Unfortunately, despite their stated aims, their actual charitable recommendations are generally wasteful
So far as I can see, you (Salemicus, author of the OP) present no evidence for this, beyond the following claims:
You misquoted me
I didn't quote you at all (aside from the very opening bit, which was verbatim, and a few words later in quotation marks), I paraphrased you. It wasn't my intention to paraphrase inaccurately, and I'm sorry if you consider that I did.
On the substantive question: first of all, there is a difference between what you say ("just 39% of the cash transfers boosted assets") and what the paper actually says (on average, assets were boosted by 39% of the cash transferred), and I think it's an important one. Secondly, we are talking here not about businesses but about people, and (regrettable though it may be) people need to eat. If you give money to someone whose family is close to starvation, and they spend a lot of the money on food, that is a good outcome.
(The portion of my comment that offended you was small; have you nothing to say about any of the rest?)
[EDITED to add: Er, of course maybe other bits offended you too; I meant "the portion that you singled out for comment and complaint". EDITED again some days later, to clarify a bit of wording that on reflection was much less clear than I'd thought it was.]
The population of sub-Saharan Africa is around 950 million people, and growing. They have been a prime target of aid for generations, but it remains the poorest region of the world.
In absolute terms, conditions in sub-Saharan Africa have improved a lot. Saying "poorest" only states that it hasn't caught up with the rest of the world, which is also improving.
That's true. But conditions in sub-Saharan Africa have improved by a lot less than in other regions that were extremely poor 50 years ago, such as China and South-East Asia. For most of that period, growth in Africa was slower than growth in the West, despite the fact that catch-up growth is much easier. Indeed, sub-Saharan Africa continues to fall further behind China (growth rate of 4.24% versus 7.7%, both for 2013) despite the fact that catch-up growth should favour Africa.
This is not a success story.
Unfortunately, no-one knows how to turn poor African countries into productive Western ones, short of colonization.
The UN millennium goals of halving the amount of people in extreme poverty from 1990 to 2015 was successfully achieved 5 years ahead of schedule. We achieved that without any colonization.
To the extent this critique, it may be that Effective Altruists should focus on promoting a pro-innovation and pro-liberty mindset
It's quite easy to say that you want to promote a pro-liberty mindset. There seems to be a lot of corporate money invested in think tanks to promote the concept of economic freedom.
What's makes you think there a good way for EA's to spend money in that region that isn't already funded?
We also want some government regulation to prevent Xrisk.
I think you can make this critique more pointed. That is: "pro-liberty" is flag-waving rhetoric which makes us all stupider.
I dislike the "politics is a mind-killer" idea if it means we can't talk about politically touchy subjects. But I entirely agree with it if it means that we should be careful to keep our language as concrete and precise as possible when we approach these subjects. I could write several paragraphs about all the ways that the term "pro-liberty" takes us in the wrong direction, but I expect that most of you can figure all that out for yourselves.
Which "capitalism"? The word is used to mean too many things.
Do you mean "capitalism" in the sense that has been around since the Dutch and British East India Companies: the synergy, at the national level, of military force and private investment to meet those ambitions of the national elite that could not be funded by the hereditary conqueror class alone?
Do you mean "capitalism" in the sense of Adam Smith — an independent private business sector, enabled by government regulation to prevent collusion and fraud, but freed from nationalist mercantilism?
Do you mean "capitalism" in the sense of Marx — a globalizing economy focused around the ownership of capital by a shrinking minority class; with the non-owning class eventually reduced to possessing nothing of value but their labor, and their eventual privation through mechanized overproduction?
Do you mean "capitalism" in the sense of Ayn Rand — an economy in which the greatest human aspirations are realized through the unshackling of great men from their subjection to unworthy men, and from irrational ideologies such as altruism?
Do you mean "capitalism" in the sense of the &...
This post has some faults, but it correctly points out the narrowness of currently EA thinking.
The problem with effective altruism is that it depends on values, and values are hard. Values are also notoriously gameable by politics. Currently, EA is Afrocentric and only effective for a very narrow value system.
EA is focused on saving the max number of lives in the present, or giving directly to the poorest areas. This approach is beneficial for those people, but it's not clear that this approach has a large impact on the future of humanity. It also seems ve...
