I'm sure there are people who aren't going to want to hear this but this is why people over history have used governments and religious organizations to supply public goods, not individual philanthropists. All governments, even the most totalitarian, must have at least the grudging consent of the governed providing the feedback you talked about above. Religious organizations generally have the same need or desire to build wide popular support. In the absence of a profit motive or a need to have a broad base of support to keep the lights on, what gets built are totalitarian feifs. The EAs are not proposing some new form of enlightened gifting but providing a justification for keeping in place what we can already see is largely not working for society but does work to give ultra-wealthy donors outsized influence. It probably bought a Presidential election.
Once your charitable work tries to expand out beyond your own locality, it is far more likely to fail than to succeed. The information problem is unsolvable beyond that level. Donate to your local foodbanks/goods bank, but do it with actual food and goods, not cash. Contact your local private schools and donate to them specifically to pay the tuition of students by economic class. Do the same with your local colleges and universities. Contact your local medical facilities and offer to pay for necessary medical interventions for people without insurance. Or start your very own food banks, schools, and medical facilities that give away goods and services for free on demonstrated economic need.
My impression of effective altruism is that it was a good faith and worthwhile attempt to bring some quantitative rigor to philanthropical activities. It has since become something like a fantasy baseball league minus the baseball and the chance of actually winning anything; you just pore over numbers and charts and reports to attempt to outdo the other guys with your limited budget of charity dollars. The payoff is the smug sense of superiority you feel towards those who were so crass and clueless as to just donate money to their alma mater or local food bank or something and call it a day. LOL, don't these people know how many utils they're leaving on the table?
"Businesses are bad at producing public goods like helping poor people without much money, solving existential risks, and promoting forms of research that can't internalize profits." is apparently true. However, that being true doesn't make other government or philanthropic organizations/institutions competent at helping poor people or "people with problems".
It is very difficult to build an organization (public or private) that can handle individual problems, especially when trying to help individuals that are non-mentorable whose behavior (culture) can't be changed. Our family over two generations has tried to help a lot of "people with problems" who fell through the cracks of our society with over 70 years of trying. Addiction, mental health issues, poor education and poor cultural values are the main issues.
One on one private and family help will be the best you can get, but even that doesn't work a lot of times. Trying to scale that to large institutional sizes is near impossible. More than once I have bailed out people hitting hard times, when the credit card companies or government taxes got them into deep water with all the "fees" and outrageous interest rates. Without the drag of the parasitic companies they could swim to shallow water but very few didn't return to deep water or screwing me out of a few thousand dollars.
Your thinking about this topic is radical in a very interesting way, and I've learned a lot from putting myself inside your perspective a bit. That said, I really think you're thinking about this topic in a mistaken way. I don't know if a comment on your Substack is going to convince you of that, but here goes.
The overarching position you're taking is that we're never going to be in a position to believe that not-for-profit solutions are better than for-profit solutions. But there's no guarantee that the world needs to be arranged so that this never happens. It's an empirical question--a completely empirical question--whether there might be a handful of easily identifiable situations where nonprofit solutions are best.
I think you would agree with me that the structure of the family is one such case. You don't cut deals with your children or your spouse with a profit motive in mind; you act *altruistically* because you know (especially in the case of the kids) some things you could do with *your* resources that would benefit these people. You are in a position to know this, despite the fact that feeding your kids isn't profitable.
The reason you are in a position to know this is that your kids are so lacking in agency that there is lots of obvious low-hanging fruit where other people can use their resources to benefit the kids.
Now think of people living on $2 a day overseas, or very mentally ill people. Isn't it plausible that there might be lots of low-hanging fruit for philanthropists to help them with, for the exact same reason?
But George Soros and Peter Thiel suck, and they're philanthropists too, you say. Point taken. But we're not going to make philanthropy illegal. So I can't do anything to stop GS and PT. The question that faces me is whether I have means available and my disposal to be philanthropic in a way that brings more good into the world than spending that money on further expanding my action figure collection. And I think it's pretty obvious that I know I can do this if I put the money into GiveDirectly.
