Further Than Africa

Imagine you asked people whether they cared about poor Africans, and if so, what were they doing to help.  Imagine your heard following answers:

  1. Africa is so far away, and some Africans are much richer than I am.  The process of sending money to such a distant place is so complex that I fear anything I gave would be stolen along they way, especially by rich Africans.  So I don’t give.
  2. I contribute to the world economy just by doing my job and buying stuff.  Eventually that ends up helping everyone in the world, including Africans.
  3. I donate to my local hospital, volunteer at my local school library, and buy cookies from local girl scouts.  All charity helps the world, and so helps everyone in the world.
  4. I buy fair coffee to save the rain forrest, march to stop nukes, and drive a Prius to stop global warming.  When I save the world in these ways that helps Africans, who also live in this world.
  5. If I gave directly to Africans, that would cheat all the folks between here and Africa from the chance to help their neighbors.  My plan instead is to give to a local neighbor and have faith that this neighbor will then give to his neighbor, and so on until far away Africans are helped.

Which of these folks would you conclude really did care about Africans? What if you offered to match their donated funds by a factor of a million or trillion, and they still fell back on these excuses? Would you still think they cared?

A few weeks ago at Oxford I talked on “We Don’t Donate To The Distant Future; Do We Care?” (slides here).  I pointed out that no one tries, like Ben Franklin, to use compound interest to donate huge sums to the distant future, at a tiny cost to themselves.  When I suggested that this fact suggests few care much about the distant future, people responded with arguments like the above.  They donate to charity, try to save the world, do their job that builds the world economy, they fear donations would be stolen and many future folks will be rich, and its better to just give to their kids with faith that each generation will give to the next.  So of course they care about the future – how dare I suggest otherwise?

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  • Grant

    I saw a number of very good arguments against the Franklin compound interest idea. Current data suggests people in the future will be richer than us, so it just seems odd to give them stuff.

    To me it feels like you’re saying: “the poor don’t give the rich any money, so they obviously don’t care about them at all”.

    I can see justifications for giving people in the future real goods that they may find useful. Caches of food, shelter and knowledge in case of nuclear war, meteor strike, etc. In fact I’m surprised there aren’t more projects like this, despite many people thinking them to be ‘silly’.

    e.g.:
    http://en.wikipedia.org/wiki/Svalbard_Global_Seed_Vault

    • http://williambswift.blogspot.com/ billswift

      In “Life After Doomsday”, Bruce Clayton suggested a distributed version of this – the “Clayton-Liebowitz Project”, to save knowledge in event of global disaster. Buy and protect two new books in your specific domain of knowledge so that they would survive a major catastrophe and would hopefully be available to help rebuild in the future.

  • http://t-a-w.blogspot.com/ Tomasz Wegrzanowski

    There have been plenty of people in history who cared about distant future. Like Egyptian Pharaohs to name some highly notable ones. They tried to make sure there will always be priests praying for them, donated lands to temples of their name so that priests could live off that land forever. And yet, all of this for naught.

    Long term compound interest is nonsense. Your account cannot grow faster than world GDP indefinitely – it will eventually (rather quickly) hit a wall. And you vastly overestimate risk-free investment opportunities of the ancient world – the risk of others just taking what you consider yours one way or the other was immense, and there was little way to diversify away from it.

    With proper adjustment for risk, interest rates on capital was nearly zero, and very likely negative.

  • Idiot

    “Which of these folks would you conclude really did care about Africans?”

    If they even bothered to make excuses rather than saying, “I like to spend my own money”, then, yes, they do care about Africans. #3, #4, and #5 does showcase good examples of how to ‘help’ Africans without .

    How about a #6? “Yes, I care about poor Africans, but I cannot provide ‘help’ without strings attached to ensure that such ‘help’ is used properly. But if attach said ‘strings’, I would end up dictating to the Africans what he can and cannot do, and I feel that this is even more worse than the disease. Hence, I cannot ‘help’ the African without fear of subjecting them to imperialism.”

  • Idiot

    “Long term compound interest is nonsense. Your account cannot grow faster than world GDP indefinitely – it will eventually (rather quickly) hit a wall.”

