Scott 2 wrote:
The efforts of a single person do not produce 10+ times the value of the average person. It may be they eliminate a bottleneck, align people to a single goal, or provide a good idea (maybe software or media or medicine) that is easily reproduced. Our system provides high reward for those activities, but the individuals involved are not solely responsible for the result. They are being rewarded for what they've done with the work of others. Even a researcher with a dramatic breakthrough is building on the work of his peers.
Ever heard the old joke about the engineer fixing the machine?
There was an engineer who had an exceptional gift for fixing all things mechanical. After serving his company loyally for over 30 years, he was laid off prematurely.
Several years later the company contacted him regarding a seemingly impossible problem they were having with one of their multimillion dollar machines. They had tried everything and everyone else to get the machine to work but to no avail. In desperation, they called on the retired engineer who had solved so many of their problems in the past.
The engineer reluctantly took the challenge. He spent a day studying the huge machine. At the end of the day, he marked a small "x" in chalk on a particular component of the machine, stated "This is where the problem is", and tapped it sharply with a hammer. The machine began working perfectly again.
The company received a bill for $50,000 from the engineer for his service. They demanded an itemized accounting of his charges.
The engineer responded briefly:
One service call, $50.00.
Chalk, $1.00.
Knowing where to tap, $49,949.00.
"Knowing where to tap" is enormously valuable.
My pay has increased more than 10x in the last twenty years. The number of people my work impacts today has increased much more than 10x, and in much more important ways. Not because I work harder, which I do not. But because I've spent the time to develop skills in the marketplace that serve more people than wiping toilets.
The wealthy are stewards, entrusted with the future of our system. They are responsible for leveraging labor towards productive ends. Like anyone given substantial power, they need a support system to avoid collapsing under the burden.
What support system, and why should we care if they need it? If they "collapse under the burden", our system reacts extremely efficiently to reallocate that capital. There are plenty of broke lottery winners and pissed away inheritances demonstrating this. If they don't employ their capital to serve other people as Jacob demonstrated above, but instead consume it, they lose it along with any commensurate power it gives. Then "their" capital goes to other people who get the chance to steward it better.
The engineer's tap is worthless, in the absence of the people running the machine, distributing the product, making the sales, etc.
As a student wiping off gym equipment, my hourly rate was less than 10% of what I get today as an IT guy. I don't think for one second I'm 10x better than the student currently doing that job.
The support system controls how the wealthy interact with the rest of society. It discourages them from using power to do things like buying and selling people, or raiding the financial system. The right structure and effectiveness could be debated, sure. I view a little scrutiny as a good thing though.
The wealthy that piss away their money on consumables are to me, some of the least offensive of the poor stewards. If someone spends 50k on a rare bottle of scotch, really, they've just put another person in charge of managing that wealth. Who cares. It's not like there's going to be substantially less food or shelter in the world because of that purchase.
Looking at effort, it might stand to reason that the span of human effort various by maybe 1/4 to 2.5 or something, as in, the laziest human puts in about a quarter of the average human and the most energetic puts in 2.5 times as much.
When it comes to unskilled manual labor, the productivity between a hard worker and a slacker might be a 50% difference in the extreme. That's not a whole lot.
When it comes to skilled manual labor, I see a difference of something like 400% between a layman and someone who had modestly mastered what they're doing.
When it comes to routine intellectual work, the difference is again something like 400% between a beginner and a master. A fastbook keeper is four times faster than a slow one.
Now it gets interesting ..
When it comes to creative intellectual work, the difference may be as much as 10000% when talking about things like software work, engineering, investing, designing... the top will be a hundred times as productive as the bottom.
When it comes to original intellectual work, the difference approaches infinity.
Don't quote me on these ranges. They're purely based on my personal observations of different types of work.
The problem is that a lot of human history; a lot of human ethics; and a lot of human culture is based on comparing productivity of unskilled manual labor (farm labor) or the kind of skill that's easy for laymen to distinguish (e.g. repairing a motorcycle). It's therefore easily possible to see someone being compensated 100x the average for delivering 100x the production as very unjust because we're so finely attuned to the effort as the explaining variable instead of the value.
