The Causes of Poverty (68): Rich People Not Giving Enough Money to Poor People

You can criticize trade policy, immigration restrictions, bad governance or any other commonly cited cause of poverty, but you shouldn’t forget the obvious: there are a lot of wealthy people in the world who could, without losing much wellbeing (due to the diminishing marginal utility of money), help to lift every single poor person in the world to a much higher level of wellbeing.

The fact is that they could but don’t. We do have progressive taxation systems and other means of redistribution, we have development aid, we have charity etc., but none of these things yields enough money to lift everyone out of poverty. And there’s not enough public support to strengthen these redistribution mechanisms. Development aid is already unpopular at current levels, and don’t even start to talk about tax increases. The tireless efforts of Peter Singer and company to promote giving also have only a small effect.

The insufficiency of giving and other means of redistribution is hard to understand, in particular given the fact that rich people are generally not very dumb and able to understand the law of diminishing marginal utility. Of course, I know about loss aversion, the endowment effect, habit formation, the importance of status etc. But again, wealthy people should in general be the ones best able to overcome biases, to distinguish the important things in life from the unimportant, and to see how helping others can be beneficial to ourselves, both psychologically and socially (helping makes you feel good, and living a good life amid misery is socially untenable). But perhaps I’m wrong about rich people.

And then there’s something else stopping us from giving more (or allowing ourselves to be taxed more, which is roughly the same thing), namely the stories we tell ourselves. For example, you often hear that it’s better to allow people to look after themselves first, so that they can create the conditions in which they unintentionally help. Allowing entrepreneurs to get rich – i.e. not taxing them too heavily and not insisting that they should give their money away rather than invest it – will be much more beneficial to the poor. Many of the poor will get a job thanks to them, and their products and services will also make the lives of many a lot better.

However, this is not incompatible with giving. True, what you give you can’t invest, but we can allow people to delay their giving until the day that they don’t need to invest a lot more. The example of Bill Gates comes to mind. So we can accept that there is some truth to the story that free enterprise takes care of a lot of poverty, and at the same time insist that there should be more giving.

Another story we tell ourselves goes like this: giving people money isn’t a very good way of helping poor people. Many of them will just waste it, middle men will confiscate it, third world governments will misuse it, people will become to depend on it etc. Well, that doesn’t seem to be completely correct. Experiments with conditional cash transfers are very promising. And even if it’s correct to some extent, that’s just an argument to be smarter when giving money: invest it in businesses, healthcare etc.

And finally, there’s the story about agency: helping people is disrespecting them as self-authors and self-governing moral creatures. You may make them materially better off – at least in the short run because dependence on help may create motivational problems in the long run – but you take away their dignity and make them psychologically and morally worse off. People may not want to be helped, and even if they do it may not be in their best long term interest. The problem with this story is not that it’s false as such; it’s that people may not have a long term if we fail to help, and that starvation or homelessness is also an affront to dignity, and surely one that is a lot worse than receiving help.

More about giving is here. More posts in this series are here.

The Ethics of Human Rights (22): Caring for What Happens in the World vs Moral Indifference or Moral Apathy

I guess we all have, now and again, the feeling that it’s strange that we go about our business as usual, being content or even happy, when at exactly the same time in countless other places in the world, someone is suffering, being tortured, killed, raped or whatever. Normally, we don’t think about these facts, because that would make our lives impossible. Thinking about it causes feelings of guilt and unease. Even though we’re often not directly responsible for what happens to these people, there’s always the lingering thought that there may be something we can do to help. And probably there is something we can do, especially if we invested some more effort in associating with others. (Individually we may indeed be powerless).

And there’s an even more unsettling thought lurking deeper in the backs of our minds, namely that we are responsible to some extent, even for the suffering of people thousands of miles away, people we don’t know and will never know. Thomas Pogge for instance has claimed – correctly in my view – that in our globalized world we all contribute, to some extent,  to institutions, rules and processes that violate human rights. For example, we buy clothes from companies that use child labor or ban trade unions; we still profit from colonial exploitation that happened more than a century ago; we acquiesce in democratically enacted laws that exclude poor producers from our markets etc.

The existing global trading regime contributes to the perpetuation of poverty through the asymmetrical market opening that took place in the 1990s. Poor countries still do not enjoy unfettered access to our markets and are still hampered by anti-dumping duties, quotas and very high subsidies, for instance on agricultural products and textiles. Not only do these subsidies make poor countries’ products uncompetitive on rich countries’ markets. They also hamper poor countries’ products in other markets because they allow the rich countries to undersell these products everywhere. By upholding a global economic order that grandfathers the rich countries’ right to impose such protectionist measures into the global trading system, the rich countries greatly contribute to the persistence of the world poverty problem. Thomas Pogge (source)

By the way, Pogge’s argument can be used to counter the claim that “poverty human rights” are substantially different from “normal human rights” such as the right to free speech etc. (are perhaps not even “real human rights” at all), because they impose positive duties instead of merely negative duties, duties to help instead of merely duties not to interfere. For Pogge, poverty is a negative duty: people aren’t poor because we fail to help them but because we actively – albeit often unconsciously – contribute to their poverty. Rather than focusing our efforts on how we can help the poor, we should focus on how we hurt them. This is reminiscent of recent debates on the continued usefulness of development aid.

