I watched Living on One Dollar on the Canadian Netflix tonight. It had the impact one would expect. Some (a lot!) people are very poor in this world, and it’s sad to think about. I felt sad watching it. But here in the first world, you don’t have to look far to find heart wrenching stories of third-world poverty. It’s everywhere, everybody knows about it, and everybody has felt sad about it. Despite massive awareness of the problem, few are willing to reach into their pocketbooks to fix it. A more controversial truth is that when they do it doesn’t seem to help very much. The idea that if only people cared more the problem would be fixed has been the a huge distraction. Effective altruist groups are necessary because so much altruism is ineffective. And they’re ineffective because they’re cognitively lazy.
It’s always more about the care than the effectiveness. There’s a reason why people focus in on America’s low % of GDP charity donation rate, rather than their very high absolute donation rate. Which one helps the poorest of the poor more? Of course it’s the number of actual dollars spent. The poor aren’t helped more because you donated 10% of your income instead of 2%. They’re helped more if you donated $100 rather than $20. One shows that you care more, and one helps more. And everyone I’ve ever met wants to hone in on the one that shows that you care more.
Look at it this way. People care. People care a lot. They care so much that it hurts. Rational hurting people use the least cost method of relieving themselves of the hurt. The first best solution is to ignore it, and they do. But what if they can’t bare to ignore it? They donate. Now they can feel good about themselves. They can tell themselves that they donated and they feel better. Problem solved. But it isn’t the problem of poverty.
What I liked about the movie is that wasn’t all about caring. It was about understanding. It was explicit in communicating how complicated poverty is in the real world. I was glad to see them help popularize microfinance, which I’ve heard so many good things about from development economists.
Something I was surprised by in the movie was how much of their income taken up by purchasing firewood. That’s not what I would expect.
The movie also pointed attention to the importance of child labor. Of course child labor isn’t ideal (those kids should be in school!), but when you take it away families often starve. I hope it will incite serious consideration from people who want to just take away child labor as if it were the problem rather than an unfortunate solution. This point has been made by economists across the political divide, see Paul Krugman or Benjamin Powell.
The movie also pointed attention toward how important the variance between very low incomes can be. It’s very easy for us in the rich world to conflate $.50 a day, $1 a day, and $2 a day like they’re the same. In reality they’re very different. In the movie the group had a four day streak of only receiving $2 total and it was much worse.
