Enterprise is the most ‘effective altruism’

There’s a new movement afoot: talented Ivy League grads are joining Wall Street in order to make scads of money — and then give it away philanthropically.

These young people might seem to be inspired by John Wesley, the founder of Methodism, who advised the faithful to make all they could, save all they could, and give all they could. Not bad advice. But these graduates are responding to a call from controversial ethicist Peter Singer. In a recent TED talk, Singer referenced the Bill and Melinda Gates Foundation and its philosophy that “all lives have equal value.” In light of that, Singer suggested, people in wealthy countries should not just focus on helping each other, but should also help those in less developed countries.

As Christians, we agree that all (human) lives have equal value, but we’re skeptical of Singer’s hyper-utilitarian approach, which he calls “Effective Altruism.” His is an artificially mathematical and abstract way of dispensing help. In effect, it treats individuals as commodities to whom we deliver units of charity. But the most effective charity treats individuals not just as mouths to feed, but as whole and particular persons, with material, moral, cultural, and spiritual needs. That process can’t be reduced to an impersonal utilitarian calculus.

The other problem with this Singer-inspired movement is economic rather than philosophical. “Effective Altruism” encourages young and old to pursue the jobs that earn the highest paycheck for the sole purpose of giving most of their income away philanthropically. This treats philanthropy as if it were the only, or at least the most effective, way to act altruistically — that is, for the benefit of others. It also implies that business pursued for its own purpose is morally suspect.

In reality, the primary way widespread poverty is alleviated is with plain vanilla factors such as business, hard work, property rights, a reliable dispensation of justice, and enterprise.

The Gates Foundation has saved an estimated 5 million lives thus far. But we rarely hear of the countless lives saved or improved by the profit-seeking activities of Microsoft. It’s not clear how we could even measure the total effects.

One effect is the Foundation itself. To be able to start such a large aid organization, Bill Gates first had to be a successful entrepreneur. As a philanthropist, Gates is not “giving back” to the world, as if he had taken from it in the first place. His philanthropic giving is possible only because he first “gave” as an entrepreneur.

Perhaps only God knows what Gates’ motives were as a businessman; but there’s no evidence that it was inspired by anything like Singer’s “Effective Altruism.” For all we know, the software billionaire was motivated just by self-interest and a desire for profits.

Still, he and Microsoft succeeded only because they provided value for hundreds of millions of people. Gates had to meet the needs of his customers better than his competitors could. And to stay ahead, he had to invest wisely rather than consume or give away all the profits.

A healthy market economy can channel not just compassion but also self-interest into outcomes beneficial to others. This is how wealth is created and accumulated in free societies.