Russ Roberts

William MacAskill on Effective Altruism and Doing Good Better

EconTalk Episode with William MacAskill
Hosted by Russ Roberts
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Crime & Punishment & Cooperati... Earning to Live or Earning to ...

Doing%20Good.jpg How much care do you take when you make a donation to a charity? What careers make the biggest difference when it comes to helping others? William MacAskill of Oxford University and the author of Doing Good Better talks with EconTalk host Russ Roberts about the book and the idea of effective altruism. MacAskill urges donors to spend their money more effectively and argues that the impact on human well-being can be immense. MacAskill wants donors to rely on scientific assessments of effectiveness. Roberts pushes back on the reliability of such assessments. Other topics include sweatshops, choosing a career to have the biggest impact on others, and the interaction between private philanthropy and political action.

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0:33Intro. [Recording date: September 1, 2015.] Russ: We're going to talk about the ideas in your book, Doing Good Better, and the whole concept of effective altruism. But first I want to give a shout out to Marc Gunther, whose article on effective altruism, which we'll link to, got me interested in the idea. So, I want to start with the principles of effective altruism. You list five. What are they? Guest: Yes. So, effective altruism is about using your time and money as effectively as possible to make the world a better place. And taking a scientific approach to doing so. And in the book I list these 5 principles that help you to think in the way that effective altruists tend to think. And as I'm sure your audience will notice, there are lots of similarities to some cool concepts in economic thinking. So, the first one is just to think about the impact of your actions. And in particular, the impact in terms of improvements in people's wellbeing. So, ask: How many people benefit and by how much? Where the idea is, if you can benefit more people or if you can benefit them by a greater amount, then that's a better action to do. If you are giving to charity, for example. The second key question is: Is this the most effective thing I can do? Because there's a lot of talk about making a difference when we are trying to do good; but not so much folks trying to make the most difference. And if you look at the distribution of impact among different sorts of social programs, you find the fairly best social programs are far, far better than even merely very good ones. So that means it's crucial not to just try and do some amount of good, but to try and to do the most good you can. The third question is: Is this area neglected? And that's bringing in the idea of diminishing returns, which again is crucial, I think, if we want to have the biggest impact we can. So, for example, there's a lot of focus on domestic issues and within charity, especially U.S. education or domestic poverty. But if you look at just the scale of the an extremity[?] of global inequality and global poverty, you can do far, far more to benefit the very poor in poor countries, simply because they have so much less than the lowest hanging fruit, in terms of improvements to people's lives till haven't been taken. Like, just simply saying bed nets or deworming children. The fourth question is: What would have happened otherwise? So, in order to do good or make a difference, it's not enough to just have a causal impact. You need to think about the difference of what you have done and what would have happened otherwise. An example of this is if you become a doctor, let's say; and you might think, 'Oh, well I'm saving lives every single week.' But that's not enough to ensure you are actually having a big impact. You've got to think, 'Well, I wasn't the person doing this, what would be happening instead?' And in fact, someone else would be in your position. They'd be doing fairly similar things, performing those life-saving surgeries or life-saving treatments. And so the impact you are having as a doctor is just the difference between the way the world is given that you've become a doctor, and what it would have been like had someone else been in your shoes. And then the final question is: What are the chances of success and how good would success be? And that's bringing in the concept of expected value. And that's crucial because in the book I do talk a lot about concrete measurable ways of doing good, [?] impact by randomized control trials, like deworming, like distributing bed nets. But that's certainly not the only way to do good, and certainly potentially make a very large change by focusing on more speculative, more difficult-to-quantify sorts of activities like trying to make systemic policy change. And there I think the approach you should take is still trying to be rational and reflective about this, and instead just trying to look at, 'Okay, if this were to be successful--if this policy change were successful, for example--how good would that be?' And actually try to get an estimate for that. And then just try and get at least some sort of estimate on, 'Yeah, what's the chance of me actually being able to bring this about?' And then you multiply that low probability by that very large amount of value, and at least sometimes that means it will be even better to pursue this more uncertain path over something that would be more concrete and more certain to make a benefit, but a benefit of smaller magnitude.
5:37Russ: So, to illustrate the principles, let's start with the two examples you start in the book with--the Playpump and deworming. The latter being a little more controversial when it started; but the Playpump is such a fantastic example, a tragic example of good intentions not paying off as well as one might hope. So, talk about what went wrong with the play pump and what's the potential, at least, for deworming. Guest: Playpump came to, was invented in the 1990s and really got a lot of fame in the 2000s. And it's a way of providing clean water to the people of a village in a poor country like South Africa. And the idea is that it's a children's merry-go-round that doubles as a pump. So, children will play on this merry-go-round, and using the power of children's' play, that will pump clean water from the ground up into a tank, which people can then draw from. So it's this fairly exciting, innovative-seeming idea. And the media really loved it. They loved the opportunity to [?] headlines like 'Pumping Water is Child's Play,' it's the magic roundabout. And it got a huge amount of attention. So, it won--I [?] know-- Russ: It's just so appealing. You can see why. Guest: Exactly. It just seems like a win-win. Children get their first playground [?]-- Russ: It's a free lunch-- Guest: The village gets--yeah, exactly. It seems like that. And it even won the World Bank Development Marketplace Award. Jay-Z was a supporter. The First Lady at the time, Laura Bush, announced that they were going to donate $12 million by USAID (U.S. Agency for International Development) with a further $5 million from the Case Foundation to role out playpumps across the country. So it was getting a huge amount of attention. Bill Clinton called it a 'wonderful innovation.' The issue though--it was actually in practice a terrible idea. It was a very sexy idea, but one that was just fairly[?] unfunctional. So, unlike a normal merry-go-round which spins freely once you give it sufficient momentum, this one required constant force in order to pump clean water from the ground. That would mean the children would get very tired very quickly. Some would fall off, some would break limbs, some would vomit from the spinning. But most importantly they wouldn't want to play on this pump all day, every day. And that meant that if people wanted water, it was normally left up to the elderly women of the village to push this pump all hours of the day, a task which they found kind of undignified and demeaning. The pumps would also often break down. They were supposed to have maintenance numbers, so people could phone if there were any problems; but that didn't happen, either. But the crucial thing was just that the communities hadn't actually been asked if they wanted these playpumps. And the pumps often replaced traditional hand pumps that were a third of the cost, much easier to maintain, and pumped several times as much water. So they were much less sexy, Zimbabwe hand pump, but much more functional for the needs of the local community. And thankfully, these problems were noticed. Investigations by a couple of different organizations, including the UN (United Nations), pointed out these flaws. And then there was another big media discussion. And again, thankfully the Case Foundation acknowledged--what's actually quite a rare event--acknowledged that it made a big mistake and withdrew further funding. And the Playpump Organization still does continue but in a much diminished capacity now. Russ: That's an example of altruism, you could say, run amok. Because the effectiveness wasn't--not enough attention was paid to initially in the effectiveness of the scheme. Guest: Yes. It shows that good intentions aren't good enough. It's not merely enough to think, 'Oh, I want to do good.' I think everyone here was well-intentioned. But you need to be careful; you need to be reflective about what you are actually doing. If you actually want to make a big difference.
9:57Russ: And, now, let's turn to deworming, which has had a lot of excitement around it. And some, a bit of pushback lately. But talk about deworming and what happened there. Guest: Yeah. So deworming is a [?]. I tell about Michael Kremer going to Kenya and working with a charity called ICS [Internationaal Christelijk Steunfonds Africa? International Christian Support Fund?], that provided educational programs for local schools. And he suggested to this charity, 'Well, you are doing this stuff, but do you know that it really works? And why don't we test it? Just use the same methods that are used, experimental methods, that are used in all other areas of science?' And again, kind of unusually, the charity is kind of like, 'Okay.' So they took the program ICS was doing, took 7 schools as a control group--so they didn't do anything to those schools but just monitored the educational performance of the children there. And then implemented the program in 7 other schools in order to see what sort of impact it was having. And now, they did find the package that ICS was delivering did have a positive impact on educational outcomes. But ICS were doing a variety of different things. So, they thought: Okay, we are test lots of these different components one by one to see what actually has an impact. And what they found was that some things that would seem like obviously they were going to do good, actually had no discernable impact at all. So, distributing textbooks, for example. They tested that. Most schools have about one textbook per classroom. You'd think, obviously, providing a textbook or providing more books would improve learning among students. But they tested it; they found no impact, in fact. No difference in terms of educational outcomes. They did the same with flip charts. They did the same with class sizes. And again, just found no evidence of these actually improving the education of the people they were assigned to help. So, again, showing[?] actually even things that seem like they are great ideas, when you actually investigate it, may turn out not to be. Then they tried something quite different, something most people in the West have never even heard of, which is deworming school children. So, children have a variety of intestinal worms. In fact these intestinal worms affect over a billion people worldwide. We don't know about them in countries like the United States because they were eliminated in countries like the United States in the 1950s. And they don't kill as many people as HIV/Aids or tuberculosis or malaria. And again, that's why we may not have heard of them. They do make many, many children sick. And you can treat these worms for only about 50 cents per child, so you can just--the drugs, the treatments[?] have no side effects; you can just roll them out among all the schools you want to treat and you just treat