Capitalism, markets, greed

This post ties together two other posts I have written on capitalism, markets and morality.

The following things are all different but are often not distinguished properly:

Capitalism – The private ownership of the means of production
Markets – A system in which buyers and sellers engage in exchange
Ethos of selfishness – People have very limited duties to benefit others and have extensive permission to engage in self-interested action.
Egalitarianism – Equality of outcome or opportunity for outcome is intrinsically good.
Utilitarianism – Everyone’s happiness counts equally, so more count for more.

The pros and cons of all of these things are quite different. Some of these things are foundational ethical theories, some are theories of personal morality, some are evaluations of culture, and some are institutional systems of ownership.

Today, whether one believes in an egalitarian society is predictive of whether one is anti-capitalist, anti-big business, anti-market, anti-ethos of selfishness and anti-bourgeois morality. Also, whether one is pro-capitalist, pro-business, or pro-market is predictive of whether one is pro-ethos of selfishness or pro-bourgeois morality. I think there is room for a more nuanced mix of these beliefs.

Capitalism & Socialism

Capitalism is defined very specifically as the private ownership of the means of production. The main argument for it is that it seems to have played a major role in the greatest increase in human welfare ever over the last 200 years. Moreover, experiments with socialism – extensive public ownership of the means of production – tend to go very badly.

The Labour Party’s Clause IV used to say:

“To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.”

Clause IV was altered by Tony Blair in the 1990s to be focused not on socialism, but on the broader ethical aims of the party. It is at least worth noting that it is a very long walk from the claim that it would be better to have a prosperous and equal society to the claim that Tesco should be taken into state ownership. There seem to be many other ways to achieve the aim of a prosperous and egalitarian society, such as redistribution, free childcare, increased skills training, and so on.

Being a pro-capitalist egalitarian is a live option – this is social democracy.

Going further, I think there are good social welfarist and egalitarian arguments for a common-ownership self-assessed tax, which would not be capitalistic.

Capitalism, big business and markets

Capitalism and big business are different to a market-economy. Firms are not markets. Herbert Simon a thought experiment to make this clear:

Suppose an alien intelligence were to study a strange world with “a telescope which reveals social structures”. Pointed at the Earth, Simon argued, that telescope would show lots of solid green areas with faint interior contours linked by a network of thin red lines. Both colours would be dynamic; new red links would form and old ones perish; some green blobs would grow, others shrivel. Now or then one blob might engulf another.
The green blobs in Simon’s vision were firms and other organisations in which people work; the red lines, market transactions. And if asked what the long-range scanner revealed, the observer would reply “large green areas interconnected by red lines” not “a network of red lines connecting green spots”.
The Economist

In a large company like Amazon or Tesco, decisions are not made by the market mechanism. Rather, the activities of managers and employees are determined by management structures and by algorithms.

Uber is a platform that provides a market for its drivers and riders to buy and sell services on. When demand increases, the price of a ride increases with surge pricing, so drivers are incentivised to provide more rides and consumers are incentivised to reduce their demand. To reiterate, most decisions in firms are not made like this – there is no market system set up to determine who does what project, rather managers or algorithms decide how it is done and who does it.

Conceptually, there could be a market economy that is not capitalist. The common-ownership self-assessed tax is one way this could happen. Under that system, everyone sets a price for all of their property, and they would have to sell if someone bids that price. The higher they set the price, the higher the tax they pay. This would increase market transactions and encourage more accurate pricing of assets, but it would do away with a key feature of private property, which is that you have monopoly rights over what you own – if you don’t want to sell then you don’t have to.

Another non-capitalist market system would be a system of worker-run cooperatives operating in a market economy. Thus, each firm would be owned and democratically run by its employees. The feasibility and scalability of this system is questionable because cooperatives are disincentivised to grow and accept new members.

Moreover, it is again a long walk from the claim that it would be better to have a prosperous and egalitarian society to the claim that we should not use market prices to make investment and production decisions. One could be in favour of a market economy, but also find other ways to realise a prosperous and equal society, such as redistribution, free childcare, skills training, and so on.

Suppose we were thinking about how to distribute cabbage. On the anti-market approach, we would not use prices, but would instead use state planning. A bureaucracy would have to decide how much cabbage was needed in Oxford on a given day, what type of cabbage people wanted, where they wanted to get it from, how they wanted it packaged, and so on. Doing this without feedback from prices is hard.

In a market system, if demand for cabbage rises, then supermarkets in a competitive market increase their prices. This sends a signal to consumers to limit their consumption of cabbage relative to other vegetables. This also sends a signal to cabbage growers to increase their production of cabbages to meet demand. This kind of information is lost in the absence of market prices.

An ethos of selfishness

Many people in rich Western societies think that their moral responsibilities are heavily circumscribed. Provided people stick to the rules and look after their family, any benevolent acts are purely supererogatory. I think the ethos of selfishness is wrong and that people in fact have quite extensive duties of benevolence. However, this is completely conceptually distinct from one’s assessment of the value of markets and capitalism.

Indeed, I think it is plausible to be pro-market and pro-capitalism but also in favour of extremely stringent duties of benevolence that require thoroughgoing self-abnegation.

