It seems like recently (say, the last 20 years) inequality has been rising. (Editing, from comments)
Right now, the top 0.1% of wealthy people in the world are holding on to a very large amount of capital.
(I think this is connected to the fact that certain kinds of inequality have increased in the last several years, but I realize now my specific crossed-out sentence above led to a specific argument about inequality measures that I don’t think is very relevant to what I’m interested in here.)
On the whole, it seems like the wealthy donate incredibly little (a median of less than 10% of their wealth), and recently they’ve been good at keeping their money from getting taxed.
I don’t think that people are getting less moral, but I think it should be appreciated just how much power and wealth is in the hands of the ultra wealthy now, and how little of value they are doing with that.
Every so often I discuss this issue on Facebook or other places, and I’m often surprised by how much sympathy people in my network have for these billionaires (not the most altruistic few, but these people on the whole). I suspect that a lot of this comes partially from [experience responding to many mediocre claims from the far-left] and [living in an ecosystem where the wealthy class is able to subtly use their power to gain status from the intellectual class.]
The top 10 known billionaires have easily $1T now. I’d guess that all EA-related donations in the last 10 years have been less than around $10B. (GiveWell says they have helped move $2.4B). 10 years ago, I assumed that as word got out about effective giving, many more rich people would start doing that. At this point it’s looking less optimistic. I think the world has quite a bit more wealth, more key problems, and more understanding of how to deal with them then it ever had before, but still this hasn’t been enough to make much of a dent in effective donation spending.
At the same time, I think it would be a mistake to assume this area is intractable. While it might not have improved much, in fairness, I think there was little dedicated and smart effort to improve it. I am very familiar with programs like The Giving Pledge and Founders Pledge. While these are positive, I suspect they absorb limited total funding (<$30M/yr, for instance.) They also follow one particular highly-cooperative strategy. I think most people working in this area are in positions where they need to be highly sympathetic to a lot of these people, which means I think that there’s a gap of more cynical or confrontational thinking.
I’d be curious to see the exploration of a wide variety of ideas here.
In theory, if we could move from these people donating say 3% of their wealth, to say 20%, I suspect that could unlock enormous global wins. Dramatically more than anything EA has achieved so far. It doesn’t even have to go to particularly effective places—even ineffective efforts could add up, if enough money is thrown at them.
Of course, this would have to be done gracefully. It’s easy to imagine a situation where the ultra-wealthy freak out and attack all of EA or similar. I see work to curtail factory farming as very analogous, and expect that a lot of EA work on that issue has broadly taken a sensible approach here.
> People in advanced economies stand to inherit around $6trn this year—about 10% of GDP, up from around 5% on average in a selection of rich countries during the middle of the 20th century. As a share of output, annual inheritance flows have doubled in France since the 1960s, and nearly trebled in Germany since the 1970s. Whether a young person can afford to buy a house and live in relative comfort is determined by inherited wealth nearly as much as it is by their own success at work. This shift has alarming economic and social consequences, because it imperils not just the meritocratic ideal, but capitalism itself.
> More wealth means more inheritance for baby-boomers to pass on. And because wealth is far more unequally distributed than income, a new inheritocracy is being born.
I think you are usually an insightful, reasonable, and truthful commenter on the forum and off the forum. That said, I think there are a few errors and important facts on this topic that are omitted.
This is the Gini coefficient (measurement of inequality) in the United States over the last 20 years (the country I expect you are talking about).
Here it is for several more countries where EAs predominantly live.
I don’t know why it “seems” like inequality is getting worse. I think a lot of that has to do with news coverage and such. But Gini coefficients are flat in most of the world over this time and going down (towards less inequality) in a few countries.
With respect to donations, I again want to point out that EAs themselves don’t donate very much money. This link is from 2019, I don’t have more recent data, but I expect that the trend has gone down significantly since then (i also think there is a good chance that these surveys overestimate donations) as there has been less emphasis on earning to give in the community. I understand that the majority of EAs aren’t billionaires, but they do often earn a significant amount of money, definitely enough to put them in the global top 5% and often the top 1%. The median EA donates something like 3%. These are people who self-identify as charitable.
On the power of the ultra-wealthy, I expect some of this is coming from Elon Musk’s power, but keep in mind that the majority of billionaires supported the candidate that lost the election. I’m not sure which measure would have billionaires being more powerful than previous years (unless of course that there are more of them since the world is getting richer + inflation).
In absolute terms, the income share of the top 1% in the US has been steadily rising since the 1980′s (although this is not true for countries like japan or sweden)
Your point about the top 1%’s rising income share uses pre-tax and transfers data, which can be misleading here because the discussion is specifically about how much income rich people actually control and can redirect towards their desired ends. Post-tax and transfer measures are more informative in this context since they directly reflect the resources individuals genuinely have available after taxes and redistribution. In other words, taxes and transfers matter because they substantially reduce the actual amount of wealth the rich can freely use, donate, or influence society with. Ignoring this gives a distorted picture of how much power or control rich people practically possess, which is central to the original discussion.
Other studies have notably not found meaningful increases in the top 1%’s income share after taxes and transfers are taken into account:
If the relative amount of wealth in the top 0.1% increases compared to the top 1%, it makes sense for EA to prioritize more the former (assuming constant relative tractability)
Using the data cited in your source (the Distributional Financial Accounts (DFA) provided by the Federal Reserve Board of Governors), it seems to me that the growth in the share of wealth held by the top 0.1% has not been very fast in the last 20 years—growing from around 10-11% to around 14% over that period. In my opinion, this is a significant, albeit rather unimportant trend relative to other social shifts in the last 20 years.
Moreover, this data does not include wealth held in social insurance programs (as I pointed out in another comment). If included, this would presumably decrease the magnitude of the trend seen in this plot, especially regarding the declining share of wealth held by the bottom 90%.
Thanks for replying with data. I think what matters for EA fundraising strategy is the relative share of wealth in the top 0.1% and in the top 1% (or maybe top 10%), it’s great that the share of wealth in the bottom 50% is increasing, but I don’t expect many there to be significant donors (with important but rare exceptions).
