Interesting throughout. One early excerpt:
Russ: Yeah. I have a different perspective. I give money to food banks, also. But I also like giving cash to poor people, particularly [?]–I hate to say this; my offense on people, and I don’t know if I’ve talked about this on EconTalk because, particularly if they are going to spend it on drugs and alcohol, I sometimes feel like it’s good to give them cash. Because sometimes when you are desperately miserable, drugs and alcohol might be what you want. People say to me: Doesn’t the donor have a right to decide what the money is spent on? Of course the donor can earmark it. You can give to the food kitchen if you want, or I can. But I like the idea that I respect the recipient, and I treat the recipient like an adult, not like a child, and I don’t decide for that person what’s good for them. I let them make that decision. And I think that’s a dignified way to interact with desperately poor people. Even when they are a little bit off the beaten track
When I was in college the majority of charity I gave was what beer and cigarettes I could spare coming out of the convenience store. They were very appreciative. Of course, no high status philanthropy/cocktail party circuit is going to spring up to supply poor people drugs, or any other low status relief from boredom – marijuana may be the exception one day, especially if it is marketed as ‘medicine’.
Wrt foreign aid, I think it is interesting that we see third world countries in the same way we saw Europe after the war, a first world society that just needs temporary assistance. Yet we see primitive hunter-gather tribes as a natural system to be studied but otherwise left alone.
I’ll always remember Larry Iannacone’s summation of most people’s outlook on charity. “Sure, I want to help the poor, I like the poor but I don’t trust them.” It was one of the better lessons I learned in an Econ class. His point was like the one in the podcast, if you want to help, respect them as people.
Honestly, I like Russ, but that strikes me as a bit of self-flattery. “I’m not like one of those paternalists who wants to boss poor people around in exchange for charity.” IE, trying to raise your status not only above those who don’t demonstrate that they care about the less fortunate by donating money to the right causes, but also above your fellow donors by claiming that your cash assistance is provided in a more humanitarian way than theirs is.
Clearly some people do need assistance figuring out what is “good for them.” Discerning which people fall into this category vs. people who are quite competent at managing their own affairs and have just had a run of bad luck is, I think, a necessary step if you actually want your generosity to actually help the recipients. Furthermore, the fewer strings attached to public assistance, the more potential for abuse (not just people wasting money on drugs, but people who aren’t poor at all getting their hands on it) and dependency there is.
Also, and maybe this is just my inherent callous individualism talking, but I have to ask how dignified do you really want people to feel when accepting handouts? Not that I want to humiliate anyone, but attaching a social cost (ie, a stigma) to accepting aid from others is one perfectly rational way to limit the problem of free riders, at least at the margin. Personally, I suspect I would feel a measure of shame, having to ask other people for financial assistance, suggestive, as it is, of some kind of personal inadequacy. I think this is a healthy impulse for people to have and I’d be resistant to things I think might undermine that sentiment.
And speak to panhandlers to whom you give cash, a few minutes of chatting lends dignity to the participants.
“…particularly if they are going to spend it on drugs and alcohol, I sometimes feel like it’s good to give them cash.”
How is that any different from loading bullets into the revolver of a wannabe suicide?
Would you do that, too? And call it a respectful and a dignified way to help a less fortunate person satisfy his wants?
We each should be free to contribute or not, in cash or in kind, in whatever manner we choose, to the less fortunate; it’s your justification of cash donation that I find interesting.
I have a somewhat different take – if I give drug money to a user, or bullets to a suicidial person, who ELSE will they injur?
Now, you could argue (and I sometimes agree) that giving money to the meth user keeps them from robbing my neighbor to get money to buy meth. In some sense paying them off.
I could see it both ways – but the arguments for/against earmarking and such for charity ought to consider the effects on the rest of society.
As for foreign aid, let’s not be deluded – it is focused on the issues presumed to be of strategic import to the US. It’s not “let’s respectfully help the citizens of X” it’s “let’s buy off this or that group in X to support goal Y”
There is a spillover from the Libertarian political language axis of freedom-coercion into paternalism-‘dignity’ (adult maximal independence). That is why they are the most likely to complain about the nudging nanny-state.
Libertarians not only resent governmental coercion restrictions on their freedom of choice, but they especially chafe at being treated like immature children who must be protected by some wiser entity from the harmful consequences of the bad decisions
“Why should I, a full-grown man, of sound mind and body, able and willing to be held completely responsible for my actions, be treated like this? Leave me along and let me do what I want and I’ll face the consequences on my own.”
They do not like or accept the argument that some adults, some of the time, are child-like in their maturity, self-control, or decision-making capacity, and that for the good of these individuals, and those they may harm, all adults must be equally held to the same legal prohibitions.
And so they project themselves into the shoes of some needy individual and ask, “Were in that condition, in what form would I prefer to receive a charitable contribution?” Cash contribution without regard to ‘merit-goods’ is the form of charity with the minimum amount of paternalism.
An insightful comment, but I disagree that
> They do not like or accept the argument that … all adults must be equally held to the same legal prohibitions.