High stakes instrumentalism and billionaire philanthropy

Many have argued that billionaire philanthropy is objectionably undemocratic. For example, Anand Giridharadas writes:

“When a society helps people through its shared democratic institutions [as opposed to private charitable foundations], it does so on behalf of all, and in a context of equality. Those institutions, representing free and equal citizens, are making a collective choice of whom to help and how. Those who receive help are not only objects of the transaction, but also subjects of it—citizens with agency. When help is moved into the private sphere, no matter how efficient we are told it is, the context of the helping is a relationship of inequality: the giver and the taker, the helper and the helped, the donor and the recipient.”

There have been other criticisms of these arguments by Scott Alexander and from Cullen O’Keefe. I think one additional point is worth making. The point of view expressed by Giridharadas, Rob Reich and others has almost no support from within mainstream political philosophy, at least as a criticism of effective altruist billionaire philanthropy. The reason for this is that almost all mainstream political philosophers endorse a view I call High Stakes Instrumentalism, which permits the use of undemocratic procedures, such as billionaire philanthropy, in order to avoid high stakes errors.

High Stakes Instrumentalism

When studying for my doctoral thesis, I set out to argue for an instrumentalist defence of political procedures: I argued that we should use democratic procedures if and only if doing so produced the best results. Upon approaching the topic for the first time, I expected to find the field to be split broadly into two camps: pure instrumentalists and pure intrinsic proceduralists who argued that democracy is intrinsically valuable or intrinsically just and so should be used even if it does not produce the best results.

However, what I actually found was that political philosophers were broadly divided into pure instrumentalists and proponents of hybrids of instrumentalism and intrinsic proceduralism. Even proponents of the latter type of view endorse a theory I call High Stakes Instrumentalism:

High Stakes Instrumentalism = For all cases in which we can feasibly use either a political procedure in the set of procedures S₁, or a procedure in the set of procedures S₂, and all procedures in the set S₁ would produce high stakes errors if used, but those in S₂ would not, we ought, for instrumentalist reasons, to use a procedure in S₂ rather than S₁.

More informally, High Stakes Instrumentalism is the idea that if we can use undemocratic procedures to prevent high stakes political errors, then we ought to do so, even though those procedures are undemocratic.

The boundary of high stakes error is usually drawn somewhat fuzzily at policies that violate rights to subsistence or an economic minimum, or basic liberal rights. For example, Joshua Cohen argues,

“Decisions should also be substantively just, according to some reasonable conception of justice, and effective at advancing the general welfare. But a principle of political equality states norms that will normally override other considerations, apart from the most fundamental requirements of justice.”[^1]

And Tom Christiano writes:

“[Democratic] institutions are partly evaluated by whether they manage to protect democracy, liberal rights, and the economic minimum. But beyond these there is no agreement on justice in law and policy in terms of which we can evaluate democracy from the egalitarian standpoint. Therefore, with the exception of these, democracy will be entirely intrinsically justified from the egalitarian standpoint.”[^2]

I discussed the popularity of High Stakes Instrumentalism in a paper in Ethical Theory and Moral Practice. The only prominent political philosopher to deny High Stakes Instrumentalism was arguably the Jeremy Waldron of Law and Disagreement, but even he explicitly came to accept High Stakes Instrumentalism a few years later.[^3] In general, it seems as though High Stakes Instrumentalism is a principle which any prima facie plausible democratic theory ought to accept. It appears to be very difficult to defend the view that majorities have the right to violate fundamental rights or to be tyrannous to minorities. Thus, while denying High Stakes Instrumentalism is an option, it is not a palatable one. Indeed, the fact that almost all democratic theorists accept High Stakes Instrumentalism provides some indication of its intuitive strength.

Does political theory condemn billionaire philanthropy?

Billionaire philanthropy is undoubtedly politically inegalitarian and undemocratic. When Bill Gates decides to spend $1m on vaccinations in poor countries, he has unequal influence over that decision. If he were to make this decision democratically, he would put it in a fund and have the US electorate (or maybe all global citizens) vote on what to do with the money.

However, if High Stakes Instrumentalism is true, Gates’ influence over how this money is spent is not objectionable, as long as his control over it prevents high stakes errors. Gates spends substantial portions of his philanthropic money on direct global health aid and on global health research, such as research into vaccines. Open Philanthropy spends its money on saving and improving the lives of people in extremely poor countries; reducing the risk of pandemics; campaigning against horrific abuse of animals in factory farms, and so on. If this money and that of other impact-focused philanthropists were instead under the control of the American democratic system, it would not be spent on these priorities. Some would be spent on farm subsidies, some on wars in the Middle East, some on income support for people in high-income countries, and so on. There would, in short, be far more high stakes errors if this money were under democratic control.

Thus, while billionaire philanthropy may well be undemocratic, it would be incorrect to conclude that a substantial fraction of political philosophers believe it is therefore necessarily illegitimate. In fact, almost all democratic theorists accept that billionaire philanthropy is morally required, provided the money is spent wisely.

