The Non-collective Benefits of Effective Altruism

    In my politics class, we are discussing the effective altruism movement which is basically a coalition of rich philanthropists who have agreed to donate much of their wealth to charitable causes. There are different extremes within the movement. Some take the normative stance that differences in material wealth are entirely arbitrary and therefore everyone should donate until they are as well off as the least well off person in the world. Others argue simply that if one wants to be charitable, it is far more effective to get as rich as possible and then donate, rather than working directly for charitable organizations. In public choice terms, the movement is an attempt to mobilize a latent group: those who value charitable giving and egalitarian principles. So, following from Olson’s theory of special interests. I will explore what are the non-collective benefits that the EA movement uses to draw people to its cause.

    This is a bit of a counterintuitive interpretation, because philanthropy is usually thought of as donating to a cause from which you don’t expect to benefit yourself. However, if we look closely at the movement, we can see that Olson’s theory still applies. While philanthropists don’t benefit materially from EA the same way that members of the AMA do (receiving access to medical journals, educational opportunities, and legal aid for malpractice suits), the benefits they do receive are much closer to the psychological benefits like those gained from voting. 

EA’s promotional strategy is two-fold. First, they argue that it is unethical for rich people to have so much wealth and that that wealth is obtained through exploitation or other morally contestable means, thereby creating a sense of guilt in their target audience. One of the benefits of donating then is relieving that sense of guilt. Second, they use data about how much better the world is getting as part of their feel-good message of positive change. A TED talk by an EA member says, “In 1980 we eradicated smallpox. I estimate we thereby saved 60 million lives.” Obviously when he says “we” he means humanity, but he is implying that by subscribing to thier organization, you too can be part of this paradigm shifting change. The psychic benefit here is feeling like you are helping the world.

    This is one of the reasons why the EA movement is specifically targeted at rich people. Not only do they have more money to give, but they are more likely to feel guilty about their wealth, and they have less marginal utility per dollar they own, so they are more likely to be willing to trade a significant amount of money for these psychic benefits.

If philanthropists of the EA community were really acting altruistically, they would likely donate almost all of their money, but they don’t—the actual value is closer to 10% on average. So, we can assume that the marginal utility that donors get in psychic benefits for the last dollar donated is roughly equal to the opportunity cost of giving up that last dollar.