The Fatal Conceit and Effective Altruism

Centralized empathy and the philanthropic calculation debate

Maimonides (Moses ben Maimon). Rendering from 1744, likely by Blasio Ugolini. From Wikimedia Commons.

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Below: What Yiddish, Hayek, Dead Poets Society, Lord Kelvin, Frank Knight, Maimonides, Virginia Postrel, Shruti Rajagopalan, Michelangelo, The Flying Lizards, The Beatles, Nathan Robinson, Samuel Bankman-Fried, Herbert Simon, Sir Robert Alexander Watson-Watt, Francis Galton, and Jeremy Bentham’s dessicated corpse tell us about Effective Altruism.

The greatest economics lesson of all may reside in the Yiddish expression, “Der mensch tracht, un Gott lacht” (“Man plans, and God laughs.”) That, writ small, is the message of Friedrich Hayek’s broadsides against central planning in The Fatal Conceit and “The Use of Knowledge in Society.” The latter was one of the most influential economic essays of the 20^th century, and in a gentler time, when philosophical adversaries actually listened to one another (some, at least), a significant number of socialists and would-be planners found the anti-socialist Hayek’s arguments persuasive (or at least informative). Hayek dedicated his The Road to Serfdom "to the socialists of all parties," and he wrote that dedication with respect. Hayek, ever-generous of spirit, had no interest in “owning the libs.”

In recent years, the impulse to apply central planning techniques to charitable endeavors has taken form in the Effective Altruism (EA) movement. The movement has been defined by its own adherents as:

“Effective altruism is a research field and practical community that aims to find the best ways to help others, and put them into practice.”

Ostensibly, the idea is to think systematically about charity, to develop metrics concerning the relative effectiveness of different charitable outlets, and to use those metrics to apply cost-effectiveness analysis to help allocate resources across charitable institutions. Both the goal and the mathematical approach of EA appeal to me as an economist, but I’m always aware of economists’ chronic overconfidence in the ability of mathematical tools, created and operated by a clerisy of “experts,” to optimize over complex human behavior.

“Measure Anyhow” versus “Rip It Out”

To begin with, human preferences are complex, subjective, and resistant to quantification. Two literary references come to mind. First, the 19^th and early 20th century physicist Lord Kelvin reportedly said:

“[W]hen you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be.”

The acerbic University of Chicago economist Frank Knight added, years later:

“And when you can measure, your knowledge is of a meager and unsatisfactory kind.”

Or, in a shortened, more barbed version:

“If you cannot measure, measure anyhow.”

In a classic scene in Dead Poets Society (1989), literature teacher John Keating (Robin Williams) has a student read a deadly dull textbook excerpt offering a bivariate mathematical formula for evaluating the worth of a poem. After the student finishes, Keating issues an expletive and orders all the students to rip the offending page out of their textbooks.

Michelangelo’s David versus Malaria Deaths

In January,

Virginia Postrel

tackled the intrinsic difficulty of mathematizing human desires on her Substack in “On the Effectiveness of Charitable Giving.” Her piece builds on a Substack essay by my erstwhile Mercatus Center colleague, Shruti Rajagopalan of

Get Down and Shruti

(“Altruism and Development - It’s complicated......”). To illustrate the enormous complexity in optimizing charitable giving, Virginia examines one single example from a half-millennium ago—the commissioning of Michelangelo’s David:

“The 400 florins that Florence paid Michelangelo to carve the David could have provided a whole year’s subsistence living for about 100 Florentine residents. Was the commission an immoral use of funds? Should the money instead have gone to the poor, some of whom surely starved without it? If justified for reasons of civic cohesion, would the sculpture have been unjustified as a private purchase like much other Renaissance art? And what about its value to the future? If Florentine authorities in 1501 had known Michelangelo’s masterpiece would become a major tourist attraction centuries later, bringing untold wealth and admiration to their city, should that future have entered their calculations?”