I do not think you are right, after reading your arguments and the discussion below; yet I upvoted your post for at least the reason that it provided a perspective of which I would not have thought otherwise. This is exactly what discussion is for.
John Paulson recently gave Harvard $400 million. Unfortunately, this meant he came in for a torrent of criticism from people claiming he should have given the money to poor Africans, etc. I hope to see Effective Altruists defending him, as he has clearly followed through on their concepts in the finest way.
I don't think Harvard is on any EA list for recommended charities. You also don't provide an argument that Harvard has a high use for marginal dollars and that more EA money should go towards Havard.
I too have the impression that for the most part the scope of the "effective" in EA refers to "... within the Overton window". There's the occasional stray 'radical solution', but usually not much beyond "let's judge which of these existing charities (all of which are perfectly societally acceptable) are the most effective".
Now there are two broad categories to explain that:
a) Effective altruists want immediate or at least intermediate results / being associated with "crazy" initiatives could mean collateral damage t...
it massively restricts EA's maximum effectiveness
It's not that simple. Implementation of radical outside-of-Overton policies requires not only the willingness to do so. You need to have sufficient power to say "We will do this and the rest of the world can go jump into the lake".
EA is very very VERY far away from such an amount of power.
(That is a good thing)
Would it be fair to summarise your post thus: "aid to the poorest people on earth is an ineffective way to create utils, it is better to invest in western businesses" ?
Now I must say that this is a very long-standing debate. One way this debate has taken place is between Jeff Sachs and William Easterly. (Easterly basically takes the same position as you in this post.) Sachs and Easterly have been writing books on this for years. You provide a link to one general economic history book, and a link to an RCT evaluation of GiveDirectly. This is a goo...
I don't see an alternative recommendation in your post to giving your money to the most needy people in the world. You mention investing in economic tools - could you give an example of an economic tool that you could use your money on that would be better than giving it to a woman and child starving to death in Africa?
Unfortunately, most of the funds invested to finance people like Norman Borlaug turned out not to be financing Norman Borlaug.
Still, if you want to generalize from that example, feel free. The conclusion would be that would-be effective altruists should be sending their money to the Mexican government, which is what was paying Norman Borlaug to do the work that led to his discoveries. We could generalize further and suggest supporting government-sponsored research. But I don't think there's any credible way to get from Norman Borlaug to saying that the best way to help the world's poorest people is to invest in the stock market or to send money to elite US universities like Harvard, which were your preferred options.
OK. So suppose that I grant your claim that donations to sub-Saharan Africa will not substantially affect the size of the future economic pie, but that other investments will. I claim that there may still be reason to donate there.
I grant that such a donation will produce fewer dollars of value than investing in capitol infrastructure. On the other hand dollars is not the objective, utils are. We can reasonably assume that marginal utility of an extra dollar for a given person is decreasing as that person's wealth increases. We can reasonably expect that w...
...However, if investment in capital is foregone consumption, then consumption is foregone investment. If I invest in the stock market today (altruistic), then in ten years' time spend my profits on a bigger house (selfish), then some of the good is undone. So the true altruist will not merely create capital, he will make sure that capital will never get spent down. One good way of doing that would be to donate to an institution likely to hold onto its capital in perpetuity, and likely to grow that capital over time. Perhaps the best example of such an insti
Effective altruists should be applauded for trying to bring evidence and reason to a subject that is plagued by far-mode thinking. But taking their ideas seriously quickly leads to a much more radical approach.
Feels like your sentence got cut off there, it should be followed by a colon and a summary of the approach. But I don't think that
So the true altruist will not merely create capital, he will make sure that capital will never get spent down.
is quite the approach you recommend.
Unfortunately, no-one knows how to turn poor African countries into productive Western ones, short of colonization.
short of colonization.
uhhhh
Epistemic status: 90% confident.
Inspiration: Arjun Narayan, Tyler Cowen.
The noblest charity is to prevent a man from accepting charity, and the best alms are to show and enable a man to dispense with alms.
