John Stuart Mill

Scope neglect and the question of optimal altruism

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JDN 2457090 EDT 16:15.

We’re now on Eastern Daylight Time because of this bizarre tradition of shifting our time zone forward for half of the year. It’s supposed to save energy, but a natural experiment in India suggests it actually increases energy demand. So why do we do it? Like every ridiculous tradition (have you ever tried to explain Groundhog Day to someone from another country?), we do it because we’ve always done it.
This week’s topic is scope neglect, one of the most pervasive—and pernicious—cognitive heuristics human beings face. Scope neglect raises a great many challenges not only practically but also theoretically—it raises what I call the question of optimal altruism.

The question is simple to ask yet remarkably challenging to answer: How much should we be willing to sacrifice in order to benefit others? If we think of this as a number, your solidarity coefficient (s), it is equal to the cost you are willing to pay divided by the benefit your action has for someone else: s B > C.

This is analogous to the biological concept relatedness (r), on which Hamilton’s Rule applies: r B > C. Solidarity is the psychological analogue; instead of valuing people based on their genetic similarity to you, you value them based on… well, that’s the problem.

I can easily place upper and lower bounds: The lower bound is zero: You should definitely be willing to sacrifice something to help other people—otherwise you are a psychopath. The upper bound is one: There’s no point in paying more cost than you produce in benefit, and in fact even paying the same cost to yourself as you yield in benefits for other people doesn’t make a lot of sense, because it means that your own self-interest is meaningless and the fact that you understand your own needs better than the needs of others is also irrelevant.

But beyond that, it gets a lot harder—and that may explain why we suffer scope neglect in the first place. Should it be 90%? 50%? 10%? 1%? How should it vary between friends versus family versus strangers? It’s really hard to say. And this inability to precisely decide how much other people should be worth to us may be part of why we suffer scope neglect.

Scope neglect is the fact that we are not willing to expend effort or money in direct proportion to the benefit it would have. When different groups were asked how much they would be willing to donate in order to save the lives of 2,000 birds, 20,000 birds, or 200,000 birds, the answers they gave were statistically indistinguishable—always about $80. But however much a bird’s life is worth to you, shouldn’t 200,000 birds be worth, well, 200,000 times as much? In fact, more than that, because the marginal utility of wealth is decreasing, but I see no reason to think that the marginal utility of birds decreases nearly as fast.

But therein lies the problem: Usually we can’t pay 200,000 times as much. I’d feel like a horrible person if I weren’t willing to expend at least $10 or an equivalent amount of effort in order to save a bird. To save 200,000 birds that means I’d owe $2 million—and I simply don’t have $2 million.

You can get similar results to the bird experiment if you use children—though, as one might hope, the absolute numbers are a bit bigger, usually more like $500 to $1000. (And this, it turns out, is actually about how much it actually costs to save a child’s life by a particularly efficient means, such as anti-malaria nets, de-worming, or direct cash transfer. So please, by all means, give $1000 to UNICEF or the Against Malaria Foundation. If you can’t give $1000, give $100; if you can’t give $100, give $10.) It doesn’t much matter whether you say that the project will save 500 children, 5,000 children, or 50,000 children—people still will give about $500 to $1000. But once again, if I’m willing to spend $1000 to save a child—and I definitely am—how much should I be willing to spend to end malaria, which kills 500,000 children a year? Apparently $500 million, which not only do I not have, I almost certainly will not make that much money cumulatively through my entire life. ($2 million, on the other hand, I almost certainly will make cumulatively—the median income of an economist is $90,000 per year, so if I work for at least 22 years with that as my average income I’ll have cumulatively made $2 million. My net wealth may never be that high—though if I get better positions, or I’m lucky enough or clever enough with the stock market it might—but my cumulative income almost certainly will. Indeed, the average gain in cumulative income from a college degree is about $1 million. Because it takes time—time is money—and loans carry interest, this gives it a net present value of about $300,000.)

But maybe scope neglect isn’t such a bad thing after all. There is a very serious problem with these sort of moral dilemmas: The question didn’t say I would single-handedly save 200,000 birds—and indeed, that notion seems quite ridiculous. If I knew that I could actually save 200,000 birds and I were the only one who could do it, dammit, I would try to come up with that $2 million. I might not succeed, but I really would try as hard as I could.