    Exactly, which is why you start spending your trust 200 years later, before it hits said brick wall.

  • http://hanson.gmu.edu Robin Hanson

    Grant, you could target your donations to the future poor.

    Tomasz, no one said investments could grow indefinitely. Property has been reasonably secure in the UK since about 1200.

    Idiot, even bothering to make up an excuse shows you care? Really?

    • http://t-a-w.blogspot.com/ Tomasz Wegrzanowski

      Since 1200? How can you forget one of the largest government takeovers of wealth in history – confiscation of Catholic Church property during reformation?

      Then there’s been expulsions of Jews from England in 1290 – another large scale confiscation. Then there’s been a fairly regular schedule of politically motivated confiscations for whoever was out of favor.

      Not that there could even be much talk about risk-free interest rates, with charging interest being illegal in the first place. Jewish and Italians bankers were randomly allowed and then prosecuted, expelled (or worse), and their profits confiscated if the king got into too much debt – including in England. (some other parts of UK like Ireland, and many parts of Europe had their lands confiscated outright multiple times due to wars)

      There’s nothing remotely risk-free about it all.

    • http://hanson.gmu.edu Robin Hanson

      Land was reliably rented and rent money was collected, which could be used to buy more land.

    • jc

      regarding Grant: I don’t want to put words in Grant’s mouth, but Grant may be assuming that the poor of tomorrow will be wealthier than most of us today, and thus have less need for our contributions than we, ourselves, currently have.

      Even if this is true, and one doesn’t care about equalization of incomes in the future enough to donate to the future poor, it’s still a neat idea, harnessing the power of compound interest.

      On a related note, taking a page out of various science fiction novels, one could leave the money to future relatives or even, if technologies like cryogenics become more realistic, to oneself, trading a relatively modest life today for a vastly richer one tomorrow.

      Or someone like Kling or Caplan could leave money to a future philanthropy that promotes an ideal like liberty. (In a sense, some charitable givers today engage in a very small scale version of this by trading relatively small monetary figures (in the form of premiums) today for a huge, lump sum donation (in the form of life insurance proceeds) in the future. It’s a pretty compelling pitch used by some fundraisers who show how a very small outlay today results in a huge outlay tomorrow, and at least a little immortality when, say, a building is erected with your name on it. Of course, now we’re getting further away from caring about others, confounding that with ego…)

  • http://metadoxy.blogspot.com/ Norman

    I think the question itself is a bit disingenuous. In order to donate to the poor in Africa (or the distant future), you need to not only care about them, but to care about them more than you do about the poor in southeast Asia, or Haiti, or Appalachia. The reasons given above are simply justifications, whether legitimate or invented, for favoring one group over the other.

    I think people, to the extent they care about any poor, tend to care about the poor that share some connection with them, whether it be in demographics, physical location, or temporal location. Perhaps this is a near/far thinking issue, or perhaps not. In either case, framing the question as “we don’t give, therefore we don’t care” ignores the real trade-offs people are making.

  • nazgulnarsil

    my excuse is that I care proportionately to how much people share my values. people from other cultures share few of my values and I care relatively little about them. my available surplus goes to my ingroup, sometimes this includes devoting resources to signaling that I care about africans. but of course I only care about the benefits I derive from doing so.

  • mitchell porter

    How did you come up with this idea?

    • mitchell porter

      Let me explain that question… Every so often you make a post of the following form:

      “People claim that they want to be smart and would like to be smarter. But if you stand on your head, blood pools in your brain, providing more oxygen, and thus improving your cognitive function. Yet people spend hardly any time standing on their heads. Does this mean that they don’t really want to be smarter?”

      i.e. you spring a suggestion on people they’ve never even considered, then tell them that because they aren’t already doing it, they must be lying to the world and to themselves about what they really want. This then produces expressions of baffled irritation from your audience, e.g. the commenter above who says “the question itself is a bit disingenuous”.

      Now maybe this stems somehow from a lifetime of having your own good ideas ignored. And of course there is such a thing as motivated bias. But it is my strong impression that periodically, you speculate about human nature in ways that are quite unreasonable. I cannot tell if this is indeed disingenuous provocation, or reflects some cognitive idiosyncrasy (you really may think differently to most people). I don’t even know if it would be better for you to stop (assuming that to be possible; your readers will have different opinions about where the boundary of unreasonableness lies). Maybe it’s good for people to experience baffled irritation once in a while.

