You would like to go to the beach tomorrow if it's sunny, but aren't sure whether it will rain; if it rains, you'd rather go to the movies. So you resolve to put on a swimsuit and a raincoat, and thus attired, attend the beach in the morning and the movies in the afternoon, regardless of the weather. Something is wrong with that decision process,^[1] and it's also wrong with the decisions made by many supposedly systemic approaches to philanthropy: it does not engage with real and potentially resolvable uncertainty about decision-relevant facts.

Different popular philanthropic programs correspond to very different hypotheses about why people are doing wealth inequality, much like swim trunks and a trip to the movies represent different hypotheses about the weather. Instead of working backwards from the proposals to the hypotheses, I will lay out what I think are the two main hypotheses worth considering, and reason about what someone might want to do if that hypothesis were true. This is not because I want to tell you what to do, but to clarify that any time you think that something in particular is a good idea to do, you are acting on a hypothesis about what's going on.

The ideas of charity and philanthropy depend on the recognition of inequality; otherwise it would just be called "being helpful." The persistence of wealth inequality, in turn, depends on many people working together to recognize and enforce individual claims on private property.

If the mechanism of private property tends to allocate capital to its most productive uses, then incentives are being aligned to put many people to work for common benefit. But if wealth does not correspond to productive capacity - i.e. the people with the most are not those best able to use it - then, assuming diminishing marginal returns to wealth, coordination towards persistent wealth inequality comes from a self-sustaining misalignment of incentives, i.e. conflict.

The economic ideology taught in introductory microeconomics courses, which is assumed by many formal analyses of how to do good at scale, including much of Effective Altruist discourse, tends to make assumptions consistent with the means of production hypothesis, so if we are considering making decisions on the basis of that analysis, we want to understand which observations would falsify that hypothesis, and which beliefs are incompatible with it.

You walk into a workshop, and see someone holding a hammer. You can infer that this is because there is some hammering to do right now, and the holder is competent to do it. Someone else has a saw, and you make a similar inference. In this context, the unequal distribution of production goods is part of how things get made; wealth inequality is a part of the means of production. If a workshop did not allocate tools in a way that justified those inferences - if perhaps you observed one person with a hoard of wrenches doing nothing while others used their bare hands as best they could - then you might infer the existence of a conflict between the wrenchmaster and the other laborers, and you would expect that workshop to do a worse job if called upon to make something. On the other hand, if someone with a hoard of wrenches were freely lending out the wrenches when appropriate, seemed like an especially good judge of which wrench (if any) is appropriate for which job, and made sure people put the wrenches back instead of putting them down at random in hard-to-find places, then you might not think worse of the workshop for its wrenchmaster.

The hypothesis that wealth inequality is part of the means of production has moral and strategic implications for charity.

From a global utilitarian perspective, having much more than others is not on its own a reason to transfer wealth to them. Instead, you should expect the return you can get on reinvesting your wealth into profit-yielding enterprises to frequently be higher than the return they can get, so you might be able to make a more important gift to the future than to the present. Even when there is a large enough market failure to justify philanthropy, some amount of paternalism is warranted, because your wealth advantage corresponds to a way in which you know better than them. An exemplar for this perspective is Andrew Carnegie, who amassed a vast fortune improving the organization of steel production, and used some of that fortune to provide a public good, specifically the information good of public libraries. Readers who want his perspective in his own words might do well to read The Gospel of Wealth and his autobiography.

While the details of the return on investment calculation from the selfish perspective will be different, the basic tradeoffs are similar. Due to diminishing marginal returns, at some point it becomes so prohibitively expensive to solve your problems by buying commodity goods or even custom services that the most selfish thing to do is contribute to undersupplied public or coordination goods. For example, Elon Musk's interest in acquiring Twitter and relaxing its censorship regime - and creating Starlink - may be the selfish one of wanting to maintain access to lines of communication with sympathetic strangers (which has been important for things like his ability to find a compatible reproductive partner).

If, on the other hand, wealth inequality is mainly due to systemic oppression, i.e. coordination by an extractive class against producers, then the world looks very different. The simplest implication is that the possession of a fortune is no longer evidence that you know better than others. And before we can even generate the idea of charity under this framework, we run into a justification for a radical form of economic skepticism: what are we even doing when we try to buy a good?

Under the means of production hypothesis, the answer was straightforward: when I buy a good, I am sending a price signal which causes some combination of reallocation of resources to produce more of that good, and the reallocation of that good and its inputs away from those with the least productive use for them. On balance I should expect such price signals to enrich those alleviating scarcity by improving the efficiency with which scarce goods are produced. It follows analytically that under the oppression hypothesis, since the enrichment of producers doesn't happen, any price signals I send do not reallocate resources to produce more in-demand goods on net. There must be a loser, so either I am paying for a weapon to extract from others, or I myself am the target for extraction, i.e. I am being scammed. The pure oppression hypothesis implies that wealth has no real purchasing power for goods; at most it has an illusory or dramatic one.