Through the development of concepts like NAP, it seems clear to me that libertarians more than any other political group seek generalized principles which apply to all. Equality under the law is a bedrock position for the classical liberal. Yes, libertarians and classical liberals want to minimize these legal prohibitions, but they want everyone bound by them equally, sometimes even government officials themselves!
I think I may lean libertarian, because I feel that even as Martha Stewart did jail time for lying to federal investigators, federal officials, even elected ones, should be locked up if it ever happened that they lied to any of the public.
Mr. Lebeau – just to set the record straight, Martha Stewart did not do jail time for lying to investigators, she did jail time for telling her stockholders that she didn’t think she would be prosecuted for insider trading (and, in fact, she wasn’t. . .).
She was sent to jail for telling the truth?
“Stewart was sentenced to five months in prison, plus five months of house arrest and two years of probation for lying, obstruction of justice and conspiracy.”
http://coveringbusiness.com/2012/05/15/what-martha-stewart-did-wrong/
You guys are right, I’m wrong. She was charged with securities fraud for lying to her stockholders by telling them that she was innocent of insider trading (which she was never charged with) but the judge threw out that charge. She was convicted of lying to the investigators.
“it seems clear to me that libertarians more than any other political group seek generalized principles which apply to all”
A law that makes reasonable distinctions amongst different kinds people according to relevant characteristics is perfectly equal in its general application. Most Libertarians would not think a young child or a very senile person is competent to provide testimony or sign a binding contract or even vote.
You don’t want to give every breathing human being exactly the same rights and duties; though you may want to maximize the number of rights held by the maximum fraction of people and minimize the number of exceptions and have a very strict standard or burden of proof for the deprivation of full adult rights. Still, if you are not dogmatic about it, there will be some exceptions. The question is how does one best determine the line between competent and incompetent.
The good ways are very intensive, costly, and burdensome and require something like a certification examination (like a driver’s license test), regular verification through recertification, or even a trial exposing a trained judge to all the available evidence in each individual case, and subject to continuous monitoring by the court in case the individual drifts in and out of competency, as they sometimes tend to do. Even so, often even the best attempts at diagnosing and forecasting an individual’s competence or maturity in some field are not very reliable.
So to reduce this administrative burden to something more manageable the legislators instruct the government to take some reasonable short-cuts and use some very rough proxies as presumptions. We say that all individuals under 21 are too young to drink responsibly, even though some of them have the biological and personality attributes that would lead them to enjoy alcohol in moderation at younger ages, while others would tend to become irresponsible alcoholics at any age if they are allowed legal access to liquor. Same thing goes for 16 for driving, or 18 for voting or being a member of the Armed Forces. These are bad proxies, but we’ve decided they’re good enough given the alternative and the costs of trying to be more accurate.
One interesting example of such a proxy in the financial arena is the SEC’s definition of an Accredited Investor. Consider qualification 6:
So, according to the SEC, if you’ve got $1 million on top of your home equity, the U.S. government will presume you have sufficient wherewithal and sophistication to make certain very risky (but also potentially very lucrative) investments. If you don’t have that much wealth then you aren’t allowed to do it. This is a pretty clumsy way to moderate between the two extreme positions of, “Every adult should be able to do this,” and “No one should be allowed to make these investments.” But there you have it.
Now, many paternalistic types will say that even if 90% of the popular would enjoy alcohol responsibly, and only 10% would become reckless alcoholics, then they may still drink and drive and cause lots of vehicular homicides of innocent people in ways that cannot be easily deterred. Ideally (at least in their opinion), we would try to tell the 90% apart from the 10% and give the 90% a license to drink and declare the 10% incompetent to purchase, possess, or consumer alcoholic beverages, or maybe just charge the 10% a much higher excise tax rate. That’s not an unreasonable position; it may be the best of some bad options.
But they would also say that it’s just too hard or expensive to tell the 90% apart from the 10% and to administer and successfully enforce the licensing rules in a way that would effectively ensure the 10% never get their hands on the whiskey, especially since they could just buy it illegally at a profitable margin from a licensed intermediary. So it would be better to just ban alcohol for everyone in one mass prohibition.
A Libertarian now finds himself in a bit of a dilemma. On the one hand, he wants the maximum amount of liberty for the maximum amount of people. On the other hand he may admit the heavy toll that legal alcohol imposes on society at large. He wants to reduce that roll cause by a minority of trouble-makers, but he is also reluctant to pass non-universal laws that discriminate between classes of adults on the basis of whether the government assesses them to be sufficiently mature to handle a risky activity. Values – even those held by most Libertarians – often conflict, and every choice involves some kind of trade-off.
But, interestingly, those trade-offs are not static in this era of rapid technological change with plenty of innovation in the field of information technology and data management. Managing licensing systems and running human diagnostics may become much less expensive and administratively burdensome to governments in the near future, and that means that discrimination on the basis of responsibility, maturity, competency, and self-control may become the new optimal solution to many social problems.
