True but irrelevant

An interesting perspective in Buy Charity Now, While It’s Still Cheap by Alex Tabarrok.

Prior to 1800 or so there were no large differences in per-capita GDP between nations, differences were perhaps on the order of 2-3 at most. As modern economic growth took hold in some nations and not in others, between-country inequality increased dramatically with differences in per-capita GDP between nations of up to a factor of 100. As more and more nations enter a modern economic growth phase–which now includes a very rapid catch-up phase–between-country inequality has started to decline. In the future we may return to much smaller differences in per-capita GDP between countries.

As MacAskill points out in Doing Good Better (review here see also here) this means that we live today in an unusual time when charity is very cheap. Today, for example, it’s possible to save a life for as little as $4000. As other nations become rich that will no longer be true. More generally, the average person in a developed country can do a lot of good today by giving up relatively little. As MacAskill writes:

Imagine a happy hour where you could either buy yourself a beer for five dollars or buy someone else a beer for five cents. If that were the case, we’d probably be pretty generous–next round’s on me! But that’s effectively the situation we’re in all the time. It’s like a 99-percent-off sale, or getting 10,000 percent extra free. It might be the most amazing deal you’ll see in you life.

I like this because it is likely true and because it provides new insight on established knowledge.

But what to do with it?

First, how much charity is intercountry (as required in this observation) versus intra-country. I know in the US, which is exceptional and therefore unrepresentative of other developed countries, that we contribute more money and time to charities than most other developed countries. However, my impression is that, while that largesse does translate into large funds going overseas for charitable purposes, the great bulk of those contributions of time and money are within country to support all sorts of good communal good causes. That is not a criticism but it adds to the interesting oddity of MacAskill's observation. Yes, rich country giving to poor country can have inordinately large impacts, and yet the bulk of the giving (I am assuming) remains in-country where it is theoretically least effective.

Second, even though likely true, is it useful. If the bulk of charitable contributions are ineffective in achieving their stated goals (as is the implication of research such as Doing Bad by Doing Good by Christopher Coyne, and indeed often counterproductive and damaging, then the issue is not the relative value of giving intra-country versus intercountry, but rather that the giving should not occur at all (except where it is empirically demonstrated to be constructive and effective).

In the latter reading MacAskill's observation is true but irrelevant, which might explain why there has not been more discussion of the observation.