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Ask the Readers: What Are the Moral Implications of Spending?
Published on - May 6th, 2011 (Modified on - May 16th, 2011) (by J.D. Roth)
Most reader questions I share at Get Rich Slowly are meant to solve a problem — somebody has a financial dilemma they're hoping you folks can help them fix. But Rita sent a different kind of question. She doesn't want to solve a problem — she wants to stir debate. Rita writes:
I ask myself "How much is enough?" several times daily. My husband and I make good money — over $100,000 in combined income — own a home in an expensive city, have two large dogs, and are able to buy most of what we want. I don't have a problem with normal spending, but I often feel bad when I purchase something really nice (such as a nice purse, a collectible book, etc).
- On one hand, I can afford these things.
- But on the other hand, I still feel that it's somehow wrong that I continue to buy this stuff while many people in the world cannot afford clean water and food.
Just yesterday, I read an article on an entertainment site about Steven Spielberg's $200 million personal yacht. I think that this a a crazy, immoral waste of money. He could make a HUGE difference by using that $200 million for charity.
I guess my point is: Am I really any better? No, I'm not buying a yacht anytime soon, but I do buy luxury items. And someday I'd like the satisfaction of being able to buy my husband a Range Rover. (He loves those damn cars.) My husband doesn't feel guilt for having these things, but (if I'm being completely honest with myself) I do. Oddly enough, I majored in finance in college and am currently studying for the CFA exam, so the topic of "efficiency and equity" is really on my mind.
Four years ago, prompted by this thoughtful essay in the New York Times, I asked: What should a billionaire give, and what should you?
In this essay, philosopher Peter Singer discussed the magnitude of charitable donations from the two richest men in the world: Warren Buffett contributed $37 billion to charitable foundations, and Bill and Melinda Gates gave $30 billion. Singer wrote:
Philanthropy on this scale raises many ethical questions: Why are the people who are giving doing so? Does it do any good? Should we praise them for giving so much or criticize them for not giving still more? Is it troubling that such momentous decisions are made by a few extremely wealthy individuals? And how do our judgments about them reflect on our own way of living?
Singer's article discusses the ethics of giving, and tries to establish some guidelines. (It's a fascinating read but it's long, so budget half an hour or so.)
After years of dithering, I'm finally moving forward with philanthropy in my own life. I've been researching (and finding!) causes to support. I've been exploring the possibility of volunteer tourism. And one of my goals for Awesome People is to donate all profits to charity. (I'll share more about my forays into philanthropy in coming months.)
But Rita's question is about more than just giving. It's also about consumption. When we buy things, there are ramifications across a vast economic web. This is why some people are willing to pay a premium to buy local or to buy organic. It's also why some people insist on buying American and others boycott specific items. (Some people refuse to buy diamonds; my high-school social studies teacher refused to buy bananas.)
On a basic level, every time we choose to buy a comfort or a luxury, we're also making the choice not to use the money to help somebody else — whether in our own community or in the world at large. To what degree is this acceptable? To what degree is this reprehensible?
This goes beyond just the personal level, of course.
- Today as I drove into downtown Portland, I passed the $37,000,000 Mercy Corps building. I winced when I saw it. Mercy Corps does great work, but how much more great work could it have done with the money it spent for its new headquarters?
- Or what about the humble country church my family attended when I was in high school? About a decade ago, the congregation spent tens of thousands of dollars to pave the parking lot and to build a new kitchen, gymnasium, and office. Is this what Jesus would have done? Or would he have used the money to help the poor?
I used to think there were clear answers to questions like these. Now I'm not so sure. What is right and what is wrong? What are the moral implications of spending, especially on Wants? (I doubt anyone would argue that we shouldn't spend on our own Needs.) If I spend $1500 for a pair of season tickets to the Portland Timbers, is this immoral? What if I also contribute $15 to a charity to make amends? $150? $1500? And at what point am I just "buying" a mental pardon?
Some of you will argue loud and long that there aren't any moral implications to spending. Others will argue just as loudly (and just as long) that every economic act carries a moral and ethical component, that our financial decisions have meaning. I can see both sides.
What do you think? What are the moral implications of spending? When is it okay to buy a $200 million yacht? Is such a decision ever justifiable? Always justifiable? If Steven Spielberg also donates $200 million to charity, does that ameliorate this obscene expense? And what about on a more mundane scale? Are there any absolutes? How do you decide?
This article is about Ask the Readers, Choices, Consumerism, Giving
Funny this question should come up now. I've just been wrangling with this question in my own life.
We recently took a trip. We went to Asia for the weekend (from the East Coast of North America). There was an amazing seat sale, we had a long weekend with no plans, we have the money, we pay extra on to the mortgage, no debt, etc. etc.
It was wonderful and something we (very likely) won't be able to do one day when we have kids. But we very nearly didn't do it because of these questions:
And yet, I was wracked by guilt- at least before we went. How could we do this? Wasn't this a giant waste of money? Couldn't it go to something else? Shouldn't it go to something else?
What would people think of us? Would they think we were irresponsible? Sneer at us? That we had gotten "too big for our britches"? That we're selfish? That we should have shared our wealth (either with them or otherwise) if we were doing so well? *What had we BECOME*?
I'm not sure those questions were actually resolved. They've just faded to the back of my mind now that we're home and settling back into your routine. But I would think twice about doing a trip like that again- not because we didn't have a great time, but because of the moral weight of it and the feeling that I was doing something very wrong.
I have always worked very hard to be "good." I worked during high school, worked during college (including during a semester abroad), and pursued very tough curricula (IB/AP, double major with research projects plus an honors thesis). My sister has always traveled extensively – Hungary, Switzerland, Morocco… but I'd never been able to visit her. I never thought it was "right" to spend my money on such luxury.
The summer after graduation, however, I knew I needed something to re-set after a rough "senior" year (I graduated in three years…). I was already planning a trip to Calgary to present my thesis at an academic conference. Still, this wouldn't be so relaxing – it was work. When I realized that I had enough money to afford a fantastic deal on round-trip airfare to Paris, I jumped at the chance. And I don't regret it one bit. I had two and a half days in Paris (plus another day if you count an overnight rest at De Gaulle…) with my sister, and it was one of the most fantastic adventures I've had.
Don't feel guilty for spending your money on yourself. If you didn't take a break on occasion, you'd burn out!
I have no problem with someone analyzing their own spending; I do this myself all the time. The difficulty begins when someone decides another person's spending is immoral or "obscene." I worry that our society is headed toward a war between the haves and the have-nots, and the day will come when a person is not allowed to spend his money as he wishes.
Exactly, we have the right to choose how to spend our own money. It immoral to tell others how to best spend theirs.
How many people are employed serving peoples wants? Millions, if people stopped buying wants they then might end up needing charity themselves because no one needs their goods anymore.
Think of how many people where employed creating a $200million dollar yacht. from the miners and loggers, to the steal mill a wood mill workers. to the welders and craftsmen, to the designer and foreman. That $200m didn't just disappear, it went from hollywood(someones wants to see a movie) to a miner and his family. That miner could have been in South American or Africa.
Sometimes spending is actually better than giving. Didn't Jesus even preach something about give and man a fish and he eats for a day but teach him to fish and he eats for a life time. So if people didn't build yachts with movie money a miner in South America might not have a job.
What a good answer!
Obviously, a $200,000,000 yacht is a bit excessive, but this is a pretty tough question. How much is too much?
My wife and I are on course to be moderately wealthy in a few years, and I've often asked myself this very same question. Ultimately, I don't think it's the right question.
The more appropriate question is, what brings true happiness? For many of us, we believe that stuff will make us happy. Frankly, this is just stupid. Stuff is fun for a while, but ultimately, it's relationships that matter.
Money should be used to help others in this world, not yourself. A $200 mil yacht is selfish, and so is a Coach purse. None of it is necessary, and none of it will bring true pleasure.
I agree with everything except your last paragraph, particularly this line: "A $200 mil yacht is selfish, and so is a Coach purse."
If you enjoy purchasing luxury items once in a while, and can afford them, why not? The pleasure I get from my really nice brand-name bag (great construction, fabulous-feeling material, sturdy and useful pockets) is worth it to me.
I am an ethically-minded person who works for a non-profit organization. I also don't LOVE shopping that much and would rather buy a few nice pieces of clothing or accessories than a bunch of lower-quality items that may not last as long, forcing me to replace them sooner. Even if the items cost more initially.
I like good quality items; and some of them have brand names and are moderately expensive. This is my personal choice and preference.
Also, what if the higher priced one is the more ethical product? A £20 handbag was most likely made by slave labour in a 3rd world country using their local resources that probably weren't harvested in the best of ways. Isn't it better to spend £100 on a handbag hand-made by a fashion student who lives in the same city as you and sourced their leather from a UK tannery?
Personally, I think all consumption in wrong. Yes, all consumption. Humans are a fundamentally flawed species who over consume in every way and have wrecked the planet. We are a nasty species. But then, hey, I'm a "crazy hippy" so my opinion is invalid.