It is just an empirical question how well for-profit investment works. The world could have been designed the way Paul Ehrlich thought, with extremely scarce non-fungible natural resources. It turned out he was wrong about that, but whether he was wrong about it was an empirical question. There was no law of the universe that said he had to be wrong (which is not to say he wasn't in a position to know that his prediction was mistaken).
I agree that it's rarely wise to bet against the market being able to solve a problem, but sometimes it is wise (like when you're deciding whether to feed your kids) to bet that the market isn't going to just take care of somebody's problem all by itself, without altruistic action on another person's behalf.
If you could provide some concrete comparisons between specific for-profit decisions one could make, on the one hand, and specific highly optimized non-profit actions (like GiveDirectly) on the other hand, that would make your case potentially more convincing. Would be very curious to see something of that sort, which I think would advance the discussion you're trying to have.
It is hubris, but of a very particular kind. Metrics? Yes, of course. At the center is a deterministic belief that with enough data and observation, all things can be modeled if only approximately: Perhaps a universal law discovered? Newton’s impact continues to be felt.
What a timely article for me. I’m now semi-retired (probably “forever” because I want to work). My wife and I come from modest means but built a sizable net worth, mostly from the sweat equity side. We have no heirs, and no desire to have our names on a plaque. My California state university alma mater is wining and dining us because we have already donated some to them. But they have gone over-the-cliff woke.
So we have the serious, but enjoyable task to find worthy recipients of our lifetime achievement. It isn’t easy, and it isn’t something we will delegate.
Cold Buttons seems like common sense. Neither party is right on all issues so why not do what one can (if anything?) to move both toward better positions.?
If a public-spirited philanthropist believes (rightly or wrongly) that government provides a reliable safety net and necessary public goods (justice, national defense, infrastructure, etc), then she will give to other, perhaps "taste-based" causes. See Jackie Mason's comedy routine about saving the ballet.
If a public-spirited philanthropist wants to help the weak, the poor, and the vulnerable who "fall through the cracks" of the welfare state, then she must identify those who (a) are truly needy and (b) won't squander the gift. Yancey Ward (comment above) says keep philanthropy "simple and local." Samuel L. Popkin's classic study of village community, "The Rational Peasant: The Political Economy of Rural Society in Vietnam" (1979) finds that villagers allocated charity to needy widows, orphan support, persons unable to work, and the like. Simple and local.
By contrast, many ambitious philanthropists in modern polities want to address large national or global problems. They get entangled with politics. Robin Hanson points out that politics is about status, not policy. Bryan Caplan points out that politics is about what *sounds* good, rather than what *does* good. Effective Altruists point out that innumeracy distorts philanthropy towards what sounds good, rather than what does good. Arnold Kling points out that Effective Altruists puts way too much faith in numeracy (metrics). Well-meaning philanthropists have to reckon with the twin pitfalls of social desirability bias and hard utilitarianism, as well as the temptations of status and hubris.
My intuitions:
1. There is room and need for Effective Altruists as *bullshit detectors* in the world of philanthropy.
2. Cognitive humility is key when philanthropy tries to go beyond what is simple and local. (See Arnold and Popkin.)
3. In wealthy countries, everyday beliefs, about what *does* good, tend to overrate not-for-profit orgs and underrate markets. A wicked problem is to persuade people to bend the stick the other way -- to make the case for markets and the price mechanism. (See Arnold.)
Another point on this, Arnold. Suppose that, as most EA people believe, de-beaking chickens in factory farms is pretty wrong. What's a solution, or even a partial remedy, for this problem that proceeds via profitable investment? Farms that de-beak their chickens are going to be more profitable than ones that don't, for the foreseeable future at least.
‘ Profit-seeking investment is driven ultimately by what consumers want. Philanthropy is driven ultimately by what donors want. ’
And unlike profit-seekers (capitalists), philanthropists never risk their own money always somebody else’s - preferably taxpayers but also gullible donors with more money than sense.