And if I could single-handedly end malaria, I hereby vow that I would do anything it took to achieve that. Short of mass murder, anything I could do couldn’t be a higher cost to the world than malaria itself. I have no idea how I’d come up with $500 million, but I’d certainly try. Bill Gates could easily come up with that $500 million—so he did. In fact he endowed the Gates Foundation with $28 billion, and they’ve spent $1.3 billion of that on fighting malaria, saving hundreds of thousands of lives.

With this in mind, what is scope neglect really about? I think it’s about coordination. It’s not that people don’t care more about 200,000 birds than they do about 2,000; and it’s certainly not that they don’t care more about 50,000 children than they do about 500. Rather, the problem is that people don’t know how many other people are likely to donate, or how expensive the total project is likely to be; and we don’t know how much we should be willing to pay to save the life of a bird or a child.

Hence, what we basically do is give up; since we can’t actually assess the marginal utility of our donation dollars, we fall back on our automatic emotional response. Our mind focuses itself on visualizing that single bird covered in oil, or that single child suffering from malaria. We then hope that the representative heuristic will guide us in how much to give. Or we follow social norms, and give as much as we think others would expect us to give.

While many in the effective altruism community take this to be a failing, they never actually say what we should do—they never give us a figure for how much money we should be willing to donate to save the life of a child. Instead they retreat to abstraction, saying that whatever it is we’re willing to give to save a child, we should be willing to give 50,000 times as much to save 50,000 children.

But it’s not that simple. A bigger project may attract more supporters; if the two occur in direct proportion, then constant donation is the optimal response. Since it’s probably not actually proportional, you likely should give somewhat more to causes that affect more people; but exactly how much more is an astonishingly difficult question. I really don’t blame people—or myself—for only giving a little bit more to causes with larger impact, because actually getting the right answer is so incredibly hard. This is why it’s so important that we have institutions like GiveWell and Charity Navigator which do the hard work to research the effectiveness of charities and tell us which ones we should give to.

Yet even if we can properly prioritize which charities to give to first, that still leaves the question of how much each of us should give. 1% of our income? 5%? 10%? 20%? 50%? Should we give so much that we throw ourselves into the same poverty we are trying to save others from?

In his earlier work Peter Singer seemed to think we should give so much that it throws us into poverty ourselves; he asked us to literally compare every single purchase and ask ourselves whether a year of lattes or a nicer car is worth a child’s life. Of course even he doesn’t live that way, and in his later books Singer seems to have realized this, and now recommends the far more modest standard that everyone give at least 1% of their income. (He himself gives about 33%, but he’s also very rich so he doesn’t feel it nearly as much.) I think he may have overcompensated; while if literally everyone gave at least 1% that would be more than enough to end world hunger and solve many other problems—world nominal GDP is over $70 trillion, so 1% of that is $700 billion a year—we know that this won’t happen. Some will give more, others less; most will give nothing at all. Hence I think those of us who give should give more than our share; hence I lean toward figures more like 5% or 10%.

But then, why not 50% or 90%? It is very difficult for me to argue on principle why we shouldn’t be expected to give that much. Because my income is such a small proportion of the total donations, the marginal utility of each dollar I give is basically constant—and quite high; if it takes about $1000 to save a child’s life on average, and each of these children will then live about 60 more years at about half the world average happiness, that’s about 30 QALY per $1000, or about 30 milliQALY per dollar. Even at my current level of income (incidentally about as much as I think the US basic income should be), I’m benefiting myself only about 150 microQALY per dollar—so my money is worth about 200 times as much to those children as it is to me.

So now we have to ask ourselves the really uncomfortable question: How much do I value those children, relative to myself? If I am at all honest, the value is not 1; I’m not prepared to die for someone I’ve never met 10,000 kilometers away in a nation I’ve never even visited, nor am I prepared to give away all my possessions and throw myself into the same starvation I am hoping to save them from. I value my closest friends and family approximately the same as myself, but I have to admit that I value random strangers considerably less.

Do I really value them at less than 1%, as these figures would seem to imply? I feel like a monster saying that, but maybe it really isn’t so terrible—after all, most economists seem to think that the optimal solidarity coefficient is in fact zero. Maybe we need to become more comfortable admitting that random strangers aren’t worth that much to us, simply so that we can coherently acknowledge that they aren’t worth nothing. Very few of us actually give away all our possessions, after all.

