Money: The Unit of Caring

What really makes people uncomfortable is taking this to its logical conclusion and pointing out that enough economic inefficiency is as much of a human tragedy as, say, driving a school bus full of kids off a cliff. Which I absolutely believe.

I have trouble applying this post's message to the charity I know closely, Wikimedia.

[I'm a volunteer media contact in the UK, for both WMF and WMUK. This is in no way an official statement.]

The Wikimedia Foundation is a weird one. There are very few staff for hundreds of thousands of volunteers. This leads to problems trying to put meaningful numbers together for Guidestar ...

It takes money to run, but for the current funding drive we've deliberately adopted a strategy of getting the greatest number of donors rather than a few big-ticket donors, specifically to ensure our editorial independence. If I recall correctly, the average donation per donor is actually down slightly this year so far compared to last year. The more donors, the more people feel a bond to us.

If you're enormously rich, your money would be nice (thank you!) but even nicer would be your knowledge. (English Wikipedia is notoriously bad at keeping idiots out of experts' faces, but there are many other Wikimedia projects. Photos are easy and welcome, for example.) This year's drive will include asking people to contribute to the projects.

So yes, we actually want your time. Your brain. Your soul.

(My banner suggestion, "PAY UP OR THE HOMEWORK GETS IT", has inexplicably failed to make the cut for another year in a row.)

If people are so keen to donate time rather than money to charities, this suggests the creation of charities specifically designed to harness that.

One thing that might be going on here is that you can put money in the bank for later. You can't do that with time - if you don't use all your time doing something, you have wasted it, not saved it. When I consider spending money on charity, I'm not usually weighing it against my other expenses - I'm weighing it against the risk that I will be hit by a cement truck and need as much as I can possibly have put away in my savings account. Perhaps this is only because I'm pretty poor.

Another thing that might also be only me or a group of people similar to me is expense compartmentalization. I'm very reluctant to buy most things. I own exactly one pair of shoes and I'm repairing them with duct tape, but I won't replace them until I have no choice. However, as soon as I enter the grocery store, anything I want goes in the cart, because I consider food purchases to be non-optional. Similarly, I might care more in some very real sense about five dollars' contribution to Charitable Goal X than I do about a burrito. However, if the overpriced burrito is the only dinner available (if for some reason I can't go home and eat leftovers on the cheap), I'll still buy it, because I don't consider going without dinner altogether to be a viable option. Money is only a fungible unit of value in a situation where the opportunities to spend it are distributed in a more or less flat way.

Salaried professionals often cannot do an extra hour of work in order to donate the proceeds to charity. My employer basically prohibits me from moonlighting/consulting/etc. Even many hourly employees can't get extra hours at work as that would be higher-rate overtime that their employer is unwilling to pay. Monetary charitable giving takes away from my current bottom line, but charitable working just eats into my leisure hours.

Since I cannot do extra paid work without fear of consequences at my primary job, my non-work time may be practically worthless. I can only use it to do things that I might otherwise pay someone else to do. If I can do work around the house, then I can save the cost of paying the plumber. Suppose I make $100/hr (nominally) and the plumber charges $50/hr. Assuming we can do the same job in the same time, I haven't lost $50/hr by doing it myself instead of paying the plumber, I've simply lost the utility of those hours which I may not rate highly if I'd have otherwise laid on the couch watching Simpsons reruns.

Some units of caring cost more than others. I can donate $100 to charity, or I can do 100 hours of work for that charity using hours that only cost me $1/hr (presuming that I rate the utility of those hours otherwise spent low enough).

Clearly, people shouldn't be derided for donating excess money (the "overemployed"?) to charity rather than their time, but I think the calculus is a little more complex than what you describe in your post. For those living near their means (neither under- or overemployed), there are additional economic factors that make donation of time heavily favored over donation of money. That a culture of valuing this has arisen to justify/rationalize such behavior shouldn't be terribly surprising.

I tried to make this observation before, but my point doesn't seem to have been addressed in this followup.

Throwing money in the direction of a problem without checks and balances to ensure that the money is actually spent productively is wrong.

For example, suppose that Dark Side Charity's message is just like Light Side Charity's message: "give me money to save the world". However, Dark Side Charity doesn't spend the money on saving the world, but on sending out more and more requests. Giving money to Dark Side Charity would be wrong. Because the two charities's requests are identical, giving money to Light Side Charity based only on the request is also wrong.