I have enough money to pay a modest premium for high quality ingredients, and I really do seem to feel better after eating them, which is some evidence for the hypothesis that wealth inequality is part of the means of production. But a friend of mine lives nearby in public housing and cooks on a food stamp budget, and my millionaire housemate enjoys my friend's cooking more than mine. The friend in public housing has complained to the two of us that a much wealthier friend and potential donor to her nonprofit likes to take her out to eat at an expensive club with dismally bad food to waste her time, and won't actually financially support her programs, even the ones he's agreed are good ideas. This is not consistent with the story that money buys good things, but is consistent with the oppression hypothesis.

The pure oppression hypothesis is difficult to imagine. If wealth is nothing but a way to threaten others, and has no independent purchasing power, then it has no way to threaten anything outside of the system; it is a closed system of domination and those outside it can safely ignore it. The rule of the Roman Catholic church in Europe is not a perfect example, but provides a suggestive resemblance. The church made the most extreme metaphysical threats towards its constituents, mixed with what were in most cases mild physical threats if any. The very large sums of gold paid in indulgences or contributions to crusaders show how strongly motivated people were to get out from under this threat. People who rose in the ranks acquired more power to make or withdraw threats towards others, but were not supposed to correspondingly control more productive capital, and they were discouraged from reproducing.

From a global utilitarian view, on the oppression hypothesis, what should a rich person do? The arguments for paternalism or reinvestment do not apply here; your wealth does not imply that you are a good steward, because the allocation of resources does not conform to the function of meeting people's needs. You have no reason to think that you know better than others how to help them, and the idea of a return on investment is perverse. But needs are getting met somehow, so the coordination to do so must be happening outside the system of oppression.

One thing you might try to do in this situation is to use your position as someone validated by a system of oppression to invalidate it, e.g. by publicly setting your money on fire. (This differs from conspicuous consumption because it eliminates motive ambiguity; intentionally wasteful spending still pretends to be receiving something of value, while literally making a pile of cash and setting it on fire does not, so it sends a credible signal that you think the money is worse than useless.) Another thing you might do is try to deescalate threats towards others, in the hope that this frees up their capacity to solve problems, including the existence of the system of threats you're caught up in. In other words, cash transfers.

You might try applying some selection by concentrating your gifts on people with reputations as good actors within the system. The Bezoses seem to have done something like this, with MacKenzie Scott distributing money widely among nonprofits working on things that seem good, and Jeff Bezos making one-time $100 million grants to Van Jones and José Andrés. On the other hand, you might reasonably worry that the reputational system - or at least, the mechanism by which news gets delivered to you, a wealthy person - is part of the system of oppression. In that case, you might apply Rawlsian skepticism and simply try to help whoever is worst off, e.g. cash transfers to the global poor, programs to help prisoners, etc. But then you need to trust that you can pay for the cash transfers to actually happen, which is not clearly justified (remember, under this hypothesis money facilitates threatening people, not providing goods and services) - the best available option might be to wander around incognito looking for people who seem like they could use help but aren't seeking attention.

We live in a mixed economy, but it can't be a homogeneous mixture. Instead, there are details to investigate: who gets paid to produce, and who gets paid to destroy, under what circumstances?

This post was inspired by the state of public discourse on effective altruism, in which cash transfers to the global poor, paternalistic global health interventions, animal welfare interventions in explicit conflict with incumbent powers, and extremely high-leverage high-trust speculative AI design, are put on a single list as though the same set of assumptions could calculate an ROI for all of them, and the main thing that's left to do is pick from the list, or add items. This seems crazy to me like planning to put on swim trunks and a rain coat, and go to the beach in the morning and the movies in the afternoon. It represents a huge missed opportunity: to clarify what our hypotheses actually are about the world in which we live, and test these hypotheses in ways that prevent us from wasting huge sums of money and a corresponding number of human lifetimes on programs that do not matter.

A community without the discursive apparatus to clarify such disagreements, and the ability to invest an appropriate level of work into testing them, is operating on assumptions too low-trust to justify any of the predominant EA hypotheses, all of which require the ability to delegate a lot of work to strangers, including much of the work of evaluating the output of the work you are funding.

Addendum: If you don't already find yourself with a large surplus of wealth or power, and are considering how to make yourself helpful to yourself or others, the model laid out above implies that one thing worth paying a lot of attention to is, as you make your way in life, whether the skills and behaviors you are learning and being rewarded for seem like the sort of thing that is likely to be able to help someone solve a practical, material problem. Sometimes the connection may be real but unclear, but the less reason you have to think that your society is a just one, the more open you should be to the hypothesis that you're being rewarded for bad behavior. If so, you might want to look for another game to play. On global-utilitarian grounds, if you thought that capital accumulation is a gift to the future (or that accumulating "career capital" would improve your ability to help others), you might want to update away from that. On selfish grounds, you should become more skeptical about what money can buy you.