I and David Manheim, a Good Judgement’s superforecaster, agreed on the following bet on 19 May 2025:
- If the mean monthly unemployment rate in the United States (US) in 2027, as reported by the Federal Reserve Economic Data (FRED), is higher than 8 %, I donate 2 k$ to an organisation or fund of David’s choice in January 2028.
- Otherwise, David donates 1 k$ to an organisation or fund of my choice in January 2028. Currently, it would be the Centre for Exploratory Altruism Research’s (CEARCH’s) High Impact Philanthropy Fund (HIPF), which I estimate decreases 5.07 billion soil-animal-years per $.
Neglecting the risk of the bet not being fulfilled, it is worth it for me if my probability of winning is higher than 2/3 (= 1/(1*10^3/(2*10^3) + 1)).
Here are my and David’s informal signatures:
- Vasco Grilo.
- David Manheim.
I remain open to bets against short AI timelines, or what they supposedly imply, up to 10 k$. I mostly think about AI as normal technology.
I think I would take your side here. Unemployment above 8% requires replacing so many jobs that humans can't find new ones elsewhere even during the economic upswing created by AGI, and there is less than 2 years until the middle of 2027. This is not enough time for robotics (on current trends robotics time horizons will be under 1 hour) and AI companies can afford to keep hiring humans even if they wouldn't generate enough value most places, so the question is whether we see extremely high unemployment in remotable sectors that automate away existing jobs but don't have huge labor productivity gains from AI. 2029 could be a different story.
Would like to see David's perspective here, whether he just has short timelines or has some economic argument too.
It's partly shorter timelines, which we're seeing start to play out, and partly underlying pessimism on US economic policy under Trump, and the increasing odds of a recession.
The Us economy has been stalled, and the only reason this isn't obvious in the stock market is the AI companies - so my weak general model is that either the AI companies continue to do better, which at least weakly implies job displacement, or they don't, and there's a market crash and need for stimulus and inflation. In that situation, or even with a continued status quo maybe AI matters/maybe it doesn't, then absent a pretty strong recovery elsewhere - which seems unlikely given the ongoing uncertainty under Trump - implies that we could have a pretty major setback in the broader economy.
To be clear, I think that this bet is pretty close to fair according to my views about the likely future of the US economy - I don't have a large edge in my estimate, and I'm making the bet mostly to have my (fairly and unusually pessimistic) views clearly on the record, for myself and for others.
I would rather see people make bets that they think are very profitable (relative to the size of the bet).
There's this idea that betting on your beliefs is epistemically virtuous, which sometimes leads people to be so eager to bet that they make bets at odds that are roughly neutral EV for them. But I think the social epistemic advantages of betting mostly depend on both parties trying to make bets where they think they have a significant EV edge, so sacrificing your EV to get some sort of bet made is also sacrificing the epistemic spillover benefits of the bet.
Agree. Given that Vasco is willing to give 2:1 odds for 2029 below, this bet should have been 3:1 or better for David. It would have been a better signal of the midpoint odds to the community.
I would have been happy to get better odds, obviously!
Yeah I agree there's a decent chance of a recession unrelated to AI, but I'm not sure I would pick a 1 in 3 chance of an 8 no prevent unemployment creating recession though. The bet to me though doesn't seem too unbalanced even disregarding AI. I agree with Thomas though that 1 in 4 seems even more midpointy
Thanks for sharing your thoughts, Thomas!
Would you like to make the following bet?
No bet. I don't have a strong view on short timelines or unemployment. We may find a bet about something else; here are some beliefs
Thanks for the suggestions, Thomas! Would you like to make the following bet?
Your expected gain is more than 0 (= (0.25*12 - (1 - 0.25)*4)*10^3), but sufficiently so? You said ">25% [probability of you winning the bet above]", and "maybe more [than an annual increase of 25 %]".
This is not an official proposal. I would like to think about it some more, and then formalise the bet with a post.
I perceive it as +EV to me but I feel like I'm not the best buyer of short timelines. I would maybe do even odds on before 2045 for smaller amounts, which is still good for you if you think the yearly chance won't increase much. Otherwise maybe you should seek a bet with someone like Eli Lifland. The reason I'm not inclined to make large bets is that the markets would probably give better odds for something that unlikely, eg options that pay out with very high real interest rates; whereas a few hundred dollars is enough to generate good EA forum discussion.
Thanks, Thomas. @elifland, would you like to make the bet I mentioned above (you should expect to gain money if you think your probability of winning is higher than 25 %)?
I think you meant 2/3 (payoff is 2:1 in favour of David)
Thanks, Tom! Yes, I meant 2/3, and made the bet based on this. Corrected.
What if there is no reliable data by that time?
Thanks, Xing. The bet resolves as long as FRED reports the unemployment rate, even if this is not reliable. We did not discuss what would happen if FRED does not report the unemployment rate. In this case, we could agree to use another similar source.
...it occurs to me that it's worrying in very different directions if FRED changes what or how they report. If they stop reporting or data collection is halted for political reasons, I'd expect that we either pick an arbiter to make the call, or agree to call the bet off.
I see. By default, I think the bet should resolve as specified, "as reported by the Federal Reserve Economic Data (FRED)". However, I would be happy to do as you suggested if we agree there was a significant change in the reliability or definition of the unemployment rate reported by FRED.