« No right to save your life | Main | Is TV good for Indian women? »
The economics of street charity
Freakonomics/NYT holds a symposium, including me, Nassim Taleb, Barbara Ehrenreich, Arthur Brooks, and Mark Cuban, with guest comments from Roland Fryer and Stephen Dubner. My first sentence:
I'm not keen on giving money to the beggar.
Here is another bit of mine:
Oddly, the case for giving to the beggar may be stronger if he is an alcoholic. Alcoholism increases the chance that he is asking for the money randomly, rather than pursuing some well-calculated strategy of wastefully investing resources into begging. But in that case, I expect the gift will be squandered on booze, so I still don’t want to give him the money.
Posted by Tyler Cowen on August 9, 2007 at 02:20 PM in Economics | Permalink
Comments
You could always carry small bags of nonperishable food that requires no preparation for such purposes. That is what my wife and I do when we're downtown or in other areas where transients are frequent. Sometimes, the bags also contain a 'prize', typically either a 50 cent Bible or a similarly priced piece of literature.
Posted by: David at Aug 9, 2007 2:48:56 PM
Even providing food leads to begging, however. While it's certainly better to give food, ensuring the contribution is not spent on alcohol or tobacco, it still encourages the socially wasteful activity of begging. I'd prefer to donate to a soup kitchen or shelter that will provide appropriately for those who are otherwise not able to do so for themselves.
Posted by: ah at Aug 9, 2007 3:01:36 PM
I have no problems giving a beggar some money. He'll probably spend it on the same thing I will if I am in a place with beggars. Mcdonalds and booze. Besides, it makes me feel better about myself and I find utility in that.
Posted by: Jacob at Aug 9, 2007 3:02:56 PM
If you were somehow tempted to read Taleb's *The Black Swan* please go here and read this first.
My God, the man could not order a hot dog without 20 minutes of anecdotes on what a wonderful
fellow he is.
Posted by: mkl at Aug 9, 2007 3:09:29 PM
The Barbara Ehinreich response is a joke right? Nobody knows how to suck the air out a room better than that woman.
Posted by: John Pertz at Aug 9, 2007 3:24:43 PM
Beggars surely provide a social benefit by allowing more people to feel magnanimous more often.
Posted by: chrisare at Aug 9, 2007 3:31:27 PM
"
We're in one of the richest countries in the world,
but the minimum wage is lower than it was thirty five years ago.
There are homeless people everywhere.
This homeless guy asked me for money the other day.
I was about to give it to him and then I thought he was going to use it on drugs or alcohol.
And then I thought, that's what I'm going to use it on.
Why am I judging this poor bastard.
People love to judge homeless guys. Like if you give them money they're just going to waste it.
Well, he lives in a box, what do you want him to do? Save it up and buy a wall unit?
Take a little run to the store for a throw rug and a CD rack? He's homeless.
I walked behind this guy the other day.
A homeless guy asked him for money.
He looks right at the homeless guy and says why don't you go get a job you bum.
People always say that to homeless guys like it is so easy.
This homeless guy was wearing his underwear outside his pants.
Outside his pants. I'm guessing his resume isn't all up to date.
I'm predicting some problems during the interview process.
I'm pretty sure even McDonalds has a "underwear goes inside the pants" policy.
Not that they enforce it really strictly, but technically I'm sure it is on the books.
"
http://www.lyricstop.com/u/underweargoesinsidethepants-lazyboy.html
http://www.youtube.com/watch?v=CcFJYLGmIPY
Hysterical and insightful.
Posted by: Randy at Aug 9, 2007 3:33:06 PM
I expect the gift will be squandered on booze, so I still don’t want to give him the money.
Don't you "squander" some of your income on booze?
What do you want him to spend the money on, medical school tuition? Give him money or don't, as it suits you, but drop the piety.
Posted by: Bernard Yomtov at Aug 9, 2007 3:38:55 PM
Dear Tyler:
Maybe, as an NYT columnist, you have some inside info on whether the NYT is ever going to report upon the rather humiliating "letter of clarification" that their star new blogger just released to settle the second half of John Lott's defamation suit against Levitt? You can read Levitt's letter of clarification here:
http://johnrlott.tripod.com/uploaded_images/LevittCorrection-735079.jpg
The NYT's reluctance to report bad news about their blogger/columnist (which they also displayed in 2005 when the WSJ and the Economist, but not the NYT, reported Foote & Goetz's discovery that Levitt's famous abortion-cut-crime theory was based on two technical mistakes) might be an interesting topic for you to analyze using sophisticated economic concepts such as "self-interest."