You can also see this inability in people having continuously to rediscover that the market sets price according to supply and demand and not the inherent value which is what we'd intuitively like to believe.
The other aspect of the discussion is that technology allows leverage. A person with a shovel is ten tens faster than a person digging with a clamshell. Should we pay them the same? That's technological leverage. What about financial leverage? And so on... Some activities allow leverage, some allow a lot, some allow very little.
In short, the feeling of unjustness is due to technology and that the organizational ability of human society has far exceeded that of most of human history, culturally and evolutionarily.
PS: You see the same failure when people try to grasp ERE. They're not used to the idea of arranging one's life to not need to put in daily labor. Therefore it is felt to be somewhat immoral or "wrong" whereas in reality, it's just being smart/more skilled.
4 people on the Forbes top 10 list are there because they are Waltons, not because of skill. Paris Hilton got to where she is because of skill? A bus driver in Sweden makes over 10 times more than a bus driver in India because of skill? A kid in the west plays with the toys a kid in the third world made because of skill? CEO pay rose by more than an order of magnitude while worker pay remained stagnant over the past 40 years. Is that based on skill?
You can quote examples of people whose work is extremely valuable, but you cannot reduce inequality down to skill. We do not live in a meritocracy. A lot of it is luck and a lot of it is fraud and structural violence. The existing order of things is not based on skill.
@Felix - Of course there's fraud and violence too. Inherited money too. I'm just showing the other side of the coin. It's not all fraud, violence and rent-seeking which you guys seem to suggest [whenever someone in makes substantially more than average].
Devil's Advocate wrote:
I have very recently been introduced to a gentleman, a banker in fact, who actually contributes around 75% of his after-tax income to philanthropy. ...... So although this paragon does not in any way rough it out, the good that he does actually far exceeds most EREs, perhaps all EREs.)
Each of us has a unique definition of "good". This definition is a function of the style of the time and place. Contrast that with the thou shall nots, the via negativa, which are more easily agreed upon. We know almost inherently what we shouldn't do. The very reason the title Devil's Advocate exists is because we cannot agree on what we should do.
ERE gives many of us the freedom to avoid doing what we know we should not. It also allows us to decide for ourselves what we should do. First do no harm.
Devil's Advocate wrote:This kind of thinking, and this sort of motivation, would probably be totally alien to how the ERE mind works. True, there is nothing in ERE that actually forbids philanthropy, but when someone suggests to me that this kind of person (the saintly banker, I mean to say, and Bill Gates as well) is a better human being than your quintessential ERE, I don’t like it, but cannot in all honesty disagree.
How does one determine who is the better human being? Mathematically? Reminds me of the William James equation (Self Esteem = Success ÷ Expectation)
What would the formula look like for calculating the value of a human being?
Human Value = Suffering Relieved + Joy Produced - Suffering Caused²
Should there be any other components? Is your saintly friend doing the same thing most people do when faced with the James equation by focusing on one factor and ignoring the otehrs?
The knowledge worker is building on the work of those who came first, and relying upon the support of those who are here now. While they might be the keystone that triggers release of substantial value, I don't view them as solely responsible for its generation.
Often, when you dig into "original" discoveries, you'll find that multiple people were uncovering the idea around the same time. One of them just happened to be better at claiming credit for it. It's part of why I feel no obligation to put my big brain towards something "useful". I don't think any one individual is all that special.
If someone chooses to claim a dis-proportionate share of power, I do think they carry some obligation to put it towards worthwhile means. Leaving it invested seems worthwhile to me though.
As I go through all your responses, I am immediately struck by three things.
First, the sheer intellectual strength (if I may use that term) of the group. In any general group, online or otherwise, you get a mixture of types: the brilliant, the fairly well informed and intelligent, the average Joes, the near-semi-literate types, and finally, the outright morons. And the numbers are generally weighed distinctly in favor of the latter types. Well, the first thing that strikes me here is that everyone here—not just Jacob himself and one or two others, which would have been par course, but every person here—is very well informed, has very well reasoned stances, and expresses those stances extremely competently. (No, this isn’t flattery, or even courtesy. Advocatus Diaboli, remember?) Not, of course, that I wasn’t led to expect this from the very many other posts that I’ve read here while ‘lurking’, indeed I wouldn’t have taken the trouble to post here myself if I wasn’t half expecting this, yet this is the first thing that strikes one.