      • http://entitledtoanopinion.wordpress.com TGGP

        I don’t think standing on your head actually helps you think better. Maybe Seth Roberts could do a self-experiment to find out.

      • salacious

        I was prepared to essentially write this comment, but I guess you got there first. Robin’s perpetual assumption of bad faith on the part of people who disagree with him is tiresome. Deriving that bad faith from analogies of contestable validity is even more tiresome.

      • http://hanson.gmu.edu Robin Hanson

        Sometimes people don’t show much interest in a suggestion that they should be interested in, given what they say are their interests. Sometimes this is because it takes time to assimilate a new suggestion, and sometimes this is because they aren’t actually interested in what they say. I’ve spent decades making such suggestions, and trying to discern which explanation best fits their behavior. Then I use that insight to make predictions about how new suggestions will be treated. So how is my behavior insincere?

      • Mitchell Porter

        I was never a big advocate of the insincerity hypothesis. I just think your statements here and more recently are unreasonable. But asking Robin Hanson not to call his audience hypocrites is like asking Nietzsche to stop bringing up that “will to power” concept. 🙂

  • Vilhelm S

    On a less extreme time-scale, the same “multiplier” argument shows that I should cut my consumption to the bare minimum and instead invest all my money. After all, in 70 years time it will have doubled in value! Surely it is better to give the money to future-me, who will get twice as much, than to give it current-me. Yet most people don’t do this; do they not care about their future self?

    • Prakash

      That argument is fairly true if your body didn’t degrade, reducing your chances of experiencing intense pleasure later in life. If your body is unchanging,(for eg. in the short term), you do wait for the next week for a good restaurant meal or unhurried lovemaking or the next month for a vacation.

  • Josh

    “What if you offered to match their donated funds by a factor of a million or trillion, and they still fell back on these excuses?”

    I can’t imagine anyone who isn’t a sociopath would refuse donating a dollar or two if they knew it would be multiplied that much. Hell, even sociopaths do things for the sake of appearances.

    This blog can be interesting at times but so often your wild speculations are just frustrating. I often think I’m reading the Bayesian rationalist’s version of “how many angels can fit on the head of a needle.”

    _______________________________________________________

    Compound interest doesn’t appear out of thin air, even if it is a result of a click of a computer mouse at the Federal Reserve. Any returns from interest above inflation are the result of capturing some sort of value which at some stage has been produced or found by a human. There are obvious implications to this. Your gain is someone else’s loss. Maybe its only a fraction of a cent per person, but if your account is gaining money in real terms, then it is from either other investor’s losses, profiting from other people’s production of goods and services, or some combination of the two.

    Think of the earth as a zero sum game plus the energy input of the sun. Money is just a claim on goods and services, which are incredibly complex versions of the sun’s stored energy. Now, if you take your claims on that energy and invest it what you are actually doing is lending it out for others to use in the expectation that you get it back plus more, until your charitable fund’s maturity date.

    What have you actually done? Assuming your fund is successful, you’ve slowly “collected” some combination of the earth’s existing resources plus the energy input of the sun over time and “dumped” it into the future. Since you have no way of knowing whether investing that money in a child’s education now (or some other worthy cause) will create more value over time (think of the generational effects) , or whether a big lump sum in the future will create more value, the argument is pointless, and both options are almost equivalent.

    The difference between the two is that the long-term investment version concentrates wealth over time, with an unknown probably of how much it will be needed in the future and an unknown chance of survival (war, etc.).

    The “act now” version distributes a smaller amount now with a very high chance of reaching someone who almost certainly needs it.

    Either way, they look pretty equivalent to me.

  • Jess Riedel

    In your talk, I couldn’t find anything addressing the objection I preferred last time you posted on this: in the relatively near future (<1000 years) people are likely to be extremely wealthy, and so would not need our aid. It is only in the far, far future when (you argue) Darwinian pressures may lead to low income per capita, but this is when I think we should have vanishing confidence about our ability to help people who we would want to help.