Effective Altruism (EA) is "a philosophy and social movement that applies evidence and reason to determine the most effective ways to improve the world." Along with the related organisation GiveWell, it often focuses on getting the most "bang for your buck" in charitable donations. Unfortunately, despite their stated aims, their actual charitable recommendations are generally wasteful, such as cash transfers to poor Africans. This leads to the obvious question - how can we do better?
One of the positive aspects of EA theory is its attempt to widen the scope of altruism beyond the traditional. For instance, to take into account catastrophic risks, and the far future. However, altruism often produces a far-mode bias where intentions matter above results. This can be a particular problem for EA - for example, it is very hard to get evidence about how we are affecting the far future. An effective method needs to rely on a tight feedback loop between action and results, so that continual updates are possible. At the extreme, Far Mode operates in a manner where no updating on results takes place at all. However, it is also important that those results are of significant magnitude as to justify the effort. EA has mostly fallen into the latter trap - achieving measurable results, but which are of no greater consequence.
The population of sub-Saharan Africa is around 950 million people, and growing. They have been a prime target of aid for generations, but it remains the poorest region of the world. Providing cash transfers to them mostly merely raises consumption, rather than substantially raising productivity. A truly altruistic program would enable the people in these countries to generate their own wealth so that they no longer needed poverty - unconditional transfers, by contrast, is an idea so lazy even Bob Geldof could stumble on it. The only novel thing about the GiveWell program is that the transfers are in cash.
Unfortunately, no-one knows how to turn poor African countries into productive Western ones, short of colonization. The problem is emphatically not a shortage of capital, but rather low productivity, and the absence of effective institutions in which that capital can be deployed. Sadly, these conditions and institutions cannot simply be transplanted into those countries.
However, there do exist countries with high productivity, and effective institutions in which that capital can be deployed. That capital then raises world productivity. As F.A. Harper wrote:
Savings invested in privately owned economic tools of production amount to... the greatest economic charity of all.
That is because those tools increase the productivity of labour, and so raise output. The pie has grown. Moreover, the person who invests their portion of the pie into new capital is particularly altruistic, both because they are not taking a share themselves, and because they are making a particularly large contribution to future pies.
In the same way that using steel to build tanks means (on the margin) fewer cars and vice-versa, using craftsmen to build a new home means (on the margin) fewer factories and vice-versa. Investment in capital is foregone consumption. Moreover, you do not need to personally build those economic tools; rather, you can part-finance a range of those tools by investing in the stock market, or other financial mechanisms.
Now, it's true that little of that capital will be deployed in sub-Saharan Africa at present, due to the institutional problems already mentioned. Investing in these countries will likely lead to your capital being stolen or becoming unproductive - the same trap that prevents locals from advancing equally prevents foreign investors from doing so. However, if sub-Saharan Africa ever does fix its culture and institutions, then the availability of that capital will then serve to rapidly raise productivity and then living standards, much as is taking place in China. Moreover, by making the rest of the world richer, this increases the level of aid other countries could provide to sub-Saharan Africa in future, should this ever be judged desirable. It also serves to improve the emigration prospects of individuals within these countries.
Another great benefit of capital investment is the sharp feedback mechanism. The market economy in general, and financial markets in particular, serve to redistribute capital from ineffective to effective ventures, and from ineffective to effective investors. As a result, it is no longer necessary to make direct (and expensive) measurements of standards of living in sub-Saharan Africa; as long as your investment fund is gaining in value, you can rest safe in the knowledge that its growth is contributing, in a small way, to future prosperity.
However, if investment in capital is foregone consumption, then consumption is foregone investment. If I invest in the stock market today (altruistic), then in ten years' time spend my profits on a bigger house (selfish), then some of the good is undone. So the true altruist will not merely create capital, he will make sure that capital will never get spent down. One good way of doing that would be to donate to an institution likely to hold onto its capital in perpetuity, and likely to grow that capital over time. Perhaps the best example of such an institution would be a richly-endowed private university, such as Harvard, which has existed for almost 400 years and is said to have an endowment of $32 billion.
John Paulson recently gave Harvard $400 million. Unfortunately, this meant he came in for a torrent of criticism from people claiming he should have given the money to poor Africans, etc. I hope to see Effective Altruists defending him, as he has clearly followed through on their concepts in the finest way.