An unfiltered thought on giving directly

[Content warning: Scrupulosity, discussion of poverty and poverty alleviation, one reference to sexual assault.]

[Epistemic status: I’m really just thinking out loud here, haven’t thought this through at all. Note, also, that this applies only for developing countries. There are entirely different considerations when thinking about developed countries.]

[Updates after main text of the post; my views on this have become much more uncertain, and I was already pretty uncertain.]

Here’s an unfiltered concept/idea (haven’t given it too much thinking).

GiveDirectly is a nonprofit organization—a charity, to be more specific—whose main focus is giving low-income people in Rwanda, Uganda, and Kenya unconditional cash transfers. No strings attached. And they give ~80–90 percent of all money donated to them to low-income people; only about 10–20 percent is spent internally on things like administrative costs. They’re a pretty cool charity for a few reasons. They don’t really have much to prove. Reducing poverty is plausibly a good thing in and of itself. Both in utilitarian terms and in non-utilitarian ones. Furthermore, there’s a lot of evidence backing unconditional cash transfers. Here’s GiveDirectly’s website summarizing the evidence. (You might think there’s a conflict of interest, but actually, there’s a lot of external evidence and GiveDirectly is surprisingly honest about things.) GiveDirectly is well-known in the effective altruist community.

If you live in a developing country—like I do—and you want to donate to an effective charity, it might be a better idea to just give money to someone you know who lives in poverty (so perhaps someone who lives on less than $4 a day). It functionally does the same thing as GiveDirectly—neither places any conditions on giving the money. But there’s a few reasons why giving money to a low-income person in a developing country whom you know could be more effective than donating the equivalent amount of money to GiveDirectly.

First, if you live in a country that’s different than Kenya, Rwanda, or Uganda, then there’s a chance that you have greater obligations to people from your country than people from other countries. Most people are deeply uncertain about which moral values are correct. It’s possible that effective altruism’s utilitarian approach is the correct ethical theory—I happen to be a utilitarian myself. But there’s a good chance I’m wrong. It’s possible that contractualism is correct, it’s possible that virtue ethics are correct, and it’s possible that Kantian deontology is correct. So if there are two actions that seem roughly morally equivalent from the most likely moral theory, but are morally very different from a moral theory that’s less likely but still plausible, we should default to doing the action that’s better according to the less likely moral theory. This is an argument advanced by philosophers who have researched moral uncertainty, such as Will MacAskill and Nick Bostrom (they have slightly different approaches, but both of these apply here). How does this apply in this context? According to utilitarianism, there is no moral difference between helping someone in Uganda, Kenya, or Rwanda and helping someone in your country. According to other ethical theories, you have a greater moral obligation to people who are proximate to you, whether in space or in time. And I haven’t heard of a ethical theory that says you have a greater obligation to people who are far away from you or ethically distant—it seems like a less likely ethical theory, in any case. Therefore, you should default to helping equally poor people who you know.

Second, it often makes you more likely to want to give more money to poverty alleviation in the future. There’s something disconnected about the typical effective altruist approach. The things they’re saying might be technically morally correct, but many people have a moral intuition that it is justified for them to help out in the specific areas that they have a personal connection to—whether it’s an ordinary person helping out someone they know in need or a survivor of sexual assault (like myself) wanting to donate to a charity that specializes in helping other sexual assault survivors. Thus, there’s some non-zero chance that the disconnected effective altruist approach actually discourages charitable donation because you don’t feel as good about giving to charity as you would otherwise. At the same time, completely disregarding the effective altruist approach is unfair to the people who need your money the most. However, giving money to a very poor person who you know has a dual benefit—it meets both the effective altruist standard and the personal connection standard. It makes you feel better about what you’re doing. You can often see the impact happen in front of you. And that makes you more likely, consciously or subconsciously, to do it in the future.