    Further, this all seems to be trumped by the ability to donate toward existential risk mitigation. If people don’t want to donate to that, what the point of the current discussion?

    Incidentally, I recommend posting power point presentations as PDFs rather than the original ppt files. None of the formatting and fonts came out correctly on my PC.

    • Nick Tarleton

      Further, this all seems to be trumped by the ability to donate toward existential risk mitigation.

      Seconded. This seems to be a case where answer-type #4 is actually correct.

  • Josh

    Thinking about this some more, I’m now going to contradict myself somewhat…

    Donating now vs. the future are not as equivalent as I thought. If we reduce all economic activity to “complex stores of the sun’s energy” then yes, they are, but obviously this is a bit extreme.

    I would think that if in a couple hundred years’ time if there are still similar numbers of people in as much need as there is today then the chances of a large fund being able to help the situation would be close to nil. Not being able to solve (or at least drastically reduce) genocide, starvation, and extreme povertywithin 200 years in my mind would be strongly correlated with not even surviving that long. How much money has already been thrown at problems in Africa and the rest of the world? How much of that ends up in the hands of warlords and dictators?

    Now what about the success rate of education? What if instead of donating 1000 francs (pounds?) Ben Franklin had picked a promising young pupil or two and mentored them, spending his time, rather than money? Obviously this is a complete guesstimate, but I’d bet that pupil’s contributions to society would be worth far more than 7.3 million dollars his fund returned. What if we spend money now to educate the poor? What about micro-loans to the poor? That’s money that is invested in them now with higher success rates than traditional charities and foreign aid solutions.

  • Lekowitz

    Idiot,

    I just had to say that it look’s awesome when Robin replies to you and has to write “Idiot” before his remark.

  • Doug S.

    Personally, I don’t care very much about helping the distant future; I figure that it can take care of itself – and if it can’t, there’s probably nothing I could have done anyway.

  • http://modeledbehavior.com Karl Smith

    Ah – Those slides cleared up a lot.

    You are just suggesting that people in fact discount the future. This is clear enough to me.

    That is what I meant before by, “Why the hell am I going to us the multiplier hole for someone else when I am not even maxing out its use for myself”

    I don’t even value my own welfare in the future enough to poor most of my money in the whole, I sure don’t value other people’s future welfare that much.

  • burger flipper

    So then isn’t cryogenics evil? You only plan to send one you to the distant future (and how useful will you really be, with your ancient brain?), whereas the 100K would be multiplied a thousandfold and able to assist many.

  • Josh

    Just looked at the slides and re-read the post…

    Where do I begin?

    “England property secure since 1200”

    –That’s a statistical sample of ONE… not very convincing.

    “Funds might get stolen * Even so, good mean return, gains to thief count”

    –Really? Gains to the thief count? Please humor me for a second while I stare incredulously… yes, I know its a cheap rhetorical trick, but come on! So the risk of your fund getting stolen just became an argumen for your point? Wow, that’s some doubleplusgood thinking.

    “Kind act that influences future insufficient
    * Strong temptation to wishful thinking
    Aid someone today, they might aid future
    * But they usually don’t help this much”

    –You don’t just buy someone food… you pay for some education or buy them a fishing boat…. give them a means to lift themselves out of poverty and hopefully their children as well. The pay-it-forward idea is a straw man argument…

    “cash is robust answer”

    –No. Investing in technology today is a robust answer. Reducing poverty and other sources of instability today is a robust answer. Education is a robust answer. Technology and education create immediate gains and build foundations for more gains. There is hidden compound interest in non-financial investments. People’s children have more opportunities.

    Creating a cash investment for the future is not only putting our heads in the sand, it is completely unrealistic. Have you considered the economic effect of when you liquidate all your bonds in the future for donations?

  • Marcus

    I don’t have a good response, so I’ll just settle for some cheap correlations 😉

    — Parents like to use related reasoning on kids, something like, ZOMG! How can you waste your food when there are poor kids starving in Africa!?!??