You might argue that you just need to estimate the probability that you are talking to the Light Side. However, remember that Dark Side Charity will grow when someone sends it money, changing the frequency that Dark Side Charity requests are encountered. If (as might well be the case) the system is already at equilibrium, then your probability estimate will depend primarily on the force stopped the positive feedback - e.g. the cost of sending the request. Spam is frequent primarily because it is cheap to send.

My suggestion: Incorporate this idea into the request for money, and proffer evidence that the money is being spent well. A list of "this is how we spent last year's money" isn't sufficient - Dark Side Charity could easily make a list. Independent 3rd party auditor's stamp of approval might help. Successes broadcast to the world might help. Accepting volunteers even though it seems inefficient might help.

You make a huge unspoken assumptions that people actually care about charities getting their stated work done. There's very little evidence for it, and plenty of evidence against it. As far as we know people donate time and money to charities to signal their moral character to others, and to receive pleasant feelings of contributing in return.

So you'd be right, if your basic assumption wasn't so completely mistaken. To be honest this assumption is extremely common, so it's not just your mistake, but it doesn't make it any less false.

My usual metric of whether I'm wasting my time (I'm not the first to suggest this, to be sure), has long been to value my time at some amount of money, and consciously think either "am I saving more money by doing this than the value of my time" or "am I enjoying this enough that I would spend the value of my time for this entertainment".

For instance, I don't really bother with most amusement parks because the sum cost of admission, plus the time "cost" of waiting in lines, is more value than I want to spend on the limited enjoyment of the rides.

If anything, I tend to be more stingy with time than money, because it's harder to convert money back into time than the other way around.

The Red Cross made this same point in a blog post recently: http://blogs.redcross.org.uk/emergencies/2010/01/help-not-hinder-haiti/ - I think it's the first time I've seen a charity make the point so explicitly and publicly.

I wonder how far your observation is generalizable across all people. I would have predicted the opposite effect.

I tend to be much more willing to donate money to charities than to donate time. And I find this to be a general principle (ie I tend to pay my taxes without grumbling too much, but when some stupid government policy wastes my time, that's when I get angry and write to my congressperson).

Possible explanations: I grew up in a wealthy family, and/or I don't really actually spend money on anything beyond necessities because the library gives books out for free.

Informal poll: If asked to donate either one hour of free time, or your hourly wage, to a worthy charity that would receive equal benefit from either, which would you rather do? Disregard taxes being deducted from your wage and that sort of thing.

Thinking about this, I suspect people treat charity as only a means to the end of self-cultivation (and sometimes also socializing and teamwork). The personal involvement is the payoff. It's this linkage that fouls when they spend money to get more efficient charity but at the expense of a completely impersonal transaction.

A lot of charities try to personalize the money donation, but that feels like a dirty hack to me. I think in the end we'd be better off cutting the linkage and trying to persuade people that self-cultivation is a worthy but distinct goal. (I think it's seen as a bit unworthy if not sugared with good deeds; consider people's attitude to meditation.)

I was at a music festival a few years ago and spoke with a grassroots activist about this very issue. I told him I thought it was more effective for me to give his cause money than time, and he enthusiastically agreed: the leverage that we get from supporting the cause, together, with my money and their activist smarts, is far greater than the dilettante effort that I could myself muster.

Since then donated a few $K to the cause via monthly deduction, and they've had several major wins in that period.

People who want to give time when they could better spend the money aren't really (or only) trying help the cause: they're trying to buy themselves absolution.

taw saw it. Volunteering gets things done, but not the "stated thing." Charities with effective volunteering systems seldom state that what they are trying to get done may be... (what follows is a grab bag of unstated goals, feel free to add your own):

challenge the specialized professional identity of potential volunteers and encourage them to think of themselves in another light: as citizens, neighbors, people who could under less lucky circumstances be poor/at risk of natural disaster/in need of instruction... etc. increase happiness through face to face generosity broaden social tolerance by providing opportunities for cross-class/culture/ethnic interaction. encourage group loyalty (AKA "team spirit") through personal sacrifice *challenge capitalism through illustrating the power of relationships without a price

*etc.

I like Peter Singer's "drowning child" argument in "Famine, Affluence, and Morality" as a way to illustrate the imperative to donate and, by implication, the value of money. As he says, "we ought to give the money [spent on fancy clothes] away, and it is wrong not to do so."

I do think there's a danger, though, in focusing on the wrongness of frivolous spending, which is relatively easy to criticize. It's harder to make people think about the wrongness of failing to make money that they could have donated. Opportunity costs are always harder to feel viscerally.

Every time I spend money I feel like I'm losing hit points. 

