Monthly Archives: July 2022

Oppression and production are competing explanations for wealth inequality.

You would like to go to the beach tomorrow if it's sunny, but aren't sure whether it will rain; if it rains, you'd rather go to the movies. So you resolve to put on a swimsuit and a raincoat, and thus attired, attend the beach in the morning and the movies in the afternoon, regardless of the weather. Something is wrong with that decision process,* and it's also wrong with the decisions made by many supposedly systemic approaches to philanthropy: it does not engage with real and potentially resolvable uncertainty about decision-relevant facts.

Different popular philanthropic programs correspond to very different hypotheses about why people are doing wealth inequality, much like swim trunks and a trip to the movies represent different hypotheses about the weather. Instead of working backwards from the proposals to the hypotheses, I will lay out what I think are the two main hypotheses worth considering, and reason about what someone might want to do if that hypothesis were true. This is not because I want to tell you what to do, but to clarify that any time you think that something in particular is a good idea to do, you are acting on a hypothesis about what's going on.

The ideas of charity and philanthropy depend on the recognition of inequality; otherwise it would just be called "being helpful." The persistence of wealth inequality, in turn, depends on many people working together to recognize and enforce individual claims on private property.

If the mechanism of private property tends to allocate capital to its most productive uses, then incentives are being aligned to put many people to work for common benefit. But if wealth does not correspond to productive capacity - i.e. the people with the most are not those best able to use it - then, assuming diminishing marginal returns to wealth, coordination towards persistent wealth inequality comes from a self-sustaining misalignment of incentives, i.e. conflict.

The economic ideology taught in introductory microeconomics courses, which is assumed by many formal analyses of how to do good at scale, including much of Effective Altruist discourse, tends to make assumptions consistent with the means of production hypothesis, so if we are considering making decisions on the basis of that analysis, we want to understand which observations would falsify that hypothesis, and which beliefs are incompatible with it.

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