    — Evangelical and Catholic leaders may filter the future generations discussion through a narrative about unborn babies

    — Ditto Libertarians and deficits

    — Ditto Henny Penny and skies

    — Ditto stoners and heavy

    — The social scientist will point to the research on how difficult it is for human minds to usefully parse large numbers

    — The social evolutionist will point to Dunbar’s number for clues

    — In meta-ethics there’s still no non-circular basis for absolutes, and that’s for the past and present. You’re asking us to consider ethics without a notion of time or even specific existence.

    To take that to a potential conclusion, that ethics may be atemporal. Putting it perhaps more appropriately as a question, what is the relation of ethics to time?

    Clearly *if* we did find an absolute basis for ethics then it is intrinsically compelled to something to say about it’s relation to past narratives, present state, as well as the future. I argue that’s mostly irrelevant until we do find absolutes.

    — And that leads to the really remarkable pre-quantum mathematician who thinks we’ll get this all figured out once there’s a unifying theory. Sadly (happily?) it not quite that simple.

    Personally I wonder if you’re trolling, perhaps as an experiment, and I’m wondering what you’re up to 😀

    The keywords seem to be “distant future”. I’ve talked with people about this topic. Unscientifically, it seems like a lot of people care a lot more about the distant future than I do. And they get offended by that. But I’m not trying to be a hard ass, I just don’t think they are being honest with themselves. But who am I to know, maybe they are truly ingrained with deep concern for 200-300 years from now. Concern for the distant future is clearly aesthetics with no rational basis.

    That’s why I focus on the ethical question, as you did, but perhaps for different reasons. Find something even approaching a rational basis for consideration of more than 200-300 years from now and I’m in. How can being “remembered” be anything other than aesthetic value? I’m not saying that rhetorically, I meant it practically, because if there’s a value that I’m missing, then I want to know about it. (Using 200-300 as a round number for longer than my great-grandchildren live.)

    I think our past has a lot to tell us too, or rather, how we view our past. We do not hold it in high regard. It is drama from a safe distance, made more interesting by the illusion of the narrative as an approximation of reality. The future will not look kindly on us. And I don’t blame them.

    I recognize some emotion, most likely resentment, also present in myself when I say such things. It’s not great, but it’s not a large amount and seems rational, I don’t really know. Either way I’m pretty sure it’s not a major motivator, just a recognized bias in myself toward the present. And so that’s what makes it appear to be rational even if not optimal.

  • Steven Schreiber

    I don’t think it’s true at all. The last major institutions which existed to do things for future generations using current production were all raided and largely extinct by the 19th century. They survived about 1,300 years, but primarily because of the political power of the Catholic Church, not law itself.

    What people do to promote the welfare of future generations is bequeath institutional structures and social aesthetics which tend, by altering how culture views itself and what is valuable, to preserve and extend these benefits to each generation. Since this is largely done by volunteering or accepting vast cuts in income, often by some of the most talented people in our economy, it likely represents an overall bequest worth billions, if not trillions, of current dollars.

  • http://hanson.gmu.edu Robin Hanson

    Norman, given the huge matching funds available for donations to the distant future, you must care about them *far less than Africans.

    mitchell, I must either believe that upon announcing such an option a great many people will change their behavior to use the option, or that they won’t. I know which way I’d bet; how would you bet?

    Vilhem, yes you care about your distant future self less than half your today self.

    Josh, if you think compound interest gains from savings invested are theft from someone, who are they stolen from? I see no negative externality. Why do you expend the chance of theft to rise faster than the real interest rate? Franklin’s fund *did invest in education loans. W

    burger, I didn’t say it was evil not to care.

    • mitchell porter

      Give people a chance to think about and discuss the idea! When there are a number of activities *in the present* with potentially an enormous impact on long-range outcomes, and which are woefully underfinanced right now, it seems supremely unlikely that taking that money out of circulation for a few centuries is its best possible use. So I think that on reflection people will not endorse the concept. But they would need to properly assimilate your arguments before they can evaluate them.

      It is undoubtedly true that most people don’t care about the far future, in the sense that imagined outcomes a thousand or a million years from now are not a factor in their decision-making. But again, give people a reason to think that it matters or that they could make a difference, and some of them will get involved. Meanwhile, if the few people who already try to make a difference to the far future do not adopt this particular idea right away (or ever), it does not mean that they don’t really care!

