# Introducing the Benefax Flows Model

A Generalization of Economics

By Tom Veatch

Everyone wonders what to do. What is important and valuable? What matters? Confused or short term thinkers who think they know what they want, may fool themselves while not knowing how to think about it, failing to think backwards from the consequences. Short term thinking has some value, but not all. To support practical problem solving, this essay offers a comprehensive model of (monetary and non-monetary) value flows at levels of individual, community, and history. I propose a term, Benefax, as a universal value metric which incorporates a variety of types of goodness flows transmitted from or to persons, including not just monetary resources exchanged for value recieved but also gifts, connection, genetic gifts, waste, time, effort, skills, positions of leverage, investments, etc.

Implied but not shown in the graph, the Benefax metric also incorporates triggered or knock-on value flows which one's choices and flows might induce downstream in the recipients or others, so that the total benefax of a decision is the sum across the network of affected tranmissions of flows downstream from that decision. In this way we seek to label, map, and quantify the recursive value flow structure of the world, from the level of the individual to the community, to history. "Benefax" may be translated as, the total of all downstream value flows due to a particular choice. Since the future is unknown, Benefax may be operationalized as its own expected value under some assumptions of ation of total of expected value flow

This "Benefax Flows Model" or BFM supports clear thinking about lives, life choices, and life chances, including the interactions among things like parenting decisions, love itself, as well as gifts, effort, skill development, earnings, and investments, as well as expenditures, which may be seen as wise or unwise based on downstream effects in the model. The BFM helps assign (different kinds of) value to life circumstances and choices.

We start from, and return to, a series of general observations on value flows in economics, including the pure idealism implicit in economics, recognizing the universal negative forces of externalities and the downward emphasis of additive thinking and of multiplicative returns. We confront the significance in human society and in other value chains of the concept of the absorbing barrier taken from the theory of investment. Thus, the model clarifies our thinking as to why the hated 80/20 rule, Pareto, characterizes wealth distribution, due to many factors including the influence of the mere idea of multiplicative returns. The model is presented both graphically and in words. Some of the interactions in the model are enumerated. Consequences of the model for personal and public-policy decision-making are drawn out, and recommendations as well as hope for progress in each domain is expressed and perhaps justified, as you may judge for yourself, which is the point.

### A graphical introduction

Consider the Benefax Flows Model graphically.

Figure 1. Benefax Flows

The circle represents you, quite empty to start, just a possibility. Over time, flows flow in, flows flow out, and the different types of flows start flowing roughly in the sequence shown. Genes flow in one time, that's called conception, and although there is a continuous flow of nature, we artificially impose a convenient conceptual structure by saying that a unit person, created by that stochastic merger of information, has come into existence at that time, though previously you existed not just in the twinkle in your parents' eyes, but more deeply, in the lifetime aspiration and eternal commitment which they intentionally made real in the form of you.

Genes and death are the only one-time flows; the others arrows are flow types which can occur over and over many times from their start time until their disablement moment. The different flows are somewhat ordered developmentally. So first and for a very long time you are (besides internal developments) simply the passive recipient and beneficiary of gifts upon gifts upon gifts, returning hardly more than the mere knowledge of your existence to your parents. That itself is naturally a great reward to them, for the future is in their eyes, and they see what might be, might become of you, might become, because of you, and all that summed and integrated is in their eyes when they simply see that your existence is real. It's not knowledge of the future, but it's a hope, and statistically it is an expectation, for the expected value of a person is not even just all the goodness that an average person might produce, but the downstream persons that that person might produce, grandchildren and a nation of descendants. After 30 doublings, it's a billion descendants, which might seem unrealistic but looking backward you do have a billion great-greats preceding you only 30 generations back.

That was a quick TL;DR introduction to the Benefax Flows Model.

This essay will return to the Benefax Flows Model after a detour through certain problems and potentials of Economics, the horrible implications of Pareto and the Absorbing Barrier, the hope offered by an Investment oriented mode of thinking but applied to non-investment flows, and finally back to the BFM to push toward the goal of a formal quantitative model which can be used to evaluate and optimize choices for individuals, communities and history. Are you as excited as I am? I hope so!

### Economics as Idealism

Modern history has been an attempt by idealistic improvers to make things better. Where successful, it's called progress, and the people who try to make it happen are called progressives. Since change can also potentially destroy, and since life itself exists in fragile dependency on long history, we also must be careful to hold onto our babies while changing their bathwater. Where successful, it's called survival, and the guardians of that necessary if insufficient past are called conservatives.

Even money and capitalism are idealistic improvements. Money itself was an alloyed but great bit of progress when it was invented. Read Graeber, “Debt: The first 5000 years”. Much later, modern capitalism was also huge progress when it was invented, thanks to the clever Dutch, see wikipedia. Eventually theory caught up, partly.

Classical liberal economics in the person of Adam Smith noticed that -- and I state the true essence -- exchange increases value. If you have A and I have B, and you value B more than A and I value A more than B, then if we exchange A for B, then both us end with more value, from our own perspective, than we started with. If it's easy for you to make a pizza, and it's easy for me to make $20, but I want a pizza and you want$20 then we exchange them and not only is everybody happy but the net value of everything in the world, according to the people in it, has gone up, partly because you and I are happier, partly because a pizza got made that otherwise might not have. That's the pure insight: Exchange increases total public value.

Wow, three words, exchange increases value, explains half of all politics and most of the ideology of business. If every voluntary exchange has this profound, universal, and beneficial characteristic, then the way to make the world a better place is to simply support and enable exchange. Given a few words of encouragement and some getting out of the way — of ourselves and others — economies of skill naturally arise, specialization emerges, efficiency increases, GDP goes up, people get more of what they want more, in exchange for giving in exchange what they don't mind giving up, everybody experiences freedom of choice and everyone finds their own balance. Everything is a win.

#### Economics Must Recognize Externalities

Except when it doesn't. Because there are externalities. Externalities are where a transaction isn't just between two parties but also has an impact external to the transacting parties, like, on other parties, like the general public or the environment or the future or the victim of a transacted abuse. Consider for example a slave sold by a seller to a buyer, where the net increase in value to buyer and seller as a result of the exchange exists on the back of an infinite decrease in value to the slave. Let’s be straight: Transactional externalities are shit. The curse is appropriate. Externalities are outrageous, including when you can’t even see them.

Externalities are socialism for the capitalists. The costs of a transaction are socialized onto the public, the environment, the future, while the benefits of the transaction are privatized to the transactants. Socialize the costs, privatize the profits. It's an upside down world.

My first ever college class, Monday 8am, was Econ 1, taught by Professor Gurley, a Marxian economist. I admit I wondered if that made him the devil, but he seemed a mild-mannered fellow and never seemed to say anything controversial. But looking back, he made sure we learned about externalities. Do economics classes usually teach about externalities? It sure seems like they don't, because money people, capitalists and their sycophant well-paid defenders in the media space seem to just harangue on endlessly about how socialism (of profits only) is bad and we need to just unleash the market to do anything right. As money people they surely took Econ 1, yet they seem to have never heard of externalities. One might therefore blame the Econ 1 curriculum, or more likely, the self-interest or the willingness of this class of people to shit on everyone else, or to enable that, by falsely praising an alloyed good as an unalloyed good. The alloy is good mixed with bad. Lots of good there, but let's not be ignorant of, or deny, the bad.

Ignorance and denial do not change reality, and they do not do away with externalities. Externalities exist. Externalities are a problem. And free markets, to avoid shitting on the world of the public, the environment, the future, and the potential victims of abuses, must eternally be watched and regulated so that externalities are caught, captured, stopped, repaired, as the case may be. They might be prevented entirely (by outlawing slavery, for example) or taxed (so that polluters' cleanups can be paid for), or regulated (by government agencies not yet captured by the targets of regulation), or made subject to legal liability whether criminal or civil. Etc. Just as sociopaths by their nature will eternally find new ways to make money by screwing others, in the same way those who might cause externalities must eternally be watched for and stopped.

That's why we have big regulatory government, and class action lawsuits, and a growing library of laws theoretically in the public interest, because the externalities are innumerable and technical and in the weeds and are continually popping up and being discovered by both the transactors who benefit and those who are burdened by, and bear the cost of, those transactions -- with neither choice or remuneration.

That's like US Economics Theory up to 1979. So far so good.

