Arnold Kling  

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I don't know any other way to describe Peter Wilby.


Unfortunately, private charity doesn't always have the same priorities as public policy. In the UK, the most popular causes are children, animals, cancer and lifeboats. Overseas causes, for relief of famine, disease or effects of natural disasters, tend to do well, helped by celebrity endorsements and fundraising concerts. Mental illness and disability, ex-offenders and unqualified school leavers are less likely to arouse our compassion. Again, volunteering tends to be most common in areas that need it least. It doesn't help that the coalition's standard narrative is that anyone on benefits probably lives in a Mayfair apartment and anyone claiming to be disabled is most likely faking it.

...Let Maude, David Cameron and their fellow millionaires go ahead with their big society, encouraging individual good works. But let them not imagine that it can substitute for a society big enough to accept collective responsibility for the welfare of all its citizens.

Pointer from Mark Thoma.

Read the whole thing. Every paragraph sparkles with what I regard as madness.

I would agree with Wilby that individuals give charity in part for narcissistic reasons. And many contributions go to causes I do not share--alumni contributions to universities, for example.

But do those criticisms not apply to government? How much government spending goes to feed narcissism, of politicians or their supporters? How much government spending goes for dubious causes?

It would be lovely if "society" allocated charity based on some wise, omniscient plan. Back in the real world, the question is whether, at the margin, we should want more dollars allocated by politicians or more dollars allocated by individual donors. I prefer individual donors. They will make a lot of choices that will disappoint me, but they will be more motivated to correct their mistakes.


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CATEGORIES: Political Economy



COMMENTS (9 to date)
Floccina writes:
Back in the real world, the question is whether, at the margin, we should want more dollars allocated by politicians or more dollars allocated by individual donors.

Most Gov. money goes for what could be described as charity but few choose to freely give to gov.

Most Gov. charity goes to capable retirees (SS and Medicare) and the children of the rich and middle class (Gov. schools).

Further IMO it would be good if Gov focused on mental illness and disability but that is very difficult to do by law. How do you separate in laws those disabled or mentally ill who are able to care for themselves from those who cannot? In responce to that problem I once came up with an idea of extreme localism where group of a few hundred voters would elect a benevolence officer who would get the charity part of our taxes and use it to support the poor with very wide latitude. If he does not use our money effectively we vote him out but he can us his own judgement to discriminate between those that need the help from those who would helped more by work.

Tim Worstall writes:

Wilby is also innumerate.

He says that Brits donate 0.7% of GDP to charity, then in the same piece talks about charities incomes of £35 million.

This implies total GDP of around £ 5 billion instead of the true figure of around £1,400 billion.

To be not quite right is one thing, but out by more than two orders of magnitude and to not even have the right integers (charity incomes in the UK are about £11 billion) is absurd.

No newspaper would employ someone as lingustically ignorant as this, so why do they when it comes to numeracy?

dWj writes:

There is also much better diversification with individual donations than centrally planned ones. The effectiveness of charities is likely to have a heavy tail to the upside, and a lot of individuals giving to a lot of different small entrepreneurial charities are more likely to be funding the charitable equivalent of "the next Microsoft" than is any single bureaucracy, even one the size of the government.

mikedc writes:

An obvious issue to me is that contribution choices are very likely endogenous.

I suspect that charitable donations to the poor, for example, would increase significantly were the government suddenly to abolish welfare and lower taxes.

Salem writes:

Arnold,

What do you think about the economic policies being pursued in Britain? On the one hand I'd imagine that you'd be in favour of the austerity measures, on the other the supply-side policies may make Recalculation harder. Would you say Britain is likely to perform better or worse than the USA over the next, say, 5-10 years?

jc writes:

Quick question: How much of every dollar given to charity passes through to recipients, and how does this compare to how much of each dollar taken from taxpayers reaches recipients?

(You can pick average figures, figures for efficient charities, since many of us shop around in that regard, etc. Just interested in figures, period, if anyone knows offhand.)

Also, does anyone know how long it takes for crowding out effects to disappear if govt stops funding what charity used to fund? (Maybe private charity never comes back, or takes a very long time? Or maybe it's rare for govt funding to go away in areas people think are important, so we just don't know?)

Floccina writes:

One thing to consider in charity is money and stuff given directly to relatives and friends. This sort of giving may be bigger than giving through charitable organizations. This sort of giving in easily squeezed out by Government programs.

liberty writes:

Here is one area where I disagree with you Arnold. There is a public goods problem with charity, which means that individuals (a) may be reluctant to give at all, and (b) may choose to give only to charities which provide the individual with some personal satisfaction or reward, leading to the distribution of giving mentioned. Meanwhile it is possible through government for society to agree upon a different distribution. Individuals can vote upon a distribution that WHEN GIVING ALONE they do not choose, but when considering how SOCIETY should spend the resources, they will choose.

Again: public goods problem. I may not be willing to take 30% of my paycheck every pay period and simply send it to a charity for the disabled -- but I would vote for a policy in which I was to be taxed 30% (and others would also be taxed) and that money was redistributed to the disabled.

It's true that there may be side effects to this use of government, and its true that this solution is coercive. But those are other issues.

You say: "But do those criticisms not apply to government? How much government spending goes to feed narcissism, of politicians or their supporters? How much government spending goes for dubious causes?"

These are also issues - public choice issues - but the fact that probably 70-80% of US government spending goes to the middle class or to politicians' friends does not mean it MUST be this way. The UK, for example, spends very differently. They do spend a lot on the NHS which is used by all, including the rich, but it is still a very different distribution - and the disabled and poor do receive a large chunk.

It would be very difficult to provide, for example, the kind of care that the highly disabled and chronically ill get from the NHS privately and without any redistribution to those individuals by the government. This is because some of them require $150,000/year or more. A private charity might be able to do this, and it is possible that people would donate to such a charity (there is St. Jude's for example) but it's also possible that people would not donate enough (St. Jude's is for children after all, and people love children). But this may be for PUBLIC GOODS reasons, not because people are consciously deciding that society should NOT help the disabled and chronically ill.

Again: Even if I was not taxed at all, I might not actually take 30% of my paycheck every pay period and send it to a charity for the disabled; but I *would* vote for a policy in which I was to be taxed 30% (and others were also taxed) and that money was redistributed to the disabled. I think this is common, and is due to the public goods problem. Maybe this is a flaw in human nature, but it does indicate some role for government in the area of charitable redistribution.

Colin K writes:

Pace Floccina, most money in government schools does not go to children of any socioeconomic status, it goes to employees. If anything there seems to be an inverse relationship where the worse the kids do, the more extravagantly-paid janitors and administrators one finds.

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