Posted by: Steve Sailer at Aug 9, 2007 3:39:02 PM
I'm not a Chiristian myself, but I do like Jesus' approach to the problem. "If a man asks for your shirt give him your cloak also." No means testing, nor questioning of motives or opportunity. Just respectful recognition of our neighbors' need and humanity.
Charity used to be considered a Christian virtue. Charity means loving unconditionally, answering people's needs without judgement.
When I meet an alcoholic begging for money, I would like to give him enough money to go into rehab. I can't. Given that probably nobody will do so on a given afternoon, I don't feel at all bad about giving him enough to help him not have delerium tremens for one night. Handing him some money I would like to hope is a gesture towards acknowledging him as an equal, not as a child.
I give money to beggars. Am I a sucker? Probably. Yes. I am a sucker. I'm proud to think that I am a sucker and not a mean, judgmental, suspicious tightwad. So in that one tiny respect I think that I am little bit more like Jesus than I am like George W. Bush. And sometimes, that IS the choice we have to make.
John Mark Rozendaal
Posted by: John Mark Rozendaal at Aug 9, 2007 4:00:32 PM
"I'm not keen on giving money to the beggar."
I couldn't stop laughing when I read that for the first time.
Posted by: Samir Nurmohamed at Aug 9, 2007 4:09:28 PM
I don't give to beggars because I feel it creates positive reinforcement that begging works. What I don't understand is the aggressive attitude people adopt once they don't get what they want from you. If I didn't give to them when they were civil, why would I give to them when they're aggressive?
This question became even more apparent when I ignored a beggar outside of a convenient store one night a few months ago. He began shouting expletives, followed me to my car and started kicking my door. I simply drove away, so his intimidation clearly didn't get him very far.
Posted by: Martin Gordon at Aug 9, 2007 4:45:44 PM
My wife once tried to rent a room for a homeless woman. The woman would not accept because she was afraid of the pesticides that they use in motel rooms. It is not easy to help the homeless. They often have mental illnesses. Fortunately in our area there is a homeless ministry that most of the local churches support and they have psychiatrists who volunteer and they distribute meds for mental illness. I give to that ministry rather than directly to the homeless.
Posted by: Floccina at Aug 9, 2007 4:55:32 PM
I tend to donaye money to old decrepit beggars, but not younger apparently able-bodied ones. The old beggars have most of their life behind them, their will and ability to learn is gone and its just churlish to hold their failure to prosper against them or to elevate some theory of moral hazard over the suffering standing right in front of you.
Even as a non-christian, I believe charity to all who need it is a virtue and its exhibition makes the world a better place for me to raise my kids.
Posted by: guy in the veal calf office at Aug 9, 2007 4:56:00 PM
Robin Hanson has an interesting proposal to alter the incentive structure of these situations. He calls it, "Charity Angels."In ancient mythologies, including the Bible, gods would often wander the earth dressed as beggers. Sometimes they would be travellers looking for a place to stay. Whoever took care of these gods, even though they looked like beggers, was handsomely rewarded. So, according to Hanson, here’s what we do. We pick a group of homeless beggers and designate them “angels.” If some enterprising person takes one of these angels in, and nourishes them back to health, gets them on their feet, or brings them to some generally agreed upon standard, then that person is rewarded with, say, $10,000,000. Now the whole point is the public doesn’t know who the angels are. So now they have an incentive to help beggers, in the hope that the one they’ve chosen turns out to be the angel.
What standards do you think we'd have to set for this to work? And how much money would you have to offer?
http://ruedesquatrevents.blogspot.com/
Posted by: Rue Des Quatre Vents at Aug 9, 2007 5:02:38 PM
Squander? They'd clearly rather spend their money on booze than anything else. Why do you question that choice? Where's the libertarian? If you're so good at it, why don't you tell me what to spend my money on...
Personally, I give homeless people booze. In big bottles--if you just give them money they end up buying those tiny little mini-bottles or fifths for inflated prices, instead of buying in bulk. You might as well give half the money to the liquor store owner...