It’s also not clear to me how liquid is the wealth in social insurance programs, I don’t expect it to be a viable source of donations/influence/impact (but of course it’s great that more people are covered by insurance)
I also think that I was mistaken to mention “the last decades”, as “the last 5-10 years” seems a more relevant time frame for changes in EA strategy.
In my opinion the perception that inequality is increasing could also be due to relative comparisons between the top 1%-10% and the top 0.1%-0.01%, as the former becomes relatively less influential.
With respect to donations, I again want to point out that EAs themselves don’t donate very much money. This link is from 2019, I don’t have more recent data, but I expect that the trend has gone down significantly since then (i also think there is a good chance that these surveys overestimate donations) as there has been less emphasis on earning to give in the community.
It’s not clear to me how this is relevant for my argument. I could picture a few claims you could make from this.
From my point of view a whole bunch of EAs are doing direct work at low salaries, and several prominent EA-aligned billionaires do seem to significantly donate. I’d love to see higher donations from other E2G-ers, and imagine we have things to learn from paying more attention here (that could ideally translate to other groups).
I should have made my response clearer. I am suggesting a few things.
It seems that on a relative basis, billionaires are on average, about as or more charitable than EAs. I think this is a sign that EAs should be far more charitable.
I think the fact that even EAs don’t seem to donate very much suggests that it actually is very hard to get people to donate significant percentages of their income/wealth.
I think it’s going to be quite hard to convince others (in this case, billionaires) that they should be donating significant sums of their income/wealth when we don’t. It’s just too easy to dismiss people as hypocrites at first glance or that we don’t really believe it.
I think I just don’t see that most EAs are taking very low salaries. Many (most?) make comparable salaries to what they would make in industry, some more, some less. I don’t think EA salaries are particularly low in general.
I think I just don’t see that most EAs are taking very low salaries. Many (most?) make comparable salaries to what they would make in industry, some more, some less.
I’d be curious to later see data on this (not asking you in particular). It seems like a tough thing to measure—ideally we’d want a good idea of what people’s career trajectories are like before and after taking EA directions.
There’s definitely a bunch of anecdotal data around me to suggest that many people take lower salaries than they would otherwise. At the same time, it’s hard to do an apples to apples comparison, as the EA jobs look quite different to the other jobs. For example, it being more altruistic makes it more enjoyable to some people, the work can come with more agency, you can work around people you like more, it can be higher-status in your community, etc.
Yep. Kamala Harris significantly out-raised Trump in 2024. At the same time, in total, the donations seem pretty low to me. Kalama Harris raised and spent around $2B. But given the importance of this election, I think it could have well been safe for donors (ideally, across the income ladder) to donate a lot more. My rough impression is that the “Too Much Dark Money In Almonds” post is broadly correct, though maybe 2-4x off.
My point was never that billionaires cause active damage (though some definitely do). It was that most have the opportunity to cause a lot of good, and rarely do.
I’m a bit confused what you are arguing for. Do you want the wealthy to have even more influence on our politics? Is this just a supposition that Kamala Harris would have been better than Trump (I agree) and thus it would have been good for billionaires to donate for this reason?
I think that the question “Do you want the wealthy to have even more influence on our politics?” often maps to an ongoing debate that basically says, “the wealthy have a big influence over politics, and that looks like politics being more favorable to the very wealthy, for example with tax benefits and similar.”
I think that there are many things billionaires could do that are highly cooperative with society. For example, try to stop misinformation across the board, make sure that the government is actually run well (i.e. government department competence), etc.
Personally, I’m sympathetic to the idea that the MAGA movement is unusually high-risk, and should have been uniquely opposed. I think it could have been good, looking back, for Dustin Moskovitz and other similar donors, to have done more around the 2024 election.
Elon Musk is an incredibly frustrating example, as he’s a case of a billionaire who more arguably is doing things he actually believes will be good, but by doing so he’s causing a lot of damage. But I think he’s the exception rather than the rule for the wealthy (where some evidence is the fact that Kamala Harris raised more money).
I’m fairly skeptical that more money would really have done anything. I understand that politics should get more money than almonds. But I think that would mainly be done by giving money to both sides.
As an exercise, what should Kamala have spent more money on if she had it? She had name recognition. I don’t think anyone in the country was unsure about who she was. I think it’s really hard to come up with things more money would have done for the Democrats. The real thing you need to do is not purchasable with money; you need to make Democrat policies work better for people. I think Ezra Klein is onto something here really.
I’m pretty sure you’ve thought through the most obvious answers and they haven’t convinced you. The TLDR seems likely that we then just disagree on basics.
The 2024 election was somewhat close by historical standards. Eying it now, Trump won by 80k votes in Michigan, 120k in PA, 30k in WI, 40k in Nevada, 190k in Arizona, 115k in Georgia. To flip this election, I think MI/PA/WI could have been enough, so that means (80k+120k+30k) ~ 230k votes, or half if they could come from Republican votes.
A quick check suggests that advertising/outreach costs $100 to $1k to change votes in certain settings. Say it’s a lot more, so $10k. $10k * 230k = 2.3B, which still isn’t that much.
All that said, smarter donors would have started sooner and done more strategies. By the time Harris officially started running, it was already very late in the game.
I think potential donors are quite good at suggesting that absolutely everything they could do is useless, as they really don’t want to donate. (I imagine this is much less the case for you specifically, but I suspect it is the case of the argument as it’s often used)
At very least, for such a problem, I’d hope that donors would have spent say $10M to $100M this year getting more clarity on the question of tractability, and I don’t think much of this happened.
I think most wealthy donors on the Republican side would really prefer other Republican candidates over Trump. I think Trump is uniquely bad and disliked by many elites.
All this to say, when I don’t see even $5B spent to prevent say $1T-$10T+ of damage, I get pretty suspicious.
Even if it were the case that the results demonstrated that it was impossible ex-post, I think there were many possible worlds, ex-ante, where donations were more valuable. Generally I judge actions in terms of expectations ex-ante.
I know SBF was considering various strategies, potentially for $1B to $5B or so.
I agree that we should judge the actions ex ante. I also agree that (you are implying this I think) you have to start early and do good thinking in order to be effective here. 3 months before the election is too late. We had to get on this years before the election and the most effective solutions will look like getting good, sound, authentic, moderate candidates into the running or paying Biden $100mm to committ to not running.