### Mean Thoughts

But there's more. I have an essay on three kinds of mean; let's discuss the first two. Most folks think using addition, but rich folks think using multiplication. If you are most folks, you figure you'll go make some money, that'll ADD to your wallet, then you'll go spend some money, that'll SUBTRACT from your wallet, and you add all the ins and outs and you get a TOTAL, you think you did well or poorly based on your COUNT. This is additive, "arithmetic mean" type thinking, and your baseline is ZERO because of course there will be income and of course there will be expenses, and you just want to not be negative, to not be in the red, bleeding, but to be in the black, safe. Even zero is okay, because you're at least not bleeding; you've covered your expenses, you're surviving in the additive model.

But if you are money-wise, a.k.a. rich folks, if you figure you'll go make your money make money, that will MULTIPLY your investment by some number hopefully greater than 1.0. If it's a great investment and you get 20%, it MULTIPLIES your investment by 1.2. Your conceptual baseline is 1.0 or 100%, it doesn't matter what the amount is, that's your total net worth, and you are trying to make it go up by a percentage meaning MULTIPLY by 1.XX where XX is the percent increase, like 1.50 is a 50% increase. It quite sucks if it goes down, so that's why you're careful, but it really Really REALLY sucks if it goes to zero. Zero is not your acceptable baseline result, it is the end, it is death, is what we call the absorbing barrier.

### The Absorbing Barrier from Two Perspectives

Well that's all nice introductory material, now you know how people might tend to think at different ends of the wealth spectrum, but my point is far beyond this. We have a world where folks tend to bump along the absorbing barrier, at zero, and the Pareto 80/20 rule puts most people there at the bottom, which is not just a struggle that each one individually suffers with, but a world design option which might imaginably be improved upon. At least we should think about it. How does the existence of an absorbing barrier influence the way we should think about free market capitalism? I think it might.

If it happens to land them at or closer to Zero, no big deal, they can get some work tomorrow and keep on going. Did you ever wonder how that walking disaster zone of a family member ever survived all their bad decisions? This is the answer. This is it! Bankrupt, repossessed, delicensed, even deported, whatever, there is always another day and the sun shines equally on, and the earth uncomplainingly supports, every sinner as much as every saint. There is always tomorrow. Well, until there isn't. But the point is, with arithmetic-mean thinking, with -Expenses+Income as your focus of attention, with Zero as your baseline, must-achieve, neutral expectation, then falling into zero is no big deal, it's just the cost of surviving in a hand-to-mouth working world. This is how we think.

On the other hand, the rich folks, with multiplicative, geometric-mean type thinking, with percent increase or decrease as their focus of attention, with One (100%) as the baseline neutral expectation, for them, falling into zero is the inconceiveable disaster; it is the death event which removes them from the living-investor class; it is to be avoided at all costs. If you think about it graphically where the geometric mean is charted on a log scale, remember the log of zero is negative infinity: that's the effect of a zero return event for these folks. It's actually inconceivable. In a way they have forgotten that they are human beings who can get up in the morning and get to work. But in a way they are right, because they have died as investors, and it could be a long road back to the living.

The upshot is going to be, you are already rich, and you are already making choices that have multiplicative effects, in all kinds of value flows including but not limited to investments, and choosing wisely is going to turn out to mean, thinking about multiplicative returns downstream from any given choice, your choice. It’s just a change in mindset, and you will suddenly be wise and practical and soon rich and benevolent. But let’s elaborate on the potential downsides just a tiny bit longer, and contemplate what we may hope to avoid.

### Free Market Transactions with an Absorbing Barrier

For folks near the absorbing barrier, with additive/arithmetic valuation in their heads, a free market transaction is just a certain cost, subtracted from their wallet. They are not necessarily freaking out, hitting zero is actually relatively okay from their perspective. But:

• First, it might more easily be a destructive transaction, since the rich are not destroyed financially even by an expensive cocaine habit. Forget about drugs, even a merely wasted dollar is an actual injury to a poor person, but less than a blink to a rich one, even if it is self-imposed. Choosing Fancy when Goodwill will do might keep you from paying for meds, or health insurance, or rent. This IS destructive, seen over time, even seen additively (where the same cost expense is considered the same for both rich and poor, rather than multiplicatively by comparing them as a percentage of total wealth, separately for each).

• Second, it might MUCH more easily bump them across into the death Zone of Zero. The percent of total wealth expended by a poor person buying a hamburger is far far less than by a rich person buying the same hamburger. It might be their last dollar, and it might be their last food option, especially in the grocery-shopping deserts that many poor folks live in, in our inner cities and ghettoes. So even though it puts them in the Zone of Zero, a person has to eat, so it becomes an unavoidable, a necessary choice. That's just one possible example; in every other imaginable way the risk of absorption is MUCH greater for the poor person.

• Third, the probability of making bad choices: Well, ignoring the mature, wise poor for a moment, if a person was thirteen, or mentally thirteen, or had already had bad luck or made bad choices that helped make them poor or keep them poor, then they might in future have a high probability of more bad luck or bad choices that could keep them poor or even fully bankrupt them. So the decisions made could often be worse.

• Fourth, there is a downward drift due to the downward bias of multiplicative returns. Lose 10%, gain 10%, you are not back at square one, you are Lower. So random stochastic percentage returns are actually biased downward, and this is true broadly not just in the logical extreme, where a zero return on any single bet has the effect of multiplying the entire sequence of investment returns by zero.

The greater vulnerability and potential for destruction, the short absolute distance to zero, the often worse quality of decision-making, and the downward bias of returns all drag those at the bottom toward zero, if they can even stay off the cliff they are constantly being pulled toward it. This is the power that produces Pareto.

With the vulnerability of poor folks, the damage from a destructive transaction could be much greater. All transactions have a much higher risk for the poor than the rich. A recoverable bump for someone with an emergency fund might be completely devastating for someone without. With a daily burn rate close to the daily earn rate, and no capital investments multiplying in the background to extend resource security or enable impactful future choices, the poor are stuck close to that absorbing barrier by something akin to a magnetic force: stronger when nearer.

In a circulating public market of poorer and richer folks, these asymmetries will knock more and more folks onto the absorbing barrier of Zero Resources. These asymmetries operate gradually -- and asymmetrically downward also -- to stratify and restratify folks down toward less even when zero doesn’t happen. Encountering a 50% loss, they now have a much harder recovery path than just 50%. There are some few tiny upward moving vortices composed of the lucky, hardworking and/or well-positioned, and financially wise (meaning, thinking with multiplication not addition), those ones who avoid all the dangerous known and unknown missteps and who find the narrow and sometimes inscrutable ways on the path to financial security: yes, some. But generally the rich get richer multiplying their investments, the poor get poorer subtracting their expenses, and the middle class is very much on edge and trending downward.

To summarize, in this world, the idea of a free-market transaction that universally benefits the world is actually hogwash. It's not unalloyed good. It is an alloyed good: a mix of good and bad.

Transactions definitely benefit the world IF there are no externalities, and IF there is no asymmetry of positional leverage or knowledge or quality-decision-making or negotiating abilities, and IF there is no destructive consequence for resource-constrained transactors, and IF it doesn't end up pushing the poorer party closer to Zero, and IF the poor side isn't forced into the transaction by any form of desperation, whether because having to eat, they must buy food, or in the style of the bandit who offers the choice, your money or your life. If and If and If and If and If, then it's Definitely Good.

This is quite true because there is a golden nugget of goodness in there and we can’t become stupidly pessimistic and forget it. So what is the essence of our problem here? I say besides externalities it is the absorbing barrier, and the arithmetic event of falling to zero, understood through the perspective of the geometrically accumulating, that is, exponentially growing outcome differences in the real world, which changes the free-market idyllic transaction into the real-world pit of vipers.

## Model Desiderata

We are about to come up with our model. So let's consider, what exactly are the economic and other flows of the world that result in Pareto, at the detailed level of lifetime incomes and expenses, incomes of resources and benefits and expenses in the various currencies of time and attention or effort as well as monetizeable resources.

At the same time let's not forget the point of this. My point is, what is a new-and-better theory of progress? Progress means, making the world better. How can we make the world better? Let's do the AI thing and maximize a statistical function of a big data set with an appropriately complex model able to accept the flows of all the valuable resources that do flow. What data? What function? What maximization? What model? Here are some bits of the picture:

• The strategy, s, is best if it maximizes the total benefax of the world.

"Benefax": I needed a word for the monetary or non-monetary benefit received, done, created, or given, from a more intersubjective or objective perspective, instead of the subjective word benefit, so I made up "benefax", which suggests the fact of a benefit transmitted. "Fax" as in Latin "facere", to make or do, as in English "factory", "manufacture", etc.; also as in fax transmission, emphasis on the transmission not on the facsimile aspect. Benefax is value flow seen as intersubjective or may we say objective, considering history and people equally, as opposed to subjective. Benefax is not only monetary but also non-monetary value flow which benefits the person, community and history. “Value” is too monetary a term for what I want to say. Please suggest something better.

