Book contents
three - Does economic theory lead to a cynical view of philanthropy?
Published online by Cambridge University Press: 07 May 2022
Summary
Introduction
It is particularly vital that non-economists have access to a clear view of economic thinking on the general matter of philanthropy.
A casual thought about traditional mainstream economics might suggest that, as the ‘dismal science’, it would have little to say about ostensibly non self-directed behaviour. I will explore the extent to which this is true. In the last twenty years or so, there has been an increasing amount of economic work that acknowledges social formations – see Ostrom (2000) – and looks at psychological aspects of individual choice. This widening has become even more extended recently in the form of neuroeconomics and ‘nudge economics’
Detailed interest in philanthropy is comparatively recent in economics – mainly in the last thirty years or so. The view most consistent with the traditional core of economic theory is the fundamentally selfish one in which giving to others (in whatever form) is only carried out as a source of instrumental utility to the donor. Cunningham showed in Chapter 1 the animosity of political economists to charity and philanthropy. They believed that the rate of wages should be determined by the market and market only, therefore ‘charity's meddling interfered with that.’
For the economist, giving becomes a commodity which is traded off against other more conventional commodities. Some economists attempt to give this a more rigorous foundation by rooting the degree of philanthropy in sociobiology. But this is still a fundamentally selfish approach, even though textbook accounts such as Frank (2008, p212) call the person who is donating ‘non-egoistic’. Particularly worrying is the tendency that some economists have to bandy about the word ‘natural’ in an ill-considered way. For example, the short paper by Scharf (2012), an economist who seems strongly supportive of prosocial behaviour, describes the work of Benabou and Tirole (2006) as assuming that individuals are ‘naturally greedy’. Ideas that individuals are naturally weak in prosociality might lead to the proposal that some intervention is needed by government, independent charities and corporations. Thus social justice cannot be attained by individual initiative alone in the framework of a market economy. New philanthropy can be seen as a challenge to the ‘natural greediness’ thesis as we see incredibly rich people not just giving but driving others to do so.
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- Information
- New Philanthropy and Social JusticeDebating the Conceptual and Policy Discourse, pp. 47 - 64Publisher: Bristol University PressPrint publication year: 2015