I think if you went to say Reid Hoffman and Mark Cuban and others and said “it’s going to cost $10B, $10B and we flip this election.”, I think they would probably put in ~100mm (maybe less tbh) each, personally and go pretty gung-ho to get you to $10B.
The main problem is that I just don’t think you can turn money into votes through advertising past a point. I think you need to actually just pay people (which is illegal) and then you can flip votes. But for the vast majority of people, showing them more ads just does nothing. There’s even some evidence that it turns people off.
I’m not going to scrutinize your calculations. I think you realize that you don’t know in advance how many votes you need and where and that perhaps $1k/vote flip is on the margin and once you pick that fruit, it gets a lot harder and that you don’t have good accuracy on which votes you flip (even in a model where you do get to pay $1k/vote flip, most of the time that vote flip just happens in some random unimportant state). Thus, you basically got this advantage where the math looks great due to the importance of certain states due to the electoral college but that advantage gets effectively undone because you don’t get to perfectly target the states you want.
I would greatly expect that once everything is accounted for, donating EA money to politics won’t be cost effective but I like that you’re thinking about this and realize that it’s not going to be “EA money” predominantly.
I would greatly expect that once everything is accounted for, donating EA money to politics won’t be cost effective but I like that you’re thinking about this and realize that it’s not going to be “EA money” predominantly.
To be clear, I wasn’t advocating here to donate EA money. I think this would place this at a significantly higher bar. My point instead is that I think that the political issue is much more mainstream than EA causes, and would have been a clearer cause for many other people, including the top 0.1%.
Didn’t mean to imply you were, sorry if it came off that way.
Yup, I agree. But I think most people don’t care as much about political outcomes as they purport to, based on their actions. I think a lot of that is social desirability bias.
Thanks for calling me out on these points. (Also, thanks to titotal for providing other useful metrics!) I find your take insightful, though from these arguments, I still very much stay with my overall position.
I’ll respond in different comments, to help keep discussion manageable.
When I said “inequality is on the rise”, my statement wasn’t very precise. I find it interesting that the gini coefficient has stayed somewhat flat for the last 20 years in the US, though would note that:
1. It clearly rose significantly right before ~20 years ago. (Looking back, I think “20 years” wasn’t a well chosen number to start this post with)
2. It still did definitely rise, according to the official stats, in the last 20 years. I think the graph you provide is arguably deceiving because it sets the bottom of the y-axis at 0. Consider this instead. Here it looks like it did grow from 40 in 1995 to 41.3 in 2022. While this might seem small, I suspect it still adds up.
3. The US’s gini coefficient is quite bad compared to many other countries. Given it’s massive wealth, I think this is a sizable deal.
4. I found titotal’s post below quite interesting and relevant on this.
5. For my main argument, the more key relevant question is something like, “Is it true that there’s an incredible amount of wealth contained by the ultra-wealthy, or similar?” So while I find the discussion about inequality interesting (I especially enjoy the use of official data here), It’s arguably not particularly key. It could have well been a mistake for me to begin with that sentence—I was quickly thinking that people would “know what I meant”, but it seems to have gotten in the way of my point.
Surely it would be easier to just take the money from them, with taxes
No, but seriously—the U.S. presently has an extremely clear example of the excesses of oligarchy and low taxation. The idea that billionaires need less tax in order to invest more in the economy is laughable when Elon has used his excess money to essentially just enrich himself. I think it would be pretty high leverage to put money, time, and connections into this movement (if you can legally do so); and if the enemy is properly demarcated as oligarchy, it should result in reducing wealth inequality once its proponents take power.
Just flagging that I very much agree it would be good to tax them far more. However, I’m not sure how doable that is vs. other things. More thinking/research on options here seems good to me.
I think there’s generally been recognition by many academics and intellectuals that the rich get a highly overly-favorable deal, due to their capture of politics.
I think it’s tractable, right? The rich had a far greater hold over American politics in the early 1900s, and after financial devastation coupled with the threat of communism, the U.S. got the New Deal and a 90% marginal tax rate for 20 years following the war (well after the war effort had been fully paid off), during the most prosperous period in U.S. history. My sense of these changes is that widespread labour & political organisation threatened the government into a compromise in order to protect liberalism & capitalism from a near-total overthrow. It can be done.
But equally, that story suggests that things will probably have to get much worse before the political will is there to be activated. And there’s no guarantee that any money raised from taxation will be spent on the global poor!
My honest, loosely held opinion here is that EA/adjacent money could be used to build research & lobbying groups (rather than grassroots organising or direct political donations—too controversial and not EA’s strong suit), that would be ready for such a moment if/when it comes. They should be producing policy briefs and papers that, and possibly public-facing outputs, on the same level as the current YIMBY/abundance movement, who are far more developed than the redistributionists on these capabilities. When the backlash hits and taxes get raised, we should already have people well-placed to push for high redistribution on an international and non-speciesist level.
My honest, loosely held opinion here is that EA/adjacent money could be used to build research & lobbying groups (rather than grassroots organising or direct political donations—too controversial and not EA’s strong suit), that would be ready for such a moment if/when it comes.
This seems like a reasonable potential option to me. I think a lot of policy work works this way—you realize that there are only windows every so often, so a lot of work is around “getting ready.”
I’m not sure if we disagree on tractability for policy work here. What you said seems broadly reasonable to me.
Where I may disagree is that I’m not convinced that this strategy will be the best one, after a lot of investigation. I could imagine a lot of creative approaches, like, “do a targeted marketing campaign of a very certain kind, aimed at a specific subset of the ultra-wealthy.” Or maybe something like, “find existing charities/groups that are trying to do better things with Billionaires, and steer them to be more effective and to have better epistemics.”
I’d be excited if OP staff investigate this area more. I suspect they’ve done some early investigation around it. That said, perhaps it would be awkward with Dustin being a billionaire. (Personally I think this could be fine, but could imagine situations where it won’t be. I.E. maybe work here would get in the way of other OP work to convince ultra-wealthy people of other things.)
The School For Moral Ambition is hiring people to work on Tax Fairness!
There are also several orgs working on UHNWI advising/fundraising.