The same argument cannot be made for ineffective or harmful billionaire philanthropy. Many billionaire philanthropists donate money to projects with negligible social benefit, such as concert halls at their old university. Others, such as the Koch brothers attempt to cast doubt on the science on climate change. But this should not indict billionaire philanthropists who spend their money effectively on pressing global problems, such as Gates, Open Philanthropy, Hewlett, Children’s Investment Fund, and Bloomberg.

As Rob Reich has argued, billionaire philanthropy does deserve scrutiny in a democratic society. But this scrutiny does not mean that billionaire philanthropy should be placed under democratic control. Rather it should be focused on convincing philanthropists that the world is not, as most of them seem to think, a canvas on which to paint their personality, but is something full of huge problems that they ought to help solve by spending their resources in a careful and rational way.

[^1]: [Joshua Cohen, Philosophy, Politics, Democracy : Selected Essays (Cambridge, Mass; London: Harvard University Press, 2009), 271–72.]

[^2]: [Thomas Christiano, The Constitution of Equality: Democratic Authority and Its Limits (Oxford: Oxford University Press, 2008), 73.]

[^3]: [Jeremy Waldron, “Disagreement and Response,” Israel Law Review 39 (2006): 64–65.]

Economics, prioritisation, and pro-rich bias

tl;dr: Welfare economics is highly relevant to effective altruism, but tends to rely on a flawed conception of social welfare, which holds that the more someone is willing to pay for a good, the more utility or welfare they would get from consuming that good. (I use ‘welfare’ and ‘utility’ interchangeably here). This neglects the fact that differences in willingness to pay are often merely due to differences in initial resource endowments. As a consequence, welfare economics is biased towards policies that favour the rich. Effective altruists should be aware of these problems, and economists should adopt a revised conception of social welfare.

Effective altruism is the use of reason and evidence to promote the welfare of all as effectively as possible. Welfare economics is highly relevant to effective altruism because it aims to show which policies or actions would best maximise social welfare. The modern discipline of economics was heavily influenced by early utilitarian thought, and economics has influenced effective altruism in numerous ways with tools such as cost-effectiveness-analysis and Disability Adjusted Life Years. Welfare economics is, in my view, the most useful and practically applicable prioritisation tool currently available to governments. However, as I will now argue, mainstream welfare economics relies on a flawed theory of social welfare, which leads to pro-rich bias in policy evaluation.

I hope this post will improve understanding of welfare economics among effective altruists. It would also be useful for economists to recognise these problems and take a revised approach.

Touting and social welfare

I will bring out this issue by discussing the question of ticket ‘touting’ or ‘scalping’. Economists are somewhat unusual in believing that touting is actually a good thing because it corrects for underpriced tickets. Here is The Economist on the issue:

“Flint-hearted economists might note that a secondary market suggests that the seats were underpriced. Cheaper tickets meant to boost equal access lure in touts, for whom low prices mean bigger premiums. And more scalpers means more disappointed fans in the queue.

Rather than allowing touts to profit, the play’s producers could take a cue from “Hamilton”, a wildly successful Broadway musical, and raise prices for the premium seats until demand falls in line with supply (even at up to $849 per ticket, some argue that “Hamilton” is too cheap). But the Potter producers seem to be more worried about impecunious wizarding fans losing out than about the prospect of touts swiping surplus.

Stamping out the secondary market entirely means preventing people selling their tickets to those who value them more. This inefficiency is wince-inducing for economists…” [emphasis added]

According to some economists, ticket touting improves allocative efficiency.

Allocative efficiency occurs when there is an optimal distribution of goods according to consumer preferences, or, in other words, when social welfare is maximised.

The argument goes as follows. By selling tickets at a single price on a first come first served basis, some people who really want to go to the show will be unable to go. When the ticket is underpriced, Pete, who is willing to pay no more than $50 for a Book of Mormon ticket, can get a ticket, but Rich, who is willing to pay up to $1000, doesn’t get a ticket.

Crucial Premise: Necessarily, the more someone is willing to pay for a good, the more welfare they get from consuming that good.

So, by meeting the market demand of those willing to pay more or, in other words, ensuring that price is closer to marginal utility, touts ensure that social welfare is maximised.

The vast majority (>68%) of economists believe touting increases social welfare, as shown by this IGM poll (a good place to find the views of economists on lots of different topics). It’s somewhat unclear whether they do so on the basis of the argument from allocative efficiency and the Crucial Premise, but I would bet that a significant portion do endorse that argument.

What’s wrong with this argument?

I’m going to argue that the foregoing argument fails because the Crucial Premise is false. (Note that touting might be justified by other arguments).

I’ll first clarify the assumptions made in the argument.

Utilitarianism = Agents ought to perform the act which maximises total social utility or welfare.

A large portion of economists accept preference utilitarianism, according to which utility is conceived of as preference satisfaction. When evaluating policy, many economists like to say that they put morality to one side, but this is seldom true. In actual fact, they are appealing to preference utilitarianism. This is a moral theory.

Some economists believe that allocatively efficient outcomes might involve large inequalities and therefore be unfair. Consequently, they endorse an equity or fairness constraint on preference utilitarianism. In philosophical terms, this is equivalent to preference utilitarianism with a welfare egalitarian constraint. Proponents of such a theory tend to recommend that governments correct inequality through redistribution.

