Arguments Against Effective Altruism
By: Raghul Chandrasekar
Tags: Altruism, Effective Altruism, Compassion, Charity, Donations

Arguments Against Effective Altruism

"The only wealth you truly keep is the wealth you give away." - Marcus Aurelius

Photo by Suraphat Nuea-on from Pexels

In my previous article, we saw what Effective Altruism (EA) is and why it is important. In case you missed it here it is in a nutshell:

Effective altruism is a philosophy and social movement that advocates the use of evidence and reasoning to determine the most effective ways to benefit others. It urges us to be rationally compassionate instead of emotionally empathetic.

But there are several arguments raised against the ideology. Let us look at them, shall we?

Argument #1

The argument goes like this:

Going by EA’s philosophy, if I see a destitute person on the street, I should not help him out financially. Instead, I should donate that money to one of the charities that have been analyzed to give the best return per dollar. Isn’t that cruel?

Firstly, EA does not say that you should do anything.

Secondly, it seems cruel to donate to a charity instead of someone who you see suffering on the street every day on your way to work. But your mind only perceives this to be cruel because witnessing suffering first-hand can make you tunnel-visioned i.e you are so deeply moved by the suffering you physically see that it makes you forget about the millions of people in other parts of the world who are perhaps suffering more than this poor guy.

This is proximity bias at work. Proximity Bias is when we unconsciously favor whatever is closest in time, space, and ownership while also undervaluing those in remote locations. Thanks to this bias, we pay attention and give value to whatever or whoever is literally closest to us¹.

Just because the outcome of donating to a charity is not palpable doesn’t mean it’s less effective. It is as effective or even more effective than donating to a guy on your street. Hence, doing so is not cruel.

Argument #2

So the value of the life of someone in a remote part of the world is more than someone in my local community? Are you putting a value on life? Isn’t a person’s life invaluable?

This argument is illogical. EA never said one life is more valuable than the other. Neither did it try to quantify the value of life. EA simply urges us to be cognizant of how our brain undervalues the efficacy of financial aid if the beneficiaries are living remotely.

Argument #3

What if this guy I see on the street, with financial help from me, goes on to become Bill Gates and helps millions of others? Surely it is more effective than me donating to the most effective charity.

This one is interesting and understandable. The argument essentially makes the assumption that the probability of a Future Bill Gates (FBG) is highest with the poor guy on the street than any other poor guy that the EA charities are going to help. Is there any basis for this assumption? I don’t think so. But let us still try to build a case for this argument.

Getting someone out of poverty is one thing. How do you ensure they remain out of poverty? By giving them a job. There are countries where it is relatively easy to help someone stay out of poverty simply because of the abundance of job opportunities. India is one such country with an enormous number of job opportunities for people in the lower class and this is because India has a booming economy. One indicator of a nation’s economic health is the increasing size of the middle class. According to this study, in the 1990s, the total number of people in the middle class approximated 30 million. By 2012, the size of the middle class was 600 million. A rise in the middle class also means a rise in demand for janitors, maids, cooks, gardeners, construction workers, etc. Such opportunities employ the lower class population and keep them out of poverty.

Since we have established how instrumental jobs are in the fight against poverty, let us look at another relevant metric: the unemployment rate. According to this paper:

“Unemployment rate reflects the inability of an economy to generate employment for those persons who want to work but are not doing so, even though they are available for employment and actively seeking work.”

Emerging economies like China, India, and Indonesia have unemployment rates of 3.9%, 5.6%, and 8.8% respectively². Economically backward countries like Kenya and Syria have unemployment rates upwards of 40%³. There are so few job opportunities that the probability of an FBG coming from such countries is lower than that of a country like India, China, or Indonesia.

The global average unemployment rate is 10.31% which is higher than India’s unemployment rate. So if you are in India, you have a higher chance of funding the next Bill Gates by donating to nonprofits that work in India than nonprofits that work at a global level or in countries like Syria and Kenya.

Does this imply that this FGB argument is valid? Not quite. While the argument makes logical sense, it does so only in theory. If we look at it pragmatically, the chances of an average person becoming Bill Gates is microscopically low; the chances of someone poor becoming Bill Gates is even lower. In fact, the probability is so impossibly low that it is immaterial whether you are helping the destitute in India or helping the destitute in Syria.

I think it is safe to conclude that the probability of someone becoming Bill Gates is equal across the world. Given that the probability is equal, our best course of action is to donate to charities that put our money to use most effectively.

Consider the following hypothetical scenario: 1 dollar is the amount required to pull someone out of poverty. Now say you donate 2 dollars to a non-EA NGO. After deducting for overheads, person X (who is in poverty) receives a benefit of 1 dollar. Say you donate the same 2 dollars to an EA NGO. After deducting for overheads, person X gets 1 dollar and person Y (who is also in poverty) gets 1 cent (because EA charities give you a better bang for the buck). Effectively, you would be helping 1.01 people.

Now imagine this scenario at scale. According to a study done in 2014, in India alone, in a span of one month, 249 million people donated money. Let us assume that all of these 249 million people donated 2 dollars. If they had donated to a non-EA charity, the number of people they would have ushered out of poverty is 249 million. Had they donated to an EA charity, they would have helped 24.9 million (0.01*249M) people in addition to the 249 million.

By helping 25 million more people out of poverty, we would surely be increasing the chances of an FBG.

Argument #4

If everyone donates to charities that tackle the most important causes identified by the EA community, who works on the issues that are not on the ‘most important causes’ list?

This is another understandable objection and this scenario is similar to the classic trolley problem where you have to choose between saving 5 lives and one life.

Which one would you choose? If you are a utilitarian (like myself), you would choose to save 5 lives and sacrifice one. No matter which choice you make, it still sucks.

Thankfully, real life is not as binary as this hypothetical situation. You do not have to donate all of your money to EA-identified causes. You can diversify.

In personal finance, we diversify our investments. For example, the popular 60–40 strategy asks you to invest 60% of your money in risky instruments and the rest 40% in safe instruments. You can do something similar here. You can choose to donate 60% of your allocated money to EA-identified issues and the rest 40 to non-EA-identified issues. Someone who has a friend who is a rape victim would want to donate to nonprofits that work on women’s safety. If a person’s relative suffers from Alzheimer’s, he might want to fund research projects that study Alzheimer’s. We all have causes that we are particularly passionate about so go ahead and allocate 40% of your philanthropic budget to such causes.

Oh and 60–40 is just an example. Choose a split that gives you the most satisfaction.

Bonus: How much should you donate?

Obviously, the split itself is not as important as whether you are donating or not. Admittedly, I haven’t been donating much myself. To fix that, I need to make sure that I am disciplined about donating money. That is why I decided to allocate X % of my investment budget for charity.

As I mentioned in my series on personal finance, this has been my investment strategy until now:

I am changing it to this:

I am not going to reveal how much X is but the EA community recommends that you give away 10% of your income. (Note that it is 10% of your income, not 10% of your investment budget.) Here is why:

We chose 10% because it strikes a good balance. It is a significant proportion of one’s income, in recognition of the importance of the problem and the need to take real action. But it is also within reach of most people in the developed world. - Giving What We Can

In case you are worried that 10% is too big that you consider it to be a sacrifice rather than philanthropy, I urge you to read this research paper which begins like this (slightly edited for coherence):

In the following, we present empirical evidence to show that giving away 10% of your income will most likely require no substantive sacrifice on your part, and may even be better, from a purely self-interested perspective, than spending your income in the common fashion.