Then again, what do we mean by worth? I can say from direct experience that a single migraine causes me vastly more pain than learning about the death of 200,000 people in an earthquake in Southeast Asia. And while I gave about $100 to the relief efforts involved in that earthquake, I’ve spent considerably more on migraine treatments—thousands, once you include health insurance. But given the chance, would I be willing to suffer a migraine to prevent such an earthquake? Without hesitation. So the amount of pain we feel is not the same as the amount of money we pay, which is not the same as what we would be willing to sacrifice. I think the latter is more indicative of how much people’s lives are really worth to us—but then, what we pay is what has the most direct effect on the world.

It’s actually possible to justify not dying or selling all my possessions even if my solidarity coefficient is much higher—it just leads to some really questionable conclusions. Essentially the argument is this: I am an asset. I have what economists call “human capital”—my health, my intelligence, my education—that gives me the opportunity to affect the world in ways those children cannot. In my ideal imagined future (albeit improbable) in which I actually become President of the World Bank and have the authority to set global development policy, I myself could actually have a marginal impact of megaQALY—millions of person-years of better life. In the far more likely scenario in which I attain some mid-level research or advisory position, I could be one of thousands of people who together have that sort of impact—which still means my own marginal effect is on the order of kiloQALY. And clearly it’s true that if I died, or even if I sold all my possessions, these events would no longer be possible.

The problem with that reasoning is that it’s wildly implausible to say that everyone in the First World are in this same sort of position—Peter Singer can say that, and maybe I can say that, and indeed hundreds of development economists can say that—but at least 99.9% of the First World population are not development economists, nor are they physicists likely to invent cold fusion, nor biomedical engineers likely to cure HIV, nor aid workers who distribute anti-malaria nets and polio vaccines, nor politicians who set national policy, nor diplomats who influence international relations, nor authors whose bestselling books raise worldwide consciousness. Yet I am not comfortable saying that all the world’s teachers, secretaries, airline pilots and truck drivers should give away their possessions either. (Maybe all the world’s bankers and CEOs should—or at least most of them.)

Is it enough that our economy would collapse without teachers, secretaries, airline pilots and truck drivers? But this seems rather like the fact that if everyone in the world visited the same restaurant there wouldn’t be enough room. Surely we could do without any individual teacher, any individual truck driver? If everyone gave the same proportion of their income, 1% would be more than enough to end malaria and world hunger. But we know that everyone won’t give, and the job won’t get done if those of us who do give only 1%.

Moreover, it’s also clearly not the case that everything I spend money on makes me more likely to become a successful and influential development economist. Buying a suit and a car actually clearly does—it’s much easier to get good jobs that way. Even leisure can be justified to some extent, since human beings need leisure and there’s no sense burning myself out before I get anything done. But do I need both of my video game systems? Couldn’t I buy a bit less Coke Zero? What if I watched a 20-inch TV instead of a 40-inch one? I still have free time; could I get another job and donate that money? This is the sort of question Peter Singer tells us to ask ourselves, and it quickly leads to a painfully spartan existence in which most of our time is spent thinking about whether what we’re doing is advancing or damaging the cause of ending world hunger. But then the cost of that stress and cognitive effort must be included; but how do you optimize your own cognitive effort? You need to think about the cost of thinking about the cost of thinking… and on and on. This is why bounded rationality modeling is hard, even though it’s plainly essential to both cognitive science and computer science. (John Stuart Mill wrote an essay that resonates deeply with me about how the pressure to change the world drove him into depression, and how he learned to accept that he could still change the world even if he weren’t constantly pressuring himself to do so—and indeed he did. James Mill set out to create in his son, John Stuart Mill, the greatest philosopher in the history of the world—and I believe that he succeeded.)

Perhaps we should figure out what proportion of the world’s people are likely to give, and how much we need altogether, and then assign the amount we expect from each of them based on that? The more money you ask from each, the fewer people are likely to give. This creates an optimization problem akin to setting the price of a product under monopoly—monopolies maximize profits by carefully balancing the quantity sold with the price at which they sell, and perhaps a similar balance would allow us to maximize development aid. But wouldn’t it be better if we could simply increase the number of people who give, so that we don’t have to ask so much of those who are generous? That means tax-funded foreign aid is the way to go, because it ensures coordination. And indeed I do favor increasing foreign aid to about 1% of GDP—in the US it is currently about $50 billion, 0.3% of GDP, a little more than 1% of the Federal budget. (Most people who say we should “cut” foreign aid don’t realize how small it already is.) But foreign aid is coercive; wouldn’t it be better if people would give voluntarily?