As for the giving money to charity thing, read the blog Good Intentions Are Not Enough. It highlights many of the problems with charities. A lot of charity does more harm than good (by wrecking the local economy, or setting up an infrastructure locals can't maintain, or building something they don't need etc)
I was following you merrily until you said you would do away with all consumption. Maybe the earth doesn't consume (though it's fed "freely" by the sun, making her a trust fund baby), animals however need to consume in order to exist. We then return our remains to the recycling plant so they can be used in the production of new units. May sound mechanistic to you, but I think it's a beautiful way to live.
I'm not disagreeing with you, I like post #2, people have the right to spend their money on what they want. But I don't like it when people use the "excuse"- "it'll last longer" with something like a purse. I don't think a $400 purse will last longer than a $100 one. I also don't think that my $100 bag has lasted much longer than one I could have gotten for $40 in a department store. I also think some higher priced garments definitely WILL last longer.
Some higher priced items do last longer (I'm convinced this is most true for leather goods – shoes, purses, et al., provided you're careful to pick a color that will last a long time such as brown or black). I've had the same favorite dress shoes since high school, and I still wear them to work.
This is pretty much exactly what I was going to say. The recent posts here on GRS about how money CAN buy happiness pointed out that it's not in the way of buying an expensive purse. True happiness has to come from within, and even the excitement of an expensive yacht will wear off eventually, and may even bring about more problems in one's life.
I also feel that fundamentally we're lying to ourselves if we think that our purchases of items don't come at a cost to someone else, whether it be from underpaid labor or the environmental impact it has. The consumption of STUFF has caused huge problems across the world, even if we don't see it because we're lucky enough to just buy our Gap t-shirts and not see where they came from.
LifeAndMyFinances (comment #3):
You're last paragraph is very judgmental. I took a peak at your website and found:
Since I am typically "the finance man", I am often so focused on putting money aside to pay off our debts that I forget about our many blessings and our opportunities to give. Thankfully, my better half has a heart that's the size of King Kong (no physical resemblance though), and makes me aware of al the worthy causes available.
Interpretation – you are so completely focused on yourself (selfish) that your better half has to remind you to be charitable.
This behavior is the opposite of your judgmental comment. Look to yourself first before you throw stones at others…
Umm a coach purse is selfish? I can see how that would be the case if I was living paycheck to paycheck and decided to buy a purse instead of buying shoes for the kids or something. But, honestly a coach purse holds up better than one from target.(I speak from experience.) We were at the coach outlet in Vegas and my hubby told to to get one if I wanted. There was a nice one on sale for $200. I thought it was too much so I declined. I just noticed that my recently purchased $30 target purse has a big hole in it where the strap couldn't handle the weight. damn…I should've taken him up on the offer.
I don't think the poster was trying to pass a judgement on the "selfish" buying of a Coach purse. I interpret it such that certain luxuries may benefit nobody but ourselves, but that doesn't mean we can't indulge occasionally. A $200 million yacht may also be "selfish", but it's a quantitative difference, rather than a qualitative one. We all have to choose where to draw the line.
I think this xkcd comic is really good:
On a more serious note, it can be good to budget one's charity. Choose a dollar amount or a percentage amount of income or some other target, just like any other portion of what you spend. Then plan your spending around that. Like the comic, you don't want giving to be a chore and something that causes you deprivation… if that happens you might stop giving at all.
By planning charitable giving first, just like you plan savings first, you should be able to spend guilt free, because your spending choices are being made at the expense of other spending choices, not at the expense of giving.
This is exactly what I do. I give away more than 10% of my gross income annually. I don't feel guilty about my splurges because I know I'm generous to others as well. Over time (after we pay off the mortgage, etc.), I would like to up my percentage even more. I think it's important to give but I don't think you have to be a (financial) martyr either.
Exactly; that's the only way to do it, I think. Make charitable giving a part of your life, but not so large that it's making you suffer.
In the social justice field, burnout is a huge problem. People throw everything they have into their work, and after a few years they are so emotionally drained that they just can't keep going.
It's the same thing with finances – the xkcd comic illustrates this, ironically. There comes a point when you're asking too much of yourself, and when that happens, your response is going to be to do nothing. And THAT is what we must avoid at all costs. So give what you're comfortable giving, give in a way that it's going to be sustainable, and accept that you'll never be able to live your life perfectly.
(incidentally, this is why I get annoyed when people do things like JD rolling his eyes at the Mercy Corps building. First of all, the more financially secure an organization is, the longer it'll be able to stay in business – and real estate is a great boost to financial security. But more importantly, people who work in nonprofits already deal with lower earnings and a constant sapping of their emotional energy. Must we also ask them to sacrifice comfortable working conditions, well-deserved bonuses, and other benefits that no one, not even shareholders, ever complains about in the private sector?)
Re Mercy Corps building, it could also be that the new building is more cost efficient over the long term (better insulated – lower utilities; more room – no need to rent big conference rooms for big meetings & etc).
I used to work for another highly regarded non-profit and they refused to let us buy a vehicle b/c it would make their numbers look bad, even though it would have had a HUGE positive impact on reaching the needy community. And there was funding for it!
I also get irritated when people are upset with non-profit salaries. They deserve to have a living wage too!
"…every economic act carries a moral and ethical component"
Yes, and the debate itself goes back to the idea of self-discipline. People used to flagellate themselves to get control over mind and body, now we worry about ethical spending (and eating habits, and smoking and so on). I'm not saying it's wrong, but that it taps into something basic.
And of course the spending — moral, immoral, outright ridiculous — means jobs for the people who make the stuff. (my husband is one of them; I'm very grateful for the folks who bought hand-forged curtain hardware all through the recession.)
For the other side of the argument, I recommend Sider's Rich Christians in an Age of Hunger. He even has a plan you can implement if you want to scale back your wants, even your needs, in order to give more.
The assumption with consumption is that no one wins. When Steven buys that yacht he actually employs tons of people. People who: built the yacht (including the hull, radios, buoys, rails,ropes….), put the yacht together, food services, janitorial, sales, advertising, financiers, maintenance (we have a small boat and it lives for the shop!), yard hands, chummers, tackle producers, pilots (for the helicopter) goes on and on.
The Pitt- Jolie spend more than a million just on child care every year. Those are great jobs for those who are in that line of work.
Really- how do you make YOUR money (not you specifically JD- but all of us)? Are you not dependent on someone buying your "product"?
The people are unemployed because our economy is consumer based. Several members of my family in real estate sales and construction.
You know what their economy has looked like in the last few years. When the price of food goes down- then the unemployed are farmers.
How can we help the poor- give them a job that they can do. What are those jobs? Well….that is another discussion.
Jesus never said not to build a Church. Seems to me he attended the temple pretty often and his followers worshiped in Synagog throughout their time. Yes, they fed people, but often that food was intellectual discussion. Giving of actual food and jobs- not so much.
He was a teacher. Think about it.
I have lived in rich and poor countries and traveled to many more. Charity begins at home. Care for your family and then community- move globally the more money you have. Stay within your means so you do not hurt a huge group of people when you cannot pay your bills. Be conscious that the things that you buy HELP a long line of people.
Never try to compare country economies- it doesn't work.
My father used to say that if the intellectually gifted just lived in small caves- there would be no jobs or advancement anywhere. He employed about thirty people from all walks of life, lived in an expensive house(gardeners, pool men and such), spent lots of time working at St Vincent de Paul and was one of the truest Christians I have known.
Well said. After reading the original post, I was thinking along the same lines and came to make sure this point of view was represented. It is not just okay, but virtuous to pay someone for their quality work or to receive payment for quality work. When you employ others through patronizing their employment, then you encourage them to grow. Charity has to be structured very carefully to achieve the same.
Also, folks spending on those yachts and luxury items develop new technologies and processes that are too expensive for mass-production up front, but over time can seep down into consumer products for the rest of us. Many Americans really can't imagine life without a car with much realism, but if it hadn't been for wealthy people purchasing them when they were scarce, the technologies and infrastructure wouldn't have been established for the rest of us to use.
Agreed and well said by multiple people on the "consumption promotes a better standard of living" front. It may not jive with our altruistic sensibilities but from an economic development point of view, it's usually better to provide people — and usually specifically women — with a means of earning a living than it is to give them handouts. (The hardest part, as mentioned by one commenter, is the country's government must be stable…in some cases giving people the food and clothing and shelter they need to survive is the only way to go.) A very interesting and readable older book on this topic is the book "Travels of a T-Shirt in the Global Economy." The premise is that countries that have opened themselves up to textile development, starting with England, America, moving to China which is now more developed than many of its neighbors, and then moving down into the "cheaper labor" in lesser-developed countries — each country along the way has seen substantial economic growth at the expense of sometimes sub-par working conditions. I'm not in any way saying the answer is to open more sweatshops, but what I am saying is that we shouldn't have to feel guilty about money that we are spending. Even buying a cheap t-shirt souvenir puts food on the table for more people than you would imagine.
I question the appropriateness of focusing locally. It's a convenient rule, but it will perpetuate inequalities. It also seems a little arbitrary: If some people 50 miles away need better textbooks but people 5000 miles away need food and water, we're supposed to believe the people 50 miles away are more deserving of our attention?