The second thing that stands out is how thoroughly internalized ERE is for individual members here. There are differences, many differences, in particular nuances, but the basic structure of ERE is something people here have no doubt of at all. Now this in general may not have been such a great thing at all, quite the contrary; but, coupled with my earlier observation, it is.
And finally, I see how unstintedly everyone here is sharing their thoughts and views (which also translates into their time and effort). This last more than anything else gives me the answer to my question (or at least one component of that answer).
Not, of course, that this is “giving” per se. It’s evident that no one is discussing this in a “let’s-be-of-assistance” spirit, at least not overly so, People are, obviously, (re-)examining their own bases, arguing their own little differences, at times simply gabbing away and enjoying the sound of their own voices : but the net result is one of “benefit rendered”. And that gives me yet another very important component of the answer I was looking for. One neither solicits nor welcomes overt, stand-alone help, but is grateful for benefits (in this case, insights) received nevertheless.
As I read your responses and started typing mine own, I felt a disinclination to continuing with the Advocatus Diaboli role. In the face of camaraderie, one is loath to spoil a party, time and again, which is the whole point of this persona. I do not, in the real world, generally like questioning the beliefs of others (to them that is), because I have observed that disillusionment is distressing, and in any case people often prefer the bliss (or at least the complacence) of ignorance. As I wrote the first few sentences, though, I realized my qualms were ill-founded in this particular case. There is no reason for Devil’s Advocate not to live long.
A word about my banker “friend”. He is not central to the argument, but just a prop. As such his specific occupation is irrelevant (leaving butterflies and earthquakes aside). Seneca and Jacob, I agree I shouldn’t have called his occupation out and diverted the discussion to specifics. But since I have, let me further clarify that I was using the term “banker” loosely. He’s an investment banker. Not the Gordon Gecko type of scavenger, nor the securitization/aggregator type that directly precipitated the credit crash, but an honest-to-goodness facilitator of mergers whose work is primarily research-oriented (guiding and absorbing research), and also involves direct facilitation of the actual deal-making. Nothing remotely evil about that, unless one views all Management and everything Finance as evil, which I doubt anyone here does.
It was very interesting reading your views on the ethics of well-above-average income. When I was still attending business school, we used to joke about what it is people actually do to earn the humongous salaries we were hoping to soon start collecting ourselves: did they teach you to go into your cubicle, and later your office, and lay nice large golden eggs? How else justify those salaries? I have since learned the answer (the what-do-they-do part), and despite having been for long in the center of the whole thing am still undecided about whether the stratospheric salaries and bonuses are really deserved. (Naturally I’m discounting the cases of outright fraud, as well as the cases of implicit fraud, some of which came to general knowledge in the last few years. In those cases, and there are very many of them, it is obvious that they’re undeserved, and even criminal in some cases. But equally, one can hardly paint the whole profession the exact same hue.)
Scott, Seneca, Jacob and Felix, I found your exchanges fascinating. Jacob’s reasoning was very insightful, and gave me much food for thought—as did Felix’s subsequent counter-point, especially his bus driver example (which describes a case that is free of value judgment, yet is definitely not “fair”). Let me add my own two cents here if I may. Since this is primarily a tech-heavy group, the leveraging factors discussed tended to be largely technical in nature, of the sort that an engineer or a scientist or an “inventor” would think of. (Your story was nice, by the way, Seneca. I hadn’t heard it before.) There is one more critical leveraging factor, and that is Management. Now this term is today a much-maligned cliché that covers everything from outright fraud, to a cover for faff and doing nothing, to a blind following of hierarchy and “playing the game”, to a direct and masked exercise of unearned financial might. But at its core there is indeed a certain something that, like innovation or true entrepreneurship (intra-organizational as well as out-at-large), is difficult to define but easy enough to recognize when you see it. My two cents consists in throwing that much-hated term, Management, into the ring as well as one of those skills.