I'm sure there are people who aren't going to want to hear this but this is why people over history have used governments and religious organizations to supply public goods, not individual philanthropists. All governments, even the most totalitarian, must have at least the grudging consent of the governed providing the feedback you talked about above. Religious organizations generally have the same need or desire to build wide popular support. In the absence of a profit motive or a need to have a broad base of support to keep the lights on, what gets built are totalitarian feifs. The EAs are not proposing some new form of enlightened gifting but providing a justification for keeping in place what we can already see is largely not working for society but does work to give ultra-wealthy donors outsized influence. It probably bought a Presidential election.
Once your charitable work tries to expand out beyond your own locality, it is far more likely to fail than to succeed. The information problem is unsolvable beyond that level. Donate to your local foodbanks/goods bank, but do it with actual food and goods, not cash. Contact your local private schools and donate to them specifically to pay the tuition of students by economic class. Do the same with your local colleges and universities. Contact your local medical facilities and offer to pay for necessary medical interventions for people without insurance. Or start your very own food banks, schools, and medical facilities that give away goods and services for free on demonstrated economic need.
Keep it simple, keep it local.
My impression of effective altruism is that it was a good faith and worthwhile attempt to bring some quantitative rigor to philanthropical activities. It has since become something like a fantasy baseball league minus the baseball and the chance of actually winning anything; you just pore over numbers and charts and reports to attempt to outdo the other guys with your limited budget of charity dollars. The payoff is the smug sense of superiority you feel towards those who were so crass and clueless as to just donate money to their alma mater or local food bank or something and call it a day. LOL, don't these people know how many utils they're leaving on the table?
The statement:
"Businesses are bad at producing public goods like helping poor people without much money, solving existential risks, and promoting forms of research that can't internalize profits." is apparently true. However, that being true doesn't make other government or philanthropic organizations/institutions competent at helping poor people or "people with problems".
It is very difficult to build an organization (public or private) that can handle individual problems, especially when trying to help individuals that are non-mentorable whose behavior (culture) can't be changed. Our family over two generations has tried to help a lot of "people with problems" who fell through the cracks of our society with over 70 years of trying. Addiction, mental health issues, poor education and poor cultural values are the main issues.
One on one private and family help will be the best you can get, but even that doesn't work a lot of times. Trying to scale that to large institutional sizes is near impossible. More than once I have bailed out people hitting hard times, when the credit card companies or government taxes got them into deep water with all the "fees" and outrageous interest rates. Without the drag of the parasitic companies they could swim to shallow water but very few didn't return to deep water or screwing me out of a few thousand dollars.
Your thinking about this topic is radical in a very interesting way, and I've learned a lot from putting myself inside your perspective a bit. That said, I really think you're thinking about this topic in a mistaken way. I don't know if a comment on your Substack is going to convince you of that, but here goes.
The overarching position you're taking is that we're never going to be in a position to believe that not-for-profit solutions are better than for-profit solutions. But there's no guarantee that the world needs to be arranged so that this never happens. It's an empirical question--a completely empirical question--whether there might be a handful of easily identifiable situations where nonprofit solutions are best.
I think you would agree with me that the structure of the family is one such case. You don't cut deals with your children or your spouse with a profit motive in mind; you act *altruistically* because you know (especially in the case of the kids) some things you could do with *your* resources that would benefit these people. You are in a position to know this, despite the fact that feeding your kids isn't profitable.
The reason you are in a position to know this is that your kids are so lacking in agency that there is lots of obvious low-hanging fruit where other people can use their resources to benefit the kids.
Now think of people living on $2 a day overseas, or very mentally ill people. Isn't it plausible that there might be lots of low-hanging fruit for philanthropists to help them with, for the exact same reason?
But George Soros and Peter Thiel suck, and they're philanthropists too, you say. Point taken. But we're not going to make philanthropy illegal. So I can't do anything to stop GS and PT. The question that faces me is whether I have means available and my disposal to be philanthropic in a way that brings more good into the world than spending that money on further expanding my action figure collection. And I think it's pretty obvious that I know I can do this if I put the money into GiveDirectly.
It is just an empirical question how well for-profit investment works. The world could have been designed the way Paul Ehrlich thought, with extremely scarce non-fungible natural resources. It turned out he was wrong about that, but whether he was wrong about it was an empirical question. There was no law of the universe that said he had to be wrong (which is not to say he wasn't in a position to know that his prediction was mistaken).