I would like to thank the LessWrong community for substantially curing me of this. I am not totally over it and rationality is not the only reason I made progress, but it did substantially contribute to the idea that money is a resource with which I can solve problems and the main reason not to is it might be better spent on different problems later. 

That said, if people want to mail in good 5 year old apple laptops, or 3 year old laptops in good working condition, the cause that cannot be named will probably benefit from them and the donors can benefit, I suspect, from the exceptional tax benefits associated with donating electronic goods.
Old but still fully functional cars are would also be appreciated.

Umm - who are these people that would rather donate their time than their money?

I guess, I have never been one of those people - unless someone needs work in my realm of expertise (in my case, tweaking computers to do what you want it to do, fairly cheaply, or training people to use them), I don't volunteer for very much at all.

I do love modern web banking - I can set my bank account to send $5 a month to my local NPR/PBS affiliate, 2nd week of the month, the Monday after my payday (So I can turn it off if I'm unexpectedly tight). The ACLU get it's $5 on the 4th Monday, and if I'm doing well the EFF gets a donation on week 3. It's been a bad year so I can't honestly remember what I had toggled up for week one - it's my weakest week financially (mortgage payment) so my lowest priority was there.

Giving money is great - let them hire who they need. If I show up at a soup kitchen, they needed a computer geek.

Jonnan

Have you ever noticed that wealthy people often leave money to charity in their wills? It would make sense from a utility standpoint to donate while alive because you can be more involved in the use of your money and ultimately gain the appreciation/satisfaction/utils from the result. You gain no utils when dead and I'm assuming that the prospect of future utility is less valuable than the act of donation in the present. Therefore, why do so many people donate to charity in their wills? A big reason is time. They often don't have time (as perceived by them) to research what they want to give to and therefore just leave it up to someone else. In a sense, it's paying someone to figure out what you care about and then having them donate for you. Another reason is the value many rich people place on money. You call it hit points but to some people it literally feels like lifeblood. In order to make a lot of money, it helps to have this attitude. If they were happy to spend their money (because they care) then they wouldn't be wealthy, would they? There is also the opposite effect where spending money loses all value when all you do is spend it. The only thing that seems valuable is another limited resource, time for example.

However, it's not necessarily an issue of caring but of clarifying what the money buys. If you spend $5 on a burrito you know you are getting a burrito. If you spend $2000 on a diamond ring you are buying...love? The main reason that rich people don't give to charity while they are alive is uncertainty. If they could be sure that their money was going to help a cause that mattered to them then they would be more apt to spend it. That's not such a bold claim. I think that the model of a rational, centralized, data driven charity ala The Bill & Melinda Gates Foundation is an obvious next step in helping people "care". As far as diamond rings for the SO goes...I have no idea.

Governments set up a couple of hacks to counter this effect : taxes, and tax deductions for donations.

There are probably better solutions, and we'll probably be reading about them here :)

Is there a more detailed psychological evaluation of the "spending money is like losing hitpoints" side of things? What bugs us the most? I don't think it's losing money as much as "spending money on something on which other people don't", with the associated mental image of being a sucker. It's some kind of reverse "keeping up with the Joneses", and I wouldn't be surprised if people (including me!) had the same kind of psychological resistance to unusual spendings that would actually benefit to themselves, such as taking a (paying) course in personal finance.

What does it mean if you have no units of money to spend? It seems rational to accept that, if I do not have enough money to pay for my own food, then society has deemed me too worthless to survive; and if I do not have enough money to spend on influencing the future, then society has deemed my desires not worth considering.

This is clearly true, but how is a human self supposed to survive that realization, and maintain the self-esteem necessary to go out and attempt to acquire money?

I like thinking about this in terms of transmission losses. When you donate money, you convert from your time -> money -> charitable work at maximum efficiency. When you donate time and work on something you don't specialize in, you are incurring substantial losses.

Of course, you are also having fun, and that value should go into the equation. It doesn't make any sense for people to only value impact on the world...and not value their own enjoyment. Right? Excluding your own utility from the optimization would be absurd.

Hi! Long time lurker first time poster here. I linked to this from a recent article of Scott's, so I'm a little late to the party.

A couple of things struck me about this: one, people who support an organization's work or 'want to help' may be (in many cases justifiably) suspicious about the way money is spent. Giving labour gives them some control over how that labour will be used; if it's used in a way that is obviously counter to the stated aims of the organization/what the individual volunteering actually cares about, they can leave.

Secondly, people may care enough to give their leisure time but not their working time. It would be absolutely correct to say that this is less of an indication of caring then giving money, but its a reality that people will be more willing to part with their labour (money being a representation of that labour) if it's done in a leisurely way, ie spending a morning volunteering at a soup kitchen chatting, rather than working alone in an office.