I don’t have a simple answer. I don’t know how much other people’s lives ought to be worth to us, or what it means for our decisions once we assign that value. But I hope I’ve convinced you that this problem is an important one—and made you think a little more about scope neglect and why we have it.

Are humans rational?

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JDN 2456928 PDT 11:21.

The central point of contention between cognitive economists and neoclassical economists hinges upon the word “rational”: Are humans rational? What do we mean by “rational”?

Neoclassicists are very keen to insist that they think humans are rational, and often characterize the cognitivist view as saying that humans are irrational. (Daniel Ariely has a habit of feeding this view, titling books things like Predictably Irrational and The Upside of Irrationality.) But I really don’t think this is the right way to characterize the difference.

Daniel Kahneman has a somewhat better formulation (from Thinking, Fast and Slow): “I often cringe when my work is credited as demonstrating that human choices are irrational, when in fact our research only shows that Humans are not well described by the rational-agent model.” (Yes, he capitalizes the word “Humans” throughout, which is annoying; but in general it is a great book.)

The problem is that saying “humans are irrational” has the connotation of a universal statement; it seems to be saying that everything we do, all the time, is always and everywhere utterly irrational. And this of course could hardly be further from the truth; we would not have even survived in the savannah, let alone invented the Internet, if we were that irrational. If we simply lurched about randomly without any concept of goals or response to information in the environment, we would have starved to death millions of years ago.

But at the same time, the neoclassical definition of “rational” obviously does not describe human beings. We aren’t infinite identical psychopaths. Particularly bizarre (and frustrating) is the continued insistence that rationality entails selfishness; apparently economists are getting all their philosophy from Ayn Rand (who barely even qualifies as such), rather than the greats such as Immanuel Kant and John Stuart Mill or even the best contemporary philosophers such as Thomas Pogge and John Rawls. All of these latter would be baffled by the notion that selfless compassion is irrational.

Indeed, Kant argued that rationality implies altruism, that a truly coherent worldview requires assent to universal principles that are morally binding on yourself and every other rational being in the universe. (I am not entirely sure he is correct on this point, and in any case it is clear to me that neither you nor I are anywhere near advanced enough beings to seriously attempt such a worldview. Where neoclassicists envision infinite identical psychopaths, Kant envisions infinite identical altruists. In reality we are finite diverse tribalists.)

But even if you drop selfishness, the requirements of perfect information and expected utility maximization are still far too strong to apply to real human beings. If that’s your standard for rationality, then indeed humans—like all beings in the real world—are irrational.

The confusion, I think, comes from the huge gap between ideal rationality and total irrationality. Our behavior is neither perfectly optimal nor hopelessly random, but somewhere in between.

In fact, we are much closer to the side of perfect rationality! Our brains are limited, so they operate according to heuristics: simplified, approximate rules that are correct most of the time. Clever experiments—or complex environments very different from how we evolved—can cause those heuristics to fail, but we must not forget that the reason we have them is that they work extremely well in most cases in the environment in which we evolved. We are about 90% rational—but woe betide that other 10%.

The most obvious example is phobias: Why are people all over the world afraid of snakes, spiders, falling, and drowning? Because those used to be leading causes of death. In the African savannah 200,000 years ago, you weren’t going to be hit by a car, shot with a rifle bullet or poisoned by carbon monoxide. (You’d probably die of malaria, actually; for that one, instead of evolving to be afraid of mosquitoes we evolved a biological defense mechanism—sickle-cell red blood cells.) Death in general was actually much more likely then, particularly for children.

A similar case can be made for other heuristics we use: We are tribal because the proper functioning of our 100-person tribe used to be the most important factor in our survival. We are racist because people physically different from us were usually part of rival tribes and hence potential enemies. We hoard resources even when our technology allows abundance, because a million years ago no such abundance was possible and every meal might be our last.

When asked how common something is, we don’t calculate a posterior probability based upon Bayesian inference—that’s hard. Instead we try to think of examples—that’s easy. That’s the availability heuristic. And if we didn’t have mass media constantly giving us examples of rare events we wouldn’t otherwise have known about, the availability heuristic would actually be quite accurate. Right now, people think of terrorism as common (even though it’s astoundingly rare) because it’s always all over the news; but if you imagine living in an ancient tribe—or even an medieval village!—anything you heard about that often would almost certainly be something actually worth worrying about. Our level of panic over Ebola is totally disproportionate; but in the 14th century that same level of panic about the Black Death would be entirely justified.

