The risks of economizing generosity

Another surprising revelation from Sandel’s book was hearing how some prominent economists think about generosity and civic action.

In Chapter 3 of What Money Can’t Buy, Sandel talks about Richart Titmuss’ The Gift Relationship, published in 1970, in which Titmuss compared the US and British blood collection system.  The British system is entirely voluntary and the U.S. system is part voluntary and part paid.  According to Sandel, “Titmuss presented a wealth of data showing that, in economic and practical terms alone, the British blood collection system works better than the American one.  Despite the supposed efficiency of markets, he argued, the American system leads to chronic shortages, wasted blood, higher costs, and a greater risk of contaminated blood.”

Titmuss goes further, arguing not just against the inefficiency of the U.S. system but its morality.  Paying for blood, he argues, is unfair and corrupting.  It preys upon those not in a position to strike a fair bargain (the poor) when deciding whether to give something as vital and inviolable as their own blood.

Famed economist Kennith Arrow’s retort was striking – all the more so because Arrow was known for his work on market imperfections. He was no free market purist.   Nevertheless, Arrow stated that Titmuss’ argument was flawed on two fronts.  First, Arrow didn’t believe that creation of a market would have negative spillover effects on the voluntary market (my take here is that, for blood, it probably depends on how the two systems are set up, and the impacts could be studied empirically).  More surprising was Arrow’s argument about the risks of a voluntary market, and his claim that if something could be solved by a market mechanism it should, so that ethical behavior could be economized.

In Arrow’s words, “I do not want to rely too heavily on substituting ethics for self-interest.  I think it best on the whole that the requirement of ethical behavior be confined to those circumstances where the price system breaks down….We do not wish to use up recklessly the scarce resources of altruistic motivation.”

To paraphrase Bill Clinton, “this is important, so I’m gonna repeat it.”

“We do not wish to use up…the scarce resources of altruistic motivation.”

Amazing that Arrow could actually write this, and that anyone could take it seriously as a model of human behavior.  Generosity is generative, altruism is an orientation towards the world and a pattern of behavior that creates more kind action, both by the actor and by others.  Sure, it’s not limitless – everything must remain in balance – but one of my biggest revelations is that that shifting my own attitude about generosity didn’t exhaust some small, limited supply, it cracked open a door to a whole different way of being (and no, sadly, I don’t live it every day, it’s a lifetime project).  Generosity isn’t scarce and finite.  Indeed, in its earliest forms, newfound generosity is delicate and prone to being easily cowed.  Generosity can only grow if properly nurtured and cultivated, but if it is nurtured, it blossoms, it doesn’t run out.

Taking a big step back, and thinking about the commodified world we live in, I think that Titmuss has it right.  The risk we run, in Sandel’s words, is that “the declining spirit of giving made for an impoverished moral and social life” and that, as Titmuss continues, “It is likely that a decline in the spirit of altruism in one sphere of human activities will be accompanied by similar changes in attitudes, motives and relationships in other spheres” and that ultimately we might undermine altruism and a sense of community.

As Titmuss concludes:

The ways in which society organizes and structures its social institutions – and particularly its health and welfare systems – can encourage or discourage the altruistic in man; such systems can foster integration or alienation; they can allow the ‘theme of the gift’ – of generosity towards strangers – to spread among and between social groups and generations.

What does a society look like that encourages the altruist in all of us, that fosters integration?  Certainly it is one with strong communities and groups, a sense of connection and of shared responsibility.

Harder still, how does one measure and track the supply of altruism, of generosity, in a society, and is there a risk that as market efficiencies populate every corner of our economic and social interactions, that the notion that one would do anything for anyone “for free” would become such an alien concept that it would erode the very fabric of society and the underpinning of strong communities?

(BONUS:  the nice folks at Macmillan Audio reached out after yesterday’s post to let me know that there’s an audio version of What Money Can’t Buy.  Here’s a clip.)

2 thoughts on “The risks of economizing generosity

  1. Sasha, this rings true for me. Several years ago I was in Senegal when the car I was in got a flat tire, in the middle of nowhere. We couldn’t get the wheel off because the key to remove the bolts was missing. As it turns out, our problem was short-lived. My Senegalese colleague stood at the side of the road waving his arm and every single car that passed us stopped to help. Within a few minutes we’d found a driver with a matching key, had changed the tire and were back on our way.

    In the West, we’ve diminished the prevalence of this type of altruistic solidarity with commodified relationships. If you get a flat on the I-95, other drivers don’t stop because they assume you will have paid for your AAA membership, or will call a tow truck for assistance. In other words, “Why should I help? We have market mechanisms for that.”

  2. Jamal I just love this story – thank you for sharing it. Somehow, someway, we must make sure that social fabric remains intact.

Leave a Reply