The dismal science strikes again

An article in Slate trumpets that "Charity is Selfish," and goes on to make the classic right-wing economics argument that any thought spared for the well-being of other humans is wasted energy–or, more to the point, that people who refuse to give such thought are really just being honest where everyone else is hypocritical. 

[Query whether it was necessary for Slate to sub-headline the piece "The economic case against philanthropy," when even the author feels compelled to admit, "None of this is to say that these contributions are worthless or economically insignificant."  So there actually is no case, economic or otherwise, against philanthropy.]

Two of the arguments made in the article by "the undercover economist" deserve refutation.  First is the claim that giving money to more than one charity demonstrates that people give to benefit themselves:

Someone with $100 to give away and a world full of worthy causes should choose the worthiest and write the check. We don’t. Instead, we give $5 for a LiveStrong bracelet, pledge $25 to Save the Children, another $25 to AIDS research, and so on. But $25 is not going to find a cure for AIDS. Either it’s the best cause and deserves the entire $100, or it’s not and some other cause does. The scattershot approach simply proves that we’re more interested in feeling good than doing good.

Many people are unconvinced by this argument—which I owe to Steven Landsburg—because they are used to diversifying their financial investments (a bit of Google stock and a bit of Exxon, too) and varying their choices (vanilla ice cream AND bananas). But those instincts are selfish: They are not intended to benefit both Google and Exxon, nor both the ice-cream company and the banana growers. With charity, the logic is different, and a truly selfless donor would bite the bullet and put his entire donation behind one cause. That we find that so hard to imagine is just one more indication of how hard it is for us to think ourselves into a truly selfless view of the world.

There are two problems with this argument: one, that it assumes perfect information where it’s unavailable.*  If you’re not sure whether giving people cows is more effective in fighting their poverty than giving them vaccinations, you might well split your money between Heifer International and Unicef.  And if you believe that the world benefits from culture as well as social justice, you might divide your gifts between the local theater company and the local legal services organization.  Neither of these decisions is a confession of selfishness; it’s a statement that the world is not a yes-or-no question.

It is, of course, true (as a friend points out) that when giving away more than $100 it’s foolish to give $18 here and $18 there.  Concentrating charity to some extent makes sense because it maximizes the likelihood that your gift will have an impact.  But wait: doesn’t the craving for impact represent selfishness as well? 

The second claim requiring refutation is the one that underpins the whole article.  Fortunately, refutation is easy: if charity really were selfish, more people would do it.

_______________

*Assumptions are, of course, the hallmark of the economist.  A physicist, an engineer and an economist are stranded on a desert island with nothing to eat but a can of beans.  The physicist proposes shoving the can into a rock wall, taking advantage of G-forces to split it open.  The engineer suggests rigging a catapult and an enormous receiving basin, then slinging the can with the catapult and capturing the beans in the basin.  The economist says, "First, assume you have a can opener." 

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5 Responses to “The dismal science strikes again”

  1. Anita Bernstein Says:

    Exactly right. If charity were selfish, then more selfish people would spend their money that way.

    But I wonder about a factual point: Is it possible to write a check so small that you’re harassing the recipient rather than helping? You hear about disgruntled alums of expensive colleges who send checks for $1.29 out of spite, just to throw a monkey wrench into their school’s ledger. I wonder whether some portion of charitable giving doesn’t achieve the same effect with better intentions.

  2. a fundraiser Says:

    Excellent rebuttal.

  3. Nonprofiteer Says:

    It’s hard to imagine a check too small to be worth the processing to a nonprofit–it’s already spent the money to solicit the check, and the money to process the responses, so one response more or less has little marginal cost. The $1.29 to Yale is an insult rather than a prank, and it could be taken as such by smaller nonprofits as well. But the major objection to checks for $1.29 is the extent to which they make people feel justified in responding to the next appeal with, “I’ve already given.”

    Specifying a dollar amount on the reply card usually produces that amount, so most groups can rely on the power of suggestion: “Yes! I’ll give (circle one) $25-$50- $100-other.”

  4. Frank Roman Says:

    I know that there are too many things I want to accomplish in life. Too many good causes I want to help.

    I also realize, I’m not going to be the next Bill Gates (despite what my mother says).

    I tend to give to charities in a increasing way. I start small, watch how they respond to ME, see what they do with my donation, and let the relationship mature.

    Though I do a lot of research on the causes I support – how will I know everthing there is to know? If I wait till I know it all the cause upon which the charity is founded may be gone?

    I know my $25 won’t cure AIDS. I know that money rarely solves anything. My donations usually equate with my growing (or waning) belive in a mission. People can move moutains if they get involved with and beyond mere money.

    All that being said, I tend to give smaller amounts to a number of groups and a select few that earn my trust and effect positive change get increasingly larger amounts.

    Am I unique in this?

    I hope not.

  5. Nonprofiteer Says:

    I believe it’s false to say that “money rarely solves anything.” The money raised by the March of Dimes didn’t think of the cure for polio but it did pay for Dr. Salk’s laboratory. And, especially in the developing world where we’re talking about basic necessities, money solves the ills of poverty: as UNICEF says, $17 can immunize one child for life against 6 serious illnesses.

    But that doesn’t mean it’s effective to give $17 at a time, so I, like you, try every year to increase my giving amount while holding steady or reducing the number of groups. And yet I want to be open to important new causes . . .

    Not a simple calculus, that’s for sure!

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