Baby did a bad, bad thing

An intriguing blog I’ve started reading (HT to Marginal Revolution) is A Fine Theorem, which pithily summarizes economics articles (and other writings that bear on economic motives) while advancing the author’s interesting views on the discipline. A recent post brings up a problem that I don’t believe we think about enough in philanthropy: the joy of doing the wrong thing. Here’s AFT on Dostoevsky:

Economics, inherent in its methodology, is a normative science. Even when an econ article is deliberately positive – “if people act as if they have a utility function, then the following choices will result” – the overwhelming majority of articles make assumptions such as “utility is increasing in money”. These types of assumptions are not controversial within the class of rationalist theories of human action. Indeed, many economists…considered deviations from rationalism…to be mistakes when they occur, and further to be mistakes which ought be cured with better education. [Dostoevsky’s] Notes from the Underground famous[ly] suggests an alternative, existential argument for human action: the very existence of a rational utility function which might be maximized causes people to act contrary to that function. There is a great word in German expressing this sentiment: Weltschmerz, literally “world-ache”, or the ennui which sets in when a person feels that their actions are too intentional, too preordained. Here’s the relevant quote from Dostoevsky….

“What is to be done with the millions of facts testifying to how people knowingly, that is, fully understanding their real profit, would put it in second place and throw themselves onto another path, a risk, a perchance, not compelled by anyone or anything, but precisely as if they did not want the designated path, and stubbornly, willfully, pushed off onto another one…And what if it so happens that on occasion man’s profit not only may but precisely must consist in sometimes wishing what is bad for himself, and not what is profitable?” (Part I, Section VII)

Despite recent attempts to introduce the insights of behavioral economics into the discussion about philanthropy, I think we still operate almost exclusively on a rationalist model when it comes to understanding the beneficiaries of giving. Motivations for givers, as I’ve discussed on this blog, we’re starting to understand in a diverse set of ways, but I fear we often think about recipients of services as consumers of widgets whose motivations should be obvious: offer someone a way to improve their lives, and they’ll take it.

One reason to demur from this point of view is, maybe they don’t see it as an improvement. We’re starting to get this, as the concept of the “nudge” attests: make 401k contributions opt-out rather than opt-in, for example, and rates of participation will go up.

But another reason, as AFT and Dostoevsky point out, is that recipients of services may see the service as an improvement, but may choose not to take it anyway “just because.” AFT uses the word “existential.” Poe called it “The Imp of the Perverse,” in a story of that title (thanks Wikipedia):

We have a task before us which must be speedily performed. We know that it will be ruinous to make delay. The most important crisis of our life calls, trumpet-tongued, for immediate energy and action. … It must, it shall be undertaken to-day, and yet we put it off until to-morrow, and why? There is no answer, except that we feel perverse, using the word with no comprehension of the principle. … [Then] The clock strikes, and is the knell of our welfare. At the same time, it is the chanticleer-note to the ghost that has so long overawed us. It flies—disappears—we are free. The old energy returns. We will labor now. Alas, it is too late!

I think the Imp is at work far more than we care to acknowledge in philanthropy. As Poe illustrates, he’s not a permanent presence – people do act in their own self-interest most of the time. But he’s always there, and we ignore him at our peril.

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2 Responses to “Baby did a bad, bad thing”

  1. The Blog Briefly Known as "Democratizing Philanthropy?" » Blog Archive » The Imp-ire Strikes Back Says:

    […] The Blog Briefly Known as "Democratizing Philanthropy?" BETA version, new title in the works. New post each Tuesday, Wednesday, Thursday (for now). « Baby did a bad, bad thing […]

  2. The Blog Briefly Known as "Democratizing Philanthropy?" » Blog Archive » The Song Remains the Same (again) Says:

    […] So when we look at the replication of social programs, and what it means to achieve scale, I think about musicians and cover versions. What is this replication, this cover version, trying to accomplish? Will a new arrangement get a new audience, like when Glee brings a Journey song to the top of the iTunes charts? Replication has to be relevant or it won’t work, and relevance is so dependent on context and non-rational cues (back to the Imp of the Perverse). […]

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