• The objective benefax of world history is the sum of the benefax of each person in the world across history.

• The past being past, that is to say, unmodifiable, history here means the future.

• The expected, or projected, value of the benefax of the world is the sum of discounted present values of all future lifetimes, where the future cannot count equally as the present since the increasingly remote future is increasingly vaguely projectable. Yet the future including the distant future cannot be allowed to count for nothing; that would be planning for a big party followed by the Planet of the Cockroaches. Nothing against the amazing eternal cockroach but we are constructing a valuation system for humans. The discounted present value is not a value discount based on today being worth more than tomorrow but an uncertainty discount, on the bird in hand theory that the future is a bird in the bush and therefore not as valuable as the present which is a bird in the hand. It *would* be equally valuable, if we had our hands on it. This is an objective view.

• The benefax, b, of each person, p, is the sum of benefax flows of the person at each time from birth to death, at whatever precision of time periods you want to use, so in the limit, $$b(p) = \int_0^{T_{death}} b(p,t)\ dt$$

• The benefax of a person p at time t is the benefit received then by that person as a result of past and present expenditures including every period in the past, most being perhaps zero but some having been paid for previously like a prepaid subscription or the joy of knowledge which was acquired at some cost in the past, etc.

• We are trying to come up with an expression of what people want to optimize for in life. Money, happiness, love, freedom, security? We might limit it to economic benefits, but that fails to capture the tradeoffs between for example time invested today for returns extracted tomorrow.

• The model needs, really, to have time in it, in the form of an expendable resource. Imaginably time is the fundamental currency of the whole expression.

• Also there has to be a hardening floor of required expenses where even the poorest must acquire resources and spend them on, say, food, shelter, heat, then transportation, then up the hierarchy of values. Then we have to either account for or wave our hands at societal differences; better to include them since we want a global optimum. A scenario with everyone being happy but starving and shortlived because of their local culture and technology level, might not be what we want our system to find as optimal.

To pull out a platonic essence here, let's say, economics has as its domain the transaction, the instantaneous, value-balanced, monetarily-measured, two-way, flow event; whereas in contrast the Benefax Flow Model has as its domain the value flow, which in general is one way, not necessarily instantaneous, nor balanced. Benefax or value flow modelling generalizes economics itself to recognize and include gifts not excluding biological gifts, waste, learning and skill acquisition, time as resource, expenditure, and inter-flow lag, and the multiple currencies of time, connection, attention, financial currencies, and finally the recursive impacts of flows begetting downstream flows thereby increasing benefax or value.

I want a model in which multiplicative effects are explicit and visible not just in the investment aspect of economic activity but in all areas of value flows in which knock-on flows can occur. In investment, yesterday's investment goes up by today's percent increase, which then repeats tomorrow by tomorrow's percent increase in a multiplicative accumulation. If flows not transactions are considered, then any type of flow can and does influence downstream flows by triggering a second flow which triggers a third flow etc., and even if the magnitude of the later ones drop off, they still magnify the total impact of the first flow. These may be accounted for as multiplicatively accumulating, and thus investment-minded thinking can apply to non-investment flows. This lets us consider the value of choices in a more objective and global way. For example, a decision to create a certain flow may be preferred if it is more expected to trigger a cascade of downstream flows, and even more so if that cascade is an increasing one, like a nuclear chain reaction gone critical. A gift that keeps on giving is a better gift, and one that gives more and more with each flow generation is even better. This seems clearer in a flow model than a transactional model, although a transaction chain might be made to account for the same events, if all flows are monetized.

## Flow Model

Consider some kind of Markov-inspired (but not Markovian) hydraulic flow simulator model, evolving over the typical lifetime. (See Figure 1.)

In this Benefax Flows model, the circles are all a single person, let's say, you, evolving over your lifetime. The arrows represent categories of flows into you or out from you. Each arrow is a type of flow, a category, a sort of benefactive lexicon or event sequence, a kind or class of goodness that you might give or get, whether in the thing given or the act of giving, whether to or from someone or noone at all (as in Waste, presently included in Gifts).

So each arrow or flow category represents a whole stream of events. It is a hydraulic model in the sense that the arrow represents a valve turning on, thereby enabling that type of flow, so that now and hereafter there can be flows in that pipe. Not knowing the secrets of each mind, we can perhaps model an arrow as a random process characterized by evolving and dependent probability distribution(s) that minimize the overall unpredictability of the times and magnitudes of succeeding events. The evolution of the probability distribution of a given flow is typically dependent on the balance sheet of previous accumulated flows; some cannot begin until some logical prerequisites are met (Skills < Work) and cannot continue after some logical constraints have applied (Everything < Death < Nothing).

Thus the sequence of arrows suggests the sequence in which new types of flows are enabled, and which then may occur repeatedly throughout a lifetime (excepting genes, which arrive only once). The mystery (to stymied parents) is, What prerequisites would turn on the spigot of Effort; the answer is to trust the natural efflorescence of self-evolving Consciousness with its dopamine-rewarded achievement orientation system of ambition and aspiration and and get out of the way.

It's a rather developmental ordering. Once the Person passes from left to right, each new arrow now can generate events any time after activation through to the end. Thus this graphical representation's sequence of arrows only roughly describes the dependencies of one event upon others. Another way to draw it would be as an animation, a sort of octopus popping out new arms as independence and capacities develop.

Implicit within each circle is your momentary balance sheet representing the accumulation of received benefax of each of the different types that have come in so far, also accounting for those that have gone out. (Not all outflows reduce the balance, such as Connection: Giving more love doesn't reduce the love in your balance sheet.)

Also not shown graphically, but of the essence, each flow has its particular characteristics, such as scale, frequency, magnitude; its time-domain event probability distribution (e.g., Poisson with a particular frequency and magnitude), and its parameterized dependencies on accumulations of other flows. Expenditure and gift probabilities go up briefly after a lottery win, for example. Expense prioritization is implicit in the Expenses arrow.

Figure 2. Benefax Flows, with times

Start with an empty circle representing your potentiality as a person. (In this sense we are all created equal.) Into it comes genetic capabilities both shared and unique. Into it (as a resource) comes time, out from it (as an expenditure) goes time. In comes gifted startup investment (parental and non-parental food, shelter, love and support, school support & training, everything you get without deserving it, but just because (of the virtue and investments of others in the past)), out goes focussed effort. After effort accumulates, in comes skill (which can include human skills like negotiation and diplomacy as well as more instrumental skills like the mechanic's trade etc.). Then out can go skilled effort, in can come money income or in-kind income scaled by leverage including the aforementioned skill and negotiated/earned position. Out goes money for in-kind benefits or investments; in comes life-support resources like food and water, and social-class-level-associated baseline resources like a teenager's iPhone nowadays, social-climbing resources like a job interview suit, Maslow hierarchy support resources like everything up to yoga or church attendance, self-destructive resources like drugs or mere wastedness. In comes investment principal returns and interest income; out can go time and other resources wasted, or gifted or spent in improving or reducing one's own or others' lifetime benefax.

To those who object that most of these flows are unquantifiable, I say, go have a look at Fuzzy Logic, whereby qualitative factors may be made as precisely quantitative as you like. Just as for example unpaid domestic labor can be quantified by comparison with paid domestic labor and thus by cost or use-value or impact parental gifts can be assigned value whether denominated in money or in other imaginable foundational nonmonetary currencies such as time or effort or even model-internal Benefax units, your imagined problems are, I hope, a challenge not a difficulty.

This hydraulic time-evolving model includes interrupted and crossing flows and flows with mutual amplification.

Interrupted flows: You're good for nothing but parental pleasure for many years. You may or may not expend any or much focussed effort (though it is natural in our learning and intellectually active species to focus our efforts to some degree; we somehow naturally occupy the zone of proximal development and barring interference from self or others we act energetically there) at any stage of the process (interruption having consequences; without effort you may not accumulate much skill, with knock-on effects dramatically reducing your potential flows of skilled work, therefore of future expenditures, gifts, and investments etc.). You might have a hiatus, or take vacations or retire, thus interrupting some flows. Crime interrupts. Early death interrupts. War interrupts — at scale.

Considering the total benefax of any action, huge negatives come from what we properly think of as immoral actions (is this the very definition?), but also from mere self-defeating thoughts. Fortunately the latter can be reversed by the mere possibility of admiration, or by a wise encouraging word. Therefore let us exemplify and encourage realistic admiration and humble sharing of wisdom. All this value is made explicit in the Benefax Model.