I myself would tend to think that it’s a bit of everything: that often there are cases of fraud, very often there is systemic inequity, that if you look closely you’ll find many high earners are knaves and crooks or simply lucky : but there is also a sound (if small) core of real “skill” (however defined) that is not easily replicable and, when exceptional (but only when exceptional), can justifiably command a higher-than-normal premium. How much higher? As much as the value added, as Jacob suggests? Or toned down to give credit to the giants (and regular folk and dwarves) on whose shoulders they stand, as Scott demands? I would say the latter, but then who decides how much? The market itself, or some regulatory agency, or public opinion? (And how exactly do you measure value added anyway in these cases?) That’s a classic Capitalism v. Socialism debate.
Philanthropy (a far better word and concept than Charity) is much like anything else, like eating, or travelling, or snorkeling, or reading. That sounds self-evident. Yet it wasn’t evident to me before you spelt it out, Dragline, at least not in those explicit terms. There’s nothing stopping one from increasing one’s FI level to accommodate future philanthropy, nor from extending one’s work tenure to accommodate current philanthropy. Point taken. (Although counter-point : it’s all a question of emphasis. The ERE emphasis is evident. Less focus on philanthropy usually follows—although yes, as you point out, that is not a logical necessity.)
Many of you have pointed out, Jacob complete with numbers, that philanthropy (broadly defined) need not necessarily be through dollars directly thrown. That in that sense “buying charity” is simply another form of consumerism. Agreed. Although while that applies to DIY philanthropy, Jacob’s numbers on how FI supports jobs, while absolutely correct, do not clinch the deal. Consumption feeds jobs as well (as has been argued by many others in many other threads in this forum). So if both breaking windows and investing soundly (what is “sound investment”? not shares in a glazier’s shop? –but let that go for now) help create jobs, both are equally “good” where a philanthropic goal is concerned (although yes, in other ways they may not be equally good). But no, hair-splitting and logic-chopping aside, this is a point of view I fully endorse myself.
In fact, while reading your responses, one thing was borne home to me : I’m not happy that I compare unfavorably with the philanthropist-at-large in this specific area. And face it, all the DIY philanthropy that everyone here as outlined does not compare with, for instance, sponsoring a thousand (yes, a thousand) babies’ childhood, especially when you consider that we are talking bone-crushing, literally-starving-to-death poverty here. Spartan Warrior, I agree with you that to equate “richer” with “better” is disgusting at a fundamental level. Yet “richer” can indeed translate into “has done exponentially more good”. Not to discount the more humble contributions, but credit where it is due.
And that is when the penny dropped. The question here is one of magnitude. This chappie is far more successful (using the “market” definition of success for now) than I am. So he has been able to do more good (again using the market definition of good for now, for simplicity). My angst is misplaced. Because the fact that he’s so very successful is a separate fact altogether from the whole ERE paradigm (you used those very words, Dragline, although to make a different point), and I would be a real and proper asshole to envy that. Yes, that thought puts everything into perspective.
But then there’s a second (and more disconcerting) penny that follows the first. I was much closer to this gentleman’s income level myself (than I am now) before I retired. Indeed, had I not retired, there is no reason why, with any luck at all, I should not have reached fairly close to his level in some time (perhaps just his 25% level, no more, even at my best ; but even that would be more than ample). I stepped out and embraced a simpler lifestyle for many reasons : but I realize that if helping others, philanthropy, had been a burning imperative with me, I may have continued with the grind, if only to keep some babies alive.
(I take the point that many of you have made that throwing dollars at philanthropy only feeds leaks into the pockets and lifestyles of undeserving middle-men. You say only ~10% make it to the kids in Africa, Hankroundtheworld. Let me take that at face value, and agree that much of philanthropy, then, is just waste (or worse). But let’s not forget Bill Gates, who does not throw his billions of dollars at charity, but actually escorts them to the starving kids. Another specific case: many of my friend’s philanthropic dollars are thrown, but some are personally delivered too. This is only a question of technique, and technique can always be improved, and processes streamlined.)
