State Charity

One of the arguments for government intervention is that the need for charity cannot be filled by private donors due to a collective action problem. Martha Nussbaum, for example, gives this argument in her book, Creating Capabilities.  However, Robert Nozick didn't find this persuasive.  He presents what I believe to be a valid counter-argument in Anarchy, State and Utopia.

The argument is that there really is no coordination problem.  While it would be necessary for large numbers of people to all act in order to get rid of some problem entirely, it is generally the case that by giving a little an any individual could contribute to making things a little better.

In The Upside of Irrationality, Dan Ariely points out that we don't make rational decisions when we decide which charitable causes to devote money to.  He points out that if we really wanted to help people some of our preferences make no sense.  We tend to give more to people who are closer, to individuals rather than large groups, and when the problem is described in vivid detail.  When we try to get people to be rational, then our attempts fail, since in this case people give less to charity.


I suspect this is a better explanation for why people aren't satisfied with private philanthropy.  They see that it doesn't always go to where it might do the most good.  My response to this would be that political processes are not entirely rational either, as was pointed out in The Myth of the Rational Voter.  One potential problem with this last argument is that the theory of irrationality given in the book doesn't seem to be entirely accurate.  The argument is that people tend to be irrational when the cost is less.  Dan Ariely's work shows that when the stakes are too high, people become nervous and their performance actually deteriorates.


I suspect that in the case of both voting and charity we are actually dealing with the same motivation.  Indeed others have argued that voting only makes sense if you think of it as a form of charity.  The odds of casting a deciding vote are very small.  However, when you consider how many people will be effected by a deciding vote, this could make voting rational in a sense.


As I see it, the problem is that we have failed to see why it is that people demonstrate a concern for others.  For this we need to look at both voting and charity as methods of enhancing one's reputation.  This doesn't mean that people do either of these because they believe that it will enhance their reputation.  What I am saying is that the tendency to do things like this comes from the fact that it enhances people's reputation.  In any population, traits which tend to be conducive to survival and reproduction will become more prevalent over time.  If you live in a society of beings that are somewhat rational, as humans do, then having a reputation for generosity will be useful in this regard.


Because our biological drive is to enhance reputation rather than to actually help people, if people have ideas about helping others that are fundamentally flawed this has no easy correction.  Behavior that is seen as helpful will have the desired effect.


In addition to this, a useful reputation is one that will motivate people to do things that will enhance your prospects of survival and reproduction.  This is different from a reputation for helping human beings.  A preference for helping people who are close to you will motivate people to get close to you more effectively than a more general philanthropy.