Crossing flows: You surely benefit from others' expending resources for you in the early phase of life and perhaps intermittently later in needy phases. You may expend resoures to benefit others in their times of need, early or late; whether as gifts, or even by directing your purchases through them.

Amplifying flows: Without a flow out of you of focussed effort, also without some threshold of genetic capability such as two hands or two feet or a brain or a tongue, you may or may not accumulate much or any skill. If you do develop some skill it was probably because your focussed effort was focussed by dopamine, you loved what you were exploring with curiosity and that was the path of self-improvement, and so now you probably have something fun to focus your efforts on and so you'll do that more and that will develop your skill further. The more skill you have the more your focussed efforts might produce money or in-kind income. So effort and skill are mutually amplifying. As another example, bank accounts accumulate both from parental/non-parental gifts or imaginable UBI payments as well as from pay for skilled effort over time; money can amplify investments, gifts, expenses, and also refocus time spent. These effects are defined on the Benefax Flows graph as changes in the random processes based on accumulations of past flows.

A major amplifier is investment multiplication, where more leads to more, except of course if it leads to zero then any amount leads equally to zero.

## Flow Model Based Definitions

Important concepts can be defined, measured, modelled, contextualized, perhaps better understood, and perhaps optimized on the benefax flow model. These include: bankruptcy; resource security; ambition itself, and the value of a life.

What is bankruptcy in BFM? Three things: Principal loss at t7. Death at t9. Savings = Earned resources - transactable resources becomes balanced at zero.

Additively, we define Savings = Earned resources - transactable resources; and, Bankruptcy is Savings = 0. BFM prefers multiplicative summary, that is, NOT the sum of values above or below zero, but the PRODUCT of values above or below 100%. Because even when financially utterly bankrupt one still holds Benefax accounts of an enormous accumulated history of gifts received, skills acquired, relationships built; a history of predecessors of whom you remain the blessed hope to eternity, no matter how low you may go, if only you don’t waste it all in unnecessary early death. Each action you now choose can still have a multiplying effect, not only expanding yourself by building on your capacities exponentially into the future, but also by knock-on effects where your goodness enables and triggers others’ goodness in a network-structured expanding circle of benefactive influence. Just, no matter what, don’t by destroying yourself multiply by zero, which on the log scale subtracts infinity (log(0)=-\inf), by discounting in ignorance the enormous value you still and always represent, even now: please, never destroy yourself!

What does resource security look like in BFM? It means "enough for now". Transactable Resources on hand, i.e., TR = t1 gifts + t3 earnings - t4 expenses at all times in the period under discussion should leave sufficient t4 transactable resources to postpone death and downward spiralling. The accounts at t3, t4, t5 enable continuance. Expressed in C code, with RS the resource security function, and TR the current value of transactable resources, and min the partly-subjective threshold value of TR to constitute "enough for now":

RS(t) = (TR>min?1:0)

This level of required minimum expense is partly socially defined, involving the maintenance requirements of the social identity of the person in their society and their expectations, partly aspirational, and also partly Maslowian, reflecting a universal hierarchy of needs.

What is ambition in BFM? Ambition is motivation linked to achieved conditions, to reality; aspiration is motivation linked to self. Folks differ in the nature of their ambition or aspiration. In the BFM, a person might reasonably specialize in one flow type or another, or some balance or combination of them, as their particularly motivating kind of ambition -- excepting that passive gift receipt (as an independent adult) would seem to reflect not ambition but lack of ambition. Let's take each one in turn.

• Skills: One might aspire to have unique skill, to "be the best" at something; thus effort and skilled effort (a.k.a. Work) along with the conditions to support them during training whether by gift from others or some minimized fraction of effort devoted to earning self-support through work.

• Skilled Effort: Another might aspire to simply enjoy the flow state of skilled effort, a.k.a. work. This is recommended as the path to transcendent joy by the Bhagavad Gita, work for its own sake without expectation of reward. This is also the very definition of human self-actualization according to the early Marx, who conflated human nature, human action, and the human ideal in the category of creative action in the world, i.e., Work. (and defined alienation as separation from one's creative process). (Someone might object that Work might be unskilled, but I take skills back to the root, from motor movements to spoken language to social interaction skills, up to remunerable skills like plumbing. All Work is Skilled.)

• Resources Earned: Another ambition might be to maximize, or to increase without limit, one's resources earned: to make the most money is at top of mind for every greedy person. Yet downstream from the earning come additional forms of benefax might be the underlying, driving motivators, so money-making might be merely an indirect ambition, a prerequisite for the actual goal.

• Expenses/Purchases: A person endowed with a concrete mind might aspire to be a big spender, to drive that fancy car or have that fancy house. This is ambition linked to purchases. Yet after reaching that mountaintop, they often find that it wasn't the car or the house that satisfies, but something more abstract, profound, connecting, or spiritual. (To be concrete minded, they could have rented for similar pleasure.) See the Five Levels of Happiness here and here. Later, one might have ambition to achieve some of the things one can achieve by spending money, like first not wasting it, and second paying for health insurance for the rest of your life. The health insurance account latter is a sub-account of resource security, defined above; the ambition is defined as really saving, allocating, and protecting enough resources for resource security between now and some future endpoint. I have known people whose ambition is to never have to think about the cost of groceries; this is an expenses/purchases ambition.

A subcategory of expenses is Taxes, which deserve comment as it bears on Waste and Multiplicative Benefax. Wise government expenses create downstream multiplicative benefax for society; not just the event of a government expenditure which certainly benefits primarily the pocketbook of the military contractor with his fat military-industrial markup, but the echoing impacts of that flow on recipients' benefactive activities and value-flows. Government scholarships; highways; damage-minimization (the police); etc., Multiply the direct expense by enabling others' skill development or the productivity of their skilled efforts or the seemingly simple non-waste of prevented crime or murder, which actually have huge downstream enhancements of flows by the person who might have been murdered but wasn't because the police were there, or (more probably) merely threatened to be there or might have been there.

Tax Waste: One may at least hope that tax revenues go efficiently to benefax-enhancing expenditures by government, rather than to waste. If governments are accountable for wasteful spending, that actually reduces waste in one's own personal expense budget, because in the tax column the percent waste goes down. Before writing the previous sentence, I never realized Republicans had such a powerful issue motivating them.

Curiously a person who seems to have the ambition to make the most money might be considered as actually ambitious to pay the most taxes, and through those taxes to benefit the nation. The greatest tax-paying earners turn out to be not selfish, evil, moneybags industrialists but the greatest impersonal benefactors of their whole society through being the greatest contributors to the finances of government which is or ought to be increasing the the national benefax flows of the nation. Isn't the world upside down when you look at it this way? Rich is good, if you pay taxes.

Did I just invent a new acronym? GDB: Gross Domestic Benefax.

• Investments: Investments are benefax. Investing is good because your investment enables productive assets, like other people, to be productive. Investment returns are good because they enable retirement income, later-life gift budgets, health insurance up to and including hospice, and more investments.

(Specifically, ownership of assets with pricing power protects one from future inflation, which would be great in retirement, and better than "defined benefit" retirement plans, which devalue as inflation continues. Through Covid we've had huge inflation, which has hurt, but I've also increased rents to partly recover some of that loss of real income.)

Investment is benefax without labor. Unearned income and capital gains income just come: you put your money in a box, and it sends you a check, or you open it later and more is there, magically.

My essay on Easy Taxes discusses this in some detail, reinterpreting progressive taxation as easy taxation. Unearned income of course is by definition the easiest income, since the continuing amount of work required to earn it is precisely zero. A wise society seeking to minimize the total tax burden will make it super easy to make tons of money, and then tax the easiest money the most -- or at least not the least. Therefore unearned income should be taxed at the highest rate, or at least not less than earned income -- which is the current, unwise, immoral tax system.

Since investment produces without continuing labors, it is necessary for self-supporting retirees, and an appropriate ambition for anyone who may ever become a retiree, or seek to rest from their labors. More, the experience of investment changes the mental calculus from additive to multiplicative accumulation. See Mean Thoughts.

One impactful benefit of the mere existence of investment flows, even as an example for study, is that one can begin under the influence of that example to think about economic and benefax flows as multiplicative. One may generalize the idea of multiplicative accumulation (the principle increasing by a percentage, repeatedly) to different types of flows. A giver, for example, hopes the receiver will pay it forward; benefax multiplies.