Posted by: Adam at Aug 9, 2007 5:19:12 PM
I'll sometimes give beggars a bit of cash. I don't factor in whether they're going to spend it on alcohol much - if they're hungry, I assume they'll buy the food first and the alcohol with any remaining funds, and if they're self-medicating a mental illness or have a physiological dependence, they may benefit the most on the margin from spending the money on intoxicants. I don't know enough about the beggar's situation to be able to believe that I can make better choices.
The main factor for me is how I'm being begged - polite beggars are more likely to get money from me. Aggressive begging is unpleasant to be on the recieving end of and consequently more likely to result in the beggar attracting negative attention from the police or spill over into political support for measure that make life even more difficult for the homeless (such as attempts to ban distributing food to the homeless in public parks). As a beggee, I probably can't influence deep seated behaviors like substance abuse problems, but I can encourage less socially corrosive forms of begging.
Posted by: MattXIV at Aug 9, 2007 5:31:02 PM
"First, drug dealers and other criminals hold lots of cash — why should I help them out?"
Why do you consider drug dealers to be criminals? Do you consider liquor dealers to be criminals? Did you consider homosexuals to be criminals before Lawrence v. Texas?
Posted by: HL at Aug 9, 2007 5:51:52 PM
You know, if you boil it down to substance, I actually like Taleb's answer best. But God, could he be any more of a d*ck about it?
Posted by: jeebus at Aug 9, 2007 6:07:39 PM
Since when are drug dealers criminals? Politicians who pass laws against drug dealing are criminals.
Mark Cuban's comment is by far the best and has the virtue of being short. Whatever else Taleb is, he is also a pompous ass.
Posted by: Bill Stepp at Aug 9, 2007 6:35:11 PM
Martin Gerson wrote:"I don't give to beggars because I feel it creates positive reinforcement that begging works. What I don't understand is the aggressive attitude people adopt once they don't get what they want from you."
It is interesting that Gerson uses the term "positive reinforcement." The term comes from B. F. Skinner's writings on psychology, education and conditioning. Gerson's use of the term implies that he sees himself in relation to the beggar as an educator using a notoriously manipulative pedagogical method. If the beggar percieves this I would say that his aggression is very understandable (if not in his own self-interest).
Posted by: John Mark Rozendaal at Aug 9, 2007 6:59:25 PM
Although I’m atheist, I defer to Jesus on beggar-related matters. He said, if a man asks for your coat, give him your cloak too.
Jesus was as terrible an economist as he was a carpenter. Ehrenreich doesn't even make an attempt at logic. If it makes her and Jesus feel all warm and fuzzy it must logically make the world a better place too.
Posted by: Jason Malloy at Aug 9, 2007 7:00:02 PM
Taleb makes pretty much the same mistake. He answers the question thinking only of his own totally arbitrary emotional motivations. Um, fantastic, now why not try thinking about whether or not giving to street beggars actually improves the lives of street beggars or if it ends up hurting more people on average? Then the next time someone asks you for money, your decision won't be based on meaningless, self-centered criteria - like whether or not you saw Sally Struthers on TV that day - but on steady logical principles.
Those principles might be flawed, but at least it will stop you from acting arbitrarily on your impulses like an animal.
Posted by: Jason Malloy at Aug 9, 2007 7:29:57 PM
I think giving to beggars largely depends on the context. There are some places on this earth where people simply have no hope. Obviously the opportunities for beggars in say the Ft. Lauderdale-Miami area are going to be quite different than the opportunities afforded to those living in the Sudan. In some countries people have no hope because the political context is much much too suffocating. The government in so many cases either has a foolish draconian vice grip on the economy that precludes people from attaining any semblance of material wealth, see parts of Asia, Latin America, and Africa if you need an example. Or the government is nothing more than a crony oligopolistic cash cow for the ruling elite.
However, in the U.S, even though the public school system in this country has much blood on its hands when it comes to poverty, there are still opportunities available to the underprivileged who want to work hard and attain scholarships. When it comes to the U.S I guess my answer is to side with Cuban, however, when it comes to the poor living outside of the big 13 I guess I am closer to Ehinreich.
Posted by: John Pertz at Aug 9, 2007 7:55:11 PM
I also was appalled at Taleb's complete nastiness and lack of professionalism. I liked Fooled by Randomness, and his attitude doesn't change that, but man, what a jerk!
Posted by: dave at Aug 9, 2007 8:05:50 PM
