Tuesday, January 10, 2017

Is Giving Away More Money Easy Or Hard?

Sometimes in discussions about poverty, taxation, charity and inequality, I encounter a very specific debate over whether choosing to give money away is more difficult in some way than paying a required tax. If yes, the suggestion goes, that'd be an argument for a system involving taxes to move money around. If not, things are less clear. 

Some people seem to suggest that it's no more difficult to give your money away than to have it taxed. I remember that this thought comes up in Cohen's book If You're an Egalitarian Why Are You So Rich?  It's not really harder to give money away voluntarily, the thinking goes. If you're the kind of person who has trouble being motivated or who tends to get distracted and spend your money on other things, you can just automate the process. You know, monthly auto-pay or something. By pre-committing to donation, you can lock yourself in.

Let me say first that while I appreciate the debate over voluntary action and alternatives, it seems to me first that this is the wrong framework to apply to questions of poverty, charity, and taxation. As I've said before, the real problem is the theory of ownership that implies -- falsely IMO -- that what we end up with after some exchange is uncomplicatedly "ours" -- as if our interaction were happening outside of history and outside of a social structure with vast historical and contemporary injustices already built in. From my point of view, moving money around isn't a matter of charity but rather a matter of justice. So it's a different kind of thing altogether.

The other reason this framework seems to me wrong for this problem is that there are vastly different effects from individual voluntary giving than from general taxation. If everyone at my income level is taxed in the same way, all those people have less money, and this will affect prices and which goods are available and whether or not I can afford various things. With individual giving, you're just individually making yourself financially worse off than other people with none of the ameliorating effects.

But let's leave all those problems aside for the moment and just consider this question about difficulty. Is it difficult to give away more? For me, I would say that the answer is yes. The pleasures that money can buy speak to me just as they speak to anyone else, and it's not news that in our version of capitalism the forces encouraging you to buy things are relentless. When I have discretionary income, I want to spend it. More treats for me! More gifts for my people!

It's interesting to me that the question of automation comes up in this domain. I see the point: if you automate the process of giving, then the giving happens automatically and there's a sense in which you don't have to "make a decision" about it over and over. It just happens. You're locked in.

But you know what? For me, there's locked-in, and then there's locked-in. Voluntary automated systems that take money away from me are just not the same as involuntary systems like taxation. They're not the same because I can simply change my mind any time. And knowing I can change my mind any time, continuing to give requires the same mental energy and the same motivation and the same -- let's be honest, struggle -- that non-automated giving entails.

I don't know what it's like for everyone else, but I'd say there are some reasons to think my feelings are not uncommon. We're constantly reading that people are not saving enough for retirement, or saving enough for emergencies, or allowing their credit card debt to pile up. If automating a payment system solved the problems of motivation and commitment, then dealing with these problems would be a no-brainer for most people. But obviously that is not the case.

So, while I don't buy the framework of comparing voluntary giving to taxation in addressing poverty and inequality, I will say this: within that framework, my answer to the question of whether giving away more money is easy or hard is clear: it's hard, not easy.

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