But now we are suddenly talking about gifts in our section on ambition tied to investment. So let's stay on schedule, we will continue on impactful, multiplicative gift-giving in the section on ambitions tied to gifts, next.

• Gifts: Gifts are what goes out without anything necessarily coming back in. Gifts include not just money but time, connection, wise counsel, even one's own mere example as a role model for others. One's "gifts" account has diverse entries, and some are non-depleting: giving love might not reduce one's love. One might not even realize what gifts one is giving. One might give gifts impersonally, even long after death in the form of ideas bequeathed to the world in one's preserved creative output such as writings or inventions, or in bridges or buildings built, or in social changes which one has accomplished in concert with others, which then provide benefax to future recipients personally unknown to you. Et cetera. Think of all the givers who have bequeathed this amazing world to you. You, we all, exist in a global and historical network of giving. Indeed biological inheritance is also a chain of gift giving and receiving.

An important subcategory of gifts is Waste: one can spend money to no effect, benefiting nobody, so that's resources going out without resources coming in, which fits the definition of gifts, I could have made a separate category of flow entitled "Waste", but mainly for screen real estate I merged it in as a subtype of Gifts. This subtype includes flows which come from not just wasted gifts but also Expenditures and Investment Outlays and even Time Spent and Effort which can include a fraction of Waste, which to a degree subvert one's aspirations. Thus many purchases combine some fraction of Waste, with a residue of efficient or effective or actual Value. I am personally, implicitly ambitious in my economic behavior, to minimize Waste in purchasing; I take this to an extreme, because I emotionally equate waste to a deep moral failing; perhaps a consequence of childhood poverty. In a life on the edge waste is indeed if not a moral failing then potentially very costly. But many of the Benefax Flows are subject to Waste, and to that degree are, I'd say, Not Benefax. In the model, a flow that includes some waste is two flows, one the effective flow of its type, and another some flow of Waste.

From the perspective of a buyer layers of waste in the form of middleman markup bring no received value and thus we are seeing, have seen, huge industries restructured by disintermediating business revolutions.

Few aspire to be great Wasters; but many aspire to be great, impactful givers.

Another important subcategory of gifts is family. Your children, your future generations, would not even exist without you; you have given them the gift of their very existence. Further as a good parent one gives one's children all the resources they might need (meaning anything that would increase their future benefax flows) including not just food, clothing, and shelter to keep them alive for another day, but also connection and (quality) time (quality time = Time Spent * Effort), also experiences or opportunities for enrichment/learning/empowerment. Unless parents carry inside themselves the aspiration to give, and unless they realize outside their ambition to give, their children's future benefax is reduced.

Generic gifting, or charity, might go to an impersonal NGO's general operating budget, and who knows how much waste is there (indeed that's what wise contributors most want to know about their charitable organizations). Whereas gifts in the course of wise caregiving, gifts largely in kind and especially local gifts, gifts to one's direct influence circle can directly extend life, maintain health, enable high multiplicative returns of total benefax, and avoid Waste.

Gifts might be measured or quantified as monetary amounts, but for non-IRS purposes, givers would probably want to have their gifts have impact, which itself is a benefax concept, meaning a change in the benefax recieved or generated by other people. Gifts without utility might be monetarily accountable, yet have no impact. (Much Waste comes from "No, Thanks".) So, of course give wisely; be thoughtful about what might help the recipient leverage their own progress. This is mere common sense but it hangs on the BFM conceptual structure which makes it perhaps more accessible to those lacking in common sense, like myself. Here after 60 I've finally started to figure out a coherent global model of what one might prioritize for. This!

In investments, as we know, some percent return, plus the principal, represents a multiplication of your original investment by some number hopefully more than one. Loss of principal: multiplication by a number less than one. Loss of everything: multiplication by zero. On the log scale, adding negative infinity: the Death Zone of Zero.

But the same kind of thinking can make us wiser in other domains. Suppose a gift is given, how is that to be thought of? Sometimes it creates a forward impact, a regift, which adds to the initial impact. Each time someone pays it forward it is an increment above the initial effective gift. Let G be Gift, W be Waste, EG(n) be Effective Gift after n generations of regifting. Then:

$$G(i) - W(i) = EG(i). EG(i) ge; 0. EG(1) + EG(2) ≥ 100% * EG(1).$$

100% Waste means G-100% = 0 = EG; that would be additive thinking: we did something, it came to nothing, okay we'll try again with something else maybe later, no big deal. (Barring pathology: Let's assume gifts don't actually cause damage!). What about multiplicative thinking? We really aim carefully to make sure W<100%, so then so EG $gt; 0. But whatever downstream impacts there may be only increase the impact of the original effective gift. The gift recipient might just directly consume the gift without apparent downstream impacts, like a trust fund baby coming of age who does nothing but make bad investments, turning even vast wealth into a zero balance. That would be a giver's nightmare. But usually there will at least be first-generation expenditures, with benefax created including earned resources (money) to the seller of whatever is bought and use-value to the recipient. An opinionated, curmudgeonly grandparent might consider some expenditures by their heirs to carry a high burden of waste, but that isn't their job to judge or control any more, the gift is given. Now, occasionally, the use of the gift will change the life chances of the recipient, like a scholarship or an educational opportunity. Especially the nonmonetary gifts like encouragement and good example might influence the recipient to be ambitious in one or more of these benefax flow types, to be motivated to connect or learn or earn or invest or give, and in such diamond sparkling cases even a mere word, an effortless, but wise and loving, insight-sharing, emotional-reasoning-influencing word in the right ear can make potentially huge differences in downstream outcomes, in benefax flows which never would have been achieved without a motivated person seeking that particular form of The Good. Think about Jordan Peterson giving a lecture that inspires one basement troglodyte, slacker videogame dude to clean up his room, get onto the treadmill of meaningfulness, and aspire to be worthy of mate selection; that 90 minutes just had lifetimes of downstream benefax flow impacts not just for videogame dude but for his future appreciative spouse, his happy well adjusted productive children and his and their descendants. In a thousand years, at the usual population genetic mixing rate, it will include the entire species, just from that one guy. So Jordan's benefax impact ratio has been astronomical, even discounted by his recent pointless noisemaking in the persona of a hyperventilating rightwing political rage-monger. The latter is an impactless contribution to the noise in an already noisy room, thus discountable. But the former is a pearl of great price. Summarizing: Waste eats up principal. But any downstream benefax consequences produces a multiplicative return of benefax. Next let us finish the point started under "Resources Earned": someone who aspires to be a great philanthropist, benefactor of loved ones, parents, family, or wider influences, or to be a big spender, or to have the most freedom in the spending of time, all these require a certain level of support from one's Earned Resources. Thus giving is an unrealistic aspiration if not held alongside the ambition to earn the resources that enable one to give. Many idealists skip the earning part to romantically envision grand gift impacts. I am all on board with that; I encourage impactful aspirations; but one might point out that inside that valid and praiseworthy aspiration is the aspiration to earn plenty of resources so as to be able to peel off some gift giving budget to give some gifts which if done wisely will have impact. Without bringing all those aspects along, the romantic vision will amount to being a resourceless giver: no giver at all. Generally speaking gifts are a great change in emphasis of the BFM as compared with other economic models. Half of every life is nothing but a continuous record of gifts received despite not deserving them, but just for being there. Finally after simmering in the stew of endless gifts for half a lifetime one may eventually, to the surprise and delight of others, begin to exert efforts which produce skills which enable work that is actually worth something to others who are not merely your gift-giving parents and teachers, not your circle of one-way benevolence, not the teats you suck on. This world doesn't work if everyone is a suckling piglet forever; we have to start creating value for others, earning resources, and generally doing more, as it turns out we are entirely capable of doing. But the emphasis on gifts makes concrete the reality of public, private, and parental investments. Noone requires a transactional return for these investments, but all made them with the hope and expect that recipients will assimilate their gifts, and then make use of them to create value everywhere, producing benefax to all, including recursive benefax where from a gift received the recipient becomes a bigger giver themselves, when they are able. This is one's debt to parents, one's debt to society. It's not a bad story, to rethink and expand exchange-economics to Benefax flows. Being a great giver is not just a status marker among the potlatch cultures of the pre-European Pacific Northwest, not just an ideal possibly worth promoting but also representing wealth-destroying impracticality. No, it is the universal ideal for humans in society. If you take the BFM seriously then you see how selflessness and gifts are the basis of everything; you don't even exist without gift after gift which you never deserved but which we all want you to accept and make great use of. For a person to have any ambition the greatest is that of impactful giving. The short-term view of Me, Me, Me, is impossible to maintain when you look at the BFM graph; how could you expect to just take take take and then waste waste waste with nothing but dependent survival to show for it? That is unattractive, disrespectful, and not honorable nor even particularly respectable, except for babies and children. It's not even natural; the human psychology is all about empathy, understanding and connecting with others, doing things in concert, sharing, pulling each other along, loving our kids, we are self-actualized to the degree we give our gifts to others. On the other hand the achievement of the status of a great giver requires the pre-achievement of the earning of great resources whether financial or intellectual or emotional, but the whole point must be, certainly is, to give give give. It is through a social system in which giving is efficient not wasted, and multiplicative via, not one time and done, but recursive, impact-upon-impact benefax creation, that society survives (which is benefax) and makes progress (which is benefax). This is the pursuit of happiness at the levels of community and history. If you are not a giver, in some sense, at least in the productive phases of life, you count for nothing outside the parents who love you unconditionally. Which is the opposite of the chintzy charity-giver, who feels a dollar given is a dollar lost, which is the accounting system of economics, but not of the Benefax Flows Model. I take it that by now you see the goodness of it. Thus we conclude a point within a point, the ambitions or aspirations tied to the various arrows or flow types in the Benefax Flows Model, in which we have spent quite a lot of ink on that highest ambition: gift-giving. What else can we eke out of this model? A full 2D matrix of interactions between any flow and itself and any other flow, needs to be written up and characterized by equations, crossing and amplifying effects, etc. to fully characterize this model. Are there 3-way interactions? It may not be possible to quantify all effects, but we can at least think about them, because that's how insight comes out of tight useful models like this is gradually appearing to be. • What is the total value of a human life? As Americans who inherit the belief that All [people] are created equal, it is not our purpose to evaluate, measure, and judge individuals, although our values implicitly may do so, but there are two places such judgements may be reasonable, fair, inoffensive, even quite valuable. First, one may review one's own life choices within the context of the BFM and with the benefit of the clarity and insight acquired one may reconsider those choices for the future. It is a great and appropriate use of BFM to judge the value of one's own life so far, and the potential value it might have, based on what you do with it from here. There is hardly anything more useful than a system that helps you think about what would actually be important to you if you could put it into words and decisions and plans and action. Clarity helps; and clarity about one’s motivations (ambitions, aspirations) helps the most! Second, folks concerned with public policy and the welfare of others might consider aggregate, group patterns of resource availability, behavior and choices, along with outcomes in the various dimensions, in order to clearly establish that some things are working in society, and others are not. If the gift of participation in some program such as HeadStart happens to increase BFM-downstream measures such as lifespan or incomes or even connection as might be, for example, measured by family cohesion, then a Benefax Flows Model that links them within a single coherent system of mutually influencing effects is itself an argument for that program. The logical and empirical relationships in a reality-fitted BFM, showing what interventions here do for outcomes there, should guide public/private policy and investments. The BFM clarifies common sense; it also clarifies that it is the human resources that themselves constitute community and historical wealth and value. Not the dollar value of their bank accounts, but the benefax value of their life trajectories. ## Flow Model Consequences We can therefore measure the value of a human life here, and think about what to optimize for, to give each person the most valuable life, to give communities and history the most value. Don't freak out, this language is not exclusively monetary. A tautology: Total value of a life might be measured based on some combination of all that makes life valuable. The combination might depend on the evaluator; this need not be an objective function. A person's ambition is perhaps their particular combination, their weights, if you take it as a linear combination, of the different measures. Some things on the list might be personal GDP, or charitable contributions measured by dollar value or somehow by impact, or children successfully reared, or $$\int_0^{\infty} {love(t)}\ dt$$ or $$\int_0^{\infty} {happiness(t)}\ dt$$ or $$\int_0^{\infty} \int_{0}^{Population} {happiness'(others)(t)}\ dt d{others}$$ or a decorrelated weighted sum of goodnesses,including length and quality of life, the benefax of descendants immediate or remote, the benefax of all beneficiaries direct or indirect who took your business or charity or advice or mere good example to increase their benefax, or better to amplify its ongoing flows, or your self- or other-recognized meaningfulness (which might mean how close you got to the best you could have done), or $$\int_0^{t-{death}} {flow_state(t)}\ dt$$, which is related to Connection. Again, these flows are somewhat chronological but the idea of the Benefax Flows Model is that each can continue with greater or lesser volume and frequency (e.g., a Poisson probability distribution function, with other-flow-dependent parameters) from its enablement day until its disablement day. Thus this BFM graph is of potential benefax flow types. Any individual or actual life may be modelled as a stochastic process on each arrow or flow type, where each arrow process is itself parameterized or amplified or deamplified by prior actual flows on that or other arrows. For example as skill develops, skill at learning itself develops, so later effort brings faster skill development. The third language is easier to acquire than the second. Gifts are prerequisites to learning; even a fetus sucking its thumb cannot learn without the nutrition gifted to it by its mother. More and more gifts can potentially accelerate learning. On the other hand, a transaction for an overdose quantity of drugs can reduce lifespan and all the flows deriveable from that lost span. Thus each of the flows' stochastic processes need characterization: what model, which distribution, what parameters, how are those parameters themselves dependent on history of that flow and other flows, etc. Key to examine: good and bad choices at t4, purchases, can and should be distinguished in terms of downstream amplification effects. For example food expenditures, which bring in food resources, enable lifespan extension: this day our daily bread. Thus is postponed the arrow of Death, and extended in time are the possibilities of all the other flows. What happens in the model changes the model. Benefax over a person's life might be calculated as some function of life-duration (log?) times a function of earnings-and-expenditures; but we must carefully consider the possibilities of hitting zero. Our absorbing barrier raises its head. As we can see in the benefax flow model, zero isn't zero for living humans, only for the fantasy-self of the investor class, which is only conceptually broke -- when the investment account collapses to zero. On the contrary, the true being of all humans is they wake up to a new day with time and attention to spend, and that alone is benefax, that is itself blessing enough for a good life. You are still alive in the world today! Even broke, you still have a balanced income and expense budget of time itself. It might be hard to climb away from the absorbing barrier in the Investment Resources account or even in the Earned Resources, but until you're dead, you haven't actually been absorbed into Zero, and you still have the resources of time, your skills, and your ability to pay attention and exert effort over time to improve your benefit (from your own perspective) or your benefax (considering it from the globally optimized perspective). Even a short life is far better than none, and a slightly longer life might be more better than a slightly shorter one, if its quality is not good, thus log-life-duration or similar might be part of the equation. What is that function of Time which is Benefax? (The time itself, yes, but add in the flows enabled in that extended time: consider for example what Connection is worth even in a short time, when you weigh a theoretical small extension of experimental hospitalized suffering time against hospice-supported relationship-connection time (incidentally those who accept hospice live longer according to a surprising recent study)). Greater amount of earnings are benefax, but perhaps only indirectly as they enable self-support and support of others. Also a giant brief bump of earnings followed by bankruptcy and a bum life helping noone might not be equal to a smoothed out earnings trajectory with an equal total lifetime income without bump, crash, bankruptcy, isolation, and misery. BFM gives clarity to this equation. Perhaps "resource-security" is something we'd like to measure and sum up across time. The big bump provides resource security only briefly, whereas the spread out schoolteacher career provides a lifetime of resource security but perhaps not even after a lifetime an equal total income. (As I've read and heard, happiness rises up to$80k/year income, beyond which any amount of greater income does not increase human happiness. The measure of resource-security needs to increase like that. Log-income? Give me an equation!)

Greater amount of expenditures are also benefax, to the degree that you get what you pay for, and you may pay more. Yet there are regretted, wasted, expensive purchases, which are not benefax, so more expense is therefore not more benefax. An expensive cocaine habit, thus great expense for drugs, leading to early death, would shorten the time limits of the summation, but bad expenditure is something to try to capture here separately from mere duration. Perhaps "greater expenditures viewed with greater satisfaction in the long term" might capture the concept from the expense side. The feedback effects, or one might say, energetic efficiency, of wiser purchases and investments and gifts can be expressed well in this model.

The drugs case is central to my argument. A drug user, often poor, miserable, and/or otherwise desperate, medicating their desperation, spends their very last dollar, indeed steals from their neighbor, to buy their next fix. (A rat will push the cocaine button and ignore the food button until starvation kills it, the study shows, but only if the rat is NOT in a community of other rats happily doing rat stuff. So drugs are a consequence of misery.) In classical liberal economics, the addict is maximizing their value function, they just happen to prefer drugs to life's intrinsic, gentler, or more productive joys, and everyone is free to choose what they want: exchange captures everything and they are equal and you’re done thinking about it.