The pro-touting argument combines preference utilitarianism and the Crucial Premise, concluding that touting is justified because it maximises social welfare.

With this clarified, we can now explore why the pro-touting argument does not work. The Crucial Premise is false. It is not necessarily true that willingness to pay for a good is an indicator of how much utility one would get from a good. This is obvious. For example, suppose that Pete is very poor and Rich is very rich. As a consequence, Pete willing to pay up to $50 for a Book of Mormon ticket, but Rich is willing to pay up to $1,000. But this does not necessarily mean that Rich would get more utility from watching the Book of Mormon than Pete. All it shows is that Pete doesn’t have as much money. It might be the case that Rich would mildly enjoy the show, but Pete would absolutely love it.

Indeed, imagine that Pete has no money at all. According to the view that, necessarily, the more one is willing to pay for a good the more utility one derives from it, Pete would not gain utility from the consumption of any good, even food or water. This is absurd.

We can avoid this by correcting for inequality in income or resources between individuals when assessing willingness to pay. We could, for example, ask what Pete would be willing to pay for a ticket if he had as much money as Rich. Thus, hypothetical, rather than actual, willingness to pay would determine consumer preference. Consumer preference would not be revealed by actual market demand. If so, then it is not necessarily true that touting tickets at higher prices increases social welfare by allocating tickets to those who would get most utility from them.

Not only is it not necessarily true that actual willingness to pay determines consumer preference, it is not even usually true. Differences in willingness to pay are to a significant extent and in a huge range of cases driven by differences in personal wealth rather than by differences in consumer preference. Rich people tend to holiday in exotic and sunny places at much higher rates than poor people. This is entirely a product of the fact that rich people have more money, not that poor people prefer to holiday in Blackpool. I think the same holds for the vast majority of differences in market demand across different income groups.

In sum, the argument for touting from preference utilitarianism and the Crucial Premise fails.

Implications for welfare economics

This is one instance of a serious general problem for contemporary welfare economics. Equating market demand and utility without correcting for inequality in income or resources leads economists to pro-rich bias. It is this same flaw that led the 1995 IPCC report to conclude, on the basis of a willingness to pay approach, that Indian lives were worth less than American lives.[1]

It is easy to see how this bias could come into play for pretty much all policies assessed by welfare economics. Economists will neglect inequality and tend to recommend that goods be distributed by market prices.

This is not a criticism of preference utilitarianism from equity or fairness. I am not saying that only aiming to maximise social welfare is inegalitarian, and I am not saying that equality is intrinsically valuable. I am saying that preference utilitarianism alone, properly conceived and without an equity constraint, favours more egalitarian outcomes than economists acknowledge.

One advantage of holding that actual willingness to pay determines preference is that it is easier to measure than hypothetical willingness to pay. For this reason, in some cases it may be more practicable to approximate preference utilitarianism (properly conceived) with the Crucial Premise + an independent equity constraint. This equity constraint would be justified on utilitarian grounds, rather than on the grounds that equality is intrinsically important.

The downside of this is that economists would still be giving an inaccurate account of what constitutes preference satisfaction. The statement “touting optimises the distribution of goods according to consumer preference, but is inequitable” is false because the first conjunct is false.

Thanks very much to Stefan Schubert for comments.

[1] The great John Broome discusses this on p.15 here – http://users.ox.ac.uk/~sfop0060/pdf/Valuing%20policies%20in%20response%20to%20climate%20change,%20some%20ethical%20issues.pdf

Capitalism and Selfishness

As effective altruists make increasing forays into politics, I thought it would be good to share what I have found to be one of the most useful conceptual distinctions in recent political philosophy. Many people think if you’re in favour of capitalism you have to be in favour of ruthless selfishness. But this isn’t so. As the philosopher Jason Brennan has argued,[1] we ought to distinguish capitalism – a system of ownership from selfishness – a social ethos.

Capitalism = The private ownership of the means of production.

Socialism = The collective ownership of the means of production.

People have an ethos of selfishness insofar as they pursue their own self-interest.

People have an ethos of benevolence insofar as they pursue the interests of others.

Why accept these definitions? Firstly, they align with the commonsense and dictionary definitions of ‘capitalism’ and ‘socialism’. The elision between capitalism and an ethos of selfishness tends only to happen in an informal or unstated way. People unfairly compare capitalism + selfishness with socialism + universal benevolence and conclude that socialism is the superior system, when in fact universal benevolence is doing a lot of the work. Secondly, if we conceptually tie capitalism and an ethos of selfishness, then we will be left with no term for a system in which the means of production are privately owned and everyone is perfectly benevolent. On the other side of the coin, if we conceptually tie socialism and benevolence, then we will be left with no term for a system in which the means of production are collectively owned, but people are extensively motivated by selfishness.

With these definitions in tow, we can infer the following important point:

The stance one takes on the correct social ethos implies no obvious stance on the justifiability of capitalism or socialism.

Many effective altruists are strongly critical of the ethos of selfishness: Peter Singer believes that you should give up on all luxury spending in order to help others. However, this does not mean that capitalism is bad because capitalism is not conceptually tied to selfishness.

