False Altruism

Couple of interesting posts up about altruism. If you give away billions in inherited wealth that you do not need to charity, wonders Michael of IB, does that really count as altruism? Like, Presidential-Medal-of-Freedom-worthy altruism?

Related to that is an interesting post at Reason about an economics experiment. Two strangers are matched up, one of them is given an envelope with ten one dollar bills, and invited to give some to the other person (whom they can't see and never meet.) Regular self-interested economics would predict that the guy with the ten bucks would leave with all ten, but some people give a little bit to the other guy as some sort of gratuity or, speculates author Steven Landsburg, a fear that the experimenters themselves will be observing and judging to see whether one is going to be mercenary or altruistic. But either fear or a little dash of altruism does colors such an interaction, and people show a tendency now and then to send the other guy a buck.

However, when the deal is that the experimenters offer to triple whatever the guy with the ten bucks pays, the donors become more generous. In other words, if I choose to give the mystery person a dollar of my windfall, the experimenters pass on three. And on average people decide to give more when it's tripled.

But that, Landsburg points out, is not altruism:

Altruism means personally paying for the privilege of enriching a total stranger. That's not what these people are doing at all. Instead, they're paying for the privilege of taking money away from one total stranger -- namely the taxpayer who's funding the experiment (through the University of Arizona and the National Science Foundation) -- and giving it to another total stranger who happens to be in the next room. There's no sense in which that makes the world a richer place. And the subjects do all this without knowing anything at all about either stranger or having any reason to believe that one is more deserving than the other.

In the words of University of Rochester economist Mark Bils, "That's a pretty ugly instinct. It scares me to think I'm living in the same world with these people." It's not like they're taking from the rich to give to the poor; they're just randomly taking from some people so they can give to others. It's hard to imagine their motive, unless they just plain enjoy the capricious exercise of power, bestowing good fortune on some and bad fortune on others without any need for a rhyme or reason. In a world where people get a kick out of being arbitrary, no property right is ever safe.

Here's where the libertarians at Reason need to keep their shirt on. I've done these experiments before in college and that sort of decision is neither as arbitrary as Reason makes out, nor as indefensible. Of course people are going to help out the other person, and they have several reasons to do so.

First of all, it's not like they are plucking those dollars straight from the National Science Foundation or the pocket of Joe Taxpayer. In the real world that money is sunk, as far as those organizations are concerned. There's no way that dollar is going back to the taxpayer with a note that "sorry, we didn't need all this." And the NSF and the Econ department have already budgeted for exactly this sort of decision, because they get something out of the consensual exchange--they are paying for the privilege of learning about human nature. The structure of the experiment makes it clear that the experimenters (who designed it) understand and are willing to pay for this transfer they have authorized the subject to make. They get exactly what they want out of the exchange--knowledge. It's not at all equivalent to taxes being taken out of my paycheck--or Brooke Astor's billions-- without our consent to pay for Ted Stevens' bridge to nowhere (which I do not want, and I would much rather keep my share of the money than have a bridge there.)

Furthermore, the extra two or three dollars coming from the NSF or UA based on any individual's decision is marginal to these organizations. It's likely not marginal to the second person in the room. That person is by definition someone, probably a penurious student, who decides it's worth his time to show up for a behavioral experiment, and who needs the money for ramen and birth control much worse than the college does. An experiment, by the way, in which they are not guaranteed to get paid at all if the other person isn't feeling altruistic. If they didn't need the money, they wouldn't be here.

That person took a risk and showed up, and a sense of equity would suggest they ought to be compensated for participating in the experiment. Who would you rather have the money--an economist's research account, or one of your fellow students? If the economist has consented to give it away, why not give it to the student?

So even though as an old-fashioned religious conservative I maintain a very dim view of human nature, I'm not ready to accept this experiment as extra proof of it. If anything this shows some faint equitable, if not altruistic, stirrings in the soul.

JYB Tailwag: Isaac Schrodinger.