I definitely agree that consumption provides jobs to needy people, but I think that those that need it most don't have the opportunity to have such jobs. Buying a boat or a luxury purse helps skilled craftspeople, but doesn't help so much starving children in africa (who are too hungry, and diseased to learn a trade).
I like to think that the best charities help people enough to get on their feet, and give them a push in the right direction (and if you did your job right, they can take it from there). The problem is when people get stuck in a cycle of poverty they can't escape, not that there are people who have marketable skills (i.e. boat building) who just aren't applying themselves.
Starving children in Africa are starving due to government instability. Stable governments breed stable economies, which over time will improve the fortunes of everyone in the country.
No amount of charity will ever lift the children out of poverty if the country doesnt stabilize first. In fact, aid usually ends up in the hands of the corrupt strongmen who just perpetuate the instability.
Also, free food, free clothes, etc… given out often help destroy local demand for food, clothes, etc…
Charity and aid should be reserved for refugees fleeing a disaster, either manmade(like war) or natural(earthquake).
What about charity to education organizations that help the people learn to think for themselves and form better governments for their future?
As a fundraiser for an educational institution, I couldn't agree more Chett.
Of course, a contributing factor to government corruption and instability is the destabilizing work of developed countries trying to get resources for their own production and consumptions. And now we're back to making choices about what we buy, where it comes from, and who it hurts.
Yes, Brenton, you are right. When we send food that doesn't make it to those starving, the answer is not to send more food. We first need to have relationships with those governing these poor and start by having their support. Desalination plants are made small, portable, and solar powered. Teach proper farming, then bring in education.
I am as much against child labor as anyone, but if that child is working to pay for food for the family, stopping their work may cause them to starve. I certainly don't have all the answers, but whatever we are doing now isn't having enough impact.
You can say, the $200 million yacht put people to work and did good because it allowed them to feed and take care of their own families needs and wants.
But say $200 million goes to purchase mosquito netting, vaccines, etc. The people who manufacture mosquito netting, vaccines, and other items can then feed and take care of their families.
Basically wherever we make our economic demands, the people and the jobs will shift.
Its a conscious absolving rationalization to say that purchasing a $200 million dollar yacht helps other people. What are the opportunity costs of that $200 million yacht? The opportunity costs are for the pharmaceutical companies and their employees who manufacture and research drugs, for the mosquito net manufacturers, and for the people who die because a mosquito bit them and they had neither the drugs nor the physical device necessary to prevent malaria.
I indulge myself in unnecessary goods and services, like most of us, and I'm sure there are good arguments to be made for an individual purchasing luxury goods/services, but the mere fact that those purchases help people is not that argument.
So if it's immoral to pay $200M for a yacht, is it also immoral to build a portion of the yacht and accept payment for it? I think that the answer has to be yes. But since I can't imagine that it's immoral to be paid for work (yacht builder), then I don't see how it can be immoral to pay someone for their work (Spielberg).
Or think of it this way. How did Steven Spielberg make his millions? He made entertaining (and well-marketed) movies. Would the money that we spent on tickets to Schindler's List have been better used to buy mosquito netting?
I suspect that the objection to Spielberg's yacht isn't that the money would be better used to buy baby formula for malnourished infants. Rather, it's a visceral aversion to ostentatious spending. If one really were serious about always using their resources for the greater good, then one would never buy anything that wasn't absolutely necessary. No iPhones. No laptop computers with which to view GRS…
Well said, B.
Wouldn't it be better for people how needs netting to have a job so that they could afford to buy their own netting. What if that job was mining minerals that went into building $200m yachts?
So perhaps the moral here is to spend money on industries and companies that you feel are self-sustaining and ethically run. We heavily investigate the charities we donate to. Why don't we do the same with other purchases?
-By purchasing an electric car, for example, you are supporting that industry and enabling a company to develop a cheaper product down the line. Emerging technologies have major start-up costs and often rely on affluent "early adopters."
-Supporting ethically raised meat products (whatever your own personal standards may be) means paying a few extra dollars so your meal didn't suffer before it got to you.
-If you MUST buy that yacht, buy it from the company that is known for treating its employees the way you would like to be treated.
So really, when you make a purchase, try to maximize your "trickle down" effect. When you make a purchase you are creating/sustaining jobs. But are those people working in a sweatshop or a supportive environment?
Was thinking the exact same thing – i this debate you have to consider job creation and the types of jobs as a positive offshoot of spending. I might add that high end (and probably customized) items like yachts employ highly skilled (probably domestic) craftsman and manufacturers, while something like a purse or shoes are outsourced to lower-skilled labor. Not a judgement here, but it's something to consider when making purchases – what kind of jobs are you supporting. Same reason I try to seek out locally grown produce – more expensive but I want to support that type of business.
As other commenters have noted in their replies, "Well said." I have no problem with people going out and spending money on themselves because it keeps the wheels in this economy moving and keeps people employed. The more the money changes hands the better, and when it gets taxed at each exchange along the way, then society gets a net double win–employment in the free enterprise and tax money for our infrastructure.
I do and will continue to donate to charity because some causes are worthy and aren't otherwise supported by consumer spending. But I have no qualms about spending money on myself since my money is keeping people employed–the only qualms I have is making sure I stay within my budget!
It seems what people are trying to do is justify spending on a huge consumer purchase with a cost/benefit type of analysis. I am not going to comment on whether or not the purchase of a $200 million yacht is moral (I haven't even decided for myself), but just want to comment on some alternatives.
Someone else suggested mosquito nets and vaccines, and the example I had in my mind is cancer research. Spending/donating money to any of these causes creates jobs, but not all the same jobs, and not with the same economic impact. As far as job creation, in principle the economic impact of all of these choices (and others) can be measured and compared. With cancer research, you are employing scientists, technicians, equipment manufacturers, etc… Its not like the money is just going to sit there, it will be spent, just in different areas than the money going towards a yacht.
But like other people have said, thats not the whole story. I think the arguments about future technological developments in the yacht case are fairly weak (though I may be wrong). But with the mosquito nets/vaccines and with donating to cancer research, there are benefits which are a little harder to quantify in terms of dollars and cents. If you had $200 million to spend, only doing a cost benefit analysis, you would still somehow have to include some type of measurements for saving human lives into the decision.
You said it right! There is no problem with us buying and not feeling a sense of guilt about it. It becomes obsurd quickly when we begin doing the "If you really cared then you would…". Don't ever buy a Big Mac, if you really cared you would buy a sandwich from the dollar menu and donate the saved $3 to charity. Really? I don't care about others if I buy something for myself?
It is oppurtunity cost. Whenever we spend our money, then we lose the oppurtunity to use that money for other things. If you can afford a $200 million yacht then buy it! Invite me to enjoy it with you! There is nothing wrong with this. Is there other things that the money could go to? Certainly, but unless you are a monk who is the epitomy of the minimalist lifestyle, then you can't judge. I don't remember seeing the "teach a man to fish" proverb in the bible, but Jesus did say that he who is without sin can cast the first stone. So if there is anyone out there who hasn't blown money on themselves then blast away at Steven. I know that I can't say anything, I enjoy a Big Mac from time to time.
Well, I am somewhat similar to the writer. We have no debt(no mortgage and nothing else)and are retired with pensions and 401Ks plus more than enough to keep us more than decently. We have traveled, we have fixed up the house but we give to charities as well as using our retirements to volunteer at a number of places on a regular basis. What is morally wrong or right? I think there are people who could give more and do not-esp among the really rich. However, I don't really know what they do or don't do with their money.
What I do know are people who are retired like me and rarely or never give of their time/money- that I find is morally wrong-because I know these people. I have a strong belief that one who has been blessed(yes, even if it was through one's own hard work) to have a comfortable life should give back to their community and the world. If one of these friend bought a Coach bag- I wouldn't have a problem but spending her days on the computer/TV/reading/shopping w/o giving back is wrong to me.
If every one gave all their "excessive" income to charity, their would be a lot less "excessive" income to give. People respond to incentives, for most people that is money. Through their hard work the world is a better place. Charity is good but should not be expected. Bill Gates helped more people earning his billions than he has helped through his charity. Think of how many discoveries, enhancements, etc. have been created thanks to cheap computing.
Of course, when Bill Gates was making his money he was helping people who had already been helped, i.e. people who had computers (which are not cheap by Third World standards) and electricity to drive those computers. Now he's helping people who has not been helped before.
The other day on "Survivor", a tribe had conflict bc one member wanted the "crispy rice" at the bottom of the pan and they were saving it for another. Even when you get down to the barest existence there are still natural inequities–not everyone could have the crispy rice.
It's physically and emotionally impossible to exist in this world without taking resources that another could use. Until you are the worst off in the world, there will always be someone who needs your resources "more" simply due to their relative lack. I see the point in helping others to the greatest extent you feel comfortable with, but I see nothing wrong with enjoying luxuries that you can afford.
The question is difficult for me to answer because in some ways I cannot fathom spending 200 million on anything. It's such a huge amount of money for the average Joe or Jane to contemplate.