The question of which system of economic ownership we ought to have is entirely separate to the question of which ethos we ought to follow. Effective altruists and others have made a strong case for an ethos of benevolence, but finding out whether capitalism or socialism is better involves completely different empirical questions.

Thanks to Stefan Schubert for advice.

[1] He attributes the original point to Sharon Krause.

Where should anti-paternalists donate?

GiveDirectly gives out unconditional cash transfers to some of the poorest people in the world. It’s clearly an outstanding organisation that is exceptionally data driven and transparent. However, according to GiveWell’s cost-effectiveness estimates (which represent a weighted average of the diverse views of GiveWell staffers), it is significantly less cost-effective than other recommended charities. For example, the Against Malaria Foundation (AMF) is ~4 times as cost-effective, and Deworm the World (DtW) is ~10 times as cost-effective. This is a big difference in terms of welfare. (The welfare can derive from averting deaths, preventing illness, increasing consumption, etc).

One prima facie reason to donate to GiveDirectly in spite of this, suggested by e.g. Matt Zwolinski and Dustin Moskovitz, is that it is not paternalistic.[1] Roughly: giving recipients cash respects their autonomy by allowing them to choose what good to buy, whereas giving recipients bednets or deworming drugs makes the choice for them in the name of enhancing their welfare. On the version of the anti-paternalism argument I’m considering, paternalism is non-instrumentally bad, i.e. it is bad regardless of whether it produces bad outcomes.

I’ll attempt to rebut the argument from anti-paternalism with two main arguments.

(i) Reasonable anti-paternalists should value welfare to some extent. Since bednets and deworming are so much more cost-effective than GiveDirectly, only someone who put a very high, arguably implausible, weight on anti-paternalism would support GiveDirectly.

(ii) More importantly, the premise that GiveDirectly is much better from an anti-paternalistic perspective probably does not hold. My main arguments here are that: the vast majority of beneficiaries of deworming and bednets are children; deworming and bednets yield cash benefits for others that probably exceed the direct and indirect benefits of cash transfers; and the health benefits of deworming and bednets produce long-term autonomy benefits.

Some of the arguments made here have been discussed before e.g. by Will MacAskill and GiveWell, but I think it’s useful to have all the arguments brought together in one place.

It is important to bear in mind in what follows that according to GiveWell, their cost-effectiveness estimates are highly uncertain, not meant to be taken literally, and that the outcomes are very sensitive to different assumptions. Nonetheless, for the purposes of this post, I assume that the cost-effectiveness estimates are representative of the actual relative cost-effectiveness of these interventions, noting that some of my conclusions may not hold if this assumption is relaxed.

What is paternalism and why is it bad?

A sketch of the paternalism argument for cash transfers goes as follows:

Anti-malaria and deworming charities offer recipients a specific good, rather than giving them the cash and allowing them to buy whatever they want. This is justified by the fact that anti-malaria and deworming charities enhance recipients’ welfare more than cash. Thus, donating to anti-malaria or deworming charities to some extent bypasses the autonomous judgement of recipients in the name of enhancing their welfare. Thus, anti-malaria and deworming charities are more paternalistic than GiveDirectly.

This kind of paternalism, the argument goes, is non-instrumentally bad: even if deworming and anti-malaria charities in fact produce more welfare, their relative paternalism counts against them. Paternalism is often justified by appeal to the value of autonomy. Autonomy is roughly the capacity for self-governance; it is the ability to decide for oneself and pursue one’s own chosen projects.

Even if the argument outlined in this section is sound, deworming and bednets improve the autonomy of recipients relative to no aid because they give them additional opportunities which they may take or decline if they (or their parents) wish. Giving people new opportunities and options is widely agreed to be autonomy-enhancing. This marks out an important difference between these and other welfare-enhancing interventions. For example, tobacco taxes reduce the (short-term) autonomy and liberty of those subject to them by using threats of force to encourage a welfare-enhancing behaviour.

How bad is paternalism?

Even if one accepted the argument in section 1, this would only show that donating to GiveDirectly is less paternalistic than donating to bednets or deworming. This does not necessarily entail that anti-paternalists ought to donate to GiveDirectly. Whether that’s true depends on how we ought to trade off paternalism and welfare. With respect to AMF for example, paternalism would have to be bad enough that it is worth losing ~75% of the welfare gains from a donation; with respect to DtW, ~90%.

It might be argued that anti-paternalism has ‘trumping’ force such that it always triumphs over welfarist considerations. However, ‘trumping’ is usually reserved for rights violations, and neither deworming nor anti-malaria charities violates rights. So, trumping is hard to justify here.

Nonetheless, it’s difficult to say what weight anti-paternalism should have and giving it very large weight would, if the argument in section 1 works, push one towards donating to GiveDirectly. However, there are a number of reasons to believe that donating to deworming and bednets is actually attractive from an anti-paternalistic point of view.

Are anti-malaria and deworming charities paternalistic?