    • Josh

      I didn’t say they were theft… I said they were the results of someone else’s production or discovery… obviously if they agree to terms of a loan it isn’t theft. Can you explain where compound interest comes from?

      “chance of theft to rise faster …..” ????

      Where did I write that? I quoted your slides…. You claim that even if a thief steals the fund that it still counts. Please explain.

    • http://hanson.gmu.edu Robin Hanson

      mitchell, money saved and invested is not “out of circulation.” Ben’s money was invested in apprenticeship training.

      Josh, take an econ class to understand that interest comes from opportunities foregone. The gains are real, not illusory.

      • Josh

        I didn’t say they were illusory either. If returns from interest aren’t from inflation then there is no other possible source of them than some other investor’s loss and/or productive gains (like a company turning discovering, processing, and selling a resource). Does that sound illusory?

        Do you care to defend your claim that a thief stealing the fund still counts or are you just going to cherry pick what criticisms you reply to?

      • Josh

        (wish you could edit comments after you post them, feel free to delete the above comment)

        I didn’t say they were illusory either. If returns from interest aren’t completely from inflation then there is no other possible source of them than some combination of another investor’s loss and the productive gains (like a company turning discovering, processing, and selling a resource) of a firm. In other words, zero sum (the trading of financial products) plus real productive work. Does that sound illusory?

        Do you care to defend your claim that a thief stealing the fund still counts or are you just going to cherry pick what criticisms you reply to?

  • http://www.blogger.com/profile/10546265581296919974 Rob

    I tend to think that the biologically childless, and the especially meritorious among them who choose to adopt, are less obligated to care for distant future lives than those who, by procreating, directly contribute to extending into the future the suffering and loss faced by temporally distant lives.

    • http://lightskyland.com Matthew C.

      Rob,

      There is a pill you can take to cure this kind of thinking. . .

  • Rain

    You seem to be making the claim that we can predict the marginal utility of a dollar invested today for the purposes of charity over a very long time frame. I dispute this claim on the grounds of our severely limited ability to predict that future. Given radical uncertainty, it is not at all clear to me where to achieve the best marginal utility for my dollar.

    Specific areas of uncertainty:
    * The marginal utility of the topic to which I target my money on the date of its payout.
    * The financial stability of the currencies or investment vehicles I use to make the investment. (crashes, insolvency, obsolescence, inflation)
    * The legal stability of the structure I use to handle and administer the investment. (taxes, lawsuits, politics, thieves)
    * The potential for revolutionary technological or social innovations. (money is unnecessary for whatever reason)

    The above effects add up to: the point-in-time at which the money produces the most marginal utility may be sooner rather than later, and when using the money for the far future, the error bars (uncertainty) increase dramatically.

  • jk

    Related: We promise to donate in the distant future and give/spent the money today: http://www.iff-immunisation.org/

  • Philo

    Can the strength of my “caring” for another be measured by how much I am willing to do for him? No, it’s more complicated than that. My ability to help may vary from person to person. It is usually more efficient to help those nearby: one has better information about their condition, an easier time delivering aid to them, and better facilities for monitoring the result. And there are other factors besides distance; for example, as an orthopedic surgeon, I may care equally about A and B, but devote more effort to A: A has a broken bone that I can set, while B’s bones are intact.

    In my view, the most important variable factor is the mindset of the potential recipient of aid. If I think I, personally, have arrived at the right value-scheme (and of course I do: I’m a clever, thoughtful guy), which many others have failed to do, then I will prefer to give to those who share my value-scheme; *their* actions, in turn–carried out with the extra resources they have acquired with my help–will be guided by these (correct) values. So, while I *care equally* about people who do not share my values–they are, after all, still people–I help them less or not at all: I think that helping people with the right values will do more good, because of its worthwhile *multiplier effect*.

    As for future people, the best thing I can do is to *help create* them. Having many children of my own will probably have a slightly positive effect on future population (though this is far from certain), giving more people the *boon of existence* (as opposed to the *curse of non-existence*, from which so many suffer!)