In theory, if we could move from these people donating say 3% of their wealth, to say 20%, I suspect that could unlock enormous global wins. Dramatically more than anything EA has achieved so far. [...] in fairness, I think there was little dedicated and smart effort to improve it.
20% would be absurd, but even moving the average from 3% to 3.5% would be more than anything EA has achieved so far. But there are millions of people with strong incentives to do so (including every single charity relying on donations), so it would be surprising for EA to have such a huge effect. I’m glad that many people are trying and I hope that they succeed.
Perhaps advocating for higher taxes on extreme luxury goods (e.g. yacht fleets and luxury private jets), if done in a tractable way, could get more universal traction.
10 years ago, I assumed that as word got out about effective giving, many more rich people would start doing that.
In terms of giving more, I don’t understand why you would assume that. I imagine that billionaires could always see that there was a huge number of people that they could have helped relatively cheaply. I wouldn’t expect changing the effectiveness by a couple of orders of magnitude to change things much. A typical GiveDirectly donor is closer to a typical GiveDirectly beneficiary than to a 10-billionaire, even on a log scale of income. In terms of giving more effectively, GiveWell recently commissioned a report to explore why other funders don’t fund opportunities GiveWell does, but they haven’t published it yet. (I imagine because of everything going on with USAID right now)
Small point, but I feel pretty uncomfortable with this statement, which I’ve heard before a bunch of times (in various forms):
Billionaires don’t hoard wealth, but they invest it in companies and lend it to governments.
I very much know that billionaires don’t keep their wealth as literal cash.
But I feel like it’s generally fairly clear that: 1. These Billionaires are doing this just because it’s in their best interest. Investing and lending is not done altruistically, it’s done for profit. If these actions wound up producing zero or partially-negative global impact, I suspect Billionaires would still take them. (Related, I expect that at least several of these companies they invest in are net-negative) 2. It would be dramatically better if these people would donate this money to decent causes instead.
I wouldn’t value “$1 that a Billionaire is investing in the stock market” as literally having zero value, but I think most of us would place it quite low.
I assume that as with many annoying debates, this is an issue of semantics. What does “hoarding” mean, or how would it be interpreted? I think it’s fair to classify a situation such as, “I’m going to keep a bunch of money for myself and try to do the conventional thing of maximizing it, which now means putting it in the stock market” as “hoarding”, but I realize others might prefer other terminology.
I think a main argument related to that perspective is that you shouldn’t tax wealth but you should tax consumption (holding billions in stocks and bonds has positive externalities, buying a yacht fleet has negative externalities)
I obviously don’t agree with it, so I’m likely not presenting the strongest version of the arguments, but you can see an example of people holding this view in the twitter screenshot above, and I think it’s not uncommon
Richest 1% wealth share, US (admittedly, this has been flat for the last 20 years, but you can see the trend since 1980):
Pre-tax income shares, US:
A 3–4% change for most income categories isn’t anything to sneeze at (even if this is pre-tax).
You can explore the WID data through OWID to see the effect for other countries; it’s less pronounced for many but the broad trend in high-income neoliberalised countries is similar (as you’d expect to happen with lower taxation).
It’s worth noting that much of the reported increase in wealth inequality since 1989 seems to be explained by the rising share of wealth held via social insurance programs. Catherine et al. notes,
Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper shows that top wealth shares have not changed much over the last three decades when Social Security is properly accounted for. This is because Social Security wealth increased substantially from $7 trillion in 1989 to $39 trillion in 2019 and now represents 49% of the wealth of the bottom 90% of the wealth distribution. This finding is robust to potential changes to taxes and benefits in response to system financing concerns.
Since both ordinary private wealth and social insurance programs are similar in that they provide continuous streams of income to people, I think it’s likely misleading to suggest that wealth inequality has gone up meaningfully in recent decades in the United States—at least based on the reported datasets that presently exist.
Social insurance income streams are especially relevant in this context because they directly affect how much real economic power and control people have in practice. Ignoring social insurance thus exaggerates how concentrated real economic power actually is, since it underestimates the resources available to the broader population.
That said, inequality statistics are quite contentious in general given the lack of reliable data on the exact variables we care about, so I’m not highly confident in this picture. Ultimately I’m unsure whether inequality has remained roughly constant over the last few decades in the sense we should care about.
I could sympathize with the frustration, but I feel like I’m being attacked in a way that’s pretty unfair.
This question seems to presume that I have “one single source, that’s so good that I could just link to it and the debate would mostly be over.” That’s clearly not the way most people work. There’s a whole lot of points some people might assume is common knowledge within a certain community, to some extent, for the purpose of making other points, but that doesn’t come with one incredibly clean paper.
I find your other papers you linked in other comments interesting. That said, I don’t see them changing my main argument much.
I could sympathize with the frustration, but I feel like I’m being attacked in a way that’s pretty unfair.
Sorry if my previous comment came across as rude or harsh—that wasn’t my intention. I didn’t mean to attack you. I asked those questions to clarify your exact claim because I wanted to understand it fully and potentially challenge it depending on its interpretation. My intent was for constructive disagreement, not criticism of you personally.
I find your other papers you linked in other comments interesting. That said, I don’t see them changing my main argument much.
Your main argument started with and seemed to depend heavily on the idea that inequality has been increasing. If it turns out that this key assumption is literally incorrect, then it seems like that should significantly affect your argument.
Thanks. I tried adjusting the opening of this argument accordingly.
I don’t expect at the time that this point was that contentious within our community. I was naively thinking, “this point is broadly assumed to be true, and would help provide context for my main point.” I also believed/believe that it was true, but I’d agree with you that there are a lot of specific interpretations of it that wouldn’t be true.
It seems like there are interesting debates to be had here of “How should we think about inequality? What aspects of the world are become more or less equal? What measures are the most important?” I think this does get fairly far from my main topic, though at the same time, I’m happy to see that get discussed either here or elsewhere, as long as it could be understood that it’s very arguably a only-partially-related point.
From what I can tell, it very much seems the case that some important measures of inequality are both increasing and very high (the high is probably more important), and also that other important measures might be constant/low/decreasing.
I suspect that commenters here have much stronger feelings about “is inequality increasing?” than they do “does the top 0.1% of the global elite have an incredibly large amount of wealth?”