(a) The main beneficiaries are children

Mass deworming programmes overwhelmingly target children. According to GiveWell’s cost-effectiveness model, 100% of DtW’s recipients are children, Sightsavers ~90%, and SCI ~85%. Around a third of the modelled benefits of bednets derive from preventing deaths of under 5s, and around a third from developmental benefits to children. The final third of the modelled benefits derive from preventing deaths of people aged 5 and over. Thus, the vast majority (>66%) of the modelled benefits of bednets accrue to children under the age of 15, though it is unclear what the overall proportion is because GiveWell does not break down the ‘over 5 mortality’ estimate.

Paternalism for children is widely agreed to be justified. The concern with bednets and deworming must then stem from the extent to which they are paternalistic with respect to adults.^[2]

In general, this shows that deworming and anti-malaria charities do a small or zero amount of objectionable paternalism. So, paternalism would have to be very very bad to justify donating to GiveDirectly. Moreover, anti-paternalists can play it safe by donating to DtW, which does not target adults at all.

This alone shows that anti-paternalism provides weak or zero additional reason to donate to cash transfer charities, rather than deworming or anti-malaria charities.

(b) Positive Externalities

Deworming drugs and bednets probably produce substantial positive externalities. Some of these come in the form of health benefits to others. According to GiveWell, there is pretty good evidence that there are community-level health benefits to bednets: giving A a bednet reduces his malaria risk, as well as his neighbour B’s. However, justifying giving A a bednet on the basis that it provides health benefits to B is more paternalistic towards B than giving her the cash, for the reasons outlined in section 1.

However, by saving lives and making people more productive, deworming and bednets are also likely to produce large monetary positive externalities over the long term. According to a weighted average of GiveWell staffers, for the same money, one can save ~10 equivalent lives by donating to DtW, but ~1 equivalent life by donating to GiveDirectly. (An ‘equivalent life’ is based on the “DALYs per death of a young child averted” input each GiveWell staffer uses. What a life saved equivalent represents will therefore vary between staffers because they are likely to adopt different value assumptions).

What are the indirect monetary benefits of all the health and mortality benefits that constitute these extra ‘equivalent lives’? I’m not sure if there’s hard quantitative evidence on this, but for what it’s worth, GiveWell believes that “If one believes that, on average, people tend to accomplish good when they become more empowered, it’s conceivable that the indirect benefits of one’s giving swamp the first-order effects”. What GiveWell is saying here is as follows. “Suppose that the direct benefits of a $1k donation are x. If people accomplish good when they are empowered, the indirect benefits of this $1k are plausibly >x.” If this is true, then what if the direct benefits are 10*x? This must make it very likely that the indirect benefits >>x.

So, given certain plausible assumptions, it’s plausible that the indirect monetary benefits of deworming and bednets exceed the direct and indirect monetary benefits of cash transfers. DtW and AMF are like indirect GiveDirectlys: they ensure that lots of people receive large cash dividends down the line.

As I argued in section 1, providing bednets and deworming drugs is autonomy-enhancing relative to no aid: it adds autonomy to the world. If, as I’ve suggested, bednets and deworming also produce larger overall cash benefits than GiveDirectly, then bednets and deworming dominate cash transfers in terms of autonomy-production. One possible counter to this is to discount the autonomy-enhancements brought about by future cash. I briefly discuss discounting future autonomy in (c).

This shows that anti-paternalists should arguably prefer deworming or anti-malaria charities to GiveDirectly, other things equal.

Short-term paternalism can enhance not only the welfare but also the long-term autonomy of an individual. For the same amount of money, one can save 10 equivalent lives by donating to DtW vs. 1 equivalent life by donating to GiveDirectly. The morbidity and mortality benefits that constitute these equivalent lives enable people to pursue their own autonomously chosen projects. It’s very plausible that this produces more autonomy than providing these benefits only to one person. Anti-paternalists who ultimately aim to maximise overall autonomy therefore have reason to favour deworming and bednets over GiveDirectly.

Some anti-paternalists may not want to maximise overall autonomy. Rather, they may argue that we should maximise autonomy with respect to some specific near-term choices. When we are deciding what to do with $100, we should maximise autonomy with respect to that $100. So, we should give them $100 rather than using the $100 to buy bednets.

This argument shows that how one justifies anti-paternalism is important. If you’re concerned with the overall long-term autonomy of recipients, you have reason to favour bednets or deworming. If you’re especially concerned with near-term autonomy over a particular subset of choices, the case for GiveDirectly is a bit stronger, but still probably defeated by argument (a).

(d) Missing markets

Deworming charities receive deworming drugs at subsidised prices from drug companies. Deworming charities can also take advantage of economies of scale in order to make the cost per treatment very low – around $0.50. I’m not sure how much it would cost recipients to purchase deworming drugs at market rates, but it seems likely to be much higher than $0.50. Similar things are likely true of bednets. The market cost of bednets is likely to be much greater than what it would cost AMF to get one. Indeed, GiveWell mentions some anecdotal evidence that the long-lasting insecticide-treated bednets that AMF gives out are simply not available in local markets.

From the point of view of anti-paternalists, this is arguably important if the following is true: recipients would have purchased bednets or deworming drugs if they were available at the cost that AMF and DtW pay for them. Suppose that if Mike could buy a bednet for the same price that AMF can deliver them – about $5 – he would buy one, but that they aren’t available at anywhere near that price. If this were true, then giving Mike cash would deprive him of an option he autonomously prefers, and therefore ought to be avoided by anti-paternalists. This shows that cash is not necessarily the best way to leave it to the individual – it all depends on what you can do with cash.

