Rational Altruist

Adventures of a would-be do-gooder.

What is the return on giving?

Suppose I have $1 to spend and I want to use it to make the world as rich as possible.  How far can my dollar go? Can I use $1 to to make the world $2 richer? $50 richer? $1000 richer? It’s hard to know what to even expect a priori, and people seem to have widely varying estimates. Let’s call this figure the return on giving. This seems like an important number, and I’ve seen lots of implicit speculation. I think it would be great to have much more explicit discussion, though it seems worthwhile to first clarify what exactly we are talking about. Read the rest of this entry »

Beware brittle arguments

Often there is a tension between a simple argument suggesting that a trend is positive on average, and more subtle arguments suggesting it might be negative at the moment. For example, all of the following are arguments I have encountered in the last few months: Read the rest of this entry »

The value of prosperity

“Making the world richer” seems like a useful abstraction for thinking about impact; I’m quite interested in understanding how valuable making the world richer actually is.

For concreteness and simplicity, I want to think about an across-the-board change, where everyone’s real income increases by 1% (due to some exogenous increase in supply, improvements in efficiency, or whatever). Of course no intervention would have such a simple effect. But nevertheless it seems like a good starting point for similar analyses. Read the rest of this entry »

Making people richer

Many interventions seem to have the effect of “making people richer.” In addition to understanding the long-run impacts of prosperity, I am interested in looking in more detail at what happens when you make someone richer, and looking at a few examples to understand whether the intuitive model of a small across-the-board increase in real income is reasonable.

As a first example, I’ll look at cash transfers in the developing world. I think very similar ideas are needed for the analysis of many interventions in the developing world (e.g. health interventions) and also for many interventions in the developed world (e.g. supporting self-driving cars). But it seems useful to first go through the analysis with a particular case in mind. Read the rest of this entry »

The efficiency of modern philanthropy

Summary: The most important inefficiency in philanthropy may be the philanthropist’s desire to make decisions that look good in retrospect.

In financial markets, if you encounter an investment opportunity which looks like it will significantly outperform the market, it is reasonably safe to conclude that either (1) finding the opportunity required some special ability, info, disposition, or connection you have that others lack, or (2) you are mistaken about the goodness of the opportunity, or there are associated costs.

We might ask: to what extent is the same thing true in philanthropy? If it looks to me like a cause is obviously important, but others are ignoring it, does that mean that I’m overlooking something they know? Of course, there is a spectrum of possibilities. In general I should ask: how hard should I expect to have to search before I can expect to find something important that others have overlooked?

Holden from GiveWell has recently commented on this question. His conclusion, roughly, is that while there are probably still neglected high-impact causes, you should expect to have to do a lot of effort to identify them. In particular, one can’t appeal to simple a priori arguments about what people are likely to miss and expect to thereby find great neglected opportunities. Read the rest of this entry »

Economics of small changes

Consider the following three actions:

  1. I bury $20 in my back yard.
  2. I sell a pound of strawberries at a farmer’s market.
  3. I accept an engineering job I’m offered.

Each of these actions has some obvious local effects:

  1. I’m $20 poorer.
  2. I have some money; my customer has some strawberries and they won’t buy strawberries from anyone else.
  3. I have an engineering job; my employer has an engineer and will not hire anyone else.

But each of these actions also has a more subtle long-term effect:

  1. The value of a dollar is slightly increased; everyone else is slightly richer (or the government is slightly richer, depending on their monetary policy).
  2. The price of strawberries is slightly decreased; worldwide strawberry production will decrease to substantially offset my contribution (and those resources will be used for other things).
  3. Engineering salaries are slightly reduced.

These long-term effects are very small but affect a very large number of people. They are mediated by complicated chains of cause and effect with which I have no direct experience. There are many causal steps between burying money in the ground and my local supermarket decreasing the price of milk very slightly. This seems like a brittle picture of how the world works, which could well be completely inapplicable to the real world even if it applies to an idealized efficient market.

Nevertheless, I think that these indirect effects are quite robust in the face of uncertainty and non-ideal behavior. Read the rest of this entry »

Astronomical waste

Warning: this is an unusually unusual post.

Previously I argued that human activity is only useful on net to the extent that non-human activity is harmful. This raises the question: how harmful are events in nature? I think that the big things to have in mind are disasters, resource use, and decay. But another possible problem is that natural resources throughout the universe may be slowly running out through no fault of humanity’s. Galaxies are receding, time is running out, stars are burning down. Intuitively this doesn’t seem like a big deal. The universe is very old, and our entire history is less than an instant from its perspective, while our behavior on earth is having big effects on short timescales. But it seems worth checking anyway. Read the rest of this entry »

Estimates vs. head to head comparisons

Summary: when choosing between two options, it’s not always optimal to estimate the value of each option and then pick the better one.

Suppose I am choosing between two interventions, X and Y. One way to make my decision is to predict what will happen if I do X and predict what will happen if I do Y, and then pick the option which leads to the outcome that I prefer.

My predictions may be both vague and error-prone, and my value judgments might be very hard or nearly arbitrary. But it seems like I ultimately must make some predictions, and must decide how valuable the different outcomes are. So if I have to evaluate N options, I could do it by evaluating the goodness of each option, and then simply picking the option with the highest value. Right?

Read the rest of this entry »

Consequentialist-Recommendation Consequentialism

An act consequentialist evaluates possible acts by the goodness of their consequences. In some situations this leads to bad consequences. For example, I may decline to trust a consequentialist because I am (justifiably) concerned that they will betray my trust whenever it is in their interest. This outcome is widely considered unsatisfactory, and is often taken to imply that a person should not willingly become an act consequentialist. Read the rest of this entry »

Giving now vs. later

It has been observed that money spent helping the poor compounds over time in the same way that profit-oriented investments do (see Holden Karnofsky, or Giving What We Can). When I support the world’s poorest people I’m not just alleviating their suffering, I’m increasing the productivity of their lives. The recipients of aid go on to contribute to the world, and their contributions compound in turn.

Moreover, one can argue that the returns to aid are much higher than achievable financial returns. Equities make around 5% in real terms, while the world’s poorest earn returns upwards of 20%. And that’s not surprising—more people are interested in making money than are interested in improving the world, so we should expect it to be harder to find opportunities to make money than opportunities to improve the world.

So, the argument goes, altruists ought to donate as quickly as possible, doing good works that will compound out there in the world much faster than they will compound in their bank accounts. Make sense?

I think this argument is mistaken. Read the rest of this entry »