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Peter Singer was recently interviewed by Kate O’Toole on Triple J’s current affairs program, Hack. In the interview and ensuing discussion, Singer raised some interesting points with one central theme: the rich world (that’s us) have a moral obligation to give a significant percentage of our incomes to the developing world. No ifs. No buts.
To begin with, Kate O’Toole describes a thought experiment that Singer introduced to motivate the ethical argument of his book, The Life You Can Save (he has a website of the same name). In short, the picture is this: imagine walking home one day from university with your bag over your shoulder, and you pass a local lake — you do this every day, except that this day you notice for the first time that there is a child who is stuck in the lake and is drowning not far from the edge. What should you do?
Have a think about it.
Singer’s argument is that, as you might expect, you should save the child — even though this will cost you getting your clothes wet, possibly even causing you embarrassment, and certainly delaying your evening by making you miss your bus or opportunity to go out with friends. The experiment is pertinent since he believes that this is exactly the same situation that we — in the developed rich countries — are faced with right now: we are the ones in good clothing, walking home with good education, on our way to having a good time (I have added these points) and the inhabitants of the poor countries are represented by the dying child, those with significantly shorter life expectancies, higher infant mortality rates, life-changing cataracts that needlessly cause blindness in many people, and … we could go on.
Singer’s searing question is thus: if we would act to save the child in the pond, why don’t we act to save the poor of the world?
He specifically trains his attention on the poorest 1.4 billion people who are listed as living in extreme poverty on the one hand, and the very rich (relatively) who have more ’stuff’ in their lives than they know what to do with on the other. And if you want to say, ‘I’m not rich — I’m a student’, then I’m afraid Singer doesn’t let you off the hook — he would ask, ‘have you ever bought bottled water?’ .. if you have, then since water is widely available, fresh and clear from any tap in Australia, then you clearly have more than enough income to dabble in luxury goods, since you just spent $2 or more needlessly on a whim to buy bottled water (of all things!).
Predictably, Singer’s argument is that although we can’t reach over ourselves and save the metaphorical drowning child, we can give our excess money to those who can. He has in mind aid organisations like Oxfam, Red Cross , World Vision and so on.
Whilst I’m with Singer all the way to this point — I’m a sucker for well argued, principled and rational reflection (not withstanding that we don’t get at the basic issue of why all lives are worthwhile which is an implicit assumption in Singer’s work .. but let’s assume for the moment that they are (not that I’m suggesting they’re not, but sometimes it is good to reflect deeply on why we believe this)) — I start finding his arguments a bit hairy from here on.
For instance, he goes on in the interview to describe a distinction between the ‘Ethics’ and the ‘Practicalities’ of giving.
You see, there is the ethical argument (as described above) which drives us to see that we can’t not help (through giving), but then there is the practical argument which advises us how much to give. Here, the prescription is that one should give around 1 per cent of income if on a ‘low’ income in Australia - the logic being that this fraction is substantial, but shouldn’t incur too much cost on standard of living; then if earning up to around $100,000 income, the fraction increases to around 3 per cent; 5 per cent is for the very rich (much greater than $100,000); and then a dramatic increase on a sliding scale to a third of your income if you live in the stratospheric realms of the uber-rich (earning millions per year). Whilst this, at first pass, might sound reasonable, it doesn’t make economic or moral sense.
On the economic side, evidence on happiness suggests that after a certain level of income is met, further increases in income do not have nearly the same effect on our happiness. Whilst some have taken this to meant that relative income is the only thing that matters it is sure that humans are, generally speaking, ‘happy’ when their income provides enough for a basic level of consumption.
The implication for analysing how much one should give is that if you are earning ‘enough’ to satisfy your basic needs, then the rest (as Singer’s bottled water question nicely points out) is just a luxury and should be used wisely and sparingly. Infact, this would mean rather than giving an increasing fractional portion of our income, we should give an increasing absolute amount. Indeed, if we assume that twice the PhD stipend of an Australian grad-student (i.e. about $40,000) is ‘enough’ to live on (since PhD students universally complain of their poverty, but objectively are still well fed and nourished!) then all dollars of income above $40,000 should be available for giving. Or at the very least, should be in stiff competition with other forms of leisure.
On this front, in the interview, Singer points out that the Met Museum in New York recently spent US$43 million on a new painting. His question is, since that amount of money is surely in the discretionary spending realm (since you can’t eat, shelter under, or gain nourishment in any way from art) are you sure that that money was spent in the best way? .. He contends that it could likely save a football stadium (e.g. the MCG) worth of the world’s poor from their situation .. So, will it be the painting, or the MCG worth of lives saved? .. The painting, or the MCG..?? It is easy to see why he’s so persistent in his message.
Which brings us back to our giving. Suppose we take the audacious step to allow aid money to contend on equal footing for every income dollar above our ‘basic needs’, then who should we give it to? Specifically, should we give it the government or to a non-government aid organisation?
The main interest here, from an economic efficiency perspective, would be that we wish the institution to distribute the aid with low transaction costs (i.e. not spent on bureaucracy); that the aid would be spent with high attention to where it is most effective, or in other words, that the marginal value of your aid dollar is high; and that the aid causes long-term, rather than just short-term crisis relief (although this may be called for in one-off donations) since we wish to lift our poorer brothers and sisters out of their systemic condition, rather than just cause them to be dependent.
So who is the perfect institution? Well, clearly no institution is perfect, I want to argue for a moment that the Australian government is worth considering in the mix. Why would that be? .. Well, although it is potentially the largest institution, it has excellent access to global information through its many diplomatic missions around the world, and so will likely no very well where aid can be spent with high effect. Furthermore, unlike the NGOs, the government actually has its own standing army to facilitate aid distribution and re-building in certain situations. In other words, it has enormous in-built capacity which can make its actual functions using your money wide-reaching and very powerful.
Finally, one could argue that the government should actually spend the money on the Australian Economy and not on direct foreign aid at all. What?! .. How could that help? .. Well, I don’t want to say too much (I think it would make a challenging research essay topic), but remember that for so long as there is high demand in the developed countries for raw materials, manufactured goods, and services, there will be extensive markets for developing countries to sell into. One of the forgotten truths of the present financial crisis is that with the tanking of the US and European and Japanese economies, global demand has plummeted, which has in turn lead to millions of job-losses in developing countries. China has been particularly hit in this regard. Don’t forget that the clear champion of the poorest of the poor in world history (that’s right, world history) has been China — they are almost singularly responsible for the vastly diminished numbers of extremely poor in the world today.
Of course, there are good reasons why you wouldn’t want the government alone to be providing aid — monopolies are rarely efficient institutional arrangements, the aid ‘market’ is no different — but I’ll leave that for you to think about.
A final word on the moral argument — Singer’s practical thinking is not a bad start, notwithstanding the absolute argument made above, but Singer would do well to remember that there have been many long-standing institutions that have encouraged giving to others at a much higher rate, regardless of your present income level. Take the rule of thumb for giving adopted from the Biblical tithing principle of 10% of your income. This principal has survived to guide (not stipulate) the thinking on giving of millions of modern-day Christians and Jews.
And if you’re wondering where the Australian Government is at on giving as your representative, Singer points out in the interview that ‘we’ give around 30 cents in every one hundred dollars of tax revenue (or 0.30%). How does that square with the old parable of the generous giver?