Egoist Altruism: An Economic Justification for Unconditional Philanthropy

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Because people innately desire happiness and security, and because people generally believe that health & wealth are conditions that enable and promote happiness and security, people strive to optimize their health and wealth directly (ie. eating healthy foods, exercising, and pursuing education to get a job to make money.)

While these pursuits are focused on the self, I will make the case for why helping others can also help us achieve these ends. The reason why our pursuit of health & wealth is primarily conducted through self-seeking means, I believe, is because we largely operate in a pre-industrial mindset that defines success as a relative construct: In the pre-industrial world, to succeed generally required the failure of another person.

Post-industrialism, this is no longer the case, and philanthropy can be leveraged as a means of helping you achieve these same goals. In the paragraphs that follow, I will explain how we are still hostages of a pre-industrial mentality, and why, as an economic principle, the effects of philanthropy are key to our longterm happiness (in a subsequent article I will discuss a psychological justification for how the action (rather than the outcome) of philanthropy is also key to our longterm happiness.)

The argument can be summarized with one counterintuitive assertion: The more people that want what you want, the more likely that you are to get it.

For 99.9% of human history, people existed as hunters and gathers living in small tribes, and eventually as farmers in small settlements — and world GDP was equivalent to agricultural production. During this time, the global economy grew only marginally year-over-year. Assets during this time generally had fixed quantities (land, food, raw materials,) and thus the pre-industrial economy was in every sense a zero-sum scenario.

In this fixed-pie (zero-sum) era, when one group of people gained wealth, it often meant that another group lost wealth. Net worth was limited by finite resources like land and the food that could be produced on that land. For you to become richer, it often required taking resources from someone else. For example, when the Assyiran empire conquered the Middle East and gained assets, the former inhabitants lost assets. When the Babylonians then conquered the area and gained assets, the Assyrians lost assets. Christopher Columbus did not add to the wealth of the Native Americans; their wealth was taken from them and given to him.

With the introduction of the industrial revolution in 1760, the economy changed fundamentally. Improved crops, fertilizers, and machinery ignited productivity and enabled agricultural & industrial output to skyrocket, exponentiating the economic output and transforming the zero-sum economy into a positive-sum economy.

Now that people could produce and acquire assets that augmented rather than diminished other assets — they could acquire wealth without the degradation of another’s wealth.

Innovation is fundamentally driven by supply and demand. Innovation supply increases when more people have access to freedom, education, healthcare, and an ability to contribute to the global economy — and thus have the resources to either demand or create innovation.

Today, almost 1 billion people live in extreme poverty and are malnourished. If these 1 billion people were well-fed and had access to proper education, then they or their children could become researchers, doctors, and engineers –and the world (yourself included) would be better off.

As demand for innovation increases as people become richer (and demand new solutions,) this increases the size of the market for innovations – and makes it easier for ideas to be produced and realized – creating a flywheel effect.

Including the 1 billion malnourished people, a total of 3 billion people today are poor and live on less than $2.50 per day. To understand the impact that helping those people could have on your own life, let’s consider this example.

Let’s suppose that tomorrow, unfortunately, you’re diagnosed with cancer. As things are, you have access to all of the great hospitals and research and medicine that is presently available, to help you hopefully recover. Let’s imagine, however, that we were able to alleviate the poverty of those 3 billion people, and that 3.3% of them (100 million people) became cancer researchers. Imagine the state of cancer treatment if we had an additional 100 million additional cancer researchers, today. Wouldn’t you prefer to live in this world?

Could we have cured leukemia, myeloma, and Crohn’s disease by now, if we could embrace philanthropy as a societal requirement — even if selfishly motivated?

Ultimately, and perhaps counterintuitively, the more people who want the same thing as you, the more likely you are to get it.

Today, many people only contribute to nonprofit organizations infrequently and only when it aligns to a personal passion. The results of this conditional philanthropy are counter to the intentions of the giver. In order to make your future better, you should contribute to philanthropy with the same vigor that you would contribute to your college education, your personal hygiene, or your relationships. This will lead to more people who can add value to each other’s lives.

(A subsequent article will discuss a psychological justification for why the action (rather than the outcome) of philanthropy is also key to our longterm happiness.)

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