The point, of course, is that making such an evaluation must of necessity rest on partial information, subjective preferences, tenuous mathematics, and an implicit time preference. Virginia dives a bit into Shruti’s complex piece on the cost-effectiveness of strategies for mitigating air pollution in Delhi. (Shruti is presently unable to visit family there because the pollution presents her with significant health risks.)

Shruti examines a top charitable recommendation by GiveWell—malaria reduction:

“As an alternative, I looked up the top charities recommended by GiveWell—the top two work on reducing Malaria deaths. Malaria kills between 600,000 and 700,000 each year. And GiveWell is considered one of the most credible evaluators in the philanthropic space. Should I be thinking less about air pollution in Delhi and more about malaria in Africa?”

Her analysis of this dilemma is lengthy and detailed, but well worth the effort if you have the time. If you don’t have time, Virginia’s piece summarizes the arguments nicely. Both of their essays focus mostly on the knowledge and optimization problems and not on questions of what I do with my time and my money—as EA has much to say on both.

What Are You Doing with the Rest of Your Life?

One prominent outlet, 80,000 Hours, focuses on a major EA tenet—that your choice of career (the roughly 80,000 hours of work you will do in your lifetime) should be the first step in your charitable giving. Earn more money and you can give more away to worthy causes. An ancient Greek proverb says, “First secure an independent income, then practice virtue.” Eminently sensible. But then, 80,000 Hours amplifies that sentiment by adding:

“We believe that what you do with your career is probably the most important ethical decision of your life.”

On first hearing, that sounds benign, but is career choice more important than developing one’s attitudes with respect to murder, sex, kindness, honesty, health, empathy, family, or sheer enjoyment of life? Must I choose The Flying Lizards over The Beatles? Is it somehow unethical if I decide to forgo a lucrative Wall Street job in favor of life as a clergyman, guitarist, barista, asphalt-layer, or full-time parent?

In the progressive magazine, Current Affairs¸ Nathan J. Robinson penned a piece called “Defective Altruism.” Mr. Robinson’s subhead is:

“Socialism is the most effective altruism. Who needs anything else? The repugnant philosophy of “Effective Altruism” offers nothing to movements for global justice.”

On the topic of socialism, we would part ways, but on EA, he makes some salient points. Like Hayek, I’ll strive to address his well-written piece with respect. In particular he gives an illustrative anecdote:

“I heard an EA-sympathetic graduate student explaining to a law student that she shouldn’t be a public defender, because it would be morally more beneficial for her to work at a large corporate law firm and donate most of her salary to an anti-malaria charity. The argument he made was that if she didn’t become a public defender, someone else would fill the post, but if she didn’t take the position as a Wall Street lawyer, the person who did take it probably wouldn’t donate their income to charity, thus by taking the public defender job instead of the Wall Street job she was essentially murdering the people whose lives she could have saved by donating a Wall Street income to charity.”

Robinson continued:

“the woman to whom this argument was made became angry and frustrated, and the man making the argument took her anger and frustration as a sign that she simply could not handle the harsh but indisputable logic bombs he was dropping on her.”

According to Robinson, this line of reasoning—that you are obliged to select the career that maximizes your capacity to donate funds to optimized charities—is a popular belief among EA adherents. I’ve heard the same point made elsewhere, and I’ll leave it to discriminating readers to determine whether Robinson’s anecdote (and my repeat of it) represents an isolated incident or a widespread tendency.

All Your Eggs in One Echo Chamber

In recent decades, charitable giving has been a somewhat atomized endeavor. Even John D. Rockefeller, Andrew Carnegie, and Henry Ford each controlled a relatively small percentage of charitable donations. The socialism suggested above by Nathan Robinson envisions a world where charity is planned by the monopolized, centralized might of government. EA, it seems to me, seeks a middle ground, where a goodly percentage of donations are directed (or at least strongly suggested) by a relatively compact set of EA organizations. The question is whether this leads to groupthink—a world where a relatively like-minded cadre of EA organizations mutually self-reinforce and direct themselves toward similar visions of optimal giving. I write often on early-20^th century eugenics, where the charitable arms of Carnegie, Ford, and others did, in fact, fall prey to groupthink, with horrific consequences. 