It seems like recently (say, the last 20 years) inequality has been rising. (Editing, from comments)Right now, the top 0.1% of wealthy people in the world are holding on to a very large amount of capital.
(I think this is connected to the fact that certain kinds of inequality have increased in the last several years, but I realize now my specific crossed-out sentence above led to a specific argument about inequality measures that I don’t think is very relevant to what I’m interested in here.)
On the whole, it seems like the wealthy donate incredibly little (a median of less than 10% of their wealth), and recently they’ve been good at keeping their money from getting taxed.
I don’t think that people are getting less moral, but I think it should be appreciated just how much power and wealth is in the hands of the ultra wealthy now, and how little of value they are doing with that.
Every so often I discuss this issue on Facebook or other places, and I’m often surprised by how much sympathy people in my network have for these billionaires (not the most altruistic few, but these people on the whole). I suspect that a lot of this comes partially from [experience responding to many mediocre claims from the far-left] and [living in an ecosystem where the wealthy class is able to subtly use their power to gain status from the intellectual class.]
The top 10 known billionaires have easily $1T now. I’d guess that all EA-related donations in the last 10 years have been less than around $10B. (GiveWell says they have helped move $2.4B). 10 years ago, I assumed that as word got out about effective giving, many more rich people would start doing that. At this point it’s looking less optimistic. I think the world has quite a bit more wealth, more key problems, and more understanding of how to deal with them then it ever had before, but still this hasn’t been enough to make much of a dent in effective donation spending.
At the same time, I think it would be a mistake to assume this area is intractable. While it might not have improved much, in fairness, I think there was little dedicated and smart effort to improve it. I am very familiar with programs like The Giving Pledge and Founders Pledge. While these are positive, I suspect they absorb limited total funding (<$30M/yr, for instance.) They also follow one particular highly-cooperative strategy. I think most people working in this area are in positions where they need to be highly sympathetic to a lot of these people, which means I think that there’s a gap of more cynical or confrontational thinking.
I’d be curious to see the exploration of a wide variety of ideas here.
In theory, if we could move from these people donating say 3% of their wealth, to say 20%, I suspect that could unlock enormous global wins. Dramatically more than anything EA has achieved so far. It doesn’t even have to go to particularly effective places—even ineffective efforts could add up, if enough money is thrown at them.
Of course, this would have to be done gracefully. It’s easy to imagine a situation where the ultra-wealthy freak out and attack all of EA or similar. I see work to curtail factory farming as very analogous, and expect that a lot of EA work on that issue has broadly taken a sensible approach here.
From The Economist, on “The return of inheritocracy”
> People in advanced economies stand to inherit around $6trn this year—about 10% of GDP, up from around 5% on average in a selection of rich countries during the middle of the 20th century. As a share of output, annual inheritance flows have doubled in France since the 1960s, and nearly trebled in Germany since the 1970s. Whether a young person can afford to buy a house and live in relative comfort is determined by inherited wealth nearly as much as it is by their own success at work. This shift has alarming economic and social consequences, because it imperils not just the meritocratic ideal, but capitalism itself.
> More wealth means more inheritance for baby-boomers to pass on. And because wealth is far more unequally distributed than income, a new inheritocracy is being born.
I think you are usually an insightful, reasonable, and truthful commenter on the forum and off the forum. That said, I think there are a few errors and important facts on this topic that are omitted.
This is the Gini coefficient (measurement of inequality) in the United States over the last 20 years (the country I expect you are talking about).
Here it is for several more countries where EAs predominantly live.
I don’t know why it “seems” like inequality is getting worse. I think a lot of that has to do with news coverage and such. But Gini coefficients are flat in most of the world over this time and going down (towards less inequality) in a few countries.
With respect to donations, I again want to point out that EAs themselves don’t donate very much money. This link is from 2019, I don’t have more recent data, but I expect that the trend has gone down significantly since then (i also think there is a good chance that these surveys overestimate donations) as there has been less emphasis on earning to give in the community. I understand that the majority of EAs aren’t billionaires, but they do often earn a significant amount of money, definitely enough to put them in the global top 5% and often the top 1%. The median EA donates something like 3%. These are people who self-identify as charitable.
On the power of the ultra-wealthy, I expect some of this is coming from Elon Musk’s power, but keep in mind that the majority of billionaires supported the candidate that lost the election. I’m not sure which measure would have billionaires being more powerful than previous years (unless of course that there are more of them since the world is getting richer + inflation).
The gini coefficient “is more sensitive to changes around the middle of the distribution than to the top and the bottom”. When you are talking about the top billionaires, like Ozzie is, it’s not the correct metric to use:
In absolute terms, the income share of the top 1% in the US has been steadily rising since the 1980′s (although this is not true for countries like japan or sweden)
Your point about the top 1%’s rising income share uses pre-tax and transfers data, which can be misleading here because the discussion is specifically about how much income rich people actually control and can redirect towards their desired ends. Post-tax and transfer measures are more informative in this context since they directly reflect the resources individuals genuinely have available after taxes and redistribution. In other words, taxes and transfers matter because they substantially reduce the actual amount of wealth the rich can freely use, donate, or influence society with. Ignoring this gives a distorted picture of how much power or control rich people practically possess, which is central to the original discussion.
Other studies have notably not found meaningful increases in the top 1%’s income share after taxes and transfers are taken into account:
I think looking at the top 1% is a bit misleading, as the top 0.1% and the top 1% had very different growth rates in the last decades.
https://archive.is/MFFPq
If the relative amount of wealth in the top 0.1% increases compared to the top 1%, it makes sense for EA to prioritize more the former (assuming constant relative tractability)
Using the data cited in your source (the Distributional Financial Accounts (DFA) provided by the Federal Reserve Board of Governors), it seems to me that the growth in the share of wealth held by the top 0.1% has not been very fast in the last 20 years—growing from around 10-11% to around 14% over that period. In my opinion, this is a significant, albeit rather unimportant trend relative to other social shifts in the last 20 years.
Moreover, this data does not include wealth held in social insurance programs (as I pointed out in another comment). If included, this would presumably decrease the magnitude of the trend seen in this plot, especially regarding the declining share of wealth held by the bottom 90%.
Thanks for replying with data. I think what matters for EA fundraising strategy is the relative share of wealth in the top 0.1% and in the top 1% (or maybe top 10%), it’s great that the share of wealth in the bottom 50% is increasing, but I don’t expect many there to be significant donors (with important but rare exceptions).
It’s also not clear to me how liquid is the wealth in social insurance programs, I don’t expect it to be a viable source of donations/influence/impact (but of course it’s great that more people are covered by insurance)
I also think that I was mistaken to mention “the last decades”, as “the last 5-10 years” seems a more relevant time frame for changes in EA strategy.
In my opinion the perception that inequality is increasing could also be due to relative comparisons between the top 1%-10% and the top 0.1%-0.01%, as the former becomes relatively less influential.
It’s not clear to me how this is relevant for my argument. I could picture a few claims you could make from this.
From my point of view a whole bunch of EAs are doing direct work at low salaries, and several prominent EA-aligned billionaires do seem to significantly donate. I’d love to see higher donations from other E2G-ers, and imagine we have things to learn from paying more attention here (that could ideally translate to other groups).
I should have made my response clearer. I am suggesting a few things.
It seems that on a relative basis, billionaires are on average, about as or more charitable than EAs. I think this is a sign that EAs should be far more charitable.
I think the fact that even EAs don’t seem to donate very much suggests that it actually is very hard to get people to donate significant percentages of their income/wealth.
I think it’s going to be quite hard to convince others (in this case, billionaires) that they should be donating significant sums of their income/wealth when we don’t. It’s just too easy to dismiss people as hypocrites at first glance or that we don’t really believe it.
I think I just don’t see that most EAs are taking very low salaries. Many (most?) make comparable salaries to what they would make in industry, some more, some less. I don’t think EA salaries are particularly low in general.
Thanks for the clarification.
I’d be curious to later see data on this (not asking you in particular). It seems like a tough thing to measure—ideally we’d want a good idea of what people’s career trajectories are like before and after taking EA directions.
There’s definitely a bunch of anecdotal data around me to suggest that many people take lower salaries than they would otherwise. At the same time, it’s hard to do an apples to apples comparison, as the EA jobs look quite different to the other jobs. For example, it being more altruistic makes it more enjoyable to some people, the work can come with more agency, you can work around people you like more, it can be higher-status in your community, etc.
Yep. Kamala Harris significantly out-raised Trump in 2024. At the same time, in total, the donations seem pretty low to me. Kalama Harris raised and spent around $2B. But given the importance of this election, I think it could have well been safe for donors (ideally, across the income ladder) to donate a lot more. My rough impression is that the “Too Much Dark Money In Almonds” post is broadly correct, though maybe 2-4x off.
My point was never that billionaires cause active damage (though some definitely do). It was that most have the opportunity to cause a lot of good, and rarely do.
I’m a bit confused what you are arguing for. Do you want the wealthy to have even more influence on our politics? Is this just a supposition that Kamala Harris would have been better than Trump (I agree) and thus it would have been good for billionaires to donate for this reason?
I think that the question “Do you want the wealthy to have even more influence on our politics?” often maps to an ongoing debate that basically says, “the wealthy have a big influence over politics, and that looks like politics being more favorable to the very wealthy, for example with tax benefits and similar.”
I think that there are many things billionaires could do that are highly cooperative with society. For example, try to stop misinformation across the board, make sure that the government is actually run well (i.e. government department competence), etc.
Personally, I’m sympathetic to the idea that the MAGA movement is unusually high-risk, and should have been uniquely opposed. I think it could have been good, looking back, for Dustin Moskovitz and other similar donors, to have done more around the 2024 election.
Elon Musk is an incredibly frustrating example, as he’s a case of a billionaire who more arguably is doing things he actually believes will be good, but by doing so he’s causing a lot of damage. But I think he’s the exception rather than the rule for the wealthy (where some evidence is the fact that Kamala Harris raised more money).
I’m fairly skeptical that more money would really have done anything. I understand that politics should get more money than almonds. But I think that would mainly be done by giving money to both sides.
As an exercise, what should Kamala have spent more money on if she had it? She had name recognition. I don’t think anyone in the country was unsure about who she was. I think it’s really hard to come up with things more money would have done for the Democrats. The real thing you need to do is not purchasable with money; you need to make Democrat policies work better for people. I think Ezra Klein is onto something here really.
A few quick things:
This is a complex issue, I’m not an expert
I’m pretty sure you’ve thought through the most obvious answers and they haven’t convinced you. The TLDR seems likely that we then just disagree on basics.
The 2024 election was somewhat close by historical standards. Eying it now, Trump won by 80k votes in Michigan, 120k in PA, 30k in WI, 40k in Nevada, 190k in Arizona, 115k in Georgia. To flip this election, I think MI/PA/WI could have been enough, so that means (80k+120k+30k) ~ 230k votes, or half if they could come from Republican votes.
A quick check suggests that advertising/outreach costs $100 to $1k to change votes in certain settings. Say it’s a lot more, so $10k. $10k * 230k = 2.3B, which still isn’t that much.
All that said, smarter donors would have started sooner and done more strategies. By the time Harris officially started running, it was already very late in the game.
I think potential donors are quite good at suggesting that absolutely everything they could do is useless, as they really don’t want to donate. (I imagine this is much less the case for you specifically, but I suspect it is the case of the argument as it’s often used)
At very least, for such a problem, I’d hope that donors would have spent say $10M to $100M this year getting more clarity on the question of tractability, and I don’t think much of this happened.
I think most wealthy donors on the Republican side would really prefer other Republican candidates over Trump. I think Trump is uniquely bad and disliked by many elites.
All this to say, when I don’t see even $5B spent to prevent say $1T-$10T+ of damage, I get pretty suspicious.
Even if it were the case that the results demonstrated that it was impossible ex-post, I think there were many possible worlds, ex-ante, where donations were more valuable. Generally I judge actions in terms of expectations ex-ante.
I know SBF was considering various strategies, potentially for $1B to $5B or so.
I agree that we should judge the actions ex ante. I also agree that (you are implying this I think) you have to start early and do good thinking in order to be effective here. 3 months before the election is too late. We had to get on this years before the election and the most effective solutions will look like getting good, sound, authentic, moderate candidates into the running or paying Biden $100mm to committ to not running.