But who I am to say what someone should or should not give to any charity, or how they spend money on their wants/luxuries? If it's your money that you earned, then it is your decision to make. I would only hope that those that have so much would be willing to help those that have very little, or nothing.
I agree with you. It's not my place to judge how others do or do not spend their money, and I don't appreciate those who judge how I spend mine.
I don't think anyone here is telling you how to spend your money. Rita, on the other hand, has generously requested that we judge her for the sake of a thought experiment.
So she's totally fair game.
Right, I just struggle with that concept. I am incredibly critical of my own spending and am conscious of those decisions. I find it appropriate to reflect on the whys of my choices and frequently assess my budget, including spending and charitable giving. When others invite the outside opinions of others, I have a hard time walking a line between judgement and the sharing of my personal experience/vantage point. What's right for me or what makes sense to me, may or may not add value to your own situation or be relevant to your decision making process.
True, and we all come from somewhat different backgrounds.
I don't give anything worth mentioning to charity right now, but I do feel a strong compulsion to give back to society. When I think about the circumstances that produced my current, happy, motivated self, I am floored at my luck.
So why don't I donate more to charity? Why don't I volunteer much of my time?
To use a video game term, I'm busy "leveling up." I'm fighting lots of easy enemies before I go on to fight the "boss". I'm paying off my student loans as quickly as possible, teaching myself a million things, and trying to transform myself into the sort of person who is not only willing, but able to help others without burdening the system while doing so.
In the meantime, every luxury purchase feels like going deeper into debt – moral debt. It's going to take a lot of work/donations/good deeds before I start to feel like I'm in the black again.
To the next person, this worldview might look like I'm trapped by guilt and imposing my (eeeeevil) moral will on the world. Who am I to judge what is good or not? In fact, what if my good intentions are actively harming the system which brought me (and others) so much happiness?
Moral debates are always accompanied by a big fat "it depends." But they're still useful, because they allow us to examine our beliefs and remind ourselves of our goals in life.
What's important to me is that I'm consistent within my own moral framework. If *I* purchase a Coach bag (forgive the cliche), it is an immoral action for *ME* to commit. I don't feel the same way about the next guy. But I am curious about his justifications, or whether or not he's thought it through.
There is nothing wrong with spending money on Timbers season tickets.
Now if you were spending $1500 on Chivas USA or NY Red Bulls tickets……….
James, I'd like to take this moment and thank you for your soccer smack talk.
- a DC United fan
I agree with Jan. Spending is creating wealth for someone else so there should be no guilt associated with it.
In fact, one could argue that spending and 'charity' aren't too different, just different means to achieve the same goal.
By that line of thinking saving would equate to hoarding and should be used for your future self and / or family. Saving without spending could be selfish. For example imagine having tons of gold buried in your yard that only you know about but you are too miserly to spend and then you die. The gold stays buried, nobody spends it and none of this wealth is ever distributed. Ok, maybe some kid finds it years later and is super happy but if that doesn't happen I would argue this is WAAY more selfish than the dude who bought the $200M yacht.
55I disagree on two points. Spending and charity are not different means to achieve the same goal because they're aimed at different segments of the population (generally).
To me, charity comes in two forms. 1) give a man a fish, 2) teach a man to fish.
Whereas spending is 3) buying the fish from the man that already knows how to fish.
I think there has to be a balance between the three, but I haven't got a formula for finding that balance. You need to give the man fish while he's learning to fish, and then you need to buy his extra fish from him so he can hire more people and expand his business.
The other point of disagreement I had was that saving is selfish. Sure, if you put your money under a mattress or bury it in gold in your yard. But (ideally) your money is being used by the bank to extend a loan to our intrepid fisherman so he can buy a bigger boat now and increase his profits and pay back the bank with interest. And then the bank can re-invest those profits or reward you, the customer, with higher interest rates in your savings account.
Or your savings can bypass the bank and you loan it directly to a company (buy shares) or the government (buy bonds). The company will use the money to fund/expand its operations and the government will use it to build roads/buy bombs/etc. The point is, the money you are saving is actually in use (aside from the required amount of capital a bank is required to maintain).
Good points- I like your 3 classifications.
Saving if put in the mattress (true definition of saving.. not investing) doesn't help the economy until it is used for investing. Do you agree with that?
How about this? Hiding money in mattresses and burying it in the yard most certainly does not help the economy. Until you dig it up and spend it.
"Saving" it in the bank, so the bank can lend it out to others, does help the economy.
"Investing" it in the stock market, so that companies have more capital to invest, also helps.
If the fisherman buys a bigger boat, is he being selfish? Shouldn't he just give the money to a fishermen who doesn't have a boat? And if a fisherman without a boat get the money, should he give it to another one who doesn't have a net or a pole? It can keep going this way forever. At what point would it be okay for the fishermen to have a fleet of boats? Or should we just have a bunch of people with a line and a hook each making just enough to get by?
Except that those other fishermen may be better off by working for the man with a fleet of boats rather than undertaking the risk of owning their own boat. Some people prefer security to potential economic gain.
Lots of great points here. But investment doesn't always benefit everyone equally. That's why the U.S. passed the Community Reinvestment Act–banks were accepting deposits in poor neighborhoods but were taking the money out of the community and not lending it locally.
I think it's important to wrestle with the personal implications of our actions, but it's not going to mean much if we don't have equitable laws that are fair to everyone.
that worked well, it was the cause of sub prime loans. If the bank was paying interest to the depositors, then these communities where actually saving and gain wealth through others mortgage payments. Instead the government encouraged these poorer people to take loans out that they could never afford to payback.
As long as one makes his or her money honestly and fairly, then no one else should get to decide what he or she does with it. Spending money does not make one "bad" or immoral. In fact, if people stopped spending money, including on luxury items, the world economies would crumble. Personal consumption is estimated to be around 65%-70% of the US GDP. Take away even a small portion of that and, pretty soon, there would be a lot more people needing the assistance that many of you on this site seem to think the needy are entitled to. In a perfect world, yes, everyone would have enough food and water and an extra $500 to spend on a Coach purse, but that is never going to happen, and those with comfortable lives should not be judged for spending money they have rightfully earned.
What is honestly and fairly?
Did Prince William come by his money honestly and fairly?
How about a person born in an upper income US family whose parents sent him/her to the best private schools, had private tutors, went to the parent's ivy league alma mater and then got a job at Dad's law firm?
The person born in the US to an average family, with public education?
The kid born in Afghanistan who becomes a poppy plant farmer?
The kid born in Africa whose parents died of aids and is now living in an orphanage?
Does it matter? We are all given a set of circumstances and opportunities in which to operate. It's up to us to determine what we do with them, whether we take advantage of them or not.
I've seen many of these so-called privilege kids who had the money, schooling, etc, who took advantage of these opportunities and worked extremely hard to be successful. Should they be denigrated because they were born into a better situation than another? If so, every person in America and many parts of Europe have been born into significantly more privilege than those in say Africa. I've also seen those with little do the same. And of course, there is always the otherside: the "rich kid" who did nothing and the "poor kid" who did nothing.
Exactly. Your life is what you make of it. Are some people born into more favorable situations than others? Of course. That will always be the case. If we "started over" and made everyone equal, it would not last, and we would get back to the same class system within a couple of generations. It's human nature. If helping people is what you want to do with your money, then by all means do it. But the only moral obligation we have is to ourselves.
"My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute."
-Ayn Rand
I could not disagree more with Andrew Comment 87.
While individual differences exist, these differences alone do not explain the inequalities and disparities in the world. People live and experience the world not just as individuals, but also in families, in communities, in nations, where larger systems (capitialism, democracy) affect the choices they have every day and where their histories affect the present.
I disagree with the notion that "But the only moral obligation we have is to ourselves."
Instead I believe that we are responsible to each other and for each other. Morality is involved in all the decisions we make, including where and how we earn, spend and save our money, and at its root that the moral question is about how our choices affect others. To think only of ourselves, all the time, is a problem.
We are on the earth for more reasons than to pursue our own happiness. Fighting injustice often causes people to be unhappy (Note all the discussion about finding a cause that makes your blood boil) but they should still do it.
Interesting, Patti, I disagree with both you and Andrew Absolutely I disagree that the only moral obligation we have is to ourselves. I think the only SOCIAL obligation we have is to ourselves…only we can decide for ourselves if we want to get off of welfare, or make a promotion at work, or save the extra money from that promotion instead of going into debt, and so on. However MORALLY we have an obligation to everyone we come in contact with not to, say, steal from them.
I also disagree that morality is involved in all the decisions we make. Unfortunately we do a lot of selfish things, we're just made that way, but sometimes those selfish acts also benefit others. It's nice to say that I might consider every single aspect of every product I buy and every company I invest my money in, but when it comes right down to it I eat hot dogs and buy index funds. You can't say I know morally every single act that occurred in the production of those two items. But just because I like hot dogs and eat them without thinking too hard about where they came from…doesn't mean that I'm not helping a pig farmer out with some extra cash at the end of the month. It is a problem to think of only ourselves all the time, though. I agree with you there. The trick, as barnetto said earlier, is finding the balance.