Interesting post. Reminds me of one of the things my parents think is odd about me. It causes me a pang of emotional pain to buy lunch at the cafeteria ("I should have planned better and packed enough food and saved $2") but I have no problem donating large amounts to charity. I think it has to do with the guilt factor of spending money on myself, which is replaced by the I'm-a-good-person glow of giving to charity. I probably donate nearly 5% to 10% of my total income, which is still much less than I could donate, but I'm going to wait until I have a steady 'adult' job rather than an $11/hour lifeguarding job to really push that.

Thanks, Eliezer!

That's good stuff. I really relate to " ... the poisonous meme saying that someone who gives mere money must not care enough to get personally involved." That one runs on automatic in my head. It's just one of many ways my brain lies to me.

“Every time I spend money I feel like I'm losing hit points. ” Now, I don’t know your personal situation, and I can certainly relate. My mother is a child of the Great Depression and lived her life out of a fear of poverty. She taught me to worship Bargain and Sale and to abhor “unnecessary” spending.

I suspect that most people make it worse by not saving enough. I suspect most people have only a few months salary in savings. But in many highly-skilled (specialized) professions, it can take years to find your next career job.

Anyway, I made it a life practice, starting in college, to make saving a high priority, and then don’t look at my net wealth often. That was so I didn’t get stress-related diseases from worrying myself sick over money. Once I got “rich” (I retired at age 51), I got a financial planner, set up lots of disparate investments, and I look at my net worth only once a year.

Now it’s a different world, now that I have discovered existential risks. Now I fight with my financial planner to raise my outflow rate, and that goes to the Future of Humanity Institute, Dr. Martin Hellman (see nuclearrisk.org), and mostly to The Institute Which Must Not Be Named. My goal used to be to outlive my money. Now it is Saving Humanity from Homo Sapiens™.

I say that not to brag, but to invite you each to take on an extraordinary mission for your life. This optimal philanthropy thread gives a lot of the practical steps. In the Landmark Education Curriculum for Living™ you will create yourself as an extraordinary person, living your extraordinary commitment. Now that’s cool!

In our society, this common currency of expected utilons is called "money". It is the measure of how much society cares about something.

What is this 'society' of which you speak?

And why should we expect a common currency of utilions? Money can buy you lots of things, but not anything. Plenty of people give up lucrative careers for more satisfying ones. That doesn't negate your overall argument, but I think you're wrong on that particular point.

My view is that charity has less to do with actually helping the needy than with signaling compassion to others. If that's right, the relevant metric of charitableness could well be something like resources expended rather than benefit produced. Additionally, helping at the soup kitchen may be more visible and salient to others than giving money. A lot of people would be reluctant to actively inform others that they'd given $100 to helping the needy, but feel comfortable trumpeting their volunteering to all and sundry. If someone asks you what you've been doing, it's much easier to say 'helping at a soup kitchen' than 'working an hour and donating the proceeds to charity'.

I feel the reasons you cite are all weaker than the real reason: we give work instead of money because we want to know the cause is sincere. Analogously, it's better to give a hobo bread than money, because he'd just buy booze.

Also, moralizing with an ulterior motive is bad in my metric. Didn't think I would ever downvote you, but here goes.

Believe me, I understand the feeling. Every time I spend money I feel like I'm losing hit points. That's the problem with having a unified quantity describing your net worth: Seeing that number go down is not a pleasant feeling, even though it has to fluctuate in the ordinary course of your existence.

In the movie In Time, time is their Unit of Caring.

If you don't spend two months salary on a diamond ring, it doesn't mean you don't love your Significant Other. ("De Beers: It's Just A Rock.") But conversely, if you're always reluctant to spend any money on your SO, and yet seem to have no emotional problems with spending $1000 on a flat-screen TV, then yes, this does say something about your relative values.

I disagree, or at least the way it's phrased is misleading. The obvious completion of the pattern is that you care more about a flat screen TV than your SO. But that's not a valid comparison. What it really says is that you care more about the flat-screen TV than anything else you could purchase for your SO for $1000. But for example, if you're poorer than your SO, you could believe that it's always better marginal investment to invest in your own happiness rather than theirs, but this says nothing about how much you value the relationship or the person. How much you "value" a person isn't on the same scale.

"It is the measure of how much society cares about something.

This is a brutal yet obvious point, which many are motivated to deny.

With this audience, I hope, I can simply state it and move on.  It's not as if you thought "society" was intelligent, benevolent, and sane up until this point, right?" - saying that a non-intelligent object can "care" about something is strange.