When we want to know whether something is a member of a category, again we don’t try to calculate the actual probability; instead we think about how well it seems to fit a model we have of the paradigmatic example of that category—the representativeness heuristic. You see a Black man on a street corner in New York City at night; how likely is it that he will mug you? Pretty small actually, because there were less than 200,000 crimes in all of New York City last year in a city of 8,000,000 people—meaning the probability any given person committed a crime in the previous year was only 2.5%; the probability on any given day would then be less than 0.01%. Maybe having those attributes raises the probability somewhat, but you can still be about 99% sure that this guy isn’t going to mug you tonight. But since he seemed representative of the category in your mind “criminals”, your mind didn’t bother asking how many criminals there are in the first place—an effect called base rate neglect. Even 200 years ago—let alone 1 million—you didn’t have these sorts of reliable statistics, so what else would you use? You basically had no choice but to assess based upon representative traits.

As you probably know, people have trouble dealing with big numbers, and this is a problem in our modern economy where we actually need to keep track of millions or billions or even trillions of dollars moving around. And really I shouldn’t say it that way, because $1 million ($1,000,000) is an amount of money an upper-middle class person could have in a retirement fund, while $1 billion ($1,000,000,000) would make you in the top 1000 richest people in the world, and $1 trillion ($1,000,000,000,000) is enough to end world hunger for at least the next 15 years (it would only take about $1.5 trillion to do it forever, by paying only the interest on the endowment). It’s important to keep this in mind, because otherwise the natural tendency of the human mind is to say “big number” and ignore these enormous differences—it’s called scope neglect. But how often do you really deal with numbers that big? In ancient times, never. Even in the 21st century, not very often. You’ll probably never have $1 billion, and even $1 million is a stretch—so it seems a bit odd to say that you’re irrational if you can’t tell the difference. I guess technically you are, but it’s an error that is unlikely to come up in your daily life.

Where it does come up, of course, is when we’re talking about national or global economic policy. Voters in the United States today have a level of power that for 99.99% of human existence no ordinary person has had. 2 million years ago you may have had a vote in your tribe, but your tribe was only 100 people. 2,000 years ago you may have had a vote in your village, but your village was only 1,000 people. Now you have a vote on the policies of a nation of 300 million people, and more than that really: As goes America, so goes the world. Our economic, cultural, and military hegemony is so total that decisions made by the United States reverberate through the entire human population. We have choices to make about war, trade, and ecology on a far larger scale than our ancestors could have imagined. As a result, the heuristics that served us well millennia ago are now beginning to cause serious problems.

[As an aside: This is why the “Downs Paradox” is so silly. If you’re calculating the marginal utility of your vote purely in terms of its effect on you—you are a psychopath—then yes, it would be irrational for you to vote. And really, by all means: psychopaths, feel free not to vote. But the effect of your vote is much larger than that; in a nation of N people, the decision will potentially affect N people. Your vote contributes 1/N to a decision that affects N people, making the marginal utility of your vote equal to N*1/N = 1. It’s constant. It doesn’t matter how big the nation is, the value of your vote will be exactly the same. The fact that your vote has a small impact on the decision is exactly balanced by the fact that the decision, once made, will have such a large effect on the world. Indeed, since larger nations also influence other nations, the marginal effect of your vote is probably larger in large elections, which means that people are being entirely rational when they go to greater lengths to elect the President of the United States (58% turnout) rather than the Wayne County Commission (18% turnout).]

So that’s the problem. That’s why we have economic crises, why climate change is getting so bad, why we haven’t ended world hunger. It’s not that we’re complete idiots bumbling around with no idea what we’re doing. We simply aren’t optimized for the new environment that has been recently thrust upon us. We are forced to deal with complex problems unlike anything our brains evolved to handle. The truly amazing part is actually that we can solve these problems at all; most lifeforms on Earth simply aren’t mentally flexible enough to do that. Humans found a really neat trick (actually in a formal evolutionary sense a goodtrick, which we know because it also evolved in cephalopods): Our brains have high plasticity, meaning they are capable of adapting themselves to their environment in real-time. Unfortunately this process is difficult and costly; it’s much easier to fall back on our old heuristics. We ask ourselves: Why spend 10 times the effort to make it work 99% of the time when you can make it work 90% of the time so much easier?

Why? Because it’s so incredibly important that we get these things right.