  • brazil84

    I think Rain has a good point. Actually, it seems to me Ben Franklin could have done a ton of good if he had simply used his 1000 pounds to buy up land in what is now Leonia, New Jersey and dedicated that land for use in highway construction.

    Some huge number of cars a year have to travel an extra mile or two because the NJ Turnpike had to be routed around Leonia.

    Think about the dollar value of all that extra gasoline.

    But anyway, even putting aside questions about the future, it’s difficult to assess the impact of charitible contributions today. Personally I think that “helping poor people in Africa” is counterproductive since it tends to increase the number of black people in the world. More black people = more social problems for the rest of us to deal with.

    • http://www.gwern.net/Charity%20is%20not%20about%20helping gwern

      I’m sure he could’ve done that and done a lot of good, but how on earth was he supposed to know?

  • http://timtyler.org/ Tim Tyler

    Caring about the far future seems unnatural, unbiological, and bizarre. In biology, organisms look after their descendants – and let *them* look after the future. They are closer to it, and so better positioned to execute the best actions.

  • Mike

    What causes risk free return to capital? Is there a “natural” explanation for this phenomenon?

    In the absence of some strong theory that this return will always exist and will always be non-trivial and will always be positive, I would imagine the PRIMARY result of putting more capital into “risk free” investments will be to lower this rate. I don’t see anything which stops the real risk free return from going under zero.

    Indeed, the high return goes to the scarce input. In this world in which capital becomes so much more abundant, return to capital would have to fall. And again, no reason that return doesn’t drop below zero.

    Seems to me.

    • http://hanson.gmu.edu Robin Hanson

      You could specify that your investment stop accumulating and pay out if the interest rate dropped to zero. Yes more savings would lower interest rates, and that would be a good thing.

      • http://torontopm.wordpress.com Paul Hewitt

        Robin, it is not necessarily a good thing for interest rates to fall (especially to zero). This would shut down savings and spur current consumption. Perhaps this would not be the most appropriate course of action, in terms of solving significant “charitable” problems.

        It seems that you are advocating current saving (investment), in hopes that the compounded funds would be better able to solve key problems. If interest rates fall in the future, this would reduce future saving to solve then future problems. Ultimately, there is likely to be an equilibrium level of saving for the future. Maybe we’re there, now.

      • http://hanson.gmu.edu Robin Hanson

        Interest is a price, set by supply and demand. I say that if supply is bigger, the equilibrium price falls. You say that at a lower price there would be less supply, and demand would exceed supply. You seem to interpret me as arguing for an out-of-equilibrium price, whereas I’m actually talking entirely in terms of equilibrium prices.

  • Edward Gaffney

    Future is rich. Future is not comparable to Africa. Future is comparable to Luxembourg.

    • Guillaume

      No one knows the future Edward.

      That’s a risk premium we must take into account: if Africa (as a whole?) finally develops, our donations today may seems worthless in a distant future. But we don’t really know…

      But I hope u’re right…

  • Lord

    I must say that those who offer matching contributions do so to enhance their own position, not those of others. Falling for that is a mistake and few people do. Does anyone think such an offer will be affected by such a donation? If they really cared to the extent of a million or trillion, would they withhold it if no one else gave a damn? Now if I could materially affect their position by such a match, possibly bankrupting them, it could get interesting, but the only way a match is believable is if one could not expect it to be made otherwise.

    As far as the future goes, they will get it one way or another, whether a better planet or cash, so long as it as it doesn’t make the future worse off, and that is what one should concentrate on, leaving the world better off.

  • Lo Statuz

    I agree with mitchell porter that Robin Hanson has a habit of asking why some conceivable institution or behavior does not exist, then answering his own question in some provocative way. Unlike salacious, I do not find this tiresome; I find it thought-provoking. Most of us suffer from status quo bias. Robin Hanson has the rare gift of imagining plausible alternative institutions. Even if most turn out to be impractical, all we need is one big win.

    I’d really like to see Robin Hanson team up with a good science fiction writer to write a novel. I commit here to pre-order the book for at most $15, provided it’s available in a DRM-free digital format, for example from Baen.

    As for the Africa analogy, I believe Africans today are physical human beings like me. I’m not sure I’d even recognize people 100-200 years in the future as human. They might be the artificial intelligences who exterminated my kind of human.

