17 October 2006

Charity = Not so charitable?

Tim Harford strikes again. This time his victim is the holiest of holy; charity. Let's cut right to an excerpt

In fact, the closer you look at charitable giving, the less charitable it appears to be ... Using controlled trials to compare different methods of door-to-door fund-raising, professor List's team discovered that it was much more effective to raise funds by selling lottery tickets than it was to raise funds by asking for money. This hardly suggests a world populated by altruists seeking to do the maximum good with their charitable cash.

More effective still was simply to make sure that the fund-raisers were attractive white girls rather than a dowdier assortment of males and females representing all shapes, races, and sizes. This dramatically increased the average contribution, because many more men decided to give money. Altruism?

"Shouldn't I just give up all my studies and go feed starving kids in Africa?" This is a variation of a question I often asked myself in high school/college. But I always came around to thinking that a desire to physically and directly do something meaningful and unselfish does not equate with a doing the most good possible, i.e., altruism. As a penniless college student I could only offer as my service the sweat of my brow, for example, painting pottery for old folks, shovelling mulch, or making sandwiches. In fact, just a few years later, as a recent college grad, the money I make per unit time could produce a much higher yield of these services than I could produce by spending that time unit doing the physical labor myself. And according to the theory of comparative advantage, I'm not admitting that I can't make a decent sandwich.

But what about becoming a doctor? Surely, if I invest my efforts in learning heart surgery I could save many more lives than as an engineer. Well only if I was good at heart surgery and I didn't faint at the operating table and if I learned the trade in a reasonable amount of time/at a reasonable cost. Again comparative advantage says that although I could be a doctor, the world is better off if I don't become one.

So, in fact, what an altruist would do is find that service which she can provide that is most valuable to others and provide as much of it as possible. Whether providing another unit of service directly saves lives/reduces misery or if the money received can be used for that cause should not be seen differently. But to many it is. That's a shame.

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