But in this analysis I'm trying to express the trap of the person at the bottom. They might make a purchase, like a cheap Toyota to get back and forth to community college, which will multiply over time; their very expenditure of time multiplies value through the skill development self-reinforcement chain. Or they might equally make a stupid purchase under the influence of a car-loan shark or a drug dealer, which is likelier to give them little long-term benefit and might even shorten the life function so that looking at their life as a whole on the 150 year scale there is a long-term trajectory of all zeroes to add up when counting the benefits accrued from their choice. The expenditure modified the probability functions for all the other arrows.

What I'm saying is that the mutual reinforcing benefax of good decisions and choices, of focussed and skilled effort, position-acquisition, investment choices, do and should actually count in the valuation of choices. A druggie choosing drugs is not equal to a similarly-poor but climbing person making the same withdrawal from their wallet for a same-priced good if that good extends survival or increases expected outcomes. We want an equation which reflects this or at least makes us able to understand it, hopefully both qualitatively and quantitatively through the flows-dependency, reinforcement system in the flows model. The concept that we just let everyone choose their poison is just insidious when humans are so often self-destructive. I'm not saying to control people's behavior by constraint; I'm saying let's have an idea about what's going on so that people can reasonably think about their long-term benefit, and not just their own but that of their loved ones those they wish well for. An intellectual framework that says, let's optimize the world, needs to include the nonmonetary amplifying flows.

## Community and History Benefax

The sum of individual benefax is the community benefax. The greatest good for the greatest number is not a bad formula, thank you John Stuart Mill. Here with education and wise public policy and expenditure, all the good things should fall out: and wise public policy and expenditure, all the good things should fall out: longer lives, healthier lives, less resource insecurity. Even meaningfulness of lives may be measureable in terms of impactful gifts, connection, and the intrinsic joy of skilled efforts.

True, we cannot reasonably sum the individuals across history when we are trapped ourselves within history. Neither can we see the future, nor can the future pay us back for any good thing we do for it.

But yes the future does actually count objectively as much as the present; it will be a Now just exactly as the current moment is now. After all we do feel, selfishly, that our time counts as much as the past ever did, so why would we deny the reasonableness of the same opinion held by our descendants, by discounting them.

But no, we cannot know the future very precisely. One thing we can do is energetically study the constraints on the benefax of the future, and at least do our best not to ruin their prospects. The boy scout motto is good: leave the place better than you found it. If we provide a good example for the future generations, we can at least hope that they will pass it on, and that history will deserve and have good outcomes.

## Pareto Follows, But We Can Optimize Anyway

Observe that a majority of people have few or no (financial) investments, neither outlays or returns BFM(15), BFM(16) = 0; Instead people view their economic life chances as defined by (Positional Leverage) * (Time Spent) * (Skilled Work) out and Earned Resources in, which enables -expenses for purchases and (financially accounted) -gifts, to satisfy their life priorities, from the most urgent of priorities of short term survival, on up the Prioritization Hierarchy. Achieving a zero balance between expenditure and income is itself success: you covered your expenses; no guilt, you can sleep the sleep of the just and live another day. This is Arithmetic Mean thinking, or even simpler: Sum thinking.

Folks who saved or borrowed or inherited enough to start their own business or invest in others' businesses or properties find themselves in a different intellectual posture. Zero is not their favorite number. One is their baseline number. Because they can now think about percent return (relative to 100%). They can multiply their original capital by the random sequence of investment return proportions, which hopefully don't dip below 100%. $$X*1.072*1.072*1.072*1.072*1.072*1.072*1.072 = 2X$$, is what Investor Moms teach their sons.

Most folks stop here. You think, oh if only I had a million dollars, then I'd be investing and thinking about it in those terms. That maybe seems true, for you and many, but that's not actually true nor is it my point.

My point is that the Gambler's Mean can be applied to everyone not just investors, and all flows, not just investments, and then what do you get? What you get is a bunch of purchases and gifts and investments which sometimes get multiplied by zero when the additive thinker has had a slightly bad day but which cancels everything out because zero times any product is zero, which means you are back to hand-to-mouth existence. That's the simplified view, not exactly right but I want you to think in this way.

The slightly more complex view is, you don't have to have the disaster of a multiplication by zero, you could still rather painfully just have an occasional loss, but because 50% is very different on the downslope than on the upslope, the general force of things is to push you down down down. You could easily lose half your money, very easily. Then you'd have to be an investing genius, a miracle worker, to get 50% up from that bottom. But 50% up from the bottom is still half way down from where you started. It would be beyond a miracle, a double miracle, get the 100% increase required to return to the start after a 50% loss.

Sliding down is harder than climbing up, so you have to be extra careful, and thinking about it in these terms is about the only thing that will reliably let you succeed this way. Because means even if you don't hit zero, you are under a constant force in the random flow of things to fall sharply lower and lower and encounter greater and greater difficulty to climb back again, and if you can't fix that, that you will eventually be a lot closer to zero, in your money accounts, even if you don't actually hit zero.

The fully complex view which the Benefax Flows Model benevolently gives you is, even if you think, Oh dear, my investments are gone, I've hit bottom, well No, you have misunderstood, you're not entirely at zero, you still have more time coming in, and time you still can spend, at least until the last day, and you have the ability to exert raw Effort to learn skills, and to exercise your acquired valuable Skills to Earn some more resources, to at least survive in the additive model. You're just in a different game, the game of survival as a human, rather than the game of survival as investor.

So this is the picture of why Pareto characterizes the human wealth distribution. Is it 80% of the wealth that is held by 20% of the people? And isn't it also that 80% of the 80% is held by 20% of the 20%? Because Pareto is recursive. In general more begets more in certain domains, like, as Jordan Peterson says Creativity, City Size, Planet Size, Star Size, as well as Wealth. Where more begets more, the big get bigger, but most are small and stay that way or get absorbed. I won't repeat his discussion but it's worth hearing, and this essay has been a bit of a dive into his main point.

So I'm saying, not just wealth but its generalization, Benefax, is indeed a space of more-begets-more. More Gifts, more Effort, more Skills, more Work, more Earned Resources, more Investable Resources, more Investment Returns. All of those are feedback loops, and all of them lead to more begetting more. Even this simple idea which everyone knows, the difference between plus versus times, is a feature that enhances the pattern of more begets more in the domain of wealth. Why? Because in these ways not understanding the Gambler's Mean means you'll never get out of hand-to-mouth life, never stay above zero, never figure out the particular things to pay special attention to, to succeed exponentially or even with a sense of easeful plenty.

For example a further loss after a partial loss might seem like no bigger deal, understood additively; but, understood multiplicatively, or in the log-sum domain, let me put it this way: half down from the start is a certain decrement, sure, but the second half down is the entire cliff down to zero, or adding a negative infinity in the log domain. As losses accumulate, urgency should spike to cut the losses, because the same additive impact, when heading toward Zero, is exponentially, no, worse than exponentially, it is negative-logarithmically, disastrous. Investor thinking is, Watch the downside extra carefully! We can apply this thinking to other value accumulations and flows. Thus death and crime are the biggest of terrible big deals, in the BFM.

Now if your accumulated resources are, as we all think, very small, if you instead do think in terms of percentage returns, recursive multiplicative accumulations, on every little choice and decision, which is to say you never let things go to zero, you carefully make sure the losses don't pile up, you sell in time and you don't hold onto losers, you recognize your wealth of resources even when you feel poor, if you are able to be investor-minded in the small scale even as you are just starting to accumulate earned resources, then you will be motivated and soon self-taught in how to avoid the Absorbing Barrier of Zero and then Time will become your friend and you will rise and rise exponentially. Over time you'll be the 20% of the 20% of the 20%, if you take up this particular skill, in addition to the other valuable skills that your Efforts have brought you.

Well that handles personal finance, but what about society? Sure, everyone could read this (as if! For I flatter myself that anyone ever will) and hopefully do better. Likely a minority will benefit from these ideas and do substantially better, resulting in a redistributed distribution with the same recursive 80/20 structure to it. But the ingredients for public policy are right there on the Benefax Flows Model. A floor is still indicated, and in the other dimensions of value a floor of accumulated value is already obviously present, in the form of the genes, the gifts recieved, the skills developed, and the time available, to everyone that is still alive. Perhaps a Universal Basic Income is indicated. But other policies certainly are: Make sure every baby and child and student has wind under their wings. Wisely provide opportunities to learn. Coach folks not just technically but emotionally so that Effort becomes itself pleasure and is rewarded over time with Skill. Provide encouragement and emotional support and inspiration for the aspirations of youth, for their intrinsic motivation is the vector whereby continued Effort attains the medium-term target of Skills development. Connect with everyone always; as with skills and ideas, you don't reduce your balance by giving out from it, indeed, the more you give the more you have. Help youth become well-socialized and diplomatically and strategically and negotiation-wise skilled so that they can acquire and hold high-leverage positions in society that make use of their particular strengths. Mentor; and encourage and support mentorship. Teach financial literacy.