A problem with this is that the norms around which our common laws and society have been developed and to which we are accustomed tend to make us chafe against any set of rules that distinguishes between otherwise equal adults in this fashion, with perhaps the exception of those certifying exams. But a good case could be made – not just by paternalists but by people of all political persuasions including Libertarianism – that those instincts and intuitions are outdated and we should not be too reluctant to experiment with some new approaches made possible by our technological advances.
I don’t see how the fact the system could be cheaper to run solves the issue. The fundamental problem is that you’re assuming the decisionmakers are altruistic. And would stay altruistic with increased power.
There are all kinds of reasons why you might apply a rule to someone who doesn’t need it, just to hurt them. Maybe they didn’t bribe you. Maybe they’re the opposing party. Maybe they look funny. Sure, *you* wouldn’t do that, but can you say the same for the people likely to want and get this power?
Requiring rules to be universal means that you can only pass rules that fit everyone. It’s still abusable, but less so.
One is only permitted to drive with a revokable license after passing a test. Is that law universal in your usage or dependent on altruism? No.
In reply to Handle and Rick Hull –
Over time, societies face selection pressures. I think that those pressures drive some patterns of intervention in private lives. I think there are very strong pressures to maximize the number of active, competent, productive members of “the group.” And it is these pressures that drive prohibitions on drug use, suicide, and the like. It’s not really about “we know what’s good for you, you child” (though can certainly be part of it.) Rather, it’s driven by a selection function that says “societies that one way or another induce or compel the maximum number of people to be competent members hold up better under selection pressures over time.”
Suicide prohibition isn’t just or even mostly about protection of the person who thinks they want to die – it’s about the rest of us being better off (in the general case) if they are one way or another persuaded to carry on.
Drug use prohibition is a complicated thing with many roots, but one is surely to compel or induce people to be active producers and consumers in the economy, rather than “drugged out problem people” – which drug abuse does in fact sometimes cause.
So as a libertarian thinking sort, I think “who am *I* to tell somebody to not use drugs, or to stop them from an uncoerced suicide?”
As an economic actor, I know that in the general case, *I* am better off over the broad long term if people aren’t drugged out and don’t commit suicide.
What does this have to do with charity? On one hand, one can argue that charity is for the service of the recipients. On the other, quite often, it would appear that it is for the service of the giver (social status, religious obligation, etc.) I think some part of this later class is not “freely given” but rather “investment in avoiding bigger problems later” or “investment in strengthening the economy as a whole.”
So, my charitable giving might well be focused on paths that I am confident support and encourage people to have better lives (food banks), and avoid paths that may encourage or enable destructive paths (giving beer to street drunks.) That sounds sort of high minded, but the reality is it’s probably mostly enlightened self interest.
I will note here that my personal thinking is very much “who am *I*, who are *we*, to tell someone to not do something to themselves…” – but I observe that the reality of how socieities work is rather different….
I fancy myself as a person with libertarian principles, but in this case I am in somewhat lukewarm agreement with Russ. However, I also prefer to give food, rather than cash, to homeless folks in some circumstances. The reason is that, at least in my humble opinion, having interacted on a personal basis with some homeless people, is that many such folks not only suffer from substance abuse problems, but also mental health issues. As much as we might wish, it is very unlikely that some of these people can think clearly or make rational decisions. I realize this is a generalization, and that I am somewhat blurring the line between the “poor” and the “homeless”.
Reminds me of a joke I read in Commentary:
A banker walking in the Lower East Side encountered a disheveled, poorly dressed man wearing a yarmulke. The beggar accosted him: “Hey Bud, can you spare five bucks for a cup of coffee?”
“Five dollars! Are you nuts? There’s a Dunkin Donuts across the street where you can get coffee for 99 cents.”
“Look, guy. Give me $5. Or give me a dollar. Or fifty cents. Or nothing at all. But don’t tell me how to run my business!”
But I like the idea that I respect the recipient, and I treat the recipient like an adult, not like a child, and I don’t decide for that person what’s good for them.
A hollow sentiment in this day and age where responsible people are scheduled and constrained to such a high degree. I’d say Russ Roberts gets a bit of a vicarious thrill by giving out cash to let someone roam free in vice.
Proverbs 31:6 Let beer be for those who are perishing, wine for those who are in anguish!
Of course the question on global scale and or historical scale how bad off is anyone in the SA.
Also are paying people to stand around ask when you give? That would IMO be bad. Better to tip fast food workers and any other low paid workers you run into.
More in context:
Preverbs 31: 4 It is not for kings, Lemuel—
it is not for kings to drink wine,
not for rulers to crave beer,
5 lest they drink and forget what has been decreed,
and deprive all the oppressed of their rights.
6 Let beer be for those who are perishing,
wine for those who are in anguish!
7 Let them drink and forget their poverty
and remember their misery no more.
BTW I do like giving cash, but when I do I hope the recipient will not buy booze or drugs with it but will use it in ways that I think are good.
I don’t necessarily agree with Roberts as-stated but I do believe legalizing ALL drugs once someone reaches life expectancy is a no brainer.