AndrewH's observation and opportunity costs

...no, I don't see why that means one shouldn't give money to beggars.

Let's say beggars in my city can make $1/hour. Everyone who, in a world without begging, would have made <$1/hour becomes a beggar, and everyone who in a world without begging would have made >$1 hour does not become a beggar.

Now let's say people in my city become more generous and give more money. The number of beggars cannot increase without the wage of beggars also increasing, because the only reason more people would become beggars is that there is a higher incentive, and if the influx of new beggars drive wages back down, those new beggars will "quit" their "job" and the hourly wage will stabilize. So it may be that now beggars earn $2/hour, and everyone who would earn <$2/hour at normal labor quits and becomes a beggar.

In a country with a minimum wage, this suggests that no one will ever leave a job for begging until a beggar's wage exceeds minimum wage; despite the horror stories I don't think this has happened here. It suggests that the population of beggars will probably consist of the people who would have a (low-paying) job if there was no minimum wage but can't get any job in the current regulatory climate. These people seem worth helping.

In a country with no minimum wage, begging establishes an effective minimum wage. That is, if beggars can earn $1/day, then no one will work for less than $1/day because they'd rather beg. This may be bad from an economic standpoint, but it's good from a humanitarian standpoint; it means we can be assured every poor person in the country will earn at least $1/day, whether working or begging, and that no one will have to make do with less. If people become more generous and donations rise to $2/day, this just means that all poor people can be assured of a little bit more money. This seems like exactly what people donating to beggars have as their goal.

Although it may leave a bad taste in our mouths that beggars are quitting their fifty-cent-a-day jobs for begging, if we place a greater value on people not having to live on fifty cents a day than we do on the "moral value of hard work", we are making people better off. We'd have to balance that against the lost productivity of these beggars' fifty-cent-a-day jobs,but if they're only earning fifty cents a day, they can't produce all that much.

[possible counter-argument: if you have a fifty-cent-a-day job, you might learn skills and get promoted. This seems a much more relevant concern in a first world country than in a third world country, where most people labor at dead-end jobs their whole lives, and since first world countries generally have minimum wages anyway, I don't consider it too important]

[this argument probably only works in Economics Land; I think gworley does a better job of describing what happens in the real world.]

I recently visited Los Angeles with a friend. Whenever we got lost wandering around the city, he would find the nearest homeless person, ask them for directions and pay them a dollar. (Homeless people tend to know the street layout and bus routes of their city like the backs of their hands.)

Good point! I live in Brazil and in some places you can actually rent babies to improve your success at begging as a woman.

Also what will the beggars do with the money? The truth is most of them will spend it on drinks. Begging attracts a certain type of persona, why do you want to encourage it instead of giving a help to people who are not begging? In some cases beggars will actually make more money than people doing serious work.

But the economical and social situations are different in rich countries. In a poor country many people are poor, usually because there is something keeping them poor, be it war, famine, government oppression, societal oppression, or something else. In such a country this argument works: you have to make begging so economically unattractive that few people would do it because they could make more with less effort by overcoming whatever problems are making them poor. Not to mention that if too many people become beggars the begging industry might collapse because there would be too few people producing things for the beggars to buy.

In a rich country, there is a strong social stigma attached to begging. Some cultures make exceptions for beggars with particular obvious reasons for begging (injured war veterans, orphans, etc.), but to my knowledge no rich society considers it acceptable for a person who could earn a living by other means to beg. And, being humans and not "economic men", the people in those societies feel that pressure and will go to extreme measures to avoid begging, including resorting to theft (albeit a career choice made possible by having a large population with enough money to have things worth stealing). So in a rich society it probably actually doesn't hurt to give money to beggars, and may even help because it might make begging attractive enough to overcome the social stigma that pushes some people to commit crimes.

That's my armchair social analysis. It feels like it's at least a shadow of reality, though, if not more.

I doubt he was the first person to notice it, but Tyler Cowen has made this point more than once. I think it's also mentioned in Discover Your Inner Economist. Basically, it's trivially easy to find poor and deserving people who aren't begging, so why bid up the wages of beggars?

Tyler Cowen's suggested this on his blog and in one of his books.

Surely this argument can be made for providing money to charities as well. In which case, the question is which is better:

1.) A small increase in the number of beggars. 2.) All current and future beggars receiving no aid - a possibility which has multiple problems.

Or am I missing something?

The main character of Heinlein's Citizen of the Galaxy spends his youth as a professional beggar.

The most effective version of this would probably be an iPhone (or similar mobile device) application that gives a dollar to charity when you push a button. If it's going to work reliably it has to be something that can be used when the beggar/cause invocation is in sight: for most people, I'm guessing that akrasia would probably prevent a physical box or paper ledger from working properly.

Could you be a little more specific about what exactly you perceive the problem to be here? I see a discussion treating beggars as human beings whose welfare we are interested in, that assumes that they respond to incentives. I'm not sure how accurate people's begging models are, but I didn't notice anything particularly offensive about them. It's possible I'm missing something though, so would appreciate being enlightened.

After all the controversy about exclusionary language, gender-neutrality and so on, it seems that beggars are a different case -- I think the kind of stereotyping, de-personification would not be accepted for some other groups.

Quite right. But if you translate most objections to that kind of stereotyping into "I have power and I demand status privelidges" then things start making sense again! (This, by the way, is not to suggest that demanding respect is a bad thing. Just that it is in most cases completely irrelevant to any of the ideals that the demands themselves may make reference to.)

We need some good high status beggars to set us straight. Where's David Eddings when I need him?