Altruism Harms the Economy?
Too much of a good thing? Why altruism can harm the environment?
Gilles Grolleau, Lisette Ibanez & Naoufel Mzoughi
Ecological Economics, 15 May 2009, Pages 2145-2149
Abstract: Success of eco-labeling schemes, broadly defined, varies among products and across countries. Based on a simple theoretical framework, we show that the nature of environmental attributes among products (i.e., private versus public) and the consumer type (i.e., egoist versus altruist) shape the overall performance of such schemes. In addition, we demonstrate that altruistic consumers exhibiting a too high willingness to pay for the eco-labeled product can inadvertently prevent egoistic consumers from purchasing it, leading to a sub-optimal outcome in terms of environmental performance. Several policy and managerial implications are drawn.
Do you mean that perhaps Fair Trade does more harm than good? Russ and I talked about that, a bit. And I wrote this up....
So more evidence continues to pile up for a simple proposition:
[E]very individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.
Perhaps that's not really surprising. The altruism folks, the tree-huggers and bed-wetters who want to force other people to act differently, are not really trying to help anyone. They are just trying to impose their own vision of "the good," using coercion instead of persuasion.
And, in fairness, I have to give props to Gavin K. The opposite of altruism is not "selfishness." It is honest self-interest, embedded in a community where charity is important, and in a bargaining setting where contracts are paid off. Further, I should quote Gavin's other point, on Smith's actual view of benevolence, from TMS. Quoting Kennedy, who then quotes Smith:
Anyone who had an interest in presenting a fair picture of Smith’s views of human nature, however, would also take account of the views he presented in “The Theory of Moral Sentiments”. For example: “The virtues of prudence, justice, and beneficence, have no tendency to produce any but the most agreeable effects. … In our approbation of all these virtues , our sense of their agreeable effects , of their utility, either to the person who exercises them , or to some other persons, joins with our sense of their propriety, and constitutes always a considerable, frequently the greater part of that approbation” (TMS IV, iii, 59).
Beneficence, benevolence, charity....all good things. Adam Smith clearly thought so, and I agree completely. Because those things, and the actions they imply, are MY choice, voluntary. Altruism-worshippers want to require me to sacrifice, because THEY think it is good for me. Poor A's need implies that altruistic B can rightly take from hard-working C to give to A, and then B gets to feel good about it! Quite a different matter.
(Nod to Kevin L for the journal reference, though he is emphatically not complicit in any of the conclusions I draw here)