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.)

What Money Can’t Buy

Harvard Professor Michael Sandel’s recent book, What Money Can’t Buy, is a critical look at the commoditization (economification?) of everything in our society.  We’ve gone from a world with first class and coach tickets (which, to Sandel, apparently was mostly OK) to a world where people pay for blood, pay second graders to read, pay homeless people to stand in line to hold spots for public congressional hearings, and pay people to tattoo advertisements on their foreheads.

The book is long on questions and short on answers – the central question being whether the potential utilitarian improvements that result from market transactions (both sides participate, so both parties must be better off) is corrupting to society as a whole.  As Sandel puts it, “In deciding whether to commodify a good, we must therefore consider more than efficiency and distributive justice.  We must also ask whether market norms will crowd out nonmarket norms, and if so, whether this represents a loss worth caring about.”

Sandel argues forcefully that in order to resolve these questions we need to get comfortable having normative discussions about the kind of society we wish to create and live in – and I was longing for a last third of the book that would equip me as a reader with tools to have those conversations.  That critique notwithstanding, it’s impossible to read the book and not start to notice how everything (everything!) seems to be for sale, and the prevailing wisdom is that this has to be a good thing.

The counterargument is that putting a price on things crowds out civic behavior.  The moment you offer $50 to people to give blood is the moment people stop showing up to donate blood out of a sense of duty and generosity to their fellow man.  As a wise friend of mine once said, “I’ve considered donating a kidney, but I’d never consider donating a kidney and getting paid $500 for my troubles.”

With this as context, I wonder if part of my interest in generosity was a backlash against everything being monetized and maximized – a desire to create a space in my life, connected to a sense of service, where market norms don’t prevail, where I act from a sense of duty first.

Duty means you don’t get to ask clever questions…you just act.  And these days, just acting is a welcome respite from the Chase review of line calls at the U.S. Open, the football games at Invesco Field, people buying the future income streams of young people instead of just finding great people and giving them our support.

Even in impact investing there’s a quiet whisper (getting louder every day) that if it something has a market-based solution then it HAS to be better.

Maxims are nice because they make the world simple and they ask little in the way of judgment and nuance.  But let’s just be clear: markets are great at efficiency, markets instill discipline, and markets give us quick feedback.  But the premise never was that markets alone have all the answers, and if we as a sector are going to make large-scale change, we need to learn the lessons of history – today’s (read: 2008 crisis) as well as yesterday (the building of the U.S. interstate system) – of where markets have worked and where they haven’t; what are their strengths and what are their limitations; where markets empower and where they marginalize.

The lines aren’t bright, but there are important lessons out there, and most of them weren’t written by Milton Friedman.  As our sector grows up, we will all have to start becoming better students of history, and becoming more versed in talking about where markets work, where they don’t work, and why.

Twoverwhelmed

I’m feeling twoverwhelmed.  It’s not Twitter’s fault – it’s just another tool.  But I did get on Twitter this week.  The Twitter roar (“you don’t use Twitter?”)* was getting deafening, and I know enough about myself to know that the only way I can learn something is to use it.  (I finally got a handle on Squidoo this week too).

I’m not ready to commit to tweeting just yet – at least for now.  This blog and my day job are more than enough for now.  But how can I pass up the opportunity to follow the latest musings of Nicholas Kristof, Sarah Jones, Chris Anderson, and Evan Williams, to name a few?  It’s a window into what’s top of mind for some pretty amazing people.

But wait, let’s take a step back.  Evan Williams, Twitter’s founder, recently tweeted, “Contemplating new email strategies. Current practice (responding to most of them) not scaling. Interested in doing other stuff.”

Of course Evan doesn’t just care about his Inbox, it’s one of many streams of incoming information / communication he’s managing.

If conquering your email inbox was the “can we be productive in a wired world” question of 2002, things have gotten exponentially more complicated.  (If you want to be surprised by how exponentially, this video gives you all you need to know).

My A-list (stuff I truly want to stay on top of) looks something like: all my email, “must read” blogs in my RSS feed, articles and reports that are forwarded along by colleagues and friends, and now maybe Twitter.

What about the B-list: “contender” blogs in my RSS feed, magazines I subscribe to, the NY Times, Facebook….oh, and don’t forget all the absurdly amazing TED talks that are out there free to the world.  Like Bill Gates talking about what he’s doing to save the world.  And there’s always the Guardian’s 100 greatest works of fiction of all time, which has been nagging at me for some time.

And then there’s the C list, divided between stuff I haven’t spent any time on and stuff I, regrettably, don’t seem to have any time for: Digg, Reddit, YouTube, etc, but also Huffpo, CNN.com and the Economist.

And have I mentioned that I have a full time job?  And a family?

Pratically speaking, there’s always been an infinite amount of content out there.  But the ease of getting truly fabulous, up-to-the minute content delivered right to my laptop is categorically different than the world of even 5 years ago, before the explosion of user-generated content and social networks.

It’s suddenly realistic to expect that every day, in the 30-60 minutes I have to read up on things, I’ll discover something amazing.

This is my (and your) new curriculum – which is different from “the news.”

I can get really smart about just about anything now.  So I have to choose from whom I want to learn: Greg Mankiw (great economist), Seth Godin (brilliant marketer), Mark Bittman (fabulous chef), Google (organizer of the world’s information), or Michael Sandel (to take his Harvard course on moral and political philosophy – at home!). Or I could forget all that and just take free drum lessons online from a pro.  You get the idea.

Multiply that by a few decades, and I end up a whole lot smarter about some things, but not about everything.  It’s impossible to keep up with everything.

This forces hard choices, not only for me, but for content producers who are trying to find ways to make money in this new world.

Oh, and here’s the kicker: this is all going mainstream, and 10-year-olds today who are growing up on Facebook and with iTunes won’t have any vestiges or nostalgia about the daily paper being delivered at their doorstep every morning and of mom and dad reading that paper over breakfast.

If you don’t figure out how to succeed in today’s world – personally, as a consumer of all this information; and as a content producer / business / nonprofit / you name it – you’re going to end up as quaint and finished as some soon-to-be-defunct weekly news magazines.

————————————–

* For the tiny sliver of you who are die-hard Marx Brothers fans, the line that comes to mind is “You no gotta’ a Breeder’s Guide?!” uttered by Chico Marx to Groucho Marx in a Day at the Races.

add to del.icio.us : Add to Blinkslist : add to furl : Digg it : add to ma.gnolia : Stumble It! : add to simpy : seed the vine : : : TailRank : post to facebook