Don't forget that the GDP is not set in stone. I remember when we switched from measuring GNP to GDP when I was in high school. One of the significant changes was that we started counting as economic benefits things like clean up of pollution–as if the clean up was a benefit that wiped out the damage created.
We don't have to use GDP as our measure of success. And then, all these arguments about personal spending would be moot.
What a thought provoking and far-reaching question!
I think, as someone above said, the question of "how much" is the wrong question. It's more about attitude: "how much are you willing to give away?" (As a disclaimer I'm not preaching from a soapbox looking down. I'm in the crowd looking up at this person I don't recognize telling me to change my attitude about giving.)
You brought up the point about the church and Jesus. Based on what I've read in the Bible, particularly in the New Testament since we're talking about Jesus, Jesus didn't seem to care about how much money a person had or didn't have. He cared about what their attitude towards the resources they had was. Two quick examples: The rich, young man that came to Jesus and asked about getting into heaven. The guy had lived a relatively decent life. Jesus said sell all you have and follow me. The guy left sad because he had a lot and couldn't give it up. The other example is the widow that gave two pennies to the collection plate. Jesus pointed this out to his disciples saying she gave more than any other person. In both cases I believe that he's focusing on the attitude of the giver not the amount they give or the potential they could give.
So is it wrong to have nice things? No, not necessarily. Is it right to give away everything so that you live no better than the poorest person in the world? No, not necessarily. It comes back to what is your attitude when you give.
Think about this: Is the $200 million yacht excessive because it's a $200 million yacht or is it excessive because you don't have and can't fathom having $200 million at your disposal?
As an aside, what if you didn't get a tax deduction for giving? Would you still give? Would you care if people didn't know it was you that gave?
"Think about this: Is the $200 million yacht excessive because it's a $200 million yacht or is it excessive because you don't have and can't fathom having $200 million at your disposal?"
Well said. My thoughts exactly. I've seen the Coach bag example on here a couple times in the comments… not sure why, of all the "luxury" brands one could name, this rather moderate one by comparison is brought up, but is a $400 bag obscene because you can't afford it? Is it because you wouldn't spend your $400 that way? I could say that the $1500 ticket purchase is silly because it's of no interest or value to me. However, some might question the $ I spend on shoes. The same goes for giving. If I give significant (relative to me) time and money to a cancer charity, someone else would look upon that and say I should be giving to treat AIDS in Africa instead. Each of us have different wants and needs, beliefs and charity causes on our hearts. We should avoid "labeling" each other without an intimate knowledge of each person's situation and without a healthy respect that it takes all kinds to make this world work.
"As an aside, what if you didn't get a tax deduction for giving? Would you still give? Would you care if people didn't know it was you that gave?"
I love this question.
I think the question of the Coach bag is a really good one. My friend used to use the question, if you were really wealthy, how much would you pay for a white t-shirt? as a way of getting at the same issue.
Once you hit the AMT, the amount that is deductible for charitable giving is minimal. People like Warren Buffett and Bill Gates can reap more tax benefits by forming charitable foundations, but for the vast majority of folks with an AGI>$250k who are not super wealthy, tax deductions for charitable contributions are pretty meaningless.
My wise friend Judy from church says that to be truly meaningful, charitable giving has to hurt — the $1500 you give to charity means you won't be able to buy those sports tickets. That is what the rich young man could not do and the poor woman could — he could not deny himself for the sake of others. Much as I applaud Gates and Buffett for their charitable giving, I doubt it makes much difference in the quality of their daily lives, though of course the same cannot be said of their heirs.
Another point, giving money is the easy part, at least for most of us. For me, the real payoff is giving my time to volunteer. Looking back, I regard this as the greatest gift I have ever given myself.
A good thought, but even the "hurt" is transient. When I got my first job, we set a percentage to give away. As my income has increased, so has this percentage.
Does it hurt? Not really — because I've never had that money.
I believe money gained by a person through legal enterprise is theirs to do with as they see fit. Consumption is not entirely negative.
It's a slippery slope when you start judging others actions with some "holier than thou" attitude. ("I find it morally wrong – because I know these people" seen above in #7) Really? You know everything about them and their finances?
Wants and Needs are so relative in America compared to third world countries. Who says you actually need as much food as you eat? Someone else gets by on less, so your excess above that level is selfish and could go to some starving child. Your 500 sq ft apartment might not seem excessive to you, but there are whole families living in single room buildings.
Unless you are handing your money over to someone with a specific purpose attached to it (and they fail to use the money towards that purpose), I find it wrong to go about judging other people's spending just because they took an extra vacation this year without trying to solve the world's problems first.
Remove the log from your own eye first and maybe you won't feel the need to judge others. Maybe you can simply teach by example and offer others a chance to join you.
For those struggling with their own spending and feeling guilty, I would suggest really exploring the "whys" behind your guilt with a professional if needed. It's not wrong to question the purpose behind the spending, but if doing so makes it impossible to enjoy what you've worked hard to earn (then that's sad) and there are other larger issues at play.
kate, to clarify, it sounds like you're advocating for moral relativism here: don't judge others, period*. is that right?
*except you do say "it is wrong to judge others…"–i guess this means everything's potentially okay, except judgment…
ha ha. thank you.
I'm not advocating no judgement period. People judge, period. I'm advocating not thinking yourself better for "sacrificing" a vacation to give to charity than another person who chose the vacation instead.
Make a personal decision that YOU can live with regarding YOUR money and let me manage my own. This stemmed mostly from 7s response about judging others as morally wrong because she didn't think they gave enough/any time/money. The implication is that the other people should live their life by her standards and are somehow less because they don't.
If I'm not hungry, I'm not going to purchase food and stuff my face in front of a starving child, but I also don't think that every penny beyond my basic needs is undeserved by me and should be given to someone else.
"Excess" is so relative. "Justifiable" to whom? Why should I need to justify spending MY hard earned money to anyone? I will say I only apply this to individuals – I do think charities and companies have to justify their spending to stockholders and contributors.
I can't overstate how much I've wrestled with this question in my life (i.e., in therapy, in my career choices, and where I live). I'm extremely familiar with Singer's works.
Every decision to do something is a decision not to do something else. There are *always* tradeoffs. The decision not to acknowledge these tradeoffs is closely linked to the idea of existential bad faith: by pretending we don't have choices, we deny our freedom. Life can be much more convenient this way!
People's answers to this question will differ because they have (1) different models of how the world works (e.g., the dynamics of the 'economic web' you mention, how GDP scales with subjective well-being, whether there's a God around to sort things out for us), (2) strong incentives not to feel very guilty, (3) different values to maximize (e.g., their own personal freedom versus the reduction of extreme suffering), and (4) a lack of desire to think too hard about these problems, perhaps driven by a lack of compassion.
"Some of you will argue loud and long that there aren't any moral implications to spending."
I can't fathom this perspective. Posts like this and the few comments I've read (I'll have to stop) make me feel so alone.
Our species faces a new level of challenge in cooperating with each other; so far, we've been selected to be able to cooperate at much smaller scales (i.e., groups of households and small countries), and we have some very difficult decisions ahead that will require high-level coordination. I worry about people who focus narrowly on themselves and their friends, who judge their consumption in highly normative ways (e.g., "If my friends are all doing it, why can't I? If this is part of my country's 'dream,' what's wrong with it?").
We're a really interesting species, but there's no need to believe we (Americans, humans, whatever) are immune to the simple rules that govern the populations of everything else on the planet. Populations drive themselves extinct all the time through fratricide and excessive consumption.
I can't see how spending isn't a moral issue. The next step is to get the laws in place (e.g., carbon taxes, labor protection in developing countries) so that we don't have to agonize over every purchase; the price can signal all that's relevant.
Following up for the last time:
Regarding the question of what we should focus our 'altruistic spending' on (e.g., national parks, access to contraception, clean water, political reform, etc.), J.D., you might be interested in examining more closely the activities of GiveWell. They're trying to apply theory from a very large academic field that attempts to convert interventions into quality-adjusted life years (QALYs). Maximizing the number of QALYs added by an intervention is the goal of many charities. Of course, it's easier to do this for simple linear relationships–when we're trying to prevent fisheries' collapses, eradicate entire diseases, or precipitate political change, the analysis becomes much harder.
Obviously, for some people, their altruistic priorities will be dictated by things that are close (community organizations) or their religion.
Doesn't some of the issue with consumption depend on how people are employed? To take Jan's example of that yacht, if people are paid fair, living wages, then sure the yacht is something that productively participates in society. But if the workers on that yacht are paid only minimum wage and have no benefits, is that still the case? (I'm assuming they work full time; or if part time, it's not to cut costs but bc the boat is only used part time.)
Perhaps one way to balance these issues is to spend our money consciously on items through which society is truly enriched; instead of chasing the cheapest price (or trying to look chic from Wal-Mart when you make $100K — a new trend among fashionistas), look carefully at the supply line and insure that people are paid fair wages. This, for instance, is why I have no problems buying food for the food pantry at Whole Foods. Sure I cld buy a whole lot more at a cheaper grocery store, but then I'm perpetuating a system of lower wages, which causes more people to rely on the food pantry. (The majority of the people who use our food pantry are employed 40+ hours a week, but simply don't make enough money to feed their families or have huge medical expenses, etc.)
