Arnold Kling  

The Soup Kitchen Example

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David French writes,


In this category are all the things you do when a person typically thinks of "fighting poverty." Serve in a soup kitchen. Donate canned goods. Sponsor a child. Fight for the right candidates and public policies. Volunteer at a homeless shelter. Do all that "change the world" stuff you see lionized on television and movies. But be humble about it . . . because you won't be making much of a difference to anyone.

Up until this paragraph, his focus is on staying married and living within your means.

Is serving in a soup kitchen such a good thing to do? It's probably not your comparative advantage. I think that straight economic analysis would say that you should instead use that time to work extra hours and donate your additional earnings to the people who might need to get their meals from a soup kitchen. If the best use of that money is soup from a soup kitchen, then they can buy it there, served by people for are paid enough to work in a soup kitchen to cover their opportunity cost.

Assume that you are altruistic, so that you want to help the people who might need the soup kitchen. Is my proposal the correct one to choose, or is David French correct? Be sure to specify as clearly as possible the deviations from rationality assumed in your answer.


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COMMENTS (23 to date)
Georgian writes:

You're both correct.

Weekdays you work as high paying a job as possible and in your leisure you donate your free time in the soup kitchen.

You could argue you should work in your free time but then that wouldn't be free time any more and also your work may be such that you cannot work overtime or on weekends etc. Perhaps getting a second job would fix that, but we are not machines who continuously work forever.

The soup kitchen might be a welcomed relation compared to a stressful high paying job or two jobs.

Daniel Molling writes:

I generally agree with your proposal, but I also think that straight wealth transfers don't seem to be a good way to go when being charitable (creates bad incentives for potential recipients). I think a better proposal would be to work the extra hours and then hire a housekeeper who would otherwise be at that soup kitchen. This approach would offset the hours lost from working to some degree with the hours saved from not having to do house work and provide job experience to the potential soup kitchen.

Of course, many variations of this tactic could also be employed.

Ryan Murphy writes:

You're fading from methodological subjectivism to philosophical subjectivism, which does not have a basis in economics. From the standpoint of methodological subjectivism, it's fair to equate a dollar spent on crack to a dollar spent at a soup kitchen. It's not the same thing if the people you are talking to have a philosophically non-subjectivist understanding of value.

Tim writes:

Georgian, working in a soup kitchen is ultimately going to burn a person out just like a second job will if too many hours are worked. Let's say soup kitchen volunteering wears a person out at half the rate working a second job does. All this means is that when we try to determine whether one's comparative advantage lies in soup-kitchens or second jobs, we have to compare the productivity of one hour of a second job to two hours of volunteering. The principles of specialization and trade dictate that the greatest possible wealth is created when people focus exclusively on that field wherein they have the greatest comparative advantage. If that's not in volunteering, people simply shouldn't volunteer. They should earn money and donate it.

ziel writes:

Working extra hours on weekends is costly - you're probably going to want some extra-special compensation from your employer to do so. By the same token, your employer is not inclined to pay you extra unless it's really worth it. So working overtime to donate to charity is an unlikely scenario.

The most likely scenario is that you have no extra-hours opportunities that could pay you based on your self-assessed marginal value of your labor. But you're bored on the weekend. Thus, working in a soup kitchen provides some psychic benefits, particularly in comparison to the very high cost of alternative entertainment options.

Tom West writes:

Speculating here:

If I work those extra hours, the odds that I end up donating what I would earn are pretty small indeed. In fact, I suspect that I am likely to be *more* generous if I am not working like a dog at my job. (I'm not as likely to feel that I deserve a reward for working so hard and keep all my earnings...)

Not only that, but working in the soup kitchen provides quite a break (because it's volunteer, it's rarely back-breaking, soul-crushing labor), and if I do work with the indigent, I am more likely to develop a "there for the grace of God go I", which tends to lead to even more generosity.

This is yet another case where the most efficient solution doesn't square with what is going to emotionally work for most people. In other words, I'm rational enough to realize where my rationality ends.

Tim writes:

What I'm getting from what you wrote, Tom and ziel, is that regardless of what's in the best interest of the poor, people who want to help the poor are going to do the hands-on volunteer work regardless of whether it's more efficient or not. But the question remains, is this actually the most helpful thing an altruist can do?

John S Cook writes:

Perhaps the answer lies not only in the delivery of soup in a soup kitchen but also in the goodwill and social cohesion that develops out of fair and reasonable institutional arrangements.

Argument about optimal performance reduces to absurdity if people want to ask enough questions about it. How can people know what is and what isn't optimal if there are ongoing consequences?

David O writes:

Perhaps dishing out soup in a soup kitchen isn't the best use of one's time (assuming one has other skills). But I imagine that volunteers in a given soup kitchen are more likely to give money to that soup kitchen, mostly due to the fact that they're regularly reminded of the soup kitchen's cause.