(1taskaday calls Jacob a bigger philanthropist than many other actual philanthropists. Afraid I can’t go with that. I admire Jacob immensely, and I acknowledge his not-for-profit activities too. In fact I am sitting right in the midst of one of his not-for-profit ventures myself this very moment, as are the rest of us. But I would describe him as inspiration rather than a philanthropist. I think you’ll agree with that, Jacob? And in any case, that is a one-off case, and does not apply to the rest of us here.)
To return to my second dropped penny : thanks to all you’ve written, and thanks also all I’ve thought, I see the problem more clearly now. Someone whose opinion I value thinks I’m an asshole because I don’t contribute as much to the needy as I could have because I choose not to—by choosing not to continue working. I’m no freeloader, but I’m no philanthropist either, is the accusation. Of course I’m a free agent, of course no one in their right minds can demand that I “do good”. On the one hand it’s a question of a clash of values. But no, not that entirely either. If someone had said, you’re an asshole because you’re not rich enough (despite having the potential to be rich), then even if I valued their opinion, I wouldn’t have been troubled by that absurd evaluation even for a minute. But when I am made to realize that I could have saved 1,000 babies from actually dying, but in effect choose not to, I am troubled. Not enough to write back to my last employer and other “contacts” (hate that word!), but still troubled.
Convoluted, huh? I still don’t know the full answer. Your further thoughts are welcome.
In fact, to put it in pop terms, it’s a bit like the Spiderman dilemma : With great power comes great responsibility. Spiderman would have been within his rights if he did nothing about his super powers, or even used them to simply get rich. But compared to what he did go on to do, he would then have been an asshole (if only when compared to his higher self, as opposed to people at large).
That compares exactly with the position of each one of us. We can all, if we continue the grind, potentially save 10,000 babies who will actually die (or perhaps 1,000 babies, or perhaps 50 babies, or perhaps just 1 baby). [To say that our FI enables us to feed babies anyway is a cop-out. Because if our FI lets us feed x babies, then continuing working—or by going back to work, as the case may be—lets us feed x babies + y babies, and for many the y component is exponentially bigger than the x component.] By not so doing, are we not assholes (not freeloaders certainly, nor can anyone demand our so doing, but aren’t we assholes as compared to our highest potential)? We’re doing lots of other things, yes, bettering ourselves in many ways, all that certainly, but hey, kids are actually dying, literally dying, from not getting to eat two slices of bread or an apple or a malaria shot or whatever. Yes, at bottom it is all a question of values, but the question takes on a different hue when the issue is one of life and death (or life and a horrible, poverty-ridden, miserable half-life), especially for children. Although again, the children also are only (rather dramatic) props to the real question here.
In fact, let me ask that question here (half in jest, but also half-seriously) : What would an EREr do if a radioactive spider bit them?
*******
Some thoughts were expressed here about ERE and freeloading, as well as about ERE and irresponsibility (the what-happens-to-society question). Jacob himself has spoken at some length on it here itself, as have some of you others. And I have seen this discussed at great length in a number of threads in the forum as well as the blog. While obviously the basic tenets of the ERE position are sound for the most part with respect to both arguments, there are still some specific points here that I am less than sure about. I shan’t ask those questions now, don’t want to further muddy the issue here further, but I’ll put up a separate thread/s if I may with those specific questions, later on.
What are you looking for? An objective standard for philanthropy? I think that's close to impossible. Even removing the class-warfare driven economic arguments in previous posts, you'd have to come up with a way to value things like time given versus money given. I wouldn't know where to begin with that.
A flaw in this discussion (IMHO) is lumping all philanthropy together. Anything that's promoted as a 'cause' seems to fall under this heading. Are they all equal? Is donating time or money trying to get a new cyanide-free playground built in Stepford the same as donating time or money to a soup kitchen?
I used to work in the development office of a non-profit that housed a valuable library with some important historical documents. I was very good at detecting giving patterns and raised tons of money for the organization. Some nights I would raise over $100K towards preservation efforts. Then drive home past homeless people. It turned my stomach when I thought about how much food or clothing that money could provide. I had to give it up.
