Re your last paragraph, I just wanted to drop @jefftk’s (IMO) amazing post here: https://www.jefftk.com/p/candy-for-nets
Alexander_Berger
Karma: 1,989
[Question] Post on maximizing EV by diversifying w/ declining marginal returns and uncertainty
Someone emailed me this and asked for thoughts, so I thought I’d share some cleaned up reactions here. Full disclosure—I work at Open Phil on some related issues:
Thanks for the post—I think it’s helpful, and I agree that I would like to see the EA community engage more with Lant’s arguments.
If we’re focused primarily on near term human welfare (which seems to be the frame for the post), I think it’s really important to think (and do back of the envelope calculations) more explicitly in terms of utility rather than in terms of absolute dollars. In the post, you allude to the need to adjust for this (“It should be noted that the later stages of the growth accelerations affect progressively richer people, so produce less utility from additional consumption.”), but I think it’s actually first order. In general, I think true humanitarian welfare is distributed much more linearly than exponentially, and that Jones and Klenow’s welfare concept doesn’t map very well to how I think about utility. I don’t have any knock-down arguments here, but I think looking at life satisfaction survey data and lifespan data both suggest the relevant metric is much closer to log(GDP) than pure GDP: many people in rich countries are 100x richer than in poor countries, but I don’t think their lives are 100x (or even 10x) better, and they live <2x longer on average. I could propose some thought examples here (willingness-to-pay to save different lives, how many lives would you live in one place in exchange for just one in another), but I think the intuition is pretty straightforward. Some other thoughts on using GDP $ instead of something like average(log($)) or total(log($)) as your unit:
Using GDP $ ignores distribution, which is key to, e.g., the GiveDirectly case, which explicitly isn’t aiming at global GDP. More generally, growth accelerations typically increase inequality (at least for a while), and in the quick data I googled for India, the median income is less than half of the average; just adjusting for GDP/capita will miss some of the median income dynamics you recognize as important.
Using raw GDP makes you more likely to focus on rich countries: for instance, if I thought that relaxing zoning constraints would increase US GDP by 5% (example source), the perpetuity of that increase would be worth 6 times Lant’s calculation of the Indian growth episodes combined, even though it seems far less morally valuable to me. Log($) type considerations are, I think, a lot of what motivates a focus on developing countries in the first place, and would push towards more attention to poorer countries and domestic inequality within those countries, relative to a GDP-first framework.
Logging $ to get to utility terms generally removes the compounding dynamic in absolute $ that I think partially attracts people to growth arguments; I tend to think that’s good and correct, but am not sure, and would be interested in reading more on this if people have pointers.
One part of the case for a focus on GDP that I think might be right but that I’m uncertain about and would be interested in seeing quantified more is that growth itself causes others benefits (like health, education, etc) that should be counted separately from the more direct economic/subjective wellbeing benefits of growth. That seems like an obvious way that a log(GDP) utility function could be understating the value of growth. My intuition is that it would be surprising if more of the humanitarian impact (according to my values) of growth ran through second order impacts on health than through the direct impact on income/SWB, but I’m not sure about how the causal magnitudes would pencil out.
I think Carl Shulman’s old posts on log income and the right proxies for measuring long-run flow-through effects are interesting on this.
I totally grant that GDP is important and tightly correlated with lots of other good things, but I think using it as your comparison unit biases the calculation towards growth, since the randomistas are explicitly not aiming to increasing growth, while both groups are aiming to increase welfare all things considered.
Overall, I do find it likely that some form of policy interventions (maybe focused on growth, maybe not) will likely pencil out better than the current GW top charities, but I think measuring impacts in terms of raw GDP is likely to be more distracting than beneficial on that path.
