The Redundancy of Quantitypost by Denis Drescher (Telofy) · 2015-09-03T17:47:20.230Z · score: 2 (4 votes) · EA · GW · Legacy · 3 comments
The Advantages It is Inclusive It is Motivating It Expands the Circle It Reduces Inferential Distance It Encourages Counterfactual Reasoning The Disadvantages The Magic of “Donation” It Makes Budgeting Hard None 3 comments
I’m advocating for a simpler way to think about donations and investments, namely, not to distinguish them. (Cross-posted from my blog.)
Inspired by the two-part nature of the term “effective altruism,” I often see the goal of the movement explained as pictured above. We want to increase the amounts that are donated and increase the efficiency of the donations to maximize the integral, the effect.1 The graph is pilfered from Giving What We Can, and since they are centrally concerned with encouraging donations and use them as proxy for their impact, it makes sense for them to think in these terms. But I think this is not the most parsimonious model, and the alternative has advantages beyond elegance.
The alternative is to think only in terms of efficiency. Just as the beneficiaries of our donation, we’re also capable of producing and, significantly, leveraging utils, so rather than thinking in terms of ROI in one case and in terms of utils (or QALYs) in the other, we can just think in terms of utils in both cases. (Or whatever you’re optimizing for rather than utils.)
Effective altruists have long compared donations to investments or even already seen donations as another type of investment, so this may seem trivial to some, but making more consistent use of this perspective and using it to encourage altruists to donate efficiently has several advantages.
Below a few advantages and disadvantages I can think of. Do you have further ideas?
It is Inclusive
Someone who is poor – certainly when they’re third-world poor, but it’s a sliding scale, logarithmic I think – has an extremely much harder time investing time or money into others’ happiness than someone who is even modestly affluent. Not being able to have the same impact by donating, these people will feel like failures compared to many high-profile high-achievers in the movement. Yet they may be just as smart and compassionate, and just lost the birth lottery.
But the poorer they are the more they have the ability to cost-effectively improve their own happiness. I’ve read an article a while ago (which I can’t find anymore) about people in great poverty who have devised sophisticated ways of managing their debt while maintaining liquidity. Their methods may be highly cost-effective at improving total happiness at their small scale, even if they’re only leveraging their own or that of their family. If ultimately they would be altruists given the means, they should feel welcomed in the movement.
It is Motivating
Friends of mine, and I too, often struggle with giving later. We are students, earn little, and know that it is best for us to invest in our education and careers first to earn as much as possible as early as possible, and then have for donating the maximum of money over the maximum of time. This phase feels preparatory and makes us impatient. But that is only because we think of donations as something qualitatively different from the other investments that we’re already making.
Once we come to the point where our System 1s accept investments in our education as just another vehicle to achieving our altruistic moral goals, we’re having an impact right now. The reduction in suffering that we effect may be deferred, but even with AMF our investments are converted into actual bed nets with a delay, so any difference is only quantitative.
It Expands the Circle
People who have a strong separation between themselves and others encoded in their moral goals (rather than just as a habit they want to break) will find it intuitive to make a distinction between investments that increase their happiness and those that increase the happiness of others. The rest of us, however, may come to understand EA reasoning much more easily the better we understand how this separation (which we don’t actually find morally relevant) influences our thinking.
Just as not thinking in terms of this separation may decrease risk aversity in altruism and expand the moral circle, so making this distinction may have the counterproductive effect of reinforcing this separation.
It Reduces Inferential Distance
Or it reduces something like inferential distance but between parts of our own model of the world rather than those of different people.
We are all fairly adroit at thinking about cost-effectiveness when it comes to everyday investments, so people new to effective altruism can readily transfer that experience to our new type of investment. Some of us have particular knowledge of finance and can probably recognize patterns more easily that will enable more effective altruist financial innovations.
It Encourages Counterfactual Reasoning
The flip side of this is that it makes budgeting hard, as described below, but the positive side is that it encourages people to think more clearly about the relative quality of their investments. 6% p.a. in returns doesn’t seem so amazing anymore when you can get 6000% within “a few years.” When you need to trade off donating now vs. donating later, you have to think in terms of the same outcomes anyway.
The Magic of “Donation”
Just as the separation between donations and other investments can be harmful, it can also be used for good. Compare:
EA: “Please buy one of our buttons. They’re €5, and all proceeeds go to AMF.”
Donor: “€5 for a cheap button like that? No offence, I know it’s for charity, but that’s a total rip-off. I had some made last year, and they were only €.60 in production!”
EA: “Please donate to our charity, AMF. For a donation of €5 or more, you can get button as a token of our gratitude. It can always remind you of the value of good deeds.”
Donor: “Awesome! Here, have €10!”
The proper and sustainable solution would be to present the Child in the Pond analogy to them, show them effective altruism, and then have them donate because they want to save people from malaria, but that will only work for a small fraction of your clients, and if you have several people per minute coming to your EA booth, you won’t have the time to even try. Rather you can hope that they’ll later reflect “Wow, I donated €10 for a cheap (but pretty!) button, I must be an altruist. Or I like that charity a lot. Let’s have a look at what they’re writing on their blog.”
But in this case I would blame the medium rather than the message since this ad-hoc manner of soliciting investments is highly exploitable anyway.
It Makes Budgeting Hard
One central EA coping strategy is to have a separate donation budget and worry about the counterfactual use of the rest of your money only once a year. Without the categorical separation of donations, we’ll have to think of some other manner of budgeting.
One solution may be different classes of risk-aversity. One low-risk class may be dedicated to GiveWell- or ACE-recommended charities, another to metacharities or endeavors as Open Phil might evaluate, and another high-risk class to yourself, an intervention as 80,000 Hours might evaluate.
You can think of the same classes also in terms of how long-term the investments are, what their volatility is, or what the resulting util liquidity is. I’ll stick to two such budgets, but maybe there are advantages to introducing finer graduations.
I prefer to think of “effective” as meaning that we focus on the effect rather than that we achieve it by means of high cost-effectiveness, since it should then rather be called “efficient altruism.” ↩
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