Does that mean those preservation efforts weren't worthwhile? Of course not. I did come to the conclusion though, that some 'causes'--specifically those that provide basic human needs or preserve human dignity--are more important than others. There are people that I greatly respect that don't share that opinion. They feel strongly about other issues (like climate change) or don't feel any compulsion at all to give. Does that make them wrong, or morally lacking or inferior? I'm not prepared to say that.
I know of people who give large amounts of time and money to causes that I vehemently oppose. Should I still praise them for being charitable even though I'm working just as hard at a cause in direct opposition to theirs? If my goal is success in my efforts and not universal philanthropy, then I shouldn't encourage those folks to give any money or time. It's meant to be a humorous example, but if you're in the minority on an issue, promoting universal philanthropy might work against you.
If I were bitten by the radioactive spider, I would work towards providing everyone with their basic needs and I would strongly encourage everyone to contribute to that effort. I'm not sure if I consider anything beyond that philanthropy.
The 10,000 babies that you failed to save will die not as a result of your action or inaction but as a result of a global capitalist system that worships things like "productivity" and "technological supremacy" and "iPhones" instead of things like solving world hunger or protecting the planet we live on.
Is it more effective for me to continue shooting C02 into the air on my daily commute, paying excessive taxes to a corrupt government I don't support, to go to some job that at best produces nothing of value and at worst perpetuates the very inequities that philanthropy seeks to solve? I don't think so.
I think opting out of that system as much as possible is the extent of my power to change it--disregarding any radioactive spider bites.
What I find most admirable about Bill Gates, is the investment of his most productive years into the foundation. Money is great and all, but to have talent like that leading the charge, is exceptional. Sure it might be an ego driven need to leave a legacy, but what a fine performance.
Someone that is ERE, finds themselves in a prime position for that sort of charity work.
Who is to say that one's level of philanthropy or charity is not enough? Or that one should even contribute? Devil's Advocate's argument seems to follow closely to the school of thought that believes success is based on salary or job title. For example, saying the engineer making $200,000 is more successful than the teacher at $30,000 is similar to saying Jacob's non-profit work and work on ERE is not comparable to your friend's output saving 1,000 starving kids or whatever. Why should there be a specific level? It's all qualitative IMO. One defines their own level that works for them.
Edit: The story of the widow's mites from the bible came to mind after I posted this. (Mites were lowest valued coin.)
"As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in her two mites. "Truly I tell you," he said, "this poor widow has put in more than all the others. All these people gave their gifts out of their wealth; but she out of her poverty put in all she had to live on." (Luke 21:1-4)
Last edited by theanimal on Wed Apr 16, 2014 10:50 am, edited 1 time in total.
An addition on the topic of skill in the direction Scott 2 has been going:
It is, I think, easy to argue for (and hard to argue against) the fact that both the possibility for building skill and the usefulness of that skill are highly environment-dependent (see sociology and developmental psychology).
In that sense, this skill is not merely the product of an isolated individual creating it ex-nihilo like an aristotelian prime mover, but rather dependent on a nurturing (or at least nonpreventing) environment in which such a development is made possible to begin with. One reason I am an engineer is because I live in a country that offers such schooling to the general public, parental support of intellectual endeavors from an early age, good teachers, a peer group that supported such decisions, colleagues, bosses, training opportunities in the company etc. It would be hybris to now claim that I am a self-made man despite the countless hours I put in training. It takes a village to raise a child, as the saying goes.
The same goes for being rewarded for applying the skill. The Swedish bus driver probably needs less skill than the Indian one, yet makes significantly more. The reason for this is environmental (political and geopolitical in this instance). And it is the determining factor in this case, drastically overpowering differences in skill.
Similarly, for applying skills with amazing earning potential, it is the environmental conditions that make the application of skill that profitable. There needs to be a legal and cultural framework setting the stage, allowing for the amassing of individual riches - tax code, legal distribution of risk and reward, legal boundaries for leverage, business regulations, cultural standards on what compensation is considered "just" both within a company and a country, etc.
Warren Buffett put it nicely when he stated that one of the main factors in why he is rich is that he was born in the USA and not Bangladesh, using the metaphor of winning the "Ovarian lottery" (his term).
Even the development of skill and its compensation is highly environment-dependent.
