A friend of mine is a prominent member of a philanthropic business. The idea behind the organisation is very simple. They sell clothes along with the principle that you should commit an act of random kindness to a stranger each time you wear them. Profits finance charitable projects, large-scale ‘arks’.
Their objective is to enable a positive culture shift towards every-day charity, with the founder and all the employees motivated to join the company by their desire to make the world a better place. So how does charity shape up as an economic motivation?
Altruism can be explained by evolutionary psychology, as a system of ‘generalised reciprocity’ – like an insurance policy. The society would be more likely to thrive and survive if misfortune for one member could be smoothed by charitable transfers from other members of the group, but with the knowledge that you were safe from destitution if you suffered some bad luck too.
Thus, humans rationally evolved to reward altruism. What impact does this have on our society? Firstly, individuals engaging in charitable activity receive different rewards to conventional entrepreneurs. Rather than receiving profits in accordance with the value they create for consumers, they receive praise from their peers – not to mention the positive feeling that they are making the world a better place.
People reward altruism by looking upon the perpetrators more favourably, and this creates incentives for philanthropy. Of course, the recipients can’t recompense suppliers of charity in the traditional manner (payment through the price mechanism). Thus, granting social status to honor altruism is directly analogous to giving money to the poor – They can’t pay for the goods and services they need, so you are ‘paying’ instead.
Thus, you should always remember your part to play in provision of charity. By praising members of our college community who give time to SVDP, you are helping the poor. By lauding Suas volunteers, you are making a difference in the lives of the world’s poorest people. Who knows? It might make voluntary work seem so attractive, that perhaps one more person might think it worth their while to join the Voluntary Tuition Programme. That makes the world a better place.
Of course, there are costs when we reallocate social status because it’s fundamentally a zero-sum game. If people reward charity by looking upon the individual more favourably, there is less ’social status’ to go around and less to be gained in other ways. When these alternative means of achieving social status (being funny, looking attractive, etc.) yield lower returns for the investor, they are going to invest fewer resources (time, effort, etc.) in striving for them. Basically: why bother trying to be the funniest guy in the class when Johnny Do-Gooder gets all the girls? Better to spend that time and effort elsewhere.
So a philanthropic society that rewards altruism may end up being less funny, less smart, and more ugly than a self-interested Hobbsian wilderness. This author thinks that the charitable society is preferable, and will look upon you more favourably if you agree.