EA received a certain taste of this risk when Samuel Bankman-Fried (“SBF”) emerged as perhaps earth’s most visible public face of EA. Given the adulation he had received and the spectacular manner of his fall, one might guess that divine laughter was especially hearty in the wake of that particular man’s plans. In Commentary, Noah Rothman described EA and SBF’s role in EA as “a work”—a carnival term for “a staged performance presented as entirely authentic.” As one might say in Yiddish, “A Philantrop tracht, un Gott lacht.”

To his credit, Nathan Robinson presciently, targeted Bankman-Fried’s place in the EA universe—in an article written before FTX’s spectacular collapse. A New Yorker article after SBF’s collapse (“Sam Bankman-Fried, Effective Altruism, and the Question of Complicity,” by Gideon Lewis-Kraus), bore the subtitle, “Leaders of the [EA] movement had no way to know that FTX would collapse. But they also had every incentive to ignore warnings.” Groupthink in tactics, if not in philosophy.

Another EA organ, GiveWell, seems sincere in maximizing public good, but I worry a bit about their stated goal: “to find the best ways to help others and to put them in practice.” Using the word “best” (as opposed to, say, “good ways to help others” or “cost-effective ways to help others”) and touting their own vision as “the gold standard for giving” might suggest a touch of hubris. Perhaps less puffery and more modesty might enhance the value and the reach of their advice.

The Wisdom of Crowds and the Cult of the Imperfect

My graduate studies in economics focused mostly on an endless series of optimization problems—using math to identify and simulate the very best of all possible worlds. But economics has also tossed up—and rewarded—less mechanistic views of how the world works. Herbert Simon offered an alternative concept in 1947 that he would dub “satisficing” in 1956. This is decision-making when information is missing, or computation is impossible—the problems that Postrel and Rajagopalan address. Simon said in his 1978 Nobel Prize address:

“Model construction under these stringent conditions has taken two directions. The first is to retain optimization, but to simplify sufficiently so that the optimum (in the simplified world!) is computable. The second is to construct satisficing models that provide good enough decisions with reasonable costs of computation. By giving up optimization, a richer set of properties of the real world can be retained in the models. Stated otherwise, decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world. Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science.”

Satisficing is a rather comforting, humanizing concept that suggests that, “I only have to look for what is good—not for what is best.” In most situations, I’m confident that I can do the former. I’m rarely sure that I (or anyone else) can do the latter. The British physicist Sir Robert Alexander Watson-Watt, wartime developer of radar, advocated what he termed “the cult of the imperfect”: “Give them the third best to go on with; the second best comes too late, the best never comes.” One might well consider that messy, atomized, impromptu charity might similarly confer more benefits than centrally planned giving.

In reviewing the founding document of EA, Doing Good Better, by philosopher Will MacAskill, Steven Pinker wrote:

“Effective altruism — efforts that actually help people rather than making you feel good or helping you show off — is one of the great new ideas of the 21st century.”

Of course, a millennium ago, Maimonides (Moses ben Maimon) gave a great deal of thought to “efforts that actually help people rather than making you feel good or helping you show off”—for example, in the emphasis he placed on doubly-anonymous charitable giving. In Commentary, Michael Rosen wrote:

“Effective altruists generally eschew ‘feel good’ work in the nonprofit sector in favor of employment in the world of finance coupled with massive charitable contributions. It is far better, they reckon, to save dozens of lives in the developing world with surplus income from a lucrative hedge-fund position than to marginally improve an NGO supplying laptops to the Global South.”

But in advocating this shift, EA advocates may be tearing down G. K. Chesterton’s proverbial fence. One great intangible benefit of one-on-one charity lies in the human connections that emerge from such efforts. Helping actual humans to build a clinic with one’s own hands yields benefits that running a hedge fund and cutting a mathematically optimized charity check do not.

