note that we recorded this podcast before the appearance of COVID-19. And as we discuss, Phil makes the case that patient philanthropists should wait for moments in history when patient philanthropic resources can do the most good. Could the coronavirus crisis be one of those important historical episodes during which Phil would argue that even patient philanthropists should ramp up their spending?
We’ve spoken with him more recently, and he says that this strikes him as unlikely. The virus is certainly doing widespread damage, but most of this damage is expected to accrue in the next few years at most. As a result, this is the sort of crisis that governments and impatient philanthropists are happy to spend on (to the extent that spending can help at all).
On Phil’s view, therefore, patient philanthropists are still best advised to wait i) until they’re rich enough to better address, or fund more substantial preparation for, similar future crises, or, ii) until we face crises with unusually long-lasting impacts, not just unusually severe impacts.
If this is right, COVID-19 just serves as an example of the many temptations to spend in the present that patient philanthropists will have to resist, in order to reap the benefits that can come from waiting to do good.
I’m a bit late to the party here, but just listened to the episode. Really enjoyed it and found it thought provoking, so thanks to Phil Trammel and the 80k podcast.
I had a couple of questions, so here’s hoping Phil’s still monitoring this post! Or, if not, that someone else is happy to answer these questions.
First, there was section where I think it was suggested the x-risks can be treated as feeding straight into interest rates, such that the premium for investing still outweighs the benefits of spending now to try to reduce those x-risks. The example was given that even if x-risk is at 1% per year, it’s still better to invest over the long term. But the issue that came to mind was that, if x-risk is at 1% then the expected lifespan of humanity is just another ~68 years. And, the likelihood that there is anything around to spend on in the very long terms, say 300 years, becomes quite low; below 5%. I haven’t been able to work out how the math on this would look, but doesn’t that reduced expected lifespan of humanity outweigh the upside to be earned by compounding interest rates over the very long term?
Second, is it a problem (a reductio problem, I suppose) that the logic supporting investing over spending now would apply equally at any point in time. Such that, when considering the basic premise that investment returns are higher than present expenditure returns, there would in fact never be a time when spending is the optimal strategy. So, in 200 years, when this patient investment fund has grown very large, a group of rational people sitting down and deciding what to do will again decide to just keep investing and never spending?
Finally, there was some discussion to the effect that an advantage of investing is that our understanding of ethics is likely to keep developing, such that we will be in a better position to decide how funds can best be applied in the future. But this could equally mean that, down the track, we realise that the ethics of longtermism were flawed or much less persuasive than previously thought. If that’s the case, then a fund locked into patient philanthropy could be a big mistake, no?
Anyway, just wanted to share the thoughts I’d had in case anyone has good answers or is interested in discussing.
Thanks again for the podcast.
Cheers
Glad you liked it, and thanks for the good questions!
#1: I should definitely have spent more time on this / been more careful explaining it. Yes, x-risks should “feed straight into interest rates”, in the sense that a +1% chance of an x-risk per year should mean a 1% higher interest rate. So if you’re going to be
spending on something other than x-risk reduction; or
spending on x-risk reduction but only able to marginally lower the risk in the period you’re spending (i.e. not permanently lower the rate), and think that there will still be similar risk to mitigate in the next period conditional on survival,
then you should be roughly compensated for the risk. That is, under those circumstances, if investing seemed preferable to spending in the absence of the heightened risk, it should still seem that way given the heightened risk. This does all hold despite the fact that the heightened risk would give humanity such a short life expectancy.
But I totally grant that these assumptions may not hold, and that if they don’t, the heightened risk can be a reason to spend more! I just wanted to point out that there is this force pushing the other way that turns out to render the question at least ambiguous.
#2: No, there’s no reductio here. Once you get big enough, i.e. are no longer a marginal contributor to the public goods you’re looking to fund, the diminishing returns to spending make it less worthwhile to grow even bigger. (E.g., in the human consumption case, you’ll eventually be rich enough that spending the first half of your fund would make people richer to the point that spending the second half would do substantially less for them.) Once the gains from further investing fallen to the point that they just balance the (extinction / expropriation / etc) risks, you should start spending, and continue to split between spending and investment so as to stay permanently on the path where you’re indifferent between the two.
If you’re looking to fund some narrow thing only one other person’s interested in funding, and you’re perfectly patient but the other person is about as impatient as people tend to be, and if you start out with funds the same size, I think you’ll be big enough that it’s worth starting to spend after about fifty years. If you’re looking to spend on increasing human consumption in general, you’ll have to hold out till you’re a big fraction of global wealth—maybe on the order of a thousand years. (Note that this means that you’d probably never make it, even though this is still the expected-welfare-maximizing policy.)
#3: Yes. If ethics turns out to contain pure time preference after all, or we have sufficiently weak duties to future generations for some other reason, then patient philanthropy is a bad idea. :(
Thanks Phil—appreciate the response! On #1, I think I get it though it’s a bit counterintuitive. I take it that the proposition is that permanent (or at least long-term) reduction in x-risk has a sort of ‘compounding’ impact on expected value, since it reduces risk each year, and therefore would compete with patient investing, but short-term reductions in risk don’t have that same ‘compounding’ benefit and therefore don’t compete in the same way with the interest rate (which is assumed to be increase with and therefore be higher than the x-risk rate). And #2 and #3, I think I follow too.
Some interesting ideas to think about… Looking forward to seeing your further work in this area.
Cheers
This was a very intriguing interview!
Question: If you’re an economist (or other social scientist) trying to get into the global priorities field, should you join GPI or try to start global priorities research centers at other universities?
Thanks!
I’m far from qualified to give career advice to people who are already full-time academics, but I suppose I’d say,
If you’ve just graduated and are looking for a post-doc opportunity, or are coming from outside academia and willing to move to Oxford, then apply to GPI.
If you’re already an academic elsewhere, then get in touch, come to one of the workshops GPI holds at the end of each Oxford term, and try shifting your research in a GPR direction. (We put together such a long research agenda partly in the hope that lots of interested researchers elsewhere will find something in it that they can get excited about.)
If you’re a senior enough academic that you could set up a respectable global priorities research center elsewhere, then definitely get in touch! That could turn out to be a great idea, especially if you’re an economist at a higher-ranked department than Oxford’s. Forethought—GPI’s sister org, which funds GPR activity outside of Oxford—would be a place to apply for funding for a project along those lines.