Also, your position of no one using the logic for feeding is clearly distorted - I hear from time to time from not-so-stupid people that it is merely an artifact of city life that we buy food because it is simpler and we really should spend some of our time to grow edible plants instead, and quite a lot people actually do that, actually waste their time on growing onion instead of buying onion THAT NOT BEING THEIR MAIN PROFESSION.

very, very old puzzle/observation in economics about the lawyer who spends an hour volunteering at the soup kitchen, instead of working an extra hour and donating the money to hire someone to work for five hours at the soup kitchen.

Where else can I read discussions of this idea? If it's old I'd expect to find something before at least 2006.

http://www.working-minds.com/money.htm

Sorry, I'm a bit confused. Not being fully versed in the terminology of utilitarians, I may be somewhat in the dark...

... but, is the point of this piece "Money should be the unit of caring" or "Money is the unit of caring"? I expected it to be the latter, but it reads to me like the former, with examples as to why it currently isn't. That is, if money were actually the unit of caring—if people thought of how much money they spend on something as synonymous with how much they care about something—then a lawyer would hire someone to work five hours at a soup kitchen instead of working there for an hour.

It sounds like, as it is now, money isn't the unit of caring and you think it should be. But the end again reads more like the latter statement. Which one was your intent?

If the slaves have no money, but the slave owners are wealthy, does that mean that the slaves who try to use their time and energy to revolt don't care, because they have no money? And the wealthy owners, who free a slave every 20 years because they own so many one more or less makes little difference to them, they somehow care more?

No, that's a ridiculous theory.

This site is so much fun, because I find all the ideas that I've always liked, and some more besides that are just as good.

I'll disagree on one point. Time is a much more common utilon of giving, and I believe in fact was used in some utopian communes as a unit of contribution and extraction from a common pot. I think people often depreciate giving money for a couple of reasons. First, because of the orders of magnitude difference in ability to pay. Gates and Buffet can give more than the accumulated net worth of a number of towns, and not even notice the loss. Therefore they "only gave money" - meaning it was no skin off their nose. If you gave your life savings, no one would say "you only gave money". That demonstrates a mental bias most people have when they think about charity - they're thinking primarily about a judgment on the people doing the giving, not about what the giving achieves. It's about being good, not achieving good. That's the second reason.

Further, even money is not a utilon of achievement, but again, just a givilon, a unit of giving, of input. You gave money. It's all about you. Some organization received money. How much of that money actually went to the intended recipient? Probably none. At best, someone at the organization spent the money, and your intended recipient got some goods and services.

But what did he get? This probably explains some of our lack of motivation for giving. There's no idea of any particular concrete thing delivered to a particular human being. Our sense of value and accomplishment really isn't pinged by looking at a number we put on a check. I don't think there was a lot of evolutionary fitness derived from that skill on the savannah. If they'd actually allocate your dollars, to a specific purchase. tell you about it, and keep track of it for you, it would probably be more motivating, as you could see an accumulation of actual objects and supplies that you purchased for people. You'd see a growing achievement over time.

I made just the original point, about giving money instead of time, with a Peace Corps type roommate gal when I was in graduate school. Why don't you go to work on Wall Street, and send all that filthy lucre to Africa to feed the starving? No, she thought it was better for her to go herself.

Me being in grad school, and something of an intellectual bully, I persisted. How does that make sense? You'd feed more people. Blah blah blah. Why not send money? Why do you have to go? Why? Why? Why? Eventually she broke down and said "because then I wouldn't have the experience of doing it." She was, of course, immediately appalled once it came out of her mouth.

Oh well, if it's about your experience of helping the poor, and not actually helping them, then by all means, you should take that trip instead. So sorry. I didn't understand at first. I thought it was about getting them fed, not about you getting to personally ladle out the food.

Like I said, I can be a bully about these kinds of things. I don't think I was making any friends that day, but I do admit to enjoying myself.

Unfortunately, money is not and cannot be a universal system for representing value. There are some things whose value cannot be summed up by any such system.

Integrity, for example, is proverbially a thing which can be sold but never bought. Its utility comes from its inability to be exchanged for something else and retain its value.

The idea that everything of value can be converted into a generic and interchangeable medium is incompatible with the concept of value itself.

"Indeed you can usually tell when the concepts of democracy and citizenship are weakening. There is an increase in the role of charity and in the worship of volunteerism. These represent the élite citizen's imitation of noblesse oblige; that is, of pretending to be aristocrats or oligarchs, as opposed to being citizens." —John Ralston Saul