If people are interested in taking up the mantle here and pushing these arguments further, I would be interested to see more of a focus on (a) detailed historical cases where outside efforts to improve policy to accelerate growth have worked—I think it’s unfortunate that we don’t have more concrete evidence on the amount of funding or role of the Indian think tank Lant cites; and (b) concrete proposed interventions/things to do. I agree that the “there’s nothing to do” argument is not a show-stopper, but I do think a real weakness of this overall direction of argument at the moment is answering that question. And in general, I expect an inverse relationship between “clarity/convincingness of policy impact/benefit” and “tractability/policy feasibility” (it seems to me that the clearest growth prescription is more immigration to rich countries, and ~equally clear that we shouldn’t expect major policy changes there), so I think getting the argument down into the weeds about what has worked in the past and where opportunities exist now might be more productive.
FWIW, I agree with the comment from @cole_haus speculating that part of the reason these arguments haven’t gotten traction in EA is that it seems most people who are willing to bite the “high uncertainty, high upside” bullet tend to go further, towards animals or the far future, rather than stop at “advocate for policies to promote growth.”
Again, just want to reiterate that I think this is an interesting and worthwhile question and that I’m sympathetic to the case that EAs should focus more on policy interventions writ large.
(Also, not sure I got formatting right, so let me know if links don’t work and I can try to edit—thanks!)
I think this argument is wrong for broadly the reasons that pappubahry lays out below. In particular, I think it’s a mistake to deploy arguments of the form, “the benefit from this altruistic activity that I’m considering are lower than the proportional benefits from donations I’m not currently making, therefore I should not do this activity.”
Ryan does it when he says:
How long would it take to create $2k of value? That’s generally 1-2 weeks of work. So if kidney donation makes you lose more than 1-2 weeks of life, and those weeks constitute funds that you would donate, or voluntary contributions that you would make, then it’s a net negative activity for an effective altruist.
Toby says:
One way I look at it is that I wouldn’t donate a kidney in order to get $2,000 (whether that was to be spent on myself or donated to effective charities), or equivalently, that I am prepared to pay $2,000 to keep my second kidney. This means that, for me at least, donating is dominated by extra donations.
The problem with these comparisons is that they’re totally made up. There’s a potential one-off activity (donating a kidney) which, Thomas argued above, has large benefits to recipients relative to costs to the giver. There’s also a question about how much you donate to charity. Based on the rationales you’re giving here, someone who is happy with the cost/benefit tradeoff of donating a kidney as a one off, but is convinced that it’s not as good cost/benefit as further donations, should actually increase their donations. However, my impression is that that has not been the reaction to these arguments; instead they justify current behavior/levels of altruism. (Toby, Ryan, correct me if I’m wrong here.) But donating a kidney would, according to most parties to the discussion, be net beneficial on its own terms. So the net impact of these arguments is to prevent people from taking positive sum altruistic actions, thereby reducing value.
There are kinds of costs that do mix between these two activities—genuinely foregone wages. And if your foregone wages were large and you decided that you would offset donations rather that consumption or savings with them, it would be perfectly appropriate to conduct this comparison. (Similarly, if the financial risk to future donations were higher, that would also make sense to offset.) But idly speculating about how much you’d have to be paid to do something, while taking the current level of donation as fixed, results in net negative impacts.
I think it’s a problem when the “effective” side of “effective altruism” is used as a argument against the “altruism” side. I should note that Jeff Kaufman and I had this framework argument on his post on this topic a while back on Less Wrong.
I agree, and I’d add that what I see as one of the key ideas of effective altruism, that people should give substantially more than is typical, is harder to get off the ground in this framework. Singer’s pond example, for all its flaws, makes the case for giving a lot quite salient, in a way that I don’t think general considerations about maximizing the impact of your philanthropy in the long term are going to.
Yes, kidney selling is officially banned in nearly every country. My preference, at least in the U.S. context, would be to have the government offer benefits to donors to ensure high quality and fair allocation: http://www.nytimes.com/2011/12/06/opinion/why-selling-kidneys-should-be-legal.html
Obv disclaimer: not a tax adviser.
Seems like yes based on this (https://www.thebalancesmb.com/can-my-business-deduct-charitable-contributions-397602) and according to this (https://www.philanthropy.com/article/nonprofits-win-extended-charitable-deductions-and-paycheck-protection-loans-in-stimulus-bill) the recent stimulus bill increased the limit for 2021 to 25% of corporate taxable income (instead of the normal 10%).