Category Archives: Economics

Cash transfers are not necessarily wealth transfers

Here’s a common argument:

The problem with the poor is that they haven’t got enough money. There’s ample empirical evidence backing this up. Therefore, the obviously-correct poverty intervention is to simply give the poor cash. You might be able to do better than this, but it’s a solid baseline and you should often expect to find that interventions are worse than cash.

There are technical reasons to be skeptical of cash transfers - which is why it is so important that the cash transfer charity GiveDirectly is carefully researching what actually happens when they give people cash - but until fairly recently, these objections seemed to me like abstruse nitpicks about an intervention that was almost analytically certain to be strongly beneficial.

But they’re not just nitpicks. Cash isn’t actually the same thing as human well-being, and the assumption that it can be simply exchanged into pretty much anything else is not obviously true.

Of course, saying “X is possibly wrong” isn’t very helpful unless we have a sense of how it’s likely to be wrong, under what circumstances. It’s no good to treat cash transfers just the same as before, but be more gloomy about it.

I’m going to try to communicate an underlying model that generates the appropriate kind of skepticism about interventions like cash transfers, in a way that’s intuitive and not narrowly technical. I’ll begin with a parable, and then talk about how it relates to real-world cases. Continue reading

Why I am not a Quaker (even though it often seems as though I should be)

In the past year, I have noticed that the Society of Friends (also known as the Quakers) has come to the right answer long before I or most people did, on a surprising number of things, in a surprising range of domains. And yet, I do not feel inclined to become one of them. Giving credit where credit is due is a basic part of good discourse, so I feel that I owe an explanation.

The virtues of the Society of Friends are the virtues of liberalism: they cultivate honest discourse and right action, by taking care not to engage in practices that destroy individual discernment. The failings of the Society of Friends are the failings of liberalism: they do not seem to have the organizational capacity to recognize predatory systems and construct alternatives.

Fundamentally, Quaker protocols seem like a good start, but more articulated structures are necessary, especially more closed systems of production. Continue reading