The Importance of Empathy

An insightful economics student once complained to me that a highly acclaimed economics educator had told his class (on Secretary’s Day) that it is always preferable to give your secretary cash rather than, say, a bouquet of flowers or a book. Cash, the professor argued, allows the secretary to buy the flowers, the book, or an infinite array of other goods and services. This flexibility, he said, is, therefore, always superior. The student noted to me that gift-giving has been an important component of every society in human history and that this extraordinary empirical regularity seems not to have moderated the professor’s love for his simplistic utilitarian model. I thought the student was wise and the professor was an overeducated fool.

For the aforementioned Maimonides, the very highest form of charity was for one individual to help another individual to start a business and to become self-sufficient. Teaching him to fish, so to speak. One of the benefits of such fly-by-wire, one-on-one charity is that it builds the sort of social connections and empathy that will not likely come from writing a check to Effective Alturism, Inc. In Dead Poets Society, Keating tells his students:

“When you read, don’t just consider what the author thinks, consider what you think.”

There is wisdom to be found in replacing “author” with “the professional altruist.”

In 1906, British polymath Francis Galton attended a county fair, where a great huge bull was on display. The assembled crowd, including some expert butchers, were asked to estimate how many pounds of meat would be extracted from the bull at slaughter. Galton was surprised to find that average weight of all the attendees’ guesses was closer than almost any individual guesses—including guesses by the experts. To his credit, Galton readily admitted that his suppositions were in error, and this phenomenon became known as the “wisdom of crowds.” Perhaps the same principle holds merit for charitable donations. Perhaps 330 million Americans fumbling their way through brochures and phone solicitations for myriad charities, rather than outsourcing their decency to small groups of elites advising the rest of us where to work and where to donate.

Galton’s brilliant and humble observation is remarkably ironic. 23 years before that county fair, Galton had invented the word “eugenics.” He had also helped found the field of mathematical statistics, largely to erect a scientific framework to validate eugenics, which he anticipated would be primarily a science for providing good advice to those who cared to listen. By the time his movement was fast becoming an authoritarian monstrosity.

As a final note, one might ask whether the sort of people who become effective altruists are, in fact, those best suited for altruism that is, well, effective. Charity is, in essence, empathy as action. Effective altruism is to a considerable degree an edifice constructed by those whose talents lie in financial engineering, quantitative research, and software programming. At the risk of stereotyping, one might ask whether people with these particular skills are especially well-endowed with empathy. As an economist, I have some concerns on that score.

Lagniappe

Jeremy Bentham, Altruist

Jeremy Bentham's mummified remains at The Student Centre, University College London. Photo by Philip Stevens under Creative Commons license at Wikimedia Commons.

Jeremy Bentham (1747-1832) was one of the West’s greatest philosophers and social theorists. He is the founder of utilitarianism, which, one could say, forms the basis for effective altruism—and of modern microeconomics in general. He is credited with the term “greatest happiness of the greatest number” and wrote that “the obligation to minister to general happiness, was an obligation paramount to and inclusive of every other.” Bentham was himself a noted altruist. He famously donated his body to science, and this bequest came with a peculiar provision. His trustees were required to have his post-dissection leftovers stuffed, mummified, and dressed to the nines as an “auto-icon.” Today, nearly two centuries after his death, he remains on permanent display at University College London. It has long be rumored that Bentham regularly attends business meetings of the University’s governing council. That always struck me as depriving Bentham of one of death’s single greatest virtue—no more meetings. Alas, these rumors are but a myth, though Bentham’s shuffled-off mortal coil did attend the final meeting of the University’s soon-retiring provost in 2013.

Robert F. Graboyes is president of RFG Counterpoint, LLC in Alexandria, Virginia. An economist, journalist, and musician, he holds five degrees, including a PhD in economics from Columbia University. An award-winning professor, in 2014, he received the Reason Foundation’s Bastiat Prize for Journalism. He publishes Bastiat’s Window, a Substack-based journal of economics, science, and culture. His music compositions are at YouTube.com/@RFGraboyes/videos.