What?!? No cat picture? But, I thought we were on a roll these last few days. (sigh)
Interesting debate and one that I don't have an answer to, but I'll add my two cents.
I try not to think about "giving back" in the narrow sense of giving money to charity. When you spend $1500 for season tickets for the Portland Timbers, you are supporting athletes who are passionate about what they do, often have short careers, and who probably do not make a lot of money. Same goes for when you buy tickets for the symphony or the theatre. You are supporting local artists who devote many hours to their field and generally have an income that is at or just above the poverty line. One could argue that sports, the arts, literature, etc. contributes to a more vibrant and richer society.
You could also argue that buying art or collectibles is frivolous, especially when that money could be donated to the poor. But then many collectors end up donating their collections to museums, where the objects can then be appreciated by the public and used for educational purposes.
I think Marsha makes a very good point — it's one thing to self-examine and another to pass judgments on others. We all make choices about what makes us happy and the answer to that question is different for all of us.
I know I need to restrain myself from judging those who value luxury items like fancy purses, when my 'cheap chic' knockoff serves me just fine — and doesn't prompt guilt when I get ballpoint ink stains on it. But after taking several international flights last year, I've got a carbon footprint about the size of Maine, so who am I to judge?
As for church spending on improvements, you have to remember that the organization's goal is not just to help the poor but also to maintain and support a community — and if the congregation decides a new kitchen and gym will accomplish that goal, then it's a good investment. But I'm hoping your church also devotes a good chunk of its budget and fundraising to social justice programs.
In the same vein, the Catholic Church could sell off the masterpieces in its collections or stop maintaining the Sistine Chapel to save the poor, but cultural patrimony is one of its responsibilities as well.
What are my moral obligations? To make the world a better place? It's better even if it's just for me.
To make the world a more equal place? Equal for who? For everyone, or just for me and a people in a specific group (i.e., people with muscular dystrophy, or people in a particularly downtrodden country)?
Something else?
If I have none of these obligations, then I am not being immoral by neglecting them.
What's the real question? Certainly a $200,000,000 yacht feeds fewer people than a $200,000,000 farm, but who says I'm supposed to feed other people?
What are "better" forms of charity? Feeding the poor? What about donating to a political cause? Or supporting national parks? Are any of these better or worse and at what point do I hit "good enough" to not be considered "immoral" by pouring my money (and therefore, some percentage of my life's work) into them?
Is it immoral for the moderately poor not to give to the extremely poor?
At what point did providing the best possible life for your own family become morally questionable? When that life includes a yacht?
I'm not sure morality is a continuum, but rather any action is either "moral", which includes morally irrelevant things, like making your bed, or "immoral" in which it harms someone else in an immoral way. Exactly what falls into the second category is up for debate, but I'm pretty sure it doesn't include, "doing well for myself".
This doesn't mean that actions aren't better or worse than one another on a sliding scale by some *other* metric, but I think morality is binary.
Re: the moderately poor giving to the even more poor — see under "Mite, widow's".
I used to make my living pumping jet fuel for corporate (aka rich people's) jets. Along the same lines as the yacht, there are many working stiffs who just get by supporting the industry. Political/media attacks on the industry used to drive me nuts because the side affects of making it un-pc to have your own jet impact a lot of people.
Tyler, it seems to me you are introducing all of these questions which suggest that morality runs along more of a continuum, and then you conclude that it black & white / binary. I'm not sure how you came to this conclusion. To me it seems you are saying you have no legal obligation to help less fortunate people, and as a result you have no moral obligation to do so.
I do think morality is highly personal, so some people don't feel morally obligated to help anybody less fortunate. However, I don't think that's most people here.
As a current seminary student in the ELCA church, this is a question my wife and I have struggled with. On one level I am a full time student and am paying off debt. On another end we love to travel. How we currently deal with this dilema is that we have decided to donate to those organizations that help deal with something that angers us – the sex slave trade in the U.S. It boils our blood that this goes on.
I would suggest that readers find something that boils their blood: animal abuse, homeless children, etc. Then set up a regular giving within your budget (and try to push it).
We donate, and yet are planning a trip to Europe next year. The only thing I hope for is that God will forgive me for my actions.
To Adam the seminary student — I love the "find something that makes your blood boil" notion. What a great way to immunize your will and your budget against the non-stop selfish consumerist messages we are all confronted with.
I guess it's called righteous anger and that's a way to channel it.
"Find something that makes your blood boil," and then research the heck out of it before donating your time/money.
Just be aware that charities and non-profits use similar PR and advertising tactics to companies to tap into our emotions.
I encourage anyone whose "blood is boiling" about a perceived social ill to really research the issue from multiple sides and heavily vet any organization you're considering donating to.
It may make you feel better to give, but doing so in a thoughtful, considered way will have the best impact.
[I'm following up on the comment I made earlier (#16).]
A lot of people seem to be interpreting the "pro-charity" stance as an attack on free markets. One can interpret charity, for example, as buying the slightly more expensive version of something to alleviate harm uncorrected in current markets–the organic fruit, the free-trade coffee, carbon offset credits, the recycled/reclaimed furniture. Other items (e.g., education, certain kinds of health care) need a more direct subsidy. Arguing that charitable donations dissolve markets is an overstatement, a straw man.
To some I suppose that I would appear to be selfish with my money. I tithe all income to causes I support but I do not go above that 10% mark ever.
I prefer to save my money for myself so that I will be able to own a home outright and provide good education for my children all the way through college. Am I somehow less of a good person because I prefer to invest in my own community and family? Personally, I don't think so.
We don't need people who can give 20 billion to AIDS in Africa necessarily. What we do need desperately is just good people in everyday life who support their own communities and are involved in them whether that be through money or time.
I live frugally because stuff doesn't really make me all that fulfilled. I would much prefer to travel and see the world rather than buy expensive shoes and purses. But that's just me.
I've always thought this was an odd observation. Though I choose a fairly austere lifestyle, I don't begrudge those who can afford luxuries. People act as though the money spent on these items is put on a big bonfire and destroyed. It takes chain of labor and materials to create yachts and buildings. What are all of the people down the line spending that money on? I think the key is to make mindful decisions about your money. Is the product skillfully made from quality materials? Does the producing company or individual align with your values? Will you truly enjoy, utilize, and be able to properly maintain the item?
How dreary the world would be without some the man-created wonders around us that require an accumulation of wealth to produce and procure. And how dull the person who can't appreciate those wonders and the effort it requires to create them. But shame on those who spend recklessly and thoughtlessly.
I am so glad you brought up this topic on GRS. It's great to see how many other people are, like me, wrestling with it and trying to do right.
We don't hear about this much in our consumer-based economy and society, outside of church and maybe giving circles. There aren't many ads urging us to be charitable (at least, not in comparison to the prime-time stuff urging us to spend to make ourselves happy in some way).
After half a lifetime of plenty of self-denial and extreme thrift, I've found in mid-life that I'm substantially happier and more pleasant to be around if I do satisfy some of my longings for interesting trips (often small trips), pretty things in my house, and some nice clothes.
I find that a few indulgences are often enough to boost my mood and make me feel more of a sense of abundance, rather than the constant irritation of scarcity.
That tends to make me a more giving person overall and definitely more pleasant to be around. I guess the trick is to scale it right, and also to include an intentional and significant giving component, as part of one's expenses.
And also, to be involved personally in SOME way with people who are less fortunate — it kind of inoculates you against overspending and excess, and it puts you in mind of wants vs. needs.
I am a mentor to a child in a poor neighborhood and whose parents are absent, and seeing how little she and her family have keeps my feet on the ground.
So that's an obvious way to keep it real and help understand "how much is enough".
Also, I think living in a mixed-income neighborhood helps.
If you sequester yourself in a neighborhood of houses that are all in your own price range, you get a very distorted view of society, money, and a lot of other things.
It isn't good for everyone in a neighborhood to be poor and it isn't good for everyone in a neighborhood to be rich. That isolation has bad effects on both groups.
I've always found it interesting that various religions practice giving not just as a way to support others, but as spiritual cleansing.
I'm not Muslim, but I find the practice of Zakat interesting — each year, people have to give 1/40 of their accumulated wealth. It's quite different from tithing because it's not based on income, but on assets and savings as well. (Basic expenses like a modest home and car I think don't count — but I'm not 100% sure).
The point is that there is nothing immoral about having wealth (gained through honest means, of course), but there is still the emphasis on giving part of the wealth to help those less fortunate in your community.
Like others here, I struggle with questions of spending and finding ways to give back. I'm not judging whether one religion or set of beliefs is better than another, I just think this Zakat is an interesting model.
It's so arbitrary, though. How can you trust someone else to tell you that 1/10 or 1/40 is "enough"? Clearly, 1/10 to someone making $20,000 is a big deal; for someone making $200,000, it's a joke. Contributions should be progressive.
