I’m new to EA, and my experience talking to people about it has been different than yours Gleb: They’re very pragmatic, and ask an important question I don’t have a good answer to.
Here’s how my conversations usually go:
I explain EA/Peter Singer
THEM...”yeah, but the ECONOMY! It would be bad for everyone because the world economy is driven by consumption. If we stop that it won’t work.”
ME: “when people get richer, they have more money to spend to buy things, which provides a larger market for the first world, and thus could improve the world economy, or at least dampen the effects of less consumption in the rich world.”
THEM: “What about the people now who would lose their jobs? Like the factory worker who makes Ferraris, or starbucks coffee barista? If there were less frivolous spending, many of those people would be out of work.”
At this point I get stuck. They make a fair point don’t they? If many people gave large amounts of their income to charity there would be some bad effects, undoubtedly—probably on the economy in the first world, at least temporarily, and on many people’s livelihood in the first world. I have no doubt those negative effects would be much smaller than the positive effects that charity would have, but I don’t have any proof.
Am I missing some logical counter-argument I could make here? Has an economist taken a stab at estimating the immediate and longer term effect on the world economy, of a segment or the entire population of the first world giving large parts of their income to charity?
If many people gave large amounts of their income to charity there would be some bad effects, undoubtedly—probably on the economy in the first world, at least temporarily, and on many people’s livelihood in the first world.
The phrase you are looking for in the economics literature is ‘pecuniary externality’. In general there are good reasons not to care about them.
Not sure about economist, but you can always make the counter-argument that spending on charity will get the economic wheels moving as well, and in a much better direction. For example, spending on AMF would cause production of malaria nets, and then shipping them overseas, and then the malaria net would cause a mosquito to not bite a productive worker, and that worker would not be sick and lose work time, etc.
I’m new to EA, and my experience talking to people about it has been different than yours Gleb: They’re very pragmatic, and ask an important question I don’t have a good answer to.
Here’s how my conversations usually go:
I explain EA/Peter Singer THEM...”yeah, but the ECONOMY! It would be bad for everyone because the world economy is driven by consumption. If we stop that it won’t work.” ME: “when people get richer, they have more money to spend to buy things, which provides a larger market for the first world, and thus could improve the world economy, or at least dampen the effects of less consumption in the rich world.” THEM: “What about the people now who would lose their jobs? Like the factory worker who makes Ferraris, or starbucks coffee barista? If there were less frivolous spending, many of those people would be out of work.” At this point I get stuck. They make a fair point don’t they? If many people gave large amounts of their income to charity there would be some bad effects, undoubtedly—probably on the economy in the first world, at least temporarily, and on many people’s livelihood in the first world. I have no doubt those negative effects would be much smaller than the positive effects that charity would have, but I don’t have any proof.
Am I missing some logical counter-argument I could make here? Has an economist taken a stab at estimating the immediate and longer term effect on the world economy, of a segment or the entire population of the first world giving large parts of their income to charity?
The phrase you are looking for in the economics literature is ‘pecuniary externality’. In general there are good reasons not to care about them.
Not sure about economist, but you can always make the counter-argument that spending on charity will get the economic wheels moving as well, and in a much better direction. For example, spending on AMF would cause production of malaria nets, and then shipping them overseas, and then the malaria net would cause a mosquito to not bite a productive worker, and that worker would not be sick and lose work time, etc.
Thanks Gleb. Any suggestions for where else I could post/who else I could ask? I’m sure someone’s got to have put some numbers together!
Thanks! Ryan
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