I agree that it's rarely wise to bet against the market being able to solve a problem, but sometimes it is wise (like when you're deciding whether to feed your kids) to bet that the market isn't going to just take care of somebody's problem all by itself, without altruistic action on another person's behalf.
If you could provide some concrete comparisons between specific for-profit decisions one could make, on the one hand, and specific highly optimized non-profit actions (like GiveDirectly) on the other hand, that would make your case potentially more convincing. Would be very curious to see something of that sort, which I think would advance the discussion you're trying to have.
It is hubris, but of a very particular kind. Metrics? Yes, of course. At the center is a deterministic belief that with enough data and observation, all things can be modeled if only approximately: Perhaps a universal law discovered? Newton’s impact continues to be felt.
What a timely article for me. I’m now semi-retired (probably “forever” because I want to work). My wife and I come from modest means but built a sizable net worth, mostly from the sweat equity side. We have no heirs, and no desire to have our names on a plaque. My California state university alma mater is wining and dining us because we have already donated some to them. But they have gone over-the-cliff woke.
So we have the serious, but enjoyable task to find worthy recipients of our lifetime achievement. It isn’t easy, and it isn’t something we will delegate.
Cold Buttons seems like common sense. Neither party is right on all issues so why not do what one can (if anything?) to move both toward better positions.?
If a public-spirited philanthropist believes (rightly or wrongly) that government provides a reliable safety net and necessary public goods (justice, national defense, infrastructure, etc), then she will give to other, perhaps "taste-based" causes. See Jackie Mason's comedy routine about saving the ballet.
If a public-spirited philanthropist wants to help the weak, the poor, and the vulnerable who "fall through the cracks" of the welfare state, then she must identify those who (a) are truly needy and (b) won't squander the gift. Yancey Ward (comment above) says keep philanthropy "simple and local." Samuel L. Popkin's classic study of village community, "The Rational Peasant: The Political Economy of Rural Society in Vietnam" (1979) finds that villagers allocated charity to needy widows, orphan support, persons unable to work, and the like. Simple and local.
By contrast, many ambitious philanthropists in modern polities want to address large national or global problems. They get entangled with politics. Robin Hanson points out that politics is about status, not policy. Bryan Caplan points out that politics is about what *sounds* good, rather than what *does* good. Effective Altruists point out that innumeracy distorts philanthropy towards what sounds good, rather than what does good. Arnold Kling points out that Effective Altruists puts way too much faith in numeracy (metrics). Well-meaning philanthropists have to reckon with the twin pitfalls of social desirability bias and hard utilitarianism, as well as the temptations of status and hubris.
My intuitions:
1. There is room and need for Effective Altruists as *bullshit detectors* in the world of philanthropy.
2. Cognitive humility is key when philanthropy tries to go beyond what is simple and local. (See Arnold and Popkin.)
3. In wealthy countries, everyday beliefs, about what *does* good, tend to overrate not-for-profit orgs and underrate markets. A wicked problem is to persuade people to bend the stick the other way -- to make the case for markets and the price mechanism. (See Arnold.)
Another point on this, Arnold. Suppose that, as most EA people believe, de-beaking chickens in factory farms is pretty wrong. What's a solution, or even a partial remedy, for this problem that proceeds via profitable investment? Farms that de-beak their chickens are going to be more profitable than ones that don't, for the foreseeable future at least.
"smarter than the voters" is generally unconvincing.
limit oneself to clear cut cases (God help us etc) might help here.
you don't want to interfere in most things.
only in the near 100% cases.
example: yimby. add utilitarian calculations and studies in public policy. more Pareto improvements. etc.
it's difficult to contain oneself. but this is at least less dubious
‘ Profit-seeking investment is driven ultimately by what consumers want. Philanthropy is driven ultimately by what donors want. ’
And unlike profit-seekers (capitalists), philanthropists never risk their own money always somebody else’s - preferably taxpayers but also gullible donors with more money than sense.