Third, in some cases, you are in a position to give other people financial advice—whether it’s how to save money or how to spend it effectively. If you can couple your giving money with advice—if the advice is solicited or you know the person well enough to give it, of course—making it even better at reducing poverty or improving the quality of life of people. Economist Chris Blattman notes:

I think of the time that I’ve spent helping people think through what their options are, and reevaluating those opportunities suddenly changes all of their returns to investment. So that kind of advising and mentoring and connection is unusually powerful.

There’s an important caveat here: GiveDirectly produces another good. That good is research. GiveDirectly conducts randomized controlled trials and checks whether its programs are effective. This is really useful because it informs other charities and other policymakers who are designing social policy. However, I suspect that there’s a good chance that it’s a better idea to give money to someone who is at risk who you know personally.

Update 1

A friend points out that this post doesn’t take into account the effects of scale. So, for example, a $100 cash transfer to a single family is more effective than $4 cash transfers to twenty-five different families. For people with limited money to give on a charitable donation, giving the money to GiveDirectly allows resources from different people—often on different ends of the earth—to be pooled together and donated with reasonable scale. However, a lot of this still applies if you donate a fairly large amount, e.g., the difference between  $100 donations to five different people and one $500 donation is smaller than the difference between $50 donations to ten different people and one $500 donation.

Update 2

My debate coach points out a bunch of smart things—that is, advantages that donating to GiveDirectly has that simply giving money to a low-income person you know wouldn’t have—that I didn’t think of:

  • In many contexts, giving money to someone you know could create a sense of obligation on their part, e.g., giving money to a poor employee or janitor could create, on their part, a sense of obligation that they should work a few extra hours overtime, or that they should try and repay you as soon as possible. This would mean the net effect of my proposal could be zero or even negative.
  • There’s another reason why scale is often important: because organizations like GiveDirectly often give money to many people in the same community. This could have an added positive effect—because it could mean the community could work together to do things like set up self-help groups that allow for the pooling together of resources to do things like borrow money from financial institutions, or to set up cooperative societies, or even the setting up of public goods. However, this must be balanced against potential negative externalities of sudden cash injections into communities, such as a possible higher cost of living.

Contra Mankiw on political philosophy

Harvard economist Greg Mankiw, someone I greatly respect, wrote an article for The New York Times a few years ago on the political philosophy of economists. The thesis of his piece is two-fold.

First, he says that any economist making a normative judgment—much like any normative judgment made by anyone else—is also assuming a particular political philosophy. Often, they look at what maximizes “social welfare,” measured in utilitarian terms. That’s a value judgment about political philosophy and not an assumption that can be taken for granted.

Second, he offers an alternate political philosophy which he calls a “do-no-harm principle” that is entailed, according to him, by epistemic humility. In his own words:

So, what is the alternative? At the very least, a large dose of humility is in order. When evaluating policies, our elected leaders are wise to seek advice from economists. But if an economist is always confident in his judgments, or if he demonizes those who reach opposite conclusions, you know that he is not to be trusted.

In some ways, economics is like medicine two centuries ago. If you were ill at the beginning of the 19th century, a physician was your best bet, but his knowledge was so rudimentary that his remedies could easily make things worse rather than better. And so it is with economics today. That is why we economists should be sure to apply the principle “first, do no harm.”

This principle suggests that when people have voluntarily agreed upon an economic arrangement to their mutual benefit, that arrangement should be respected. (The main exception is when there are adverse effects on third parties — what economists call “negative externalities.”) As a result, when a policy is complex, hard to evaluate and disruptive of private transactions, there is good reason to be skeptical of it.

He then proceeds to apply this principle to the Affordable Care Act and the minimum wage:

As I see it, the minimum wage and the Affordable Care Act are cases in point. Noble as they are in aspiration, they fail the do-no-harm test. An increase in the minimum wage would disrupt some deals that workers and employers have made voluntarily. The Affordable Care Act has disrupted many insurance arrangements that were acceptable to both the insurance company and the insured; these policies were canceled because they deviated from lawmakers’ notion of the ideal.