absolutely everyone, and that costs about 50 cents per child and will cure them of worms for one year. And they tested this. It's normally thought of as a health program. But when they put this to the test in a landmark study they found it was one of the most cost-effective educational programs. So, one reason why children weren't attending school was simply because they were sick--they were lethargic. And because they suffered from these intestinal worms. And then when this was followed up with, kind of 12 years later, children who had been dewormed, now adults, were working significantly more hours and were earning significantly more as well. So it did seem to have this long-run impact on productivity and earnings. Russ: And it's incredible low-lying fruit, because it's so cheap. The intervention is so--it's a simple intervention. There's not a lot of follow-up. You don't have to watch to make sure that the protocol is being followed, some complicated thing. So it seems like a fabulous improvement. Guest: Yeah. It's exceptionally cheap, it's exceptionally simple. You're using drugs that were developed in the 1950s and are off-patent. It's the sort of thing where--in this country this would have been trivially funded decades ago. And in fact was, in the United States. And that shows, the lesson here is just: We shouldn't make assumptions about what's going to have a really big impact. Playpumps seemed really sexy, seemed really exciting, like it really worked. The thought you'd have about deworming is just--so Grace Hollister, the CEO [Chief Executive Office] of Deworm the World, described deworming as the least sexy intervention there is. And I think that's probably right. It's not something you'd really get very excited about. Russ: It's not even pleasant to talk about for most people. Guest: It's not even pleasant to talk about. It's kind of gross. Russ: Yeah. I can't help but point out though that we did an EconTalk episode with Velasquez-Manoff, talking about the consequences, the possible consequences, of deworming, at least in some parts of the world--that it has perhaps led to an increase in autoimmune disorders. But for most people it's a very good thing. Guest: Yeah. And the thing is--the book is called Doing Good Better; and one of the connotations I want to convey there is that we are never doing good perfectly. And so there has been a recent debate about deworming. Which you can go into if you like. I think it was a bit overblown. Russ: Well, I want to get to it, actually, because I think one of my concerns about effective altruism--on the surface there's nothing to object to in the concept. It's a fabulous idea--the idea of spend your money well rather than just spend it on what appears to be a good cause. And the idea of bringing data and science into that seems like a good idea. The challenge, I think--we will get into this through the entire conversation--is that it's not as straightforward as it might first appear. So, the original enthusiasm for deworming came from RCTs--Randomized Control Trials--which have a scientific aura about them. There was a backlash, though. A recent analysis of deworming by the Cochrane Group has found that in fact its impact may be quite small. Certainly smaller than we originally had thought. And then there's been some pushback against that. So, tell us where you think we're at on it. Guest: Yeah. So, I think the idea that the impact is smaller than the initial buzz I think is correct. However, I still think it's one of the best development programs there is, especially for an individual donor. And that's--in general, just statistically speaking, that's actually what you should expect. If you have these, like, initial results that something is just exceptionally good, then you should expect to regress back towards the mean, in light of further evidence. There was--[?] recently of this Kremer and Miguel study, a kind of initial landmark study, and they were blown a little bit out of proportion, I think. Reanalysis done and some of the coverage was saying, 'Oh, this debunks the case for deworming.' And that was kind of overblown. Really, there was some reanalysis, there were like some mistakes in the original analysis: arguably the effect was like a bit smaller than initially claimed. But certainly nothing anything that really undermines the case for deworming. And in the landscape of different sorts of development programs, deworming still seems exceptionally good. And I think one thing we should do is still use sanity checks as well. So, the thought with deworming is it's just a very simple thing. It costs 50 cents per child. And there is at least a significant amount of evidence showing that it does improve earnings and productivity in the long run, which is also something that there's normally very little evidence about with respect to development programs. It seems like just a very good use of money. And then there's a question of how good exactly is that? And then that's just a kind of gray area of debate: maybe it's like should you be funding bed nets and so on? And this isn't a hard science like physics. It does mean that there's going to have to be judgment calls along the way. But the case is still just very strong at least compared to different sorts of development programs.
19:13Russ: I guess the question is, as you talked about at the end of the book and we'll get to later, is: Compared to other choices you might make with your charitable giving. I want to introduce a fact here that was probably my favorite fact in the book--a lot of interesting things in the book; a lot of thought-provoking ideas about how to spend your time and money. But this one particularly grabs your attention: To get into the global 1% rather than, say, the U.S. 1%, which gets a lot of conversation--to get into the global 1%, you have to earn a little over $50,000. If you earn over $20,000 a year, you are in the top 5%. And the implication of that, is that you can do a lot of good without that much sacrifice on your part. There's a lot of people who are really having a tough life and you can help them. The question is: Is that true? Now, you suggest the potential effect is very large. So I want you to talk about the Hundred Times Multiplier--what you mean by that and why you think the impact will be so large. Guest: Yeah. I think there's a couple of reasons for thinking that the impact you can have through well-targeted donations to the poorest people in the world is absolutely huge. The first is this idea of diminishing returns. So, we can look at how much do the very poor earn compared to us and look at different sorts of estimates of how additional money turns into increases in wellbeing. And approximately, it seems like wellbeing seems to vary with the log of income. That means any percentage increase in earnings generates the same increase in happiness. So, wherever you are in terms of income, doubling your income gives you the same increase in wellbeing. And that might not be exactly right but at least it's approximately right. Now combine that with two further facts. Firstly is that for the typical member of the United States, someone earning about the median income, you are about 40 times richer than the poorest billion in the world. So these are people earning less than $1.50 per day. And where you need to get really clear on what that number means. That means, $1.50 would buy in the United States in financial terms that's about 60 cents in somewhere like Kenya or India. And so that number already takes into account that money goes further overseas. And the second thing is that it's consumption expenditure--so all that it takes into account anything that that person consumes. So, if they grow food on their own farm and then consume it, that's counted as part of their income. If they gather sticks from the woods, that counts as part of their income as well. So we're forty times richer. And then money goes about two and a half times as far, just because of cost of living and the fact that money goes further overseas. So that means that if I were to just halve my income, I could double the income of a hundred people in very poor countries. And, as I said, halving my income will reduce my happiness by a certain amount; doubling the income of a hundred people will increase each person's happiness by the same amount. So that means, there's this kind of general theoretical argument for thinking that we can benefit people by a hundred times as much as we can benefit ourselves. And then that seems to be backed up when we look at specific sorts of programs. Like the cost to save a life. In the United States we're willing to spend--the government will fund a program if it saves a life for about $7 million. If you want to save a life in very poor countries it will cost you about a half-thousand dollars, by distributing bed nets, by giving to the AgainstMalaria Foundation. Then you can also look at [?] and aid as well. So even if you just thought, 'Okay, I'm just only going to be doing as much good as aid has done in the past,' one argument you can look at is just to say: Well, supposing aid did no good at all, except insofar as it eradicated smallpox, a disease that killed 300 million people before we eradicated it in 1973 and saved the lives of 60-120 million people since then. That's more lives than would have been saved than if we'd achieved world peace in that period. If you do the math in terms of how much has been spent in aid in total and then how many lives have been saved--and assumed that aid had no impact at all except insofar as it eradicated smallpox--you get the conclusion that you have a cost of a life saved is about $70,000. Which is an exceptionally good deal. And in fact again 100 times better than the U.S. government is willing to spend to save a life in the United States. So we just have these multiple arguments for thinking that development, and in particular I think global health has the strongest general case, that development in general for the very poorest people in the world is just an exceptionally powerful way to do good.
24:41Russ: So, that's a very provocative, fascinating, and really interesting--there's a lot there to think about. I want to try to unpack in maybe a couple of different steps. So, one challenge of course is most people would struggle to cut their income in half--emotionally, which would just be a difficult sell, even if you could tell them they are going to save 100 lives. But maybe not--I think if you could actually save a hundred lives, you might be more interested in it. Doubling the income of excessively poor people, to take them from, say, near-starvation and possible death to a more comfortable standard of living, that's starting to get a little more realistic, I think, and a little more appealing. And obviously we don't all have to cut our income in half to make that difference: we could cut it by, say, 10%, which is a proportion you have advocated for and I personally think is a good thing as well. We'll talk later about whether that's a good general rule or not. But let's talk about that. Let's take the 50% case. So, I voluntarily tax myself 50%--that is, I give half of my income away to effective organizations that help transform people's lives. It's not--of course, it's only once, that payment. So you have to think about that as an ongoing payment, to continue to transform their lives, unless you thought that by getting them over the hump or out of the subsistence case, they could start to stand on their own better. So let me make the case in an unappealing way: By cutting your income in half you can work for a hundred people and allow them to lead a better life, assuming they don't respond to that opportunity by reducing their own work effort. A lot of people have suggested--we had a fascinating episode with Chris Blattman on this, who suggested we should give cash rather than bed nets, rather than trying to build infrastructure, all kinds of different approaches we've taken. So, let's give cash. I'm not convinced that that would be such a great, transformative thing. Just like I wouldn't if some rich people came to me and said--and of course I'm in the global 1%--and said, 'We're doing even better than you, so we're going to cut our income and you can'--you can what? Live better even, take it easy? I don't see that transforming people's lives, just giving them money. I like saving them from starvation. But spending the rest of my life working 50% for a hundred poor people to keep them from starvation, if in fact that's the only impact, and I worry about the consequences of that--isn't it a little more complicated? Guest: Very. Yeah, I'm really glad you asked this. Because I actually think it's something a lot of people are confused about when they think about the source of concrete, measurable programs. They say, 'Okay, this is just a short-term thing. You cure someone of worms, but then that doesn't have this long-lasting impact.' But the evidence suggests it's the opposite. Let's just talk about cash. So, Give Directly is a charity I endorse very highly. And it just transfers cash to the poorest people in the world. So about a thousand dollars will double the income of a very poor household for one year. And the question is: Okay, well, what do they do with that? Is it that they spend money on consumption and then they go back to the kind of status quo, just back to where they were? In which case, that's great; they've, you've benefited them for a year, but not had a long-lasting change. And that would be true if there were this thing called a poverty trap, where you can just be so poor that actually earning more doesn't get you out of that trap, because you just need to keep spending money even to stay afloat. But as far as I know, the evidence for that seems to be--there doesn't seem to be much evidence that there is such a thing as a poverty trap, in the way you'd expect--you have better opportunities to improve your income. And in particular when you look at Give Directly, that certainly seems to be the case. So, when they make these cash transfers, they look at how people spend their money. And some of the money goes in consumption. But in fact the majority of it goes on investment, effectively savings, where they spend the money on tin rooves, is the most common single purchase. So, they only give money to people in thatched rooves, because that's fairly good indicator of extreme poverty. Thatched rooves need to be replaced every couple of years. And it's just an ongoing expense. Whereas if they buy a tin roof, they effectively get a return on their investment of about 14% a year. So, way better than anything we can get by putting it in the bank or even investing in the stock market. They also buy livestock as well, which is another sort of asset with ongoing returns. And so, given the way they spend that, it doesn't look at all like they are just doing this thing that just makes them a bit better off for the year. In fact, it's this thing with this long-lasting compounding effect. And I think people often ignore this because it's much harder to see. So, you can see immediately the consumption benefits: they are able to eat more, have better quality food, more micronutrients. But then you don't see the ripple effects from that. You don't see the fact that they are now going to be earning more over the course of their life, in [?], which then has like a multiplier effect on the whole economy. Because that's much more diffuse. But that, it just has to be an effect. And the evidence we've got from Give Directly seems to support that as well. And so I think if you think about this as just a short term thing that doesn't have any long-lasting change, that's misunderstanding the situation.
31:18Russ: Yeah. I think part of the challenge here--I want to go back to the original deworming study and the failed interventions--the textbooks, the changes in class size, etc. And I think a lot of people make mistakes in thinking about development or reforming education--in a developed country, in a rich country, even. Because they misunderstand the organic nature of life. In particular, you'd think, if you only have one textbook per class, 10 would be better. Twenty would be better. Well, it's not if the teacher doesn't show up. It's not if the teacher doesn't teach anything valuable when they do show up. And it's not, if there aren't any jobs in the country because the labor market is messed up and there's bad roads for trade, and so on. And a lot of times correlations that we observe between certain interventions--not interventions--certain facts, certain correlated things in life, is because they all tend to move together because there is underlying thing that's helping. Such as, well, markets or whatever--civil society, other culture, things that we can't intervene on. We can't switch the lever in one piece of it by itself and hope it's going to make any kind of a difference at all. You need to have all the stuff happen at once. And you can't do it at once because it's stuff that has to emerge in its own time. It comes back to an example we've been talking about, I seem to be obsessed with, which is the example of the prairie: that to create a prairie you have to have a set of things that happen at the right pace and in the right order. And to just put one of them in place doesn't get you closer. And so, when I think about prosperity or getting out of poverty or avoiding a subsistence life, I think about this classic--you know, the classic story: If you give a person a fish, they eat for a day; if you teach him how to fish, they eat for a lifetime. But as one of our listeners, I think, pointed out--and I've forgotten who it is; I'm sorry--but somebody pointed out: If you can teach somebody to fish and give them access to markets, where they can trade their fish for other things, you won't just have them eat well: they'll do more, or they'll flourish. And, I'm not sure that any of these individual pieces--I worry that--they are not necessarily--it doesn't mean they are not worth doing. Obviously. So I don't mean to be so pessimistic. But it seems to me that some of the value and return from it are going to be grossly overstated. Because we don't have all the pieces at once. Guest: Yeah. So, I think you are on to a really good point. I actually--that 'teach a man to fish'--I hate that slogan. Russ: Why? Guest: Well, so Rachel Glennerster is the CEO of the Poverty Action Lab, and again it involves this way of randomized control trials. One of her early experiences was going to Kenya and seeing a travesty that there was a nomadic tribe and they tried to settle them on this Lake Turkana, I think it was. Taught them to fish. And then there was overfishing and the fish were depleted. Russ: There you go. It was a complicated place. Guest: And the lake dried up. If you gave them fish, they could just sell the fish, and then use the money for whatever was actually best for them. So, I think teaching a man to fish is as problematic as giving them fish. Russ: I think it's a metaphor. It's a metaphor. Giving them skill. But the question is: What skill? That's the challenge. And if you say, well, why haven't they? What's stopping people from acquiring the skills they would need to thrive? And the answer--there are many possible answers. But if you don't know the answer to that, you probably can't help them so effectively. Guest: Yeah. So, one thing is just--so, I think extreme poverty is just very different than domestic poverty. Where, extreme poverty--people living on that income level just don't have productive opportunities, the same sort of productive opportunities in rich countries. And it's not because the poor--because there are things to do with them [?]. It's not like mental illness or substance abuse issues--which can be the case among very poor domestically. Instead, it's just like they've got this starting, like very small amount of income; and they have, if you give them more income, these amazing opportunities to invest that and improve their lives. And I guess you do get some effect where, they are also in a country with often-poor institutions or infrastructure; and so maybe the multiplier effect that you get just by adding $1 of wealth to that country is less than it is in the United States. But it's still significant. It's still not the case that just by making them a little bit richer then you are just kind of return to the status quo ante. And I think it's true that we don't really know what drives growth. That's an unsolved problem. But overall if you think, look, people are just going to know, on average, on balance, what's better for them, and if they are made richer, especially through something like, GiveDirectly has, cash [?] have extensive evidence behind them, many different currencies--then that, I'm sure it's something you'll be sympathetic to--that normal operation of markets where they are able to just use their money and spend it in whatever way will be best, that will organically solve these kind of, these problems of only solving one part of the pie at one time, that you can refer to with respect to textbooks not being useful if teachers don't show up, and so on. That's because there's just so much local knowledge. There's a failure of knowledge on the part of people trying to help. Whereas if you are just giving cash to the very poor people, they have that local knowledge and they can take that into account when they are spending their money. Russ: No, I agree with that. I think, obviously, and you cleverly played to my biases. That was very skillful. But I think the--I think, for me, I think the realistic upside is ameliorating suffering. Trying to reduce the amount of suffering. I think it's overly optimistic to think that giving people cash--I like the idea of giving people cash rather than giving them a play pump. I think that's a big step forward. I think giving people cash in ways that they will use it in ways that will enhance their productivity and prosperity is going to be limited by the inherent situation that many poor people find themselves in. I think it's got some positives. But I also worry about, you know, again, the incentive effects that will have. But certainly to keep people from starving to death it's a good thing. I'm all for that. Guest: Yeah. And if you just look at the history of aid, people often talk about it having no impact. But over the course of the last 50, 60 years, we've spent what's comparatively a tiny amount of money, like $20 per person, per year. So really a very small amount of money. And life expectancy has increased by a third. Childhood mortality is like absolutely minuscule compared to what it was. And aid can't really account for, can't claim credit for all of that--not for most of it, either. But actually if you just look at the history of economic progress, it's been overall and on average, an incredible success story among poor countries. The percentage of people living in extreme poverty is half what it was just a few decades ago. And so I think that gives us ground for optimism, as well. This isn't just an ongoing problem.
38:31Russ: I'm not convinced. Although I would have to admit that your example of smallpox did give me pause. That was a great example. Your basic argument, to restate it, is that: Sure, maybe a lot of aid money is wasted. Maybe it could be worse than wasted. It could be enhancing dictators' power and worse. But let's just say it's wasted. But one success can have such an enormous impact that it's worth it. And I think the natural thought that comes through your book and I think comes to people's minds is, 'Well, so let's just do the good ones.' And that's the hope: that a more scientific approach, a more evidence-based approach I would call it, we could always spend our money, might lead us to be more optimistic. But it might not be true. It reminds me a little bit of when people talk about indexed mutual funds. You buy an indexed mutual fund: you are buying a whole bunch of stocks. Some of them go up a lot; some of them go up a little; some go down. A naive person says, 'Well, let's just pick the ones that are good. Let's just pick the good ones.' Well, we don't know how to do that in the stock market. And I wonder if we are able to do it in the development world. And in particular, maybe the smallpox thing was just lucky. What's the evidence that we are going to do better with the next trillion dollars or that we are going to achieve--now that smallpox, thank God, is eradicated, mostly--that we are going to be able to find something like that again? Now, I'm on your side for sure in saying that it's a small amount of money toward a big possible improvement and it's worth spending because that's your expected value. Which I find very persuasive. It's just not obvious to me we know a lot about how to do that well. Guest: Yeah. I think there's a couple of responses. One is the fact that we do have many [?] examples--so, the progress on measles--especially in global health. It's just so clear in global health. And even the aid skeptics--even chief among the aid skeptics, Bill Easterly, [?] his book, White Man's Burden, why aid has done so much harm and so little good. And he just lambasts it over and over and over again. And then spends a couple of pages on global health; and he's like, 'Yeah, yeah, global health is awesome and it's amazing and it's changed millions of people's lives for the better.' And then moves on again to being critical. And so even the chief among the aids skeptics are just fairly positive about global health. And we can look at progress on measles, polio, and getting dewormed. Also malaria, tuberculosis. And we've made vast improvements. Public funding like the World Health Organization, Bill and Melinda Gates Foundation, is clearly a part of that. And then as to whether like we can just pick the best: I really like the stocks example. I think we should be very humble about our ability to do things that are best. I think we should always have the understanding that what we are doing, perhaps it turns out to be not at all effective. But there is a difference because the stock market is an efficient market. The reason you can't pick the winners is because there's already so many people out there who are already trying to pick the winners. And that means that the price reflects the value of the stock. In contrast, when it comes to charity or doing good, there just isn't really the same sort of efficient market. There's some people who are out there trying to do loads of good--Bill and Melinda Gates Foundation, that's saying. And that means I think that you can't pick the very best. So I think maybe immunization programs like polio vaccination--if no one else were funding them they'd perhaps be even more effective than just [?] bed nets or deworming. So, to some extent you can't pick the very, very best winners. But that's okay--they have already been funded. That's a good thing for the world. That is not the case for the vast amount of funders all wanting to do as much good as they could. Instead there just does seem to be this low-hanging fruit on the ground, and it's because the charity world and the philanthropic aid spending just doesn't have the same sort of efficient market as the stock market has. Russ: Yeah; and one of the reasons is that we don't have the data that we have for stocks, that allow us to arbitrage. We don't have earnings data. We don't have the equivalent of it. And again, it's a complexity issue. I'm going to pick on bed nets for a second. Bed nets are things that help people stop being--keep them from being bitten by mosquitoes that carry malaria. And that's a wonderful thing. But for better or for worse, a lot of people who are given bed nets use them as fishing nets, because they think that's the best use: that's the local knowledge, for some people. We don't know what the numbers are. I have no problem with giving people a fishing net, if that's what they think is best to do with it--there may be some issues there. But, you know--children, etc. I think most people love their children and they are probably more worried about feeding them than keeping them malaria-free, I guess. But I do think there is this complexity issue that relentlessly makes this challenging.
44:54Russ: I want to segue to a related point; you can come back on that if you want, but I want to make sure we touch on this. When you talk about your career choice, you make the point, which is a beautiful point, that you have 80,000 hours, approximately, of work to do in your life: why don't you put some into making sure it's time well spent and not just for yourself but for other people? And one of the options that you suggest is what you call 'earning to give.' So, talk about that, and then I'll circle back on these issues of uncertainty. Talk about what earning to give is and why it may be a good idea. Guest: Terrific. So, earning to give is the idea of deliberately taking a lucrative career in order that you can do good through your ability to donate rather than through your direct contribution of your labor. So, when most people think about careers that make a difference, they think about careers in the non-profit sector or maybe in social work. They think about careers where you are directly helping people. And I just think that's too narrow. There's--sure you can benefit people through direct impact of your labor. You could also benefit people by your ability to advocate in a position--so, Martin Luther King didn't work for charity but he had standing that led him to advocate for this incredibly important cause. And you can do good through your ability to donate. And for some people, I think maybe 15% of people or something, it might well be the best path for them to take this higher-earning career, doing good through your donations. In particular, if you have a comparative advantage in just earning more, and particular skills are very well paid but not that useful in charity sector. And I think there are a few other arguments for this as well. One is that you can target your money to the very most effective charities. Second is that your money has a flexibility that direct contributions of your labor doesn't have. So, if the evidence changes in 10 years' time and suddenly different things are most effective, then with money you can switch that quite easily. With labor, it's much more difficult. And then finally is just this boring, pragmatic reason: even if you want to work in the nonprofit sector, I think a very good thing to do in the short term is to build up your business skills in for-profit organizations. And that's not that contrarian a view. I've interviewed a large number of leaders of non-profit organizations and the majority of them say a similar thing--is that when you are coming out of college you just don't have that many skills. What you need is first get a level up [?]-- Russ: Tool up. Guest: Yeah, exactly. And so that means I think it's often a good idea to try this for a few years. You can work in some elite organization, working consulting or in some areas of finance, or programming or a variety of other careers. You can do good through your ability to donate in the meantime. And then also build amazing skills. And then, depending on how things look after a few years you can then take those skills to the non-profit sector or the public sector. Or you can continue in that path, doing good just through your donations. Russ: Well, what leads to optimism from me is that if you think about you can take that earning-to-give idea and you can just say, 'Look, you didn't choose earning to give. You chose a career that you just liked. Forget whether it was in the non-profit sector. You just chose what you enjoyed. So you took that job. But you are still free to increase the amount you donate.' And to come back to our earlier discussion--I've talked about this before--according to Jewish law, you should give 10% of your income to charity. And unless you are rich you shouldn't give more than 20%. You could push against that. But there's a chance that you could fall back being needy yourself, is the argument that's made. Guest: Okay. Russ: But so, most people don't give 10%. So, if we could get people to give 10%, my first thought is: Well, is that really going to change the world? And I think, the answer I get from you is: Well, it could if you spent it smartly. If you just continue to spread it at things that sound okay--so, even if--take my skepticism with a grain of salt. Take my grain of salt with a grain of salt. It's okay: so it won't be quite--if we double the amount that we spend deworming; if we double the amount on bed nets or quadruple it even or five-fold increase it because we can get people to give more, maybe it won't have the impact that we hope, but we'd learn from that ideally, according to the approach you are encouraging, and we'd do something else with it. I think that's a really positive vision. Guest: Oh, yeah. Thank you. I think that's right. Russ: I do say some nice things from time to time. Guest: I was like, where's the kind of decisive objection going to come. Russ: Well, not that time. Guest: One thing you said is: Is giving 10% going to change the world? And I think that's not--again, there's a framing that is quite common of just: 'Well, that's not going to solve the problem.' And this is again I think a failure to think on the margin. When I say people should give 10% or more of their income to causes the fight poverty, people often say, 'Well, what if everyone did that? Would that be the best thing overall?' And that's like an interesting thing to think about. But when you are making a decision, you should just think, 'Well, what's the best thing to do given how everyone else is,' rather than asking, 'What if everyone did this?' Russ: If they all do it, you can consider cutting back to 9%. Guest: Yeah. Maybe that's exactly right. If everyone is doing this then--if everyone in the United States was giving 10% to the most effective charities, that probably also means that you could easily pass through a whole bunch of legislation that would also benefit people in very poor countries in a way that would be extremely difficult to do just now. And so the way things look when everyone does something is often quite different than how things look when it's just one person adding your piece. And the fact that a certain action will solve the problem is totally irrelevant. It's not the size of the bucket that matters. It's how big a drop in that bucket you are making. And if you can save hundreds of lives over your lifetime, that's really a massive drop, a massive impact. And the second thing I thought was just, again in terms of funding: if everyone started to donate 10%, then we'd get through the available room for funding bed nets and deworming very quickly, in fact. And then it would be moving on to the next thing, and the next thing. And probably a large chunk of that would be wanting to fund significant [?] research to try to find more of these opportunities that allows good. But one of things that's most exciting about cash transfers is just how much room for scale they have. So, I think after a few billion dollars, we'll get very quickly through the number of bed nets--everyone will be dewormed; everyone will have a bed net over their heads. Maybe it's tens of billions of dollars. With cash transfers you could scale that up massively, almost indefinitely, I think. And that's one of these things that's really exciting about Give Directly as a program. It's got the potential to really change the landscape of international development. Russ: Again, I'd worry a little bit, or a lot, about what the consequences of that are that maybe are not so obvious when you are just doing it on a very small scale. But it might be worth finding out.
52:55Russ: While I'm on the cheerful side, why don't you talk about what's good about sweatshops? One of the more, I suspect, controversial chapters in your book. Guest: Yeah. So, there's a lot of--a number of campaigns about boycotting sweatshops. So, sweatshops are pretty horrific places to work. Basically, everyone agrees on that. People there work 14 hour days and it's fairly hot conditions. You often do get kind of meal breaks. And people--and they are making clothes that are bought in the West. And people very naturally feel quite horrible about that: they think, 'How terrible it is that anyone has to work in those conditions.' And then they want to respond by removing themselves from that situation, have no part it in, by not buying those clothes and instead buying from somewhere like American Apparel, which can boast to be sweatshop free, only use workers in the United States who are kind of paid very well, comparatively. But I think that's a mistake. And the mistake is to not appreciate just how bad extreme poverty is. And in fact it's so bad that these sweatshop jobs are actually really desirable places to work-- Russ: Tragically-- Guest: compared to the alternatives. Tragically. Absolutely tragically. These horrific conditions can be the best options. Because the alternatives are: unemployment, which can mean starvation; prostitution; back-breaking farm labor, that's far more poorly paid. Russ: Scavenging in garbage dumps. Guest: Scavenging in dumps. Exactly. And when you actually ask the very poor, they say, 'Yeah, well at least this is a job. I'm not out in the sun all day where it's sweltering. I'm being paid much more.' And you can look at the evidence of this: the people who are choosing to work there, and not only choosing to work there but also emigrating across borders, risking deportation in order to take these jobs because they are higher paying--and I think that urge to say, 'Oh, I don't want to have any part of that' is not appreciating that in doing so you are taking away the best job opportunities that these people have. And so I think the right response is to try to end the underlying poverty that makes these sweatshop conditions, these sweatshop factories comparatively desirable places to work. And I think that means engaging in trade with very poor countries. And then secondly, yeah, using our position, our wealth, in order to fight poverty, to try and end those conditions. Boycotting is just going to be counterproductive.
55:55Russ: So, effective altruism has gotten a lot of criticism from the left, both the mild left and the hard left: that if you spend all this energy giving away money and trying to solve the world's problems through cooperative means--private, uncoerced, voluntary cooperative means--you are going to discourage political solutions that might otherwise be more effective. Now, I'm even more skeptical about that, so one of the things I love about effective altruism is it does at least open the possibility of a civil society, of solutions, of cooperative voluntary solutions to problems that, if they don't work, we can change the approach--as we've talked about. But what have been your dealings with the people who urge, who criticize the movement on those political grounds? What's your response to them? Guest: Yeah. So, this is an objection that we have received a bunch. So, I'm intuitively a big leftie; I remember attending meetings of the Socialist Workers Party as a recent graduate and so on. And that makes me just personally very inclined to really understand this objection. And I think--so there's a few things I can say. One is like, yeah, maybe political change is even better. But if you think of that as easy then you are definitely mistaken. If you think political change is obvious-- Russ: You're ruining my utopian pipe dream! Don't publish that book. Guest: Yeah. If we think--like, looking at the history of Communism and the starkest example of that, where you have a certain vision, which is maybe a very compelling vision and you try to bring that about, the consequence is disastrous. And so, I'm worried about unintended consequences when it comes to these very simple things like deworming school children. When it comes to political change, there's much greater potential there. So that's the first thing: it's just not obvious. Secondly, and this isn't often explicitly stated but I do think actually underlies often a lot of the disagreement, is what you think about the causes of poverty. And what you think about--so, I hate ever using the word 'capitalism' because it seems to be so multiply ambiguous. But what you think about the sorts of economies we have, like the United Kingdom and the United States--mixed economies but with a strong free market element, private property, and so on. And if you look at the history of human progress, the fact that there's any countries like the United States, the United Kingdom, is just a sort of miracle. The state of the world, for most of human history, is everyone living on less than $2 a day. And then it's only in the last few hundred years that some countries have been able to escape that. And were these monkeys walking around in suits trying to make our lives better, the fact that we got to this stage, this actually miraculous thing. Russ: Yeah. Absolutely. Guest: And moreover, in the last 50 years--if you look at China, India; if you look at South Korea, Taiwan--so many countries that then escaped the global poverty and are now these kind of economic powerhouses--and that's been through the same sort of economic development happening in the United States and United Kingdom. So I think often the kind of criticism on the left, they see--and I really don't want to [?] around the position, but this is maybe the conclusion I came to through deeper conversations--they see things as a fixed pie, where you've got the rich countries just being rich by taking from poor countries. And I just think that misrepresents the situation, which is that, to begin with everyone's really poor. Then, some countries have had amazing economic success. And for sure some of that was based on really very horrific-- Russ: Exploitation-- Guest: Yeah, exploitation. That's right. Every country has a horrific past. And I think that gives a strong argument for us to think that the resources we earn are not really our own and we should redistribute them. But we've had amazing economic success. And the question is just how can we get more of that? And so I think the objection does come down to deep--an empirical one, actually, about what you think is going on with capitalism. So when I see all the problems in the world, I think of the ability of markets in some or many circumstances to do a huge amount of good. And then when I think, 'What are the big problems with the current world order that we need to change?' that's like quite low down on the list. Whereas they see this as: This is the problem--capitalism is just taking from the poor countries and feeding the rich countries. And I just think that's a mistake--the default state[?] is being [?]--actually the trades that happens such as using sweatshops is benefiting both parties.
1:01:30Russ: So, let me close with a story in praise of effective altruism. As you know, Will, I saw you speak in California a month or so ago. I was invited--Google hosted a conference on effective altruism. Roughly how many people were there? Guest: About 450 people were at that conference. Russ: And how many were at the one the year before? Guest: The one the year before there was I think less than a third of that. Russ: So, it's grabbing some people's attention. As I sat in the audience for that event, happily tweeting as I listened to your opening keynote address and carrying my effective altruism t-shirt that I had been given at entry, which my teenage children told me was the coolest t-shirt I owned. That's just a side benefit. That's not my focus but I did want to mention that. In terms of swag, it's very good swag. And they gave me a copy of your book, which I already had; but that was okay. So, sitting in the audience, the thing that struck me--besides you did a great job; it was a great talk and covered some of the ground we talked about today--but the first thing that struck me was how young the audience was. I think I was sitting next to a high school student who had come from--or I talked to a high school student and I sat next to a college student. I later chatted with a high school student who had come--this was in the summer before his being a freshman in college; he wanted to make sure he spent his life well. And there's something incredibly inspiring about a room of people in their 1920s desperate to make the world a better place. It was really very moving. And it forced me to think about my own life and whether I'm doing the right thing with my own time. I think it's something any thoughtful person should think about. And we didn't get to cover it very much, but your organization, 80000Hours, deals with that; and we'll put a link up to it. And I certainly applaud the idea that you should choose your idea carefully, for a whole bunch of reasons. But I started to wonder--am I doing, is the way I spend my time, am I doing it as productively as possible in terms of having an impact on the world? And I managed to convince myself that EconTalk is a good use of my time. I made a transition out of classroom teaching to spend more time on EconTalk, and I think by the criteria that you talk about I think I'm reaching more people. I don't know if I'm reaching them as deeply as you can in an intense semester-long class. But the impact, the numbers effect is so large with EconTalk. But when I confronted it, I was forced to think about the fact that--maybe I could be doing better. Maybe there's something else I should be doing. Maybe I should be doing something else to spread economic education or do something entirely different. And one of the things that I concluded was I need to spend some time trying to expand EconTalk's audience. So, I think EconTalk does, I hope, do some good for the world, but I would think EconTalk could do more good if it reached more people. So I asked the audience to help me--you out there listening--think about ways you might help me expand EconTalk's reach; and I want to let, Will, I want to let you have the last word. Either you can say something about EconTalk or you can encourage people in ways to think about effective altruism. Guest: Yeah, well, like I say, there's many ways to do good. Directly is one, but as I say, your ability to advocate and promote important causes is another; and if you can use EconTalk as a platform for doing so, and then reach as many people as you can by doing so, then that's a very promising way to do good. Russ: I forgot to mention--I am worried that, given it's what I already do, that I might be fooling myself. So, I'm aware of that. I am--[?] I've got a confirmation bias problem here. Guest: You want to be constantly self-critical about the risks of being biased, deluding yourself. And one thing you should certainly think about is how you are spending your money, as well. As you said, you're already in the 1%, and could you do more by donating more donating what you do have more effectively, a very clear way of doing good. And so for everyone listening, if you are feeling like, 'Okay, I'm feeling kind of inspired. I think I can use my life to make a much bigger impact than I thought possible; let's do it,' then there's I think a few things to do. One, the simplest thing to get yourself in the mood of doing good I think is to start donating regularly. To begin with it doesn't really matter how much that is. But it gets you in the habit of making a big impact. If you want to know where the best charities today are, go to GiveWell.org, it's standing charity recommendations, including many of the charities we've talked about. If you are thinking of going further and making a commitment, GivingWhatWeCan.org, one of the nonprofits I co-founded. It's a society of people who are giving at least 10% of their income. And if you feel like that's too much at the moment, you can do a try-out giving, where you gradually increase your donations up until that point. If you are thinking you want to do good with your time, perhaps you've got a clear decision coming up, then 80,000Hours.org is another nonprofit I set up that's trying to be like Give Well but for choice of careers, so that you can work out what careers where you have the biggest impact. And we have like a quiz you can take that makes some recommendations of things for you to think about. And then finally you can just join the Effective Altruism community. So, there's a Facebook group, an Effective Altruists' Facebook group; and then also at EffectiveAltruism.org you can sign up for a mailing list and find out about any local groups that there are. Because people with shared interests and local groups all around the country tend to get together, have meet-ups, go to talks, and discuss some of these ideas. And in general what you should think is just this is going to be a potential to have a huge impact in the world: What are the first steps I can take that will ensure I take further steps in the future? And just think of it as just this really exciting opportunity. If you were someone who could run into a burning building and save the child's life, you'd feel like a hero. You'd feel very good about yourself. You have the opportunity to do that every year, every few years, if you just choose to use your time and money wisely. And I think that's a really exciting thing to be able to do.


COMMENTS (21 to date)
Javier Hidalgo writes:

I'm very sympathetic to effective altruism and MacAskill's book, which I enjoyed and learned from. But I think he overstates the case for aid.

Take the eradication of smallpox. MacAskill thinks that the eradication of smallpox helps vindicate foreign aid. But most of the money that was used to fight smallpox was put forward by developing countries. Foreign aid made up only about a third of the funds to eradicate smallpox. Maybe this foreign aid made a decisive difference. But I don't think we know that. For more on this, see Mark Ravaillion's paper "On the Role of Foreign Aid in the Great Escape."

There is a striking contrast between MacAskill's emphasis on using rigorous evidence on the micro-level, like using RTCs to test deworming, cash, etc, and the lack of evidence on the aggregate effects of aid. It is true that some RTCs detect big positive effects from interventions, like deworming. But the macro-level studies often don't find big correlations between aid and good health outcomes. See the Center for Global Development's literature review on aid here. The relationship between aid and health outcomes is modest and some studies can't find one. It could be that aid has complex effects, both negative and positive, that RTC can't fully detect because they extend beyond the experiments.

Furthermore, some relatively rigorous evidence on the macro-level effects of aid are worrisome. See Nancy Qian's literature review on the state of the art research. The few studies that employ "natural" experiments on aid are often negative--they find that aid makes things worse in some way by, for instance, increasing civil conflict. And, as Qian notes, we lack evidence from natural experiments on the aggregate effects of aid on infant mortality and other indicators.

I support effective altruism and I'm grateful for MacAskill's work. But I suspect that we know less about how to make the world a better place through aid than MacAskill suggests.

John Biddle writes:

I thought you might appreciate this quote from Robert Heinlein:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”

Also, Bjorn Lomborg (of Skeptical Environmentalist fame) in his book Cool It, takes a similar approach to Mr MacAskill, focusing on where efforts can do the most good, not where they make us feel the best by doing them. He'd be a good guest for your Podcast.

dan writes:

Russ,
Good discussion!
I just want to comment on the concept of "salvation" used extensively by the guest. Seeing that inevitably all humans die, "salvation" is the wrong concept for what altruism achieves. "Life extension" is accurate, but uninspiring, so perhaps you can challenge your guests to use better suited alternatives like "life extension" or "premature death avoidance" or "sickness reduction" or whatever suits the moment.

This is not just a hair splitting arguments since, as I hope you know, the choice of words matters and could lead to aberrant experiments like "would you kill this guy to "save" these other people?"

Allen Hutson writes:

As important as I think this subject is, and as much as I enjoyed the episode (and as off base as I may be), I think that MacAskill’s approach is a little off base. A little off base (not completely) because it doesn’t help address the central issue in making giving more effective. At first blush it is obvious why Jay-z and the first lady were interested in PlayPump. As was pointed out, it was a sexy project that couldn’t sound anymore feel-good, if I were presented the opportunity, I probably would have too.

The question has to be, “what can be done to avoid the issue of scarce resources being directed to avoidable disasters? How can we ensure donors and organizations use their resources to achieve better results?” MacAskill’s answer is basically education and better tactics to achieve the aim of effective altruism. Putting this book in Jay-z’s hands might help, but it won’t deal with the underlying issue. I have a feeling that this is an issue not of education, but instead of the structure of philanthropy.

This is effectively the same issue that Bryan Caplan describes in The Myth of the Rational Voter. Donor and organizations are the voters in this story and the ends they hope to have achieved are good policies. Caplan argues that because votes are effectively free – there is no cost to voting for a particular policy – voters don’t search for politicians who stand for good policies, instead voting for those who propose policies that look and sound nice.

In this situation donors and organizations – by the nature of having aims that aren’t profit – don’t have a clear connection to the ends that need to be achieved, leaving them open to engage in activities that “feel good” but frequently leave low hanging fruit available, and are frequently misguided.

For profit institutions attract revenue by offering products that consumers consider value, and consumers enjoy the benefits of those products. On the other hand nonprofits attract revenues by promising to create benefits within communities by engaging in activities, they generate value for communities / individuals / etc by engaging in those activities.

There is a commonly used “proverb” in international economics. Basically an entrepreneur sells wheat to consumers cheaper than his competitors after building a facility on a river or port. Ultimately his consumers learn about the value of international trade when they learn that the entrepreneur is simply purchasing cheaper wheat from overseas. The “proverb” provides some context for understanding how international and domestic markets interact, but there is another issue that arises – consumers are naïve and agnostic to the methods that the producer employs to produce the product in question (generally). Entrepreneurs and investors build institutions that are designed to produce a profit – although profit is necessary, it is not always a sufficient (see Russ’ book on Adam Smith). It is critical to understand that their ongoing operation is almost always based on their ability to produce cost effective products.

Nonprofits are – counterintuitively – far more constrained. In the same way that potential public office holders aren’t free pursue policies that economists and experts believe are good because voters aren’t constrained by their vote having a cost, donors can’t focus on the ultimate value of their donation because – in short, they are distracted. They care about methods (production processes); are confused about what a valuable aim is; and have no incentive to care about opportunity costs. Entrepreneurs in the private sector can change production process altogether to generate value, their valuation proposition is not changed by process changes. Entrepreneurs in the nonprofit sector do not have the same freedom.

I do think that this episode was valuable, and I do believe that MacAskill’s ideas are valuable. Nonetheless, I think that doing good has bigger problems.

Simon writes:

Russ,

You seemed to me to imply here you have a good opinion of the ability of even poor people to decide for themselves what is in their best interests. In talking about the concept of giving directly, your response seemed quite positive subject to the avoidance of perverse incentives. I'm largely in agreement. However, this seems on the surface to conflict with a view I'd previously heard you espouse during an Intelligence Squared debate, in which my interpretation of one point you made was that people on the minimum wage didn't necessarily have the ability to discern whether or not allowing their wages to be artificially inflated was ultimately beneficial, or harmful. This was your explanation for why perhaps poor people tended to advocate for a minimum wage despite your insistence that it harmed them by lowering job opportunities.

I'm presumably missing an additional aspect to your opinions on the subject of the usefulness of individual autonomy and freedom, or perhaps simply misinterpreting what you are in favour of. If you'd spare the time, I'd love to hear your opinion.

Michael Byrnes writes:

@Simon

It seems like you are sort of comparing apples and oranges. I didn't hear Russ on Intellgence Squared, but from your description he was arguing about why people (and I don't think this would apply only to poor people) might support a minimum wage despite its potential disemployment effects. I don't think he would dispute the claim that workers who receive a higher wage would know best what to do with that extra money.

In this case, though charites like Give Directly, there are no obvious negative effects - there's no case that giving the poorest small amounts of money harms others.

Mark Crankshaw writes:
And I think that gives a strong argument for us to think that the resources we earn are not really our own and we should redistribute them.

Intuitively I am a big anti-Leftie and the only way I would attend a Socialist Workers Party meeting would be to heckle in the most mean-spirited way I am capable of.

The argument above is packed so full of leftist ideological assumptions (all of which I consider false) that it is almost staggering it fits in one sentence. Other people in the past did something bad (exploitation), so I, rather than they, should take responsibility for their actions? Further, I, rather than they, should have my income forcibly confiscated as a result of their actions? And this confiscation should be administered (and hence benefit) others (who is this "we"?), who by this same logic, are as "guilty" as I? What?!!

No, no, no, no. I am responsible only for my own actions. The resources I earn are mine (they belong to no one else!). If, any only if, I am guilty of personally exploiting other people, then take me to court, and seek restitution there (and pay treble damages if your suit fails). Otherwise, the jump to "redistribution" is completely unjustified and unwarranted.

Unfortunately, I couldn't agree less with the constant hectoring to give more to charity. I have never given to any charities (of any kind) and this series of left-leaning ideologically slanted arguments doesn't exactly fill me with a sense that I should start now.

I understand that by "effective altruism" he's advocating "spend[ing] all this energy giving away money and trying to solve the world's problems through cooperative means--private, uncoerced, voluntary cooperative means". I am all for voluntary cooperation that is mutually beneficial to both parties--that's why I am trying to be nice. But, I simply don't understand where the appeal (or benefit) is to all of this.

I have no psychological predisposition to perform charitable acts (with heavy emphasis on acting) to make me feel good about myself, thank you. My mission in life has never been to "save the world". I spend as much time thinking about the worlds poorest people as worlds poorest think about me. Never.

While I may be in the top 1% of world income, I also live in the top 1% of costliest places to live (heck, the top 1% of places just in the US). That high income is completely dependent on living a very costly lifestyle, particularly with respect to housing. Leaving that part out of the equation kind of takes the the income statistic way out of context. With a mortgage, wife, 2 kids, car payments, and utility and food price growth easily outpacing income growth, the idea that I have lots of money to spare and that a 10% reduction in my present income would be easily absorb-able just isn't reality. It's absurd.

However, it seems to me that the "atruism" crowd always underplays the best thing one can do for others: that is, by acting responsibly, by working hard, and by not being a burden to others. If everyone did that diligently, a lot of the worlds problems would be instantly solved! This I have always done and will concentrate all of my efforts to keep doing. This explains to me why it is that the affluent young (college students, high school students) tend to be the most vocal proponents of altruism. They haven't yet cut their dependence on the Bank of Mommy and Daddy, they aren't paying for their own housing, food, or travel. Sure, if someone else footed the bill for an affluent lifestyle then maybe I'd feel I didn't earn it and would feel "guilty" too (and maybe attend Socialist Workers Party events). Maybe. But I never had that option. On the contrary, I feel what's mine is mine, I earned it the hard way, baby...

Simon writes:

@Michael

Thanks for taking the time to read and respond.

I was referring specifically to the idea of knowledge, i.e. what to do with the resources made available, knowing which policies are capable of harm and which help. Presumably, if giving directly is justified by enabling poor workers to decide how to invest and upskill themselves, then favouring such a policy implies a certain trust in the person's ability to know what is the best policy for themselves. That seemed to be Russ' opinion. I could use that same argument to (partly) justify a minimum wage. If they are in favour of a rise, then they have probably taken into account the costs (potential disemployment) and benefits (better wages) as did the person receiving a grant when deciding to buy cattle or a tin roof.

It's true one concerns what to do with the money, and the other concerns whether or not more money is received, each with different external effects, but both seem to imply different conceptions of the ability of these people to read their own situation.

Just a note that this only concerns that particular aspect of Russ' minimum wage argument, nothing else, so in this case I do mean particularly poor people. I'm meaning the special knowledge benefit concerning one's own circumstances.

Kevin writes:

Thanks for a very interesting podcast.

Given all the money we have spent on poor countries and the uncertainties of a benefit, as described by others, I am hesitant to spend more. It is not clear anything is gained long term despite the fact that we can reason why it should be.

One of the problems identified is information. Although the marginal impact is much smaller, if I help someone I know in my community or give money to local organizations I have the satisfaction of knowing local knowledge will be employed to solve personal problems. Additionally when I give to people I know, instead of diffuse global organizations, I can participate in the development of virtue - for me sacrifice and for the receiver gratitude. Charity made global seems to lose these virtues and as someone who believes there is more than this life and more important things than daily bread, I am loathe to divorce charity from these virtues by depersonalizing it. Despite this I try to give some internationally because the marginal gain could potentially be much higher. Or it could be zero because of uncertainty while because of local knowledge my small local marginal gain is often realized.

After all my taxes are considered, about 40-45% of my income is taxed in the US to go to policies that Mr. MacAskill no doubt supports for our poor. So, in some ways nearly half of my income already goes to "help" someone. There is a real crowding out effect for charity. Mr. MacAskill might be better off by arguing the US and European countries should ignore their poor, or cut welfare benefits to our poor by 10% and transfer that to Africa for a much better marginal gain instead of trying to get more money from me. I also face significantly higher costs than those in the world bottom 99% as Mr. Crankshaw has detailed. When we ask someone to voluntary give up half their pay to double the "happiness" (I remain very skeptical of this formulation especially after the podcast Dr. Roberts did on this) what we are really saying is "Give up half of you NET income for the small and uncertain probability of at maximum doubling the happiness of about 100 people and at the far more likely minimum just wasting the money."

Mr. MacAskill clearly has a passion for those suffering in the world and I too feel a desire to help. It just continues to be unclear to me that even with enough science the net effect of sending money to people thousands of miles away is beneficial for them and of lesser concern me. But if we are going to be spending the money, better to try and do it effectively.

Martin Dertz writes:

@Mark
“Why would you enjoy treating your ideological or religious enemies as evil? Or even misguided--is also disturbing way to treat another human being. They're smart, thoughtful, nice--most of them, not all of them. Some of them are monsters, you're right; but a lot of them are just like you!”-R.Roberts, Arnold Kling episode – you should check it out!

"The resources we earn are not really our own" doesn't (to me, at least) imply paying for the wrongs of past people. I see it as a logical conclusion of the probabilistic nature of reality. There's no assumption of exploitation, only of luck and uncertainty. I agree money shouldn't be confiscated / redistributed forcibly by the state to pay for past wrongs, but I do believe that for those who have been unlucky – either in outcomes within their life or by birth – we who have been fortunate should help. Not necessarily because there’s a moral imperative (although I believe there is), but also because in makes the economic system healthier (not to mention the uncertainty of your own position in the global 1%, and that you may one day be in need).

Also, why do you think the statement is leftist? Do you believe all moral/ethical principles are either leftist or rightist?

@Kevin
I think you make a really good point re: government crowding out charitable investments. I wish it had been explored further in the podcast. Re: your statement ‘what we are really saying is "Give up half of you NET income for the small and uncertain probability of at maximum doubling the happiness of about 100 people and at the far more likely minimum just wasting the money." If you’re curious, the claim is based (I assume) on a National Bureau of Economic Research study on the correlation between reported life satisfaction and income, which is log-linear (http://www.nber.org/papers/w18992?utm_campaign=ntw&utm_medium=email&utm_source=ntw). If the study is to be believed - big if, but I find it convincing (partly b/c it confirms my intuitions on money/happiness to be sure) – then it is ‘if you can give up half your income and use it to double the incomes of 100 people, then there is a high probability the happiness of each of those 100 people will increase by the same amount yours decreased; overall there is a 99-fold increase in expected value of happiness.’. Also, there is no obvious upper bound to the happiness the group would get - doubling is not used as a limit/maximum.

Mark Crankshaw writes:

@Martin Dertz

Why would you enjoy treating your ideological or religious enemies as evil? Or even misguided--is also disturbing way to treat another human being.

I actually did listen to the Kling podcast and very recently. However, you have made several incorrect assumptions. I do not enjoy treating ideological enemies as "evil" or even "misguided". In fact, I do not consider those on the ideological left "evil" or even "misguided". I am still led, however, to the same conclusions in my post above.

To the extent they are "enemies", they are so in much the same way as an opponent in an athletic endeavor (football, basketball, soccer, take your pick). In any athletic contest, you and your opponent do not share a common goal but rather are engaged in a zero-sum conflict. When I play, I want to win, play very well and stop from my opponent from winning. In certain contexts, I may very well wish to frustrate and even humiliate my opponent. My opponent, likewise, also wants to win, play well, and perhaps wants to frustrate or humiliate me. Every night you can watch the NFL, NBA, the EPL, La Liga, etc. and observe athletes who do not necessarily view their opponents as "evil" and athletes that certainly do not view their opponents as "misguided" for opposing them. However, each athletic contest involves a conflict of interest, and the athletic contest "resolves" this conflict, and often this resolution is to the dissatisfaction of one or more parties.

I need not believe that my political and ideological opponents are "evil" or "misguided" to firmly believe that we have a severe conflict of interest and that their "political success" will result in direct harm to me. Perhaps their political goal, as they imagine it, is in their interest. Perhaps the opposition QB would like to throw 5 touchdown passes. I couldn't care less. All that matters to me is my assessment of their policy and my assessment of its potential effect on me. I don't doubt that every opponent I faced on the football field wanted to win, again, that didn't make them evil or misguided. But with every opponent I ever faced out there, their winning was not in my interest.

I don't doubt that most leftists believe their policies would "make the world a better place". So what? The bottom line for me is that I believe that their policies would not "make the world a better place" for me but would do me great harm. So if they want to enter the field of political play, I want them to be hit as hard as legally allowable and I want them to take the greatest possible loss. After all, they'd do the same to me. On the football field, I hit hard and got hit hard. There was nothing evil or misguided about it.

I see it as a logical conclusion of the probabilistic nature of reality. There's no assumption of exploitation, only of luck and uncertainty. I agree money shouldn't be confiscated / redistributed forcibly by the state to pay for past wrongs, but I do believe that for those who have been unlucky – either in outcomes within their life or by birth – we who have been fortunate should help. Not necessarily because there’s a moral imperative (although I believe there is), but also because in makes the economic system healthier (not to mention the uncertainty of your own position in the global 1%, and that you may one day be in need).

You may hold any philosophical position of your choosing. The reason politics becomes so adversarial so quickly is that others are not logically or morally compelled to follow suit.

I also believe there is luck and uncertainty in life--sure, it's a factor, but only one of many. There is also hard work, ability, judicious planning, sheer determination and many, many others. Therefore, I resoundingly reject your ideological contention that I have been only "fortunate" and therefore have a moral imperative to help those who (only) aren't. Being "fortunate" is a necessary condition for economic success, but it is not sufficient. All that fortune simply goes to waste if it is not coupled with other positive attributes. John Rawls is entitled to his opinion too, and I am entitled to reject his moral framework in its entirety.

I do not, however, reject your notion that, were economic aid (foreign or domestic) to result in the improvement the lot of others, that this would be a good thing. If that improvement were, in turn, to improve the conditions of everyone (myself included)--make the poor richer then everyone gets richer-- if that were doable, sign me up. Altruism, on the other-hand, as I understand it, isn't that. Altruism, in my view, and as commonly practiced in the form of foreign aid or domestic welfare programs, is the 100% chance that I do worse, so that there is a 1 in a billion chance that the poor will do better, and a 100% chance that some political chiseler will pocket the difference.

As to uncertainty, what I am willing to risk is equal to my assessment of the probability of me falling out of the top 1% and being "in need". As close to zip as you can get. (Is a penny cut in half still legal tender?). No doubt this fear, or lack of it, colors ones' ideological predisposition. However, I don't live life in the fear of being "in need"; likewise, I do not live life with the expectation that if I am "in need" that help will be forthcoming. I have relentlessly done everything I can to make sure I never, ever have to rely on "others". It's usually not bad luck that leads successful people to ruin. I find that argument unpersuasive.

Also, why do you think the statement is leftist? Do you believe all moral/ethical principles are either leftist or rightist?

William MacAskill admits to "intuitively being a Big Lefty", though he needn't have bothered. If it looks like a duck, sounds like a duck, and quacks like a duck, it's a duck. The Left has long used shaky moral arguments to justify wealth redistribution to meet their own ends, much like quarterbacks have long use the forward pass to score touchdowns. Doesn't make Lefties (or QB's) evil or misguided, that just how they "win" and taxpayers (or defensive backs) "lose".

Are all moral/ethical principles leftist or rightist? I am not altogether sure what "rightist" principles would even constitute, so no. In my mind, the left is pretty well defined (collectivist, statist, redistributionist, etc.), as a good rule of thumb, whatever they are is "intuitively" what I am not. I simply can't see out of the oppressor/oppressed lens (as described by Kling)--a complete blur to me. The political "right" could be (and often is) defined in very uncertain and incoherent terms. All I can say is with the "freedom/liberty" lens I can see 20/20. What eyewear do you use?

John Price writes:

It seems that one could take the MacAskill's argument even further. If it is better for the global one percent to give its money than its labour, then it seems that it would be better if the global one percent used its access to capital markets to invest its money for future charity rather than present charity. After all, after years of compounded returns, one could benefit many more people in this way. I do not necessarily agree with this line of reasoning, rather I am simply saying that it seems to follow from MacAskill's argument.

Mark writes:

If free market capitalism has been the greatest force known to man to reduce poverty and lift living standards then why would taking an arbitrary 10% from free market activities like savings, investment & consumption and directing them less inefficiently to direct aid make mankind better off?

Money given as direct aid has a definite benefit to the recipients but is that total benefit less than the aggregate dispersed benefit that money achieves being invested in capitalistic activities?

The human being in me believes giving to charity is a good thing, the economist in me wonders about costs, benefits and incentives.

Ness Blackbird writes:

Thanks for the thought-provoking podcast. I've learned a lot.

In response, specifically, to your note that you'd like to increase the listenership of Econtalk, I believe there may be some low-hanging fruit there, in terms of how interviews are conducted.

People I've talked to have often noted that your tone is arrogant, and insist that they won't listen to your podcast irrespective of their interest in the material.

So I think you should consider trying to sound more like a conventional host such as Terry Gross: primarily, I think this would mean presenting your own ideas less often, less assertively, and (most importantly) in a more humble tone.

This is obviously easier said than done. An arrogant tone is a consequence of a lifetime of habit (I should know). These things are difficult to change. The only way to sound like a good listener is to be one.

I don't mean to be rude -- though I'm sure I am. But there you have it. I just thought you might hear it more easily from another fairly arrogant guy.

Greg G writes:

Ness,

I would be curious to hear some examples of cases where you though Russ took an arrogant tone. I often disagree with him on particular issues but I find his tone to be not at all arrogant. He does often take a clear point of view but he is always fair and respectful to guests in my opinion. And he freely and often admits to being as subject to confirmation bias as anyone else.

I have been listening to every episode for the last four years and have gone back and listened to most of the earlier ones too. In all these many hours I have only heard two comments from him that struck me as arrogant. I think that is a pretty great record when you have a strong point of view and are dealing with controversial issues on a regular basis.

Avoiding taking a point of view might gain him some listeners but it would cost him others. I think the best podcasts are the ones where there is a lot of give and take and respectful debate.

Allen Hutson writes:

I'll have to disagree with Ness as well. I certainly appreciate the perspective, but I hope there isn't a change in tone.

Some may find it rude or arrogant, I certainly don't.

Moreover, a large piece of the value of the podcast is Russ' ability to push back on guests on substance. I listen to Terry Gross some, and frankly, I think that you learn the details or "facts" that the guest wants you to learn. "10% of x is y...we know a, b, and c...". Not that this isn't valuable (by the way, same commentary for Diane Rehm), but it is different.

Your guests had a full book or article to explain their position, and they have Terry and Diane to comment on it. Go ahead and push back.

steve hardy writes:

I am glad that Mr. MacAskill finally gave some credit to free markets, capitalism and property rights for reducing poverty at the end of his talk. I believe altruism had little to do with the 500 million Chinese lifted out of poverty over the past few decades. Giving money to poor people or providing them with bed nets (malaria is caused by poverty not mosquitos) is admirable but I think a much better bang for the charitable buck can be achieved by donating money to organizations that are promoting institutions that will create property rights, rule of law and personal liberty which will do a lot more to reduce poverty . For instance the Atlas Network, a nonprofit 501C3 supported by private donations helps groups set up free market think tanks in over 80 countries.

Jerm writes:

Maybe "arrogance" isn't the right word. "Disdain"? "Snark"? It's definitely something. EconTalk definitely has a unique tone among economics podcasts.

It's not like Planet Money (the NPR podcast about economics). That podcast has a tone of enthusiasm and self-discovery...like a dog in a park. They bumble around and get so excited over the most simple things. But it's genuine and charming, so it's easy to be forgiving of their errors (of which there are so many).

It's not like Freakonomics. That podcast has a tone of manufactured controversy...like an infomercial (or Buzzfeed). They tease you with claims of shocking revelations, then unspool something rather plain (maybe with a little bit of spin). I know I probably agree with what they have to say, but I don't bother. That guy sounds so smug...it's almost as if PTBarnum rubbed it in a little after swindling you out of a nickel.

EconTalk is definitely professorial, and that's gonna turn some people off. But it's also unedited, which means that it's not just the most charismatic clips like the others (even the Oprah show was edited...it makes for a much more watchable show). In that sense, it's a lot like AM talk radio. There are stretches of genuine discovery and delight, but it takes a lot of exposition (and hyperbolic straw men) to get there sometimes.

I'm surprised that Ness knows people who have listened to EconTalk before. Even in my university community, very few know that this podcast exists.

Hans writes:

Russ mentioned that he was looking for ideas on increasing the size of the Econtalk audience.

How about making it a show that is suitable for airplay on FM radio stations as well as a podcast? Econtalk would need to be a consistent length(less than an hour, perhaps as long as 58 minutes.) and there would a few other changes as well (intro/outro, for instance). Airtime can be purchased on many American FM stations, especially on the weekends.

Talk to the folks at AudioNow about getting a phone number so that people could listen to the show on demand from their phones.

Todd Kreider writes:

Do not even mention Russ Roberts and Terry Gross in the same sentence!

Anyone who thinks Roberts has an arrogant tone hasn't listened to enough economists. He's pretty far at the opposite end from the 200+ podcasts I've heard.

My small complaint is that there are times he doesn't push back quite enough.

I also suspect that many non-economists who might want to listen are only comfortable with economists who share their views. "If it isn't Paul Krugman than he or she must be wrong."

Robert Swan writes:

If you asked me, I'd say the motif of EconTalk, underlying many, many of its subjects, is "it's more complicated than you'd think -- it might even be more complicated than you or I could understand". I suppose this world view might be construed as "arrogance" by someone who maintains that he or she does understand. Seems to me that the arrogance is on the other foot (as it were). Perhaps the charge should be that our host is possessed of overweening humility.

As to increasing numbers of subscribers, it might be a case of "be careful what you wish for". At the moment the comments area is readable and worth reading -- both boosters and detractors have interesting things to say -- larger numbers might dilute this. And what would it buy you? Do you want enough clout to invite the US President (or the Australian Prime Minister of the week)? Such guests would certainly change your audience.

But aren't you happy with us?

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