you love liberty (“Give me liberty or give me death.” That is how much I love it!) or along the demention of best dressed in a philosophy department. Some may even suggest that you would try to have a better blog than others.

Now, money is an obvious competition, and physical stuff is sometimes, but note that people compete physically along different dimensions.

To this extent, we are not in the same sort of competition as with relative wealth. The problem with relative wealth is that too many people are competing on the same field so there are not enough winners. When we disperse and all compete for different things, our winning is not mutually exclusive. No matter how much better your blog is than Gore’s, he is a better environmental activist than you, and you can both be happy and prideful about it.

Layard seems to argue that (1) people have an extremely strong taste for relative position and (2) if you push them off the income/consumption race, the competition won’t just pop up on another, possibly more harmful, dimension. He implies the only alternative to income/consumption-oriented labor is leisure, and argues that people don’t race on the leisure dimension. Maybe. But that’s not the only relevant dimension. (1) implies that people won’t stop competing just because competition on one dimension has become too expensive. All the tax will have done is lower the relative cost of competing on another dimension. So, an argument for tax-as-truce that involves (1), requires an additional argument identifying the most likely substitute dimension, and showing that competition on this dimension will be more benign. An argument without (1) will have a hard time sustaining itself against “you can always just choose not to care about relative material position” least-cost avoider arguments.

Layard seems to argue that (1) people have an extremely strong taste for relative position and (2) if you push them off the income/consumption race, the competition won’t just pop up on another, possibly more harmful, dimension. He implies the only alternative to income/consumption-oriented labor is leisure, and argues that people don’t race on the leisure dimension. Maybe. But that’s not the only relevant dimension. (1) implies that people won’t stop competing just because competition on one dimension has become too expensive. All the tax will have done is lower the relative cost of competing on another dimension. So, an argument for tax-as-truce that involves (1), requires an additional argument identifying the most likely substitute dimension, and showing that competition on this dimension will be more benign. An argument without (1) will have a hard time sustaining itself against “you can always just choose not to care about relative material position” least-cost avoider arguments.

Layard seems to argue that (1) people have an extremely strong taste for relative position and (2) if you push them off the income/consumption race, the competition won’t just pop up on another, possibly more harmful, dimension. He implies the only alternative to income/consumption-oriented labor is leisure, and argues that people don’t race on the leisure dimension. Maybe. But that’s not the only relevant dimension. (1) implies that people won’t stop competing just because competition on one dimension has become too expensive. All the tax will have done is lower the relative cost of competing on another dimension. So, an argument for tax-as-truce that involves (1), requires an additional argument identifying the most likely substitute dimension, and showing that competition on this dimension will be more benign. An argument without (1) will have a hard time sustaining itself against “you can always just choose not to care about relative material position” least-cost avoider arguments.