I think if you went to say Reid Hoffman and Mark Cuban and others and said “it’s going to cost $10B, $10B and we flip this election.”, I think they would probably put in ~100mm (maybe less tbh) each, personally and go pretty gung-ho to get you to $10B.
The main problem is that I just don’t think you can turn money into votes through advertising past a point. I think you need to actually just pay people (which is illegal) and then you can flip votes. But for the vast majority of people, showing them more ads just does nothing. There’s even some evidence that it turns people off.
I’m not going to scrutinize your calculations. I think you realize that you don’t know in advance how many votes you need and where and that perhaps $1k/vote flip is on the margin and once you pick that fruit, it gets a lot harder and that you don’t have good accuracy on which votes you flip (even in a model where you do get to pay $1k/vote flip, most of the time that vote flip just happens in some random unimportant state). Thus, you basically got this advantage where the math looks great due to the importance of certain states due to the electoral college but that advantage gets effectively undone because you don’t get to perfectly target the states you want.
I would greatly expect that once everything is accounted for, donating EA money to politics won’t be cost effective but I like that you’re thinking about this and realize that it’s not going to be “EA money” predominantly.
To be clear, I wasn’t advocating here to donate EA money. I think this would place this at a significantly higher bar. My point instead is that I think that the political issue is much more mainstream than EA causes, and would have been a clearer cause for many other people, including the top 0.1%.
Didn’t mean to imply you were, sorry if it came off that way.
Yup, I agree. But I think most people don’t care as much about political outcomes as they purport to, based on their actions. I think a lot of that is social desirability bias.
I also don’t think it’s that clear that Kamala is obviously the better pick or that Trump being President over Kamala is worth $1-10T of value. I like this comment about the better choice for President being non-obvious.
Thanks for calling me out on these points. (Also, thanks to titotal for providing other useful metrics!) I find your take insightful, though from these arguments, I still very much stay with my overall position.
I’ll respond in different comments, to help keep discussion manageable.
When I said “inequality is on the rise”, my statement wasn’t very precise. I find it interesting that the gini coefficient has stayed somewhat flat for the last 20 years in the US, though would note that:
1. It clearly rose significantly right before ~20 years ago. (Looking back, I think “20 years” wasn’t a well chosen number to start this post with)
2. It still did definitely rise, according to the official stats, in the last 20 years. I think the graph you provide is arguably deceiving because it sets the bottom of the y-axis at 0. Consider this instead. Here it looks like it did grow from 40 in 1995 to 41.3 in 2022. While this might seem small, I suspect it still adds up.
https://fred.stlouisfed.org/series/SIPOVGINIUSA
3. The US’s gini coefficient is quite bad compared to many other countries. Given it’s massive wealth, I think this is a sizable deal.
4. I found titotal’s post below quite interesting and relevant on this.
5. For my main argument, the more key relevant question is something like, “Is it true that there’s an incredible amount of wealth contained by the ultra-wealthy, or similar?” So while I find the discussion about inequality interesting (I especially enjoy the use of official data here), It’s arguably not particularly key. It could have well been a mistake for me to begin with that sentence—I was quickly thinking that people would “know what I meant”, but it seems to have gotten in the way of my point.
Appreciate the post. https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/ This in-depth research article suggest the rich are getting richer faster, and suggest “Economic inequality, whether measured through the gaps in income or wealth between richer and poorer households, continues to widen.” It matches with your intuition.
I wonder what could be done to really incentive the powerful/high income people to care about contributing more.
Surely it would be easier to just take the money from them, with taxes
No, but seriously—the U.S. presently has an extremely clear example of the excesses of oligarchy and low taxation. The idea that billionaires need less tax in order to invest more in the economy is laughable when Elon has used his excess money to essentially just enrich himself. I think it would be pretty high leverage to put money, time, and connections into this movement (if you can legally do so); and if the enemy is properly demarcated as oligarchy, it should result in reducing wealth inequality once its proponents take power.
Just flagging that I very much agree it would be good to tax them far more. However, I’m not sure how doable that is vs. other things. More thinking/research on options here seems good to me.
I think there’s generally been recognition by many academics and intellectuals that the rich get a highly overly-favorable deal, due to their capture of politics.
I think it’s tractable, right? The rich had a far greater hold over American politics in the early 1900s, and after financial devastation coupled with the threat of communism, the U.S. got the New Deal and a 90% marginal tax rate for 20 years following the war (well after the war effort had been fully paid off), during the most prosperous period in U.S. history. My sense of these changes is that widespread labour & political organisation threatened the government into a compromise in order to protect liberalism & capitalism from a near-total overthrow. It can be done.
But equally, that story suggests that things will probably have to get much worse before the political will is there to be activated. And there’s no guarantee that any money raised from taxation will be spent on the global poor!
My honest, loosely held opinion here is that EA/adjacent money could be used to build research & lobbying groups (rather than grassroots organising or direct political donations—too controversial and not EA’s strong suit), that would be ready for such a moment if/when it comes. They should be producing policy briefs and papers that, and possibly public-facing outputs, on the same level as the current YIMBY/abundance movement, who are far more developed than the redistributionists on these capabilities. When the backlash hits and taxes get raised, we should already have people well-placed to push for high redistribution on an international and non-speciesist level.
This seems like a reasonable potential option to me. I think a lot of policy work works this way—you realize that there are only windows every so often, so a lot of work is around “getting ready.”
I’m not sure if we disagree on tractability for policy work here. What you said seems broadly reasonable to me.
Where I may disagree is that I’m not convinced that this strategy will be the best one, after a lot of investigation. I could imagine a lot of creative approaches, like, “do a targeted marketing campaign of a very certain kind, aimed at a specific subset of the ultra-wealthy.” Or maybe something like, “find existing charities/groups that are trying to do better things with Billionaires, and steer them to be more effective and to have better epistemics.”
I’d be excited if OP staff investigate this area more. I suspect they’ve done some early investigation around it. That said, perhaps it would be awkward with Dustin being a billionaire. (Personally I think this could be fine, but could imagine situations where it won’t be. I.E. maybe work here would get in the way of other OP work to convince ultra-wealthy people of other things.)