    • http://torontopm.wordpress.com Paul Hewitt

      Perhaps you’re right. Let him choose a “good science fiction” author, as opposed to a great one, like Ray Bradbury. Can you imagine the rewrite of “A Sound of Thunder”?

      Robin would want to change the core of the plot. In the story, a tiny change in the prehistoric environment had profound changes in that of the present day. Using the same logic, small changes, today, could have tremendous benefits in the future. It appears that Robin is advocating a deferral of small changes, today, in the hope that large changes could be made “tomorrow”. Kind of ruins the story.

      Not a book I would wish to purchase.

  • Stuart Armstrong

    As I said at the talk, I you (or anyone on this thread) would give me the ability to give small amounts of cash to the future, I will so so.

  • Guillaume

    About We Don’t Donate To The Distant Future.
    Here is my best idea so far. We see donations like of form of consumption, not an investment. The preference for an immediate consumption and therefore time value of money apply when dealing with donations. We’d rather donate for an identified cause today than for an – essentially unknown – distant future use. The idea is that the implicit discount rate we apply to donations is extremely high. Just consider Haiti: the implicit discount rate that equalizes the utility from helping them now and the future utility from helping them in some distant future is huge. It would imply that we agree to let entire families in extremely dire situation now in the hope we could help their descendants in some extents.
    What do you think ?
    (and sorry for my poor english 🙂 )

  • the dude

    current interest rates are not equilibrium prices but set and controlled by Central Banks. This complicates the analysis, as you cannt argue with an equilibrium model any longer, unless you argue CB’s will be abolished within that time frame.

    • http://hanson.gmu.edu Robin Hanson

      Central banks set short term rates, not long term rates.

  • Steve

    This is a good argument, I never really thought about how you could target the poor in the future, in theory.

    In fact, it might be easier to target the poorest of the poor in the future because we’ll better understand who “the poor” are–or better yet, be able to target the suffering directly instead of using the proxy of poverty.

    But consider how world GDP growth is rapid, and within a hundred years (what it would take to make their contributions even just 10x larger) nearly everyone might have a living standard of around $20,000. After that point having more money does people little good, the research suggests. So in terms of increasing total utility we might be better off spending today, or soon.

    I’d compare this to donating a kidney. I plan to donate a kidney within a few years. I know it’s the right thing to do, but I don’t feel like I need to do it today to save a life because some other equal life will be around in a year to save. And I might be able to make a deal with someone in their family to donate a kidney to some compatible stranger if I wait long enough to find a family like that. But if I wait 50 years they may have invented kidney printers or changed the laws on donating kidneys, and the marginal value of my donation will fall to zero.

    So maybe it’s best I put all my money in the bank and wait for RCTs to clarify what the best uses of aid are and let the money compound, but don’t wait too long that there will be very few extremely poor people.

    • http://hanson.gmu.edu Robin Hanson

      Rather than have to guess if there will be poor people, better to just bet your money that there will be. If the market odds of poor folks are 25%, then if there are poor folks you win your bet and your money will increase by a factor of four, while if there are no poor folks your bet loses and you have no money to disperse anyway.

  • Tribsantos

    Professor,
    I don’t think you answered my question last time: what is the point of my giving a millionaire gift to someone if that implies that someone will have to pay for that person? I am creating a huge credit for someone and a huge debt for someone else. How is that moral?
    As I said last time, increasing savings does increase the steady state, but not indefinitely, and there is a savings rate which maximizes comsumption.
    I may be getting this completely wrong, but I don’t think you’ve addressed this objection (or this misconception).

  • Gil

    How are the six answer hypocritical at all? Why not presume that bland charity does more harm than good? Or to put it another way: if welfare is so bad than why is charity so good? Both create dependency and helplessness. Africans have no incentive to be farmers when charities are giving food away for free. Warlords would much rather steal the proceeds of charity to support their conflicts than let it reach the starving if the warlords get the chance. I would argue buying African-made products from a business is far more helpful than buying local products of which the owners will donate some of their profits to charity. The former creates wealth and self-reliance whereas the latter keep the poor trapped in poverty.

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