Thucydides writes:

A friend who regularly volunteers at a soup kitchen was told by the manager that he has no trouble getting volunteers to serve up the portions, but few or none of them are willing to do food prep and cleanup. This suggests that the objective is not "doing something about poverty," but rather obtaining psychological satisfaction through the ostentatious display of benevolent behavior, which is what serves as the substitute for virtue these days.

Bob Knaus writes:

Hello? Soup kitchen volunteers gain utility from their work. Yes, they do it because they enjoy it.

Here's a suggestion which may allow the highbrow readers of this blog to gain a little utility of their own. Volunteer at a soup kitchen, but not at one organized by your elite peer group. Find one that's run by, say, a Christian motorcycle club. Or the VFW. You'll learn a lot about the charity of others, and maybe even a little about your own.

Yancey Ward writes:

Working in the soup kitchen is a more visible signal than working extra hours and donating the wages. Now, if soup kitchen managers want to induce a more efficient donation scheme, they should probably hold regular public feasts for wage donors and invite the press.

Bryan Willman writes:

Well, money is easy to store. So giving money to the soup kitchen may be the best thing, since they can judge when and how to spend it.

But for volunteering, the orgs I actually volunteer with/for need my special skills, and generally would have no hope of affording them.
(Neither serving soup nor cleaning the stove fall in that category.)

So volunteering with some special skill you have (that might or might not be related to employment) is probably different from volunteering at some commodity task most anybody can do.

PrometheeFeu writes:

@Arnold Kling:

You forget that what you do during the week is not necessarily what produces the most stuff and has the highest income. I know I passed on some jobs that would have afforded me more income because I believed that the extra money would not make up for the less interesting work. So your comparative advantage does not lie in where you make the most money. It lies where you get the most units of benefits for the least units of cost. As the week progresses, my amazing job feels less and less amazing. By Saturday, the costs of my job are pretty high while the benefits have not moved much. So it may be that on Saturday, my comparative advantage lies in working at the soup kitchen.

Kendall writes:

I think it is a common mistake in economic arguments to assume I can work as much as I want at my job. When I was an electrical engineer I couldn't ask for more work, when I was in the Army Rangers I couldn't ask for more work and as a teacher I can't just ask for more work (although there are some extra duty opportunities if I win the competition for them). So for many people donating their time is the most efficient way for them to help.

Robb writes:

Agree with @Bob Knaus...

There is a difference in the relative utility of donating money vs working in the kitchen.

Tim writes:

Yes, there is a difference in the utility provided by donating money or volunteering in a kitchen, but the point is that for most people the greater utility is generated by the donation. What I'm getting out of most of the above is that people who are being altruistic are going to be altruistic in the way which makes them feel best about themselves. I humbly suggest that this is a self-contradictory definition of altruism and explains why so much poverty and misery persists despite all the "help" the poor receive from private and public sources. Charities can't focus exclusively on the needs of the poor as long as they also have to make their donors and volunteers feel good.

The Engineer writes:

This debate is so pre-capitalist. Capitalism is the greatest anti-poverty program in the history of mankind.

If everyone had a straight up capitalist mentality (think, say, London circa 1800), with charity and other non-capitalist endeavors of secondary importance, what would the economic growth rate be? Would it be faster? Significantly faster? If so, doesn't that alleviate poverty (except, perhaps, for those who truly cannot work, perhaps because of real health issues or handicap).

We have infantalized the poor through "charity", particularly in the soup kitchen example.

Kendall writes:

Tim,
I have more free time than I have extra money so how is the greater utility generated by the donation?

The Engineer,
Statistically most poor people are only poor temporarily so how does temporary help "infantilize" them?

PrometheeFeu writes:

@The Engineer:

Obviously, you don't really understand what capitalism is. Capitalism does not mean you don't care about other people.

william davis writes:

Pardon me if this has already been mentioned but perhaps AK’s analysis understates the altruistic “benefits” of volunteering----that the volunteers expect to be “blessed” for having done so and have signaled to others in a kind of competition for those blessings.

Hasdrubal writes:

As a few other people mentioned, volunteering provides value to the volunteer, not just to the person who receives the charity.

Why is there an assumption that altruistic individuals are interested in maximizing the effects of their actions on the the recipients? Why would they act differently in charity than they do in any other aspect of their lives? Wouldn't it be rational to maximize utility gained from charitable activities?

Starting from the assumption that people are maximizing personal utility, we can't come to the conclusion that maximizing the effect of altruism is necessarily the best strategy. That depends on each individual's utility function.

david writes:

@Yancey Ward

Working in the soup kitchen is a more visible signal than working extra hours and donating the wages.

Yup. Obviously, signalling, penance and donor self-image have quite a bit to do with charitable endeavours. I’ve often thought that, in most cases, at least, the donors were the actual recipients of what it is that charities that are providing. In that sense, the recipients of the charity are simply a vehicle or an expense item.

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