Devil's Advocate wrote:Someone whose opinion I value thinks I’m an asshole because I don’t contribute as much to the needy as I could have because I choose not to—by choosing not to continue working.
Is that a good reason to help? Is it the right reason?
Those who are the most effective at helping others are those driven by a direct (not metaphysical) connection to them. They know best when to help and when to withhold help. The further away from the recipient and the more socially motivated the giver (or asshole if you prefer), the worse the outcome. Pathological philanthropists can be so motivated by their attempt to appear as if they are not an asshole that the outcome and the welfare of the recipient becomes inconsequential.
A national bestseller, Dead Aid unflinchingly confronts one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth. In fact, poverty levels continue to escalate and growth rates have steadily declined—and millions continue to suffer. Debunking the current model of international aid promoted by both Hollywood celebrities and policy makers, Dambisa Moyo offers a bold new road map for financing development of the world’s poorest countries.
Much debated in the United States and the United Kingdom on publication, Dead Aid is an unsettling yet optimistic work, a powerful challenge to the assumptions and arguments that support a profoundly misguided development policy in Africa. And it is a clarion call to a new, more hopeful vision of how to address the desperate poverty that plagues millions.
It's fortunate that humanity has been able to put a dollar figure on almost everything. Otherwise it would get really complicated really fast ;-P
I sometimes do some loose apples and oranges comparison as a fun exercise to judge my writing impact.
Lets say that ERE has somewhere between 100 (the number of active forum participants), 10,000 (a low estimate of those who have read the book and liked it a lot---based on reviews) and 100,000 (a low estimate of monthly blog readers) serious adopters of the philosophy. Let's assume that each adopter had made life changes to the tune of $30,000/year on average.
This means that the dollar impact of ERE is somewhere between $3 million and $3 billion annually. Of course, I can't take full credit for this. People also learn from other sources. A few would independently come up with their own ideas. And active forum participants certainly help a lot and do most of the "work" now. Still, I think I can take a material part of the credit and so it gives you an idea of the impact. It's more influential than a $5000 charity donation. It's easily beyond $100,000 too. Its cashflow impact is somewhere between the market value of a small company and small blue chip.
If I was a CEO with the same amount of management-influence leveraging my suggestions for efficient living for thousands of people and being responsible for cost-efficiency measures to the tune of tens of hundreds of millions, I'd be making an insane salary+bonus. However, that's not how the world works. As it is about 10 new people per day pay me a one time fee of $6 (my profit on a book sale), and that's it.
I think this speaks to what Felix and Scott 2 is talking about that the system is set up to reward certain structures by a lot more than others even if the value or impact is the same.
Was it philanthropy? What does it take for something to be philanthropic in nature. I definitely didn't start out because "I wanted to help people in need". Initially I just felt I had something to share that people would find interesting. Later when ERE became popular, I still didn't feel that I was driven to help the needs of individual people, but I did begin to see that ERE could result in an emergent behavior that would be very good for society as a whole. Only towards the end when the personal attacks from the clown brigade had reached a crescendo and I wanted to give up did I carry on because I saw that many only had ERE to fall back on in the miserable jobs. But I definitely didn't like that role/reason and I handed over that responsibility as soon as I found someone I thought could carry on that "duty" (MMM).
This relates to what jennypenny was talking about.---That charitable organizations often work against either other (one might ask how they can possible do that when they mission is for the good of humans).---That it's more useful to talk about how much impact one's effort have than a specific definition of charity.
It's very hard to measure impact because there are primary effects and secondary effects. Suppose I donate $1000 to some charity org that proceeds to blow 90% on administrative fees. Then my primary effect is actually only $100 ... but on the other hand, I did keep some highly paid nonprofit administrators happy with champagne party fundraisers. Conversely, suppose I take out an add for $1000 which convinces 10000 to donate $1 to save the whales. How much impact did I have then? Also consider, if I pay X $100 to work for 10 hours in a soup kitchen. Who's the bigger benefactor? Me paying $100 ... or X spending 10 hours directly helping people? Does it change the equation if we learn that X cut back their $200/hr consulting gig to do this for $10/hr?
