Are economy experts less likely to give to charity?
My most recent Forbes piece explains how to use the economic way of thinking to ruin Christmas. In this light, I found Steven Landsburg鈥檚 take on Yoram Bauman鈥檚 claim in the New York Times that economics increases Grinchiness especially interesting. I haven鈥檛 read Bauman鈥檚 underlying paper, but in his NYT summary he points out that economics majors are less likely to give money to two activist groups (they were given the option during registration for classes).
Willingness to donate to left-of-center advocacy organizations is hardly a robust test of the treatment effect of economics on public-spiritedness for a couple of reasons. To continue some of Landsburg鈥檚 examples, it shouldn鈥檛 be surprising that economics education reduces a student鈥檚 faith in government action in much the same way that med school would reduce a student鈥檚 faith in the power of healing crystals. Yes, there are difficult cases to be made for markets, but jumping from those cases (public goods, externalities, incomplete information, etc.) to 鈥渨e need government intervention to fix it鈥� is a mistake because it doesn鈥檛 carry the economic analysis far enough. Sadly, Bauman鈥檚 op-ed contributes to the popular view of economics that comes from Gordon Gekko鈥檚 鈥済reed is good鈥� speech in Wall Street. For a useful corrective, Michael Munger in last week鈥檚 EconTalk.
I think t丑别谤别鈥檚 a subtler point to be made, though, and one I address briefly in my Forbes article. I don鈥檛 think we can make a correct inference about the treatment effect of a person鈥檚 benevolence by looking at how taking economics classes affects his or her giving to advocacy organizations and charities. Economics might make some people more selfish in the socially questionable sense, but it also makes people wiser about how they use their resources. To use just one example from this semester, my students (presumably) learned that raising money to buy people out of slavery might actually make the problem of slavery worse.
Paradoxically, economics can make people less selfish while giving the appearance of increased selfishness. Particularly as I have read Robin Hanson鈥檚 blog, I have come to believe more and more that most 鈥渃harity鈥� is conspicuous: the primary motive is to signal that we care about poor people, and the secondary consequences are just that: secondary. To paraphrase Thomas Sowell, a lot of charitable endeavors are not about actually helping people so much as they are about showing that we are on the side of the angels. For some people who immerse themselves in the economic way of thinking, the Dismal Science helps them look past their (selfish? greedy?) fixation on others鈥� approval and shows them that a dollar might alleviate more human suffering if it is put in the bank rather than a donation box. I鈥檒l leave an explanation of this as an exercise for the interested reader.
I plan to write a lot more about this in 2012. For now, 丑别谤别鈥檚 a bit ofon better charity that I wrote a few years ago, largely drawing on arguments made by Tyler Cowen in his excellent Discover Your Inner Economist.
Look for more over the next few weeks and months. Good intentions aren鈥檛 the same thing as good results, and I plan to discuss a few ways to strengthen those links.