However, the limited evidence may suggest that most recipients would not in fact buy deworming drugs or bednets even if they were available at the price at which deworming and anti-malaria charities can get them. This may in part be because recipients expect to get them for free. However, Poor Economics outlines a lot of evidence showing that the very poor do not spend their money in the most welfare-enhancing way possible. (Neither do the very rich). The paper ‘Testing Paternalism’ presents some evidence in the other direction.

In sum, for anti-paternalists, concerns about missing markets may have limited force.

Conclusion

Deworming and anti-malaria charities target children, probably provide large long-term indirect monetary benefits, and enhance the long-term autonomy of beneficiaries. This suggests that anti-paternalism provides at best very weak reasons to donate to GiveDirectly over deworming and anti-malaria charities, and may favour deworming and anti-malaria charities, depending on how anti-paternalism is justified. Concerns about missing markets for deworming drugs and bednets may also count against cash transfers to some extent.

Nonetheless, even if GiveDirectly is less cost-effective than other charities, there may be other reasons to donate to GiveDirectly. One could for example argue, as George Howlett does, that GiveDirectly promises substantial systemic benefits and that its model is a great way to attract more people to the idea of effective charity.

Thanks to Catherine Hollander, James Snowden, Stefan Schubert, Michael Plant for thorough and very helpful comments.

[1] See this excellent discussion of paternalism by the philosopher Gerald Dworkin.

[2] It’s an interesting and difficult question what we are permitted to do to parents in order to help their children. We can discuss this in the comments.

Effective Altruism: an elucidation and defence

Abstract: In this paper, we discuss Iason Gabriel’s recent piece on criticisms of effective altruism. Many of the criticisms rest on the notion that effective altruism can roughly be equated with utilitarianism applied to global poverty and health interventions which are supported by randomised control trials and disability-adjusted life year estimates. We reject this characterisation and argue that effective altruism is much broader from the point of view of ethics, cause areas, and methodology. We then enter into a detailed discussion of the specific criticisms Gabriel discusses. Our argumentation mirrors Gabriel’s, dealing with the objections that the effective altruist community neglects considerations of justice, uses a flawed methodology, and is less effective than its proponents suggest. Several of the criticisms do not succeed, but we also concede that others involve issues which require significant further study. Our conclusion is thus twofold: the critique is weaker than suggested, but it is useful insofar as it initiates a philosophical discussion about effective altruism and highlights the importance of more research on how to do the most good.

Co-authored with Stefan Schubert, Joseph Millum, Mark Engelbert, Hayden Wilkinson, and James Snowden

View the pdf here: Effective Altruism

The asymmetry and the far future

TL;DR: One way to justify support for causes which mainly promise near-term but not far future benefits, such as global development and animal welfare, is the ‘intuition of neutrality’: adding possible future people with positive welfare does not add value to the world. Most people who endorse claims like this also endorse ‘the asymmetry’: adding possible future people with negative welfare subtracts value from the world. However, asymmetric neutralist views are under significant pressure to accept that steering the long-run future is overwhelmingly important. In short, given some plausible additional premises, these views are practically similar to negative utilitarianism.

Neutrality and the asymmetry

Disagreements about population ethics – how to value populations of different sizes and realised at different times – appear to drive a significant portion of disagreements about cause selection among effective altruists.[1] Those who believe that that the far future has extremely large value tend to move away from spending their time and money on cause areas that don’t promise significant long-term benefits, such as global poverty reduction and animal welfare promotion. In contrast, people who put greater weight on the current generation tend to support these cause areas.

One of the most natural ways to ground this weighting is the ‘intuition of neutrality’:

Intuition of neutrality – Adding future possible people with positive welfare does not make the world better.

One could ground this in a ‘person-affecting theory’. Such theories, like all others in population ethics, have many counterintuitive implications.

Most proponents of what I’ll call neutralist theories also endorse ‘the asymmetry’ between future bad lives and future good lives:

The asymmetry – Adding future possible people with positive welfare does not make the world better, but adding future possible people with negative welfare makes the world worse.

The intuition behind the asymmetry is obvious: we should not, when making decisions today ignore, say, possible people born in 100 years’ time who live in constant agony. (It isn’t clear whether the asymmetry has any justification beyond this intuition. The justifiability of the asymmetry continues to be a source of philosophical disagreement.)

To be as clear as possible, I think the both the intuition of neutrality and the asymmetry are very implausible. However, here I’m going to figure out what they asymmetric neutralist theories imply for cause selection. I’ll argue that asymmetric neutralist theories are under significant pressure to be aggregative and temporally neutral about future bad lives. They are therefore under significant pressure to accept the far future is astronomically bad

What should asymmetric neutralist theories say about future bad lives?

The weight asymmetric neutralist theories give to lives with future negative welfare will determine the theories’ practical implications. So, what should the weight be? I’ll explore this by looking at what I call Asymmetric Neutralist Utilitarianism (ANU).