I agree with him that anyone making normative judgments is assuming a certain political philosophy. Notice that his “do-no-harm” principle is also a political philosophy—and not one that’s somehow less controversial than utilitarianism. For one, it isn’t prima facie clear to me that people should be allowed to make decisions that hurt themselves. In fact, whether the state should legislate to prevent self harm is a key source of debate among political philosophers.

For another, the fact that a contract exists and was signed by both parties does not necessarily make it truly voluntary. For a truly free choice to exist, I would argue that certain conditions must be met.

First, I think that, for a choice to be truly free, people should be given access to full information. If there’s a significant information asymmetry, then a person is making a choice without knowing what options exist and what the implications of their choice are. That sounds, intuitively to me, like a coerced choice. And there are good reasons to believe that the market for health insurance. In fact, Professor Mankiw made this argument about health insurance himself:

Consumers often don’t know what they need. In most markets, consumers can judge whether they are happy with the products they buy. But when people get sick, they often do not know what they need and sometimes are not in a position to make good decisions. They rely on a physician’s advice, which even with hindsight is hard to evaluate.

And consumers are often unaware of the possibility that they might get sick. In fact, people are empirically really poor at making long-term calculations. Here’s some research to prove it. And here’s a meta-analysis of the literature. And often, information about the likelihood of getting specific illnesses—and the question of whether those illnesses are covered by insurance—exists with insurers but not with consumers. That’s an Econ 101 case of asymmetric information that renders free choice not truly free.

Second, people should have access to many options—or at least, more than a few bad options, at least if this is possible or if government intervention can cause this to occur. If they don’t have options, then them choosing the only option they have available is certainly not ideal—the state should seek to expand the options they have. The labor market is a good example for this. A person chooses to work a low-wage job because that’s the only option they have available—they’d rather a higher wage job. A minimum wage opens this option up to them and doesn’t force them to rely on a $3/hour wage.

Now, Professor Mankiw would likely object to this in two ways. First, he could say that both the suppliers and the demanders should have their choices maximized—a minimum wage removes the freedom of employers. The problem with this is that it potentially doesn’t take into account imbalances in power. Minimum wages often exist in industries where the demanders—employers—have substantial market power. Here, trades between workers and employers aren’t as free as they could be, and minimum wages can help make them free in that context. Second, he could say that minimum wages reduce the options available as firms simply reduce the number of workers available. I agree that that’s a possibility—but now that becomes an empirical question, and not one of political philosophy. My point is simply that a “do-no-harm principle” doesn’t necessarily entail the abolition of the minimum wage.     

In short, I don’t think Professor Mankiw’s proposed political philosophy is any more obvious than utilitarianism, and doesn’t necessarily entail opposition to Obamacare or the minimum wage. Economists do use political philosophy in making normative judgments—I think that’s true and is entailed by the definition of a “normative judgment”—and I agree that we need to be more cautious about assuming the truth of utilitarianism. So I agree with the thrust of Professor Mankiw’s point. What I disagree with is his proposed alternative, which seems (at least to me)—and I may very well be wrong here—to run into the very same problems he critiques in his op-ed: assuming a debatable political philosophy without much justification.

Right-libertarianism and restorative justice

Mainstream philosophical libertarians posit an ethical theory that contains the following features:

(1) A variant of Mill’s harm principle—such as the non-aggression principle (NAP)—which says that all actions are morally justified except those that cause active harm to the negative rights of other non-consenting individuals. It is justifiable, however, to engage in aggression to correct for a previous violation of someone’s negative rights.

(2) Property rights are important because of moral desert. Many people, like Taylor Swift, Serena Williams, and Jeff Bezos, earned their wealth by creating value for other people—whether through great music, entertaining sports play, or convenient online shopping. Thus, it is morally dubious that, for example, the state has the right to take away a significant chunk of this rightfully earned wealth and redistribute it, even if said redistribution is desirable in utilitarian terms. This includes inheritance, because it represents a choice made by someone who deserves the wealth.

Most modern right libertarians represent a less extreme version of these two viewpoints—they surely believe that we should care for the poorest people in society through some redistribution and we need a minimal state, perhaps even more than a monarchist state, to correct for market failures.