The School For Moral Ambition is hiring people to work on Tax Fairness!
There are also several orgs working on UHNWI advising/fundraising.
20% would be absurd, but even moving the average from 3% to 3.5% would be more than anything EA has achieved so far. But there are millions of people with strong incentives to do so (including every single charity relying on donations), so it would be surprising for EA to have such a huge effect. I’m glad that many people are trying and I hope that they succeed.
Possibly a tangential point, but lots of people in many EA communities think that accelerating economic growth in the US is a top use of funds. Billionaires don’t hoard wealth, but they invest it in companies and lend it to governments.
Perhaps advocating for higher taxes on extreme luxury goods (e.g. yacht fleets and luxury private jets), if done in a tractable way, could get more universal traction.
In terms of giving more, I don’t understand why you would assume that. I imagine that billionaires could always see that there was a huge number of people that they could have helped relatively cheaply. I wouldn’t expect changing the effectiveness by a couple of orders of magnitude to change things much. A typical GiveDirectly donor is closer to a typical GiveDirectly beneficiary than to a 10-billionaire, even on a log scale of income. In terms of giving more effectively, GiveWell recently commissioned a report to explore why other funders don’t fund opportunities GiveWell does, but they haven’t published it yet. (I imagine because of everything going on with USAID right now)
It sounds like we largely agree on a lot of this.
Small point, but I feel pretty uncomfortable with this statement, which I’ve heard before a bunch of times (in various forms):
I very much know that billionaires don’t keep their wealth as literal cash.
But I feel like it’s generally fairly clear that:
1. These Billionaires are doing this just because it’s in their best interest. Investing and lending is not done altruistically, it’s done for profit. If these actions wound up producing zero or partially-negative global impact, I suspect Billionaires would still take them. (Related, I expect that at least several of these companies they invest in are net-negative)
2. It would be dramatically better if these people would donate this money to decent causes instead.
I wouldn’t value “$1 that a Billionaire is investing in the stock market” as literally having zero value, but I think most of us would place it quite low.
I assume that as with many annoying debates, this is an issue of semantics. What does “hoarding” mean, or how would it be interpreted? I think it’s fair to classify a situation such as, “I’m going to keep a bunch of money for myself and try to do the conventional thing of maximizing it, which now means putting it in the stock market” as “hoarding”, but I realize others might prefer other terminology.
Yeah I don’t quite understand that line of argument. Naively, it seems like a bait-and-switch, not unlike “journalists don’t write their own terrible headlines.”
I think a main argument related to that perspective is that you shouldn’t tax wealth but you should tax consumption (holding billions in stocks and bonds has positive externalities, buying a yacht fleet has negative externalities)
I obviously don’t agree with it, so I’m likely not presenting the strongest version of the arguments, but you can see an example of people holding this view in the twitter screenshot above, and I think it’s not uncommon
Hmm I think the link does not support your claim.
Yes that’s a fair point. Do you think the claim itself is false?
I was under the impression that many YMBY/Abundance/Progress Studies-minded EA communities were operating with that theory of change, am I wrong?
When you say inequality has been rising, do you mean income inequality or wealth inequality? What’s your source for this claim?
[Edit: reworded to be less curt and harsh]
Richest 1% wealth share, US (admittedly, this has been flat for the last 20 years, but you can see the trend since 1980):
Pre-tax income shares, US:
A 3–4% change for most income categories isn’t anything to sneeze at (even if this is pre-tax).
You can explore the WID data through OWID to see the effect for other countries; it’s less pronounced for many but the broad trend in high-income neoliberalised countries is similar (as you’d expect to happen with lower taxation).
It’s worth noting that much of the reported increase in wealth inequality since 1989 seems to be explained by the rising share of wealth held via social insurance programs. Catherine et al. notes,
Since both ordinary private wealth and social insurance programs are similar in that they provide continuous streams of income to people, I think it’s likely misleading to suggest that wealth inequality has gone up meaningfully in recent decades in the United States—at least based on the reported datasets that presently exist.
Social insurance income streams are especially relevant in this context because they directly affect how much real economic power and control people have in practice. Ignoring social insurance thus exaggerates how concentrated real economic power actually is, since it underestimates the resources available to the broader population.
That said, inequality statistics are quite contentious in general given the lack of reliable data on the exact variables we care about, so I’m not highly confident in this picture. Ultimately I’m unsure whether inequality has remained roughly constant over the last few decades in the sense we should care about.
I could sympathize with the frustration, but I feel like I’m being attacked in a way that’s pretty unfair.
This question seems to presume that I have “one single source, that’s so good that I could just link to it and the debate would mostly be over.” That’s clearly not the way most people work. There’s a whole lot of points some people might assume is common knowledge within a certain community, to some extent, for the purpose of making other points, but that doesn’t come with one incredibly clean paper.
I find your other papers you linked in other comments interesting. That said, I don’t see them changing my main argument much.
Sorry if my previous comment came across as rude or harsh—that wasn’t my intention. I didn’t mean to attack you. I asked those questions to clarify your exact claim because I wanted to understand it fully and potentially challenge it depending on its interpretation. My intent was for constructive disagreement, not criticism of you personally.
Your main argument started with and seemed to depend heavily on the idea that inequality has been increasing. If it turns out that this key assumption is literally incorrect, then it seems like that should significantly affect your argument.
Thanks. I tried adjusting the opening of this argument accordingly.
I don’t expect at the time that this point was that contentious within our community. I was naively thinking, “this point is broadly assumed to be true, and would help provide context for my main point.” I also believed/believe that it was true, but I’d agree with you that there are a lot of specific interpretations of it that wouldn’t be true.
It seems like there are interesting debates to be had here of “How should we think about inequality? What aspects of the world are become more or less equal? What measures are the most important?” I think this does get fairly far from my main topic, though at the same time, I’m happy to see that get discussed either here or elsewhere, as long as it could be understood that it’s very arguably a only-partially-related point.
From what I can tell, it very much seems the case that some important measures of inequality are both increasing and very high (the high is probably more important), and also that other important measures might be constant/low/decreasing.
I suspect that commenters here have much stronger feelings about “is inequality increasing?” than they do “does the top 0.1% of the global elite have an incredibly large amount of wealth?”