Teach the costs of bad decision-making (especially potentially fatal decisions regarding drugs or other life-threatening, risky behaviors) and the converse huge benefits of good decision-making. Teach what reduces or increases benefax of all kinds. For example, what your mere simple childish selfish stupid death, or life, will do to family and loved ones, to one's bank accounts over many decades, to the gifts one could potentially give the world and the love there to be recieved, given, and experienced. (As an example "That $5 fentanyl may cost you$10 million in lost future income for yourself, may kill not just you but every future descendant you might have, your children and potential grandchildren, who will never exist, not to mention your destroyed parents."). Remind young people of the joys of parenthood; it should not be a secret or something to be ashamed of or put down in the status hierarchies of school or society. Your future children are potentially unlimited multipliers of the goodness you might potentially produce; the Benefax model makes clear how the value that flows through you could be enormous, and much of that through parenting. Counsel couples to give emotional support to each other, for that and its resulting stability is benefax to each, and even more so to their children.

Even death can be seen as benefax, at the right time, peaceful and connected and after a good long life, and in the right way, not tortured by oncologists, for example, selfishly avoiding The Conversation and therefore offering low-expected-value or experimental treatments long after hospice has been appropriate and attention might better be focussed on life quality and connecting with loved ones rather than ruinous efforts in hospital isolation for tiny amounts of life extension. Death itself is a potential blessing.

All these observations fall out of just looking at the arrows of the BFM, and saying the obvious thing. I have the feeling some will say, well this is all just obvious, this is pointless! To the contrary, if a model in social science or economics actually captures, reveals logic within, potentially quantifies, what most folks would call mere common sense, that’s already a great thing! Further, in domains where public policy or private decision-making fail to follow common sense, one needs an obvious theory which is strong, explicit, even incontrovertible, to bludgeon the bumbleheads who are making bad policy or to help the confused to reason themselves out of bad decisions. In a world where public policy is often bumbleheaded, such as welfare systems that discourage two-parent households, an objective statement of the obvious supported by a mathematico-probabilistic model that can clearly be optimized in both the model and in the reality that it is a model of, might be just the ticket. I hope so. I think that’s what this is.

## Conclusion

From an AI methodology perspective, the classical liberal economists have simply imposed a local hill-climbing optimization concept on a world with a ton of local maxima. Every ant is in their dark hole, so just give them freedom to climb their nearest grass shoot, let them figure it out themselves, that's their idea. Sure it's better than monarchy or central planning, where noone's benefit (only the monarch's) or benefax (only according to the planning department) is considered -- except from the top. Those centralized approaches are suboptimal because of the discount they apply to most benefax, which don’t even exist in their universe, and because of the true locality of information and the high cost of grand decisions gone wrong. Following Adam Smith, at least, everyone gets to choose what they want: let everything go free and the invisible hand will work. Well, yes it will work, all things being equal and maybe for most that's true and optimal, because most people are somewhat wise (meaning, as I might claim, they actually do guide their efforts by something essentially similar to benefax optimization, using their own intuitive understanding which is here made explicit as this Benefax Flows Model, applied to their individual situation).

There are a ton of empirical predictions as well as big data model-fitting tasks to be done to fully quantify this and prove it out. But the general welfare will be achieved more especially if even the unwise are encouraged by education or hard knocks to not just think but plan and execute responsibly, with due regard to the other people in their impact circle and with due regard for time. (Time is a proxy for all the amplification interactions in the model.) The Invisible Hand might not always work so well if one thinks, as many do, short term and drug-influenced and without even considering the long term or the effects on others. So my Adam Smithean, Invisible Hand like, ultra-local, global prescription would be, yes, choose what you yourself want, but first having considered the true impacts, including time and other people, by tracing out the Benefax arrows and impacts beyond just your own momentary, miserable-rat, emotional state, and only after including those in your assessment, then choose what makes sense to you. That much, I trust (almost?) everybody to do a right thing, or at least some right thing.

Let's be careful to distinguish prescription from description. I do want here a model or an equation which correctly and realistically describes the flows of constrained resources and impacts in the lifetimes of individuals and societies and the world. This DESCRIPTION can then be used to develop a PRESCRIPTION.

Some values must indeed be applied. We don't have to just give up and say Do anything, as the classical liberal economits do. We can do a little better, with a tolerable or wise range of value principles. Hopefully these will be minimally specific and maximally universal, such as the values of life, liberty, happiness, or social impact, say, or the sum or the product of benefax across time. Such principles will be built into, and then more or less implicit in any scoring system. I'm okay with a range of such evaluation or scoring systems. Not everyone has the same values, and that's not only okay, it's probably a good thing. But let's not evaluate choices ignorantly; short-term thinking and stupidity have a way of biting us back in the long term.

To satisfy the curious, one could graph, for example, across a lifetime, the accumulated amount of social impact one has had, from the contribution of one's transactable resources to means of improving others' survival and flourishing; one might operationalize this as a running total of lifetime charitable contributions in cash or kind, as an easily-accounted example. Life itself might be evaluated as not just duration but the integral of time times quality, if poor quality of life were less desireable to poor sufferers at their bitter end. Liberty might be quantified as resource security times local personal, political, and business freedoms. Happiness might be taken as consumerist, as total expenditures windowed by non-destructiveness, or even multiplied by a negative value for destructive expenses. The pure-free-market CLE's will say it's all positive, but we just had that argument about drugs, so they can shut up already.

Now then, based on measures like the above — I’m sure we will come up with many — and combining them in some way, perhaps as a simple weighted sum, a given scoring system will use the model to assign a total value to a specified scenario based on the quantities of the various scheduled flows. Expanding the model to consider history, birth rate is one flow; non-renewable-resource utilization rate is another. It could be arbitrarily complicated, but doesn't have to be too complicated.

Many conclusions seem obvious on their face, and you don't really need a model to capture the conclusions except to bludgeon CLE's whose models miss these obvious points: a purchase that destroys your life would be a net negative benefax, whereas a purchase that increases your flows downstream in your life is a potentially big impact of positive benefax. Publc policy should increase community benefax, and not damage historical benefax. Simple. When questions become more complicated, a computer program could simulate a range of scenarios with each flow type modeled as a distribution of flow durations and quantities, and monte-carlo sample the space, running it a million times. Then with the scoring system and the model, together, an optimization search is made possible. Cultural differences might appear; that's okay, because we are basically reifying morality and motivation themselves, which are clearly culturally influenced themselves, even if biologically grounded in general. Good and bad choices at the levels of individual, community, and history, might be clearly differentiated by their quantitative outcomes on a variety of measures.

Through this kind of search, the best, or at least, an improved, strategy may be brought to light for using available levers of influence such as may be known, levers such as public policy, education, childhood support, UBI, public and private insurance contracts, legislation, NGOs and charity work, balance of long-term and short-term investments, of balancing between tax-and-spend versus zero-taxation policies, et cetera.

At the end of this process is what we aim for, a better world achieved by a wise people having meaningful lives of maximum positive impact. We seek in some sense the best of all possible worlds, where we may tend each our own garden, locally maximizing in our own way our own life, liberty, fraternity, and happiness, but not without a little recognition of how we fit into and support this our lovely green garden world for not just now but practically forever, for not just me me me and today, but for us all, those here and those who may come hereafter.

# End Note

A big ugly problem in the world is economic inequality: a few very rich, and almost everyone else very very poor, like Pakistan or North Korea. And inequality itself, within geographic localities at every scale, indeed is a strong predictor of violence. If everyone is dirt poor, no violence. But if the young men see some people doing much better than they could ever hope to do, if they see no hope to do well, considering that the local pinnacle examples are so high and unreachable except that they do define what is reachable implicitly simply because they are there, that is when young men choose riskier strategies for success, and violence increases. (Google "violence and the Gini Coefficient".) Our model and scoring system, if valid, should score a community higher which has a low Gini coefficient. That would be a great validity check on the Benefax Flows model.

 Your thoughts? Comment: Feedback is welcome.