But I’m not convinced that most wealthy individuals morally deserve their wealth—not because they themselves did anything wrong, but because it often comes from previous violations of property rights. Lots of wealthy families profited out of conditions created by things like colonialism and slavery. The descendents of these families were born into relative social privilege, often, that enabled their current success (to the extent that many of them are successful). They aren’t culpable for colonialism and slavery, or for the wrong actions of their ancestors, to be sure. But the libertarian standard values inheritance—and the people today who would have otherwise inherited this wealth are now often the most unprivileged and disenfranchised.

Thus, it occurs to me that the non-aggression principle would allow for the radical redistribution of private property as it would be correcting a previous violation of the non-aggression principle—it would be morally equivalent to enforcing current property rights, at least in a rough and imperfect way. But this imperfect conclusion, from a libertarian perspective, seems more moral than not engaging in redistribution.

I’m not a libertarian and I do not endorse radical redistribution of property, but it seems that libertarians should get their story straight when discussing issues such as taxes and moral desert. I’m sure there are compelling objections to this that I haven’t thought of—but food for thought.

The principle of charity

This is a pretty cliché thing for blogs to say when they’re new. I’m going to say it anyway.

If you watched the Julia Galef TED talk I linked in post #1, you’d know that I think it’s really important to be willing to constantly reevaluate positions on issues, and to maintain epistemic humility about your current position on said issues.

An important area, in real life, to apply that, in my view, is in real life arguments.

I’m a high school “formal debater” – complete with coaches and tournament experience and everything. The way formal debate works is there’s two teams (or two individuals) on opposite sides arguing each other in a series of speeches for a while. After that, a judge makes a decision about who won and explains why. In debate, we’re often told to be charitable to our opponents. To say, “the best version of our opponents’ case is X; now I’m going to explain why X is wrong,” often followed by a snide “keep in mind, though, that our opponents didn’t actually make the point this well.” But in debating, it’s really hard to be charitable for a long enough period of time. Debaters tend only to be charitable to the other side to the extent that the judge is likely to be charitable to the other side. It’s very rare to see debaters actually construct the complete, fantastic argument that their opponents should have made and then rebut it.

This is for two reasons.

First, it’s difficult to come up with an argument for the other side that easily. This is a problem I often had in prep time. It’s a common mistake to start off prep time looking at the debate exclusively from the lens of your team, such that, when you’re thinking of arguments from the other side, you’re still subconsciously doing it from the lens of “which arguments should I think of which would help us win the debate” – which means you end up thinking of weak versions of the other side’s case.

Second, even when you do come up with the argument, it’s hard to rebut it. It obviously takes more effort to rebut a well-made version of the argument. It’s much easier to rebut the version made by the other side, even when the other side’s version is weaker, and to mock them about how their version isn’t a good one.

I’m not going to talk about whether it’s good strategy in a debate to be 100% charitable or where that line should be.

However, in a real life argument, we should always be open to changing our own opinions. Winning an argument is a good thing because it reaffirms a previously held position; losing an argument is also a fantastic thing because it forces you to scrutinize your current worldview. Both of these situations help you come closer to the truth.

My position is that you should make the strongest version of your argument and also the strongest version of the argument of the other side, and compare the two. Arguments in real life aren’t about winning. They’re about getting closer to the truth. Therefore, placing a high level of scrutiny on your own arguments and being as charitable as possible to the person you’re arguing against is good.

Scott Alexander of SlateStarCodex explains:

“Absurdity is the natural human tendency to dismiss anything you disagree with as so stupid it doesn’t even deserve consideration. In fact, you are virtuous for not considering it, maybe even heroic! You’re refusing to dignify the evil peddlers of bunkum by acknowledging them as legitimate debate partners. Charity is the ability to override that response. To assume that if you don’t understand how someone could possibly believe something as stupid as they do, that this is more likely a failure of understanding on your part than a failure of reason on theirs.”

And that’s all on charity, for now. I hope you have a good day, a day filled with learning new things, even if they contradict things you thought you knew before.