Call lives with net suffering over pleasure ‘bad lives’. It seems plausible that ANU should say that bad lives have non-diminishing disvalue across persons and across time. More technically, it should endorse additive aggregation across future bad lives, and be temporally neutral about the weighting of these lives. (We should substitute ‘sentient life’ for ‘people’ in this, but it’s a bit clunky).

Impartial treatment of future bad lives, regardless of when they occur

It’s plausible that future people suffering the same amount should count equally regardless of when those lives occur. Suppose that Gavin suffers a life of agony at -100 welfare in the year 2200, and that Stacey also has -100 welfare in the year 2600. It seems wrong to say that merely because Stacey’s suffering happens later, it should count less than Gavin’s. This seems to violate an important principle of impartiality. It is true that many people believe that partiality is often permitted, but this is usually towards people we know, rather than to strangers who are not yet born. Discounting using pure time preference at, say, 1% per year entails that the suffering of people born 100 years into the future is a small fraction of the value of people born 500 years into the future. This looks hard to justify. We should be willing to sacrifice a small amount of value today in order to prevent massive future suffering.

The badness of future bad lives adds up and is non-diminishing as the population increases

It’s plausible that future suffering should aggregate and have non-diminishing disvalue across persons. Consider two states of affairs involving possible future people:

A. Vic lives at -100 welfare.

B. Vic and Bob each live at -100 welfare.

It seems that ANU ought to say that B is twice as bad as A. The reason for this is that the badness of suffering adds up across persons. In general, it is plausible that N people living at –x welfare is N times as bad as 1 person living at –x. It just does not seem plausible that suffering has diminishing marginal disutility across persons: even if there are one trillion others living in misery, that doesn’t make it any way less bad to add a new suffering person. We can understand why resources like money might have diminishing utility for a person, but it is difficult to see why suffering across persons behaves in the same way.

Reasons to think there will be an extremely large number of expected bad lives in the future

There is an extremely large number of expected (very) bad lives in the future. This could come from four sources:

Bad future human lives

There are probably lots of bad human lives at the moment: adults suffering rare and painful diseases or prolonged and persistent unipolar depression, or children in low income countries suffering and then dying. It’s likely that poverty and illness-caused bad lives will fall a lot in the next 100 years as incomes rise and health improves. It’s less clear whether there will be vast and rapid reductions in depression over the next 100 years and beyond because, unlike health and money, this doesn’t appear to be a major policy priority even in high income countries, and it’s only weakly affected by health and money.[2] The arrival of machine superintelligence could arguably prevent a lot of human suffering in the future. But since the future is so long, even a very low error rate at preventing bad lives would imply a truly massive number of future bad lives. It seems unreasonable to be certain that the error rate would be sufficiently low.

Wild animal suffering

It’s controversial whether there is a preponderance of suffering over pleasure among mild animals. It’s not controversial that there is a massive number of bad wild animal lives. According to Oscar Horta, the overwhelming majority of animals die shortly after coming into existence, after starving or being eaten alive. It seems reasonable to expect there to be at least a 1% chance that billions of animals will suffer horribly beyond 2100. Machine superintelligence could help, but preventing wild animal suffering is much harder than preventing human suffering and it is less probable that wild animal suffering prevention will be in the value of function of an AI than human suffering prevention: if we put the goals into the AI or it learns our values, since most people don’t care about wild animal suffering, neither would the AI. Again, even a low error rate would imply massive future wild animal suffering.

Sentient AI

It’s plausible that we will eventually be able to create sentient machines. If so, there is a non-negligible probability that someone will in the far future, by accident or design, create a large number of suffering machines.

Suffering on other planets

There are probably sentient life forms in other galaxies that are suffering. It’s plausibly in our power to reach these life forms and prevent them suffering, over very long timeframes.

The practical upshot

Since ANU only counts future bad lives and there are lots of them in the future, ANU + some plausible premises implies that the far future is astronomically bad. This is a swamping concern for ANU: if we have even the slightest chance of preventing all future bad lives occurring, that should take precedence over anything we could plausibly achieve for the current generation. It’s equivalent to a tiny chance of destroying a massive torture factory.

It’s not completely straightforward figuring out the practical implications of ANU. It’s tempting to say that it implies that the expected value of a miniscule increase in existential risk to all sentient life is astronomical. This is not necessarily true. An increase in existential risk might also deprive people of superior future opportunities to prevent future bad lives.

Example

Suppose that Basil could perform action A, which increases the risk of immediate extinction to all sentient life by 1%. However, we know that if we don’t perform A, in 100 years’ time, Manuel will perform action B, which increases the risk of immediate extinction to all sentient life by 50%.

From the point of view of ANU, Basil should not perform A even though it increases the risk of immediate extinction to all sentient life: doing this might not be the best way to prevent the massive number of future bad lives.

It might be argued that most people cannot in fact have much influence on the chance that future bad lives occur, so they should instead devote their time to things they can affect, such as global poverty. This argument seems to work equally well against total utilitarians who work on existential risk reduction, so those who accept the former should also accept the latter.

[1] I’m not sure how much.

[2] The WHO projects that depressive disorders will be the number two leading cause of DALYs in 2030. Also, DALYs understate the health burden of depression.