OK, back to the main point. It’s all very well to encourage “caring”, and possibly also “helping”, but thinking about what we could call the “synchronicity of heaven and hell” makes it very difficult to get on with our lives. Hence we tend to suppress such thoughts. It’s a survival strategy, and quite understandable as such, but the consequence of not thinking is not helping. We know in the back of our minds that while we’re doing fine, elsewhere it’s hell, but we just don’t think about it too much. Only when we watch the news, donate something, or sit in the park and have nothing else to do. And then we’re amazed at how cold-hearted we can be. But at the same time and unconsciously, we continue to function in structures, institutions and sets of rules that underpin the problems that occasionally make us angry. And then we return to our normal mode of moral indifference. Much like the people in the “Fall of Icarus” by Breughel, a painting commented upon in a poem by WH Auden:

… In Breughel’s Icarus, for instance: how everything turns away
Quite leisurely from the disaster; the ploughman may
Have heard the splash, the forsaken cry,
But for him it was not an important failure; the sun shone
As it had to on the white legs disappearing into the green
Water; and the expensive delicate ship that must have seen
Something amazing, a boy falling out of the sky,
had somewhere to get to and sailed calmly on. (full text here)

Also like the father figure in the “Elf King” poem by Goethe, ignoring the suffering and anxiety of his own sun until it’s too late. We can try to rationalize our moral indifference in several ways. First, we may reject the claim that we have any part in the problems that occur far away. We may believe that poverty and dictatorship are home-grown, and not supported by globalization or our own countries’ involvement. Perhaps we believe that individuals failures are the only cause of their problems. Instead of being a bleeding heart Atlas supporting the misery of the world (as in the poem by Heinrich Heine below), we should simply “shrug“.

Ich unglücksel’ger Atlas! Eine Welt,
Die ganze Welt der Schmerzen muß ich tragen,
Ich trage Unerträgliches, und brechen
Will mir das Herz im Leibe.
Du stolzes Herz, du hast es ja gewollt!
Du wolltest glücklich sein, unendlich glücklich,
Oder unendlich elend, stolzes Herz,
Und jetzo bist du elend.

We also rationalize our inaction and moral indifference by pointing to the distance between us and those who suffer. This distance makes action on our part difficult, we believe, and makes it more likely that actions by others who are closer and more familiar with what’s happening will be more successful. While it’s generally correct to state that closeness is a factor in the ability to help, that’s not always the case. Sometimes, the causes of problems are very distant indeed, and hence the solutions have to be distant as well.

The Ethics of Human Rights (16): The Extent of Our Duties Towards the Poor

Not only the state has a duty to help the poor and to protect their economic rights. The individual should also intervene in order to realize the economic rights of his or her fellow citizens and fellow human beings. He or she can intervene in different ways: through caritas or altruism, through trade and exchange etc. (Simply giving the example and inspiring others by way of your own success, as in this cartoon, is not enough).

It is only when these interventions fail or never take place and individuals neglect their duties, that the state must act by way of redistribution. After all, redistribution is a limit on freedom and on property rights (which are very important) and should therefore be kept to a minimum.

I mentioned our fellow human beings. The extent of our duties towards the poor is an interesting discussion in contemporary philosophy. Some say that we have only duties towards our fellow citizens; others that we have a duty towards everyone. Whereas in principle, everyone regardless of borders has the same right to our assistance, there has to be some differentiation in practice. Our duties arising from economic rights are not the same towards everyone. In general, we have more duties towards certain persons than towards other persons. This is because of the principle “ought implies can” (if you cannot swim, then you do not have a duty to rescue persons from drowning), which is a general principle of law and morality. None of us can give material assistance to everybody in need of assistance. We all have a limited amount of resources, and even if we have more than we require for our basic needs, we will not be able to assist everybody.

That is why we have to be selective. Our own children, for example, take precedence. We have more duties towards our children than towards other people. Closeness means that you can do more, and if you can do more, you ought to do more. Can also implies ought. Closeness, therefore, plays a part in the degree of duty, although not in the existence of duty. If we can help everybody, then we have to help everybody. This is especially the case when we transcend the level of individuals. Wealthy groups – for example a wealthy country or a group of wealthy countries – can help many people and maybe even everybody, and hence have a duty to do so.