The paradox of effective altruism

Tomasz Kopczewski and Iana Okhrimenko

Journal of Institutional Economics, 2024, vol. 20, -

Abstract: Normative reasoning within the mainstream economic framework has been largely shaped by utilitarian ethics. The growing popularity of effective altruism indicates that the utilitarian spirit has also permeated the sphere of social sentiment, evaluating our pro-social behaviour and charitable giving in terms of efficiency. The present study assesses the appropriateness of judging social outcomes through the prism of allocative efficiency by questioning to what extent the society of effective altruists is robust, sustainable, and resilient. Using computer simulations based on the dictator game, we demonstrate that a society of welfare-maximising effective altruists can achieve an optimal outcome alongside equality under extremely restrictive assumptions, such as the uniformity of giving strategies (i.e. interacting with other effective altruists exclusively) and initial equality of wealth distribution. Yet, in the world of unequal opportunities, utilitarian giving tends to increase wealth disparity. In addition, in polymorphic societies, effective altruists underperform compared to deontological (or unconditional) altruists. Consequently, we demonstrate that striving for allocative efficiency might undermine the equality and resilience objectives and question whether the former should remain the dominant economic normative principle.

Date: 2024
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