Personal finance is personal. If you can live with yourself based on the donations you've made, then you're in the clear. The only right or wrong answer will come from you and/or your God.
Eek I really dislike these kinds of questions because they're sort of… pointless. Morality on this level is so individual. There is no specific right or wrong answer to her question because you can't please everyone. The right answer is to do that which lets you sleep at night. We have to figure that out on our own.
I hate passing judgment on people because of items they purchase. That seems extremely superficial, shallow, and rash. You're making a judgment of a person based on one singular thing without taking the rest into account. That's unfair. Sure he bought a $200M yacht. But you've no idea how much money he's been philanthropic with and seriously, it's not our business anyways. Not to mention, I'm sure his yacht purchase did have benefits for more than one person if you go down the entire line from concept to purchase.
I actually think Tyler nailed it on the head. This is personal, private, and possibly needs to be reviewed frequently. Also you need to examine what the reasons for guilt are and how to achieve satisfaction somwhere in the giving vs. acquiring spectrum. And again, charity is not just about money. Often, your time, skills, and experience are valued as much if not more than a cash donation.
I don't see how it's so personal or private. These kinds of decisions are at the foundation of our governments, laws, and tax policies.
Taxes are a systematic means of redistributing wealth, which is different from charity. How one chooses to give their own, after-tax income is, in fact, a very subjective and personal point. What happened to the mantra "do what's right for you"?
They are not the same thing, but they are similar. Paying taxes is legally enforced and charitable giving is voluntary… but in a sense they are both redistributions of wealth from the more to the less fortunate (at least to the extent that the government spends tax revenue on the poor).
I definitely disagree that this kind of question is pointless. Yes morality is different for everyone but it's not like you decide on one morality and then it stays the same forever… our morality can be influenced by the opinions and ideas of others.
Years ago, for my college English placement essay, I was asked to read a prompt by some economist that suggested that by buying a new TV, you were responsible for the death of children in Africa, because that $1000 could buy them food and medicine.
He went on to give the hypothetical scenario that "Bob" had a Bugatti (an extremely valuable car) and it is basically his retirement fund. It's worth over a million dollars. He goes out for a walk and parks it on some old, unused rail road tracks. While on a walk, he sees that a child is stuck on the main track, a train is coming, and that he can flip the switch to save the child but destroy his car. You would find a man who lets the child die to be morally reprehensible, and he says this is what you do when you choose luxuries over charity.
My rather scathing response was that bob is a complete and utter idiot for PARKING HIS CAR ON TRAIN TRACKS. I explained that while perhaps an average family can survive on 20,000 and donate the rest to charity (as the author espoused), it's a pretty dumb idea in practice. Suppose that the next year one of your children breaks his leg? Or your wife gets cancer?
Wealth isn't always about luxuries. Many times, people accumulate wealth in order to be secure under any circumstances. If they are careful with their finances, they are then able to donate to charity while still being secure in knowing that they have money put away for any eventuality.
As an aside, I was told I had to take only one quarter of advanced composition and was able to skip a year of other classes!
Not fair to judge someone like Steven Speilberg who has donated millions upon millions to charitable foundations around the world. Is a $200 million dollar yacht excessive? Of course it is, but this man has not made his wealth by betting mortgages will fail or jacking up oil prices. He has made entertainment for people around the world for years, and he is one of the best at it.
He is not a fortune heir, he is self-made and he should be able to do as he pleases with his money. He has created more jobs and given more money away than any of us ever will, combined.
As a number of people have said, buying stuff does allow other people to make a living and I think that's great — but care is obviously needed to make sure that the item is genuinely providing people with a good living, and not a survival level living for the manufacturers and a $200million yacht for someone else. (Or the money is disappearing from the local economy through a tax loophole.)
I don't give away anything as much as I could but I try to make the most ethical choice with everything I do buy.
I heard a great talk (fair warning it is a sermon from a pastor of a non-denomenational church, but it's really good regardless of your views on god/religion/christianity) about how to deal with giving to others and wealth disparity, etc.
The gist of it is that you, a non-billionare, might not be able to solve world hunger… but you can feed one person. So the rule of thumb becomes do for one what you wish you could do for everyone. As you get more, increase from one person helped to two people helped… when you get a billion dollars, figure out how to set up institutions to help many. You have a responsibility to be a good steward of what you have been given. Don't get bogged down by not being able to right every wrong in the world, but do focus your efforts on the wrongs that you can right at your fingertips.
I certainly hope this doesn't cause any flamewars since it's a 'religious' message, my only intent is to share a point of view on how we as (presumably) non billionares can help others.
Good discussion so far y'all! This is the sort of thing I love thinking about.
I appreciate the perspective found in Mark 12:41-44.
It's easy to look around and form opinions about what's excessive and how people should handle their money, but ultimately what we should be more concerned about is what we can control – ourselves.
One commentary I read on the passage in Mark suggests it's not so much about how much was given, but how much was held back. To me this comes down to our own attitude, generosity and the motivation behind giving.
There will always be inequities in the world, and even if I can't match dollars with Buffet or Gates, if I do the best I can with what I have and it's done genuinely, then it's enough.
I think that's all any of us can do.
Thanks for the post JD.
I'm going to start this by saying I don't place much value in donating to charity, at least at this point in my life.
I grew up lower-middle class (my mom gets mad if I say "poor" because we had all the basics. But we had none of the luxuries.) Since I was a kid, I was bound and determined to provide a better economic life for myself. I came out of grad school with a good chunk of debt that will take me awhile to pay off. Even buying a small house or decent townhome around here is a challenge. Saving $40k for a 20% down payment is a challenge, and it's still not easy to find a decent house for that $200k.
So, until my finances are at the point where I've bought the house and can retire comfortably, I'm not inclined to donate to charity. My values lie in taking care of my wife and I first. Poor people aren't exactly making my student loan payments, are they?
BTW, I go back and forth on this, but when I read about people who go to the food pantry and have 40+ hour/week jobs, I have to wonder why they bore children they can't afford to support. I don't feel compelled to pay for their mistakes.
"BTW, I go back and forth on this, but when I read about people who go to the food pantry and have 40+ hour/week jobs, I have to wonder why they bore children they can't afford to support. I don't feel compelled to pay for their mistakes."
Ouch, harsh. Did you ever stop to think that perhaps some of those people had kids when times were better and they could afford them, but job loss, illness, medical bills or some other type of emergency led to their current situation? Very narrow view of people who are poor or struggling financially as having brought this onto themselves. Of course if you can assign blame to the people who are living in poverty, it makes it easier to not do anything about this larger social issue. I sure hope that you never fall on hard times again.
It's a good question though. When my friend complains about anything related to her finances or the difficulty of raising her child I have to fight the urge to tell her she made a bad choice to have a child when they're in debt in the first place. But that's a whole different topic.
"BTW, I go back and forth on this, but when I read about people who go to the food pantry and have 40+ hour/week jobs, I have to wonder why they bore children they can't afford to support. I don't feel compelled to pay for their mistakes."
Dan, I agree with a previous commenter that you are taking an overly narrow view of these hypothetical people. Should our society be constructed in a way that people cannot feed their children while working 40+ hours a week?
I grew up middle-class in Canada, which has much cheaper university tuition fees than much of the USA. I was able to afford attendance to a top Canadian school and then landed a free ride to a graduate program at a private school in the USA, where the majority of my (American) colleagues come from much more affluent backgrounds than I do. I strongly believe that this difference is because I was born in a more equitable country where social mobility (at least in the form of higher education) is more attainable.
I give to charity often. But my student loans are paid off; they weren't very large in the first place, due to the society structure I grew up in. I feel really lucky.
Granted all I have is anecdotal evidence, but from what I see living in Canada versus the USA, individual action only goes so far in determining people's fortunes.
Edited to clarify, it's not that I think Canada is the best country out there, that the USA is the worst, or anything like that, but they do have some differences in income distribution and societal structure which are very striking to me considering how similar culturally they are overall.
52Interesting discussion. There will be no right answer of course. I give to Care Canada, because it helps poor people the world over in a non-secular way (I don't think drinking water should come with a side of Bibles) and the local Humane Soceity (because I can't stand to see cats and dogs suffer). I certainly don't give as much as I should by my own judgement, and that is all that matters.
In my ideal world, we'd all start with a level playing field. We are all born innocent, and not by our own choice, therefore we should all (ideally) be given the necessities of life and access to everything we need to succeed and become independent healthy mature human beings. No matter where you were born in the world, no matter what parents you have. In my opinion, giving to charities should focus on this first.
Taken to the extreme, all the money I spend beyond what is needed to sustain myself should be given to charities that would promote my ideal world.
On the other hand, my "meaning of life" is to maximize happiness. While I derive happiness in charitable giving and helping others, I also derive happiness from visiting my family and friends and the social bonds I form with them (which costs money since my parents live in another Country). I need to strike a balance, and donating 10% of my income to charities that promote my ideal seems to work. Your mileage may vary!
Phew, glad there's another Rawlsian here!
I had to look it up but I guess that's what I am. Shucks! I'm not original thinker
The better question is, how can we remove guilt from the money question?
If you think about it, charitable giving is about helping someone else to live a healthy, fulfilling and happy life. If you deprive yourself to the point where your own happiness is hindered then you have actually done a disservice.
The key is to figure out how you can care for yourself and your family while still helping others.
Katy Wolk-Stanley
"Use it up, wear it out, make it do or do without"
I totally agree. It's *very* hard to know where the line is, though. I'm going to have a smaller family than I otherwise would and am in a slightly different career than I otherwise would be because I want to help others better. I'm happy with these decisions, but if I'm not careful, I can slide into constant self-denial and asceticism. I do wish it were easier to get on in this society without consuming so much, though. Weddings can make me wince…
I have been a GRS reader for awhile but have never commented. This is a great topic, one that rarely gets discussed on the perosnal finance websites.
I just want to add a thought. There seems to be an underlying assumption that money given to a charity just goes down a black hole and does not feed back into the larger economy. However, giving to a charity not only helps the intended beneficiaries but through their spending, the money is fed back into the economy and supports jobs, etc. For instance, assistance given to the poor helps them pay their rent, buy food, buy gas, and so on. So the landlord, grocery store owners and employees, and gas station owner are indirect recipients of that assistance. Donations also support the charity's employees and those of any linked businesses and organizations, i.e. the charity's landlord, the printing company that prints their brochures, and so on. Arguably, the $200,000,000 spent on a yacht and the economic impact inherent in that purchase can have a greater impact if donated to a charity because of the potential of a greater number of recipients and the increased number of businesses and organizations who benefit from their consumption.
$200 million is expensive, even for a yacht. Here's the thing – I'll bet it's a hell of a yacht. I'll bet that a lot of woodworkers spent a lot of time creating beautiful cabinets, a lot of stoneworkers spent a lot of time creating countertops and floors, and a lot of engineers spending a lot of time to create an incredibly boat.
All of these people were probably low middle to high middle class artisans. One of the consequences of attacking high-end luxury production is that you're essentially protesting the creation of art. And I think that's the real moral test – in causing this item to be created, did you cause a work of art, to whatever extent it is, to be created, or did you merely piss it away on gadgets?
The charities I support tend to be charities which allow people to do things they otherwise could not, as opposed to a cash grant for miserable circumstances – not that there's anything wrong with that. It's just that kind of charity really does nothing to solve the underlying problem. Of course, you have to stop the bleeding before you can stitch up the wound.
It's difficult for me to suggest how others spend their money. I believe that I have a moral boligation to help level the playing field (both abroad and in this country) and will also do so. I do remember your previous comment JD, about throwing money at problems. I would usggest that there are more than a few problems in the world where money is part of the need and that simply cannot be avoided.
As for your church and Mercy example, my questions is this. How much more, if any, did those expenditures allow them to serve the poor. Did the Mercy building give more room, more storage, a place for more goods to help the poor? My church has recently done a huge capital campaign enlargement. However, we also feed the homelss weekly in our new kitchen, host a variety or local organizations (including a low income after school program, aa groups and many others) with that extra space, and do other things including allowing folks to sleep when it is cold that could not have been done without that expansion. Just as it sometimes takes money to raise money, it sometimes costs more money in the short run to help and function in the long run.
The building is really the same as a coach bag on a larger scale IMHO. A new, large, quality building that provides necessities for the organization doesn't seem immoral. To me it's that the $37 mil could seem ostentatious, overboard and immoral.
Very thought provoking discussion!
To me, this is a very individual issue – each person has to do what is right for them. Do I are that Spielberg bought a $200 million yacht? Nope – his money to do what he wants.
When my husband and I work on our family budgets, we include a line item for donations, which we then give to the organizations we choose to support. It is an expense like any other, including housing, savings, etc. If we want to give more during the year outside our regular amounts, then it comes out of our discretionary (wants) spending.
I find that morality tends to be subjective – I choose not to judge others for their spending, I'd prefer they not judge me for mine!
As I rose out of debt I struggled with this question (like many of us). I spent time thinking about aligning my spending with my values (overall). I decided that giving to others was a value of mine and like any other budget line I put a number on it – 10% of my take home pay. Then I worked through where the money was going to go. Overall I decided that one of my biggest values is education. Education is what separates me from many people who are struggling financially. I give some money every month to my grandmother who is in an assisted living home (this lets her go out to lunch, get her hair done, etc), and I put money in two 529 plans for one of my high school best friend's children. She cannot afford to set money aside for their education because she is still paying off undergrad education bills. She couldn't afford to go to grad school to qualify for better paying jobs in her field. This seemed like something I could do that would ultimately have a big impact on specific people's lives, and was very much in line with what I value.
Ultimately I think the real question behind all of this (for me) is what is the purpose of prosperity? Why are we productive, and what are we to do with the proceeds? The answer (for me) has been to care for and improve the lives of me, my family, those I love, and my community. How far out the "community" extends is up to each of us. If all I have accomplished in my "charitable" giving is help produce two more well educated people in the world, I will feel that it was prosperity well spent.
What I wonder is what change did Buffet's $37 mil and Gates's $30 mil make? That's not chump change! If $67 mil couldn't solve a few problems somewhere then how will my couple hundred make a difference? If charities do not create a sustainable living environment for people and only provide for their daily needs then any amount of money they recieve will never be enough. That's why Heifer International is one of my favorite charities. I allows the recipient a way to provide for themselves and to also pay it forward. I think it would be nice that when articles mention about people's donations, to also note the accomplishments of charities. Otherwise it sounds like the money went into a black hole and yet the same problems still exist.
That could be a reason why Rita feels guilty. Maybe if she knew that whatever donations she was making was actually making a positive change in the world she would feel happier about her purchases. Ultimately, I think that you can do what you want with your money, you earned it so you should spend it how you want.
When you start trying to determine the relative utility of your charitable choices, you've gone down the rabbit hole. I will never know whether the best use of my $100 is giving it to the United Way, to the local animal shelter or to hand it to the guy who just asked me for two bucks. Maybe he'll buy food for his family or maybe he'll spend it on drugs. Maybe the animal shelter will spend it on veterinery care, ot maybe it'll go to inflated administrative costs.
Since I can't know for sure, my tactic is to do my due diligence and not worry about it further. My own use of money is sure to be questionable to some and praiseworthy to others, but you could drive yourself crazy trying to figure out if you could or should be giving more and more. It can descend into navel-gazing.
It's not a rabbit hole. Check out GiveWell. (I don't work with/for them, for what it's worth.)
I really liked this question. I work at a nonprofit, and one day I was reading an article about a popular musician's annual salary. I did the math, and it would've funded our organization for the next 50 years! It was unbelievable! I couldn't imagine what someone could possibly do with that kind of money, but this particular person wasn't known as a philanthropist.
I think people with modest wealth have an intense opportunity to impact change. You can do it by choosing where you buy (do your shoes come from a sweatshop/does the store pay liveable wages to its workers?), what you buy (is this an environmentally responsible product?), etc. I've said that if I ever reached a point where I didn't need to work to maintain a comfortable lifestyle, I would be a full time volunteer.
Ultimately, it's about finding balance. At what point is there too much stuff? (I realize for everyone, this is different.) Live the life you were meant to lead, but try to lift up others along the way.
Great discussion!
Free trade creates wealth. Buy all of what you will, you are helping someone, somewhere, buy trading your goods for their labor.
For me this argument has about as much meaning as "if you have a baby instead of adopting, you are depriving a child of a loving home". It's your money, and you can do what you want with it. One should not do "good" to feel superior.
The charity with the big building, Mercy Corps, has costs well under control. In order to recruit excellent charity executives and employees, it helps to have a nice building. And please, no one suggest that employees of a charity since they're so virtuous, should work in a shack. It's hard enough to get people to work for nonprofits. They're doing more good by having an HQ over time, I'm sure.
Ah, but if you have a baby, you ARE contributing to overpopulation.
Is it really much better than buying a puppy from a puppy mill instead of getting one from the shelter?
That's what I'm saying – it's a pointless argument. They're all essentially the same argument. Anything you do for you, you aren't doing for someone else.
Looks like I'm a bit late to a remarkable discussion.
To some extent, it seems to be depend on what wealth is. Is it obtained by generating wealth and goods for others? Is it done by cheating at the game?
Theoretically, every transaction benefits both parties. That's standard 20th century economics. When that fails — and it often does — one party has taken advantage of the other.
Worse than that, there's some evidence that our internal desire for equity is no worse than a 30/70 split — ie, if you benefit double what I do, then I am likely to walk away.
It seems that if you only obtain wealth by benefiting both parties, then you won't have a guilty conscious and are less likely to feel a compulsion to give it away.
It is, of course, more complicated than that.
If, however, your wealth is generating due to illegitimate transactions, then the guilt may begin.
Personally, I think most of us benefit from contracts that benefit us and not others. That's part of why we want to give money away — we know we've obtained it through cheating means.
So say I, anyway. Maybe some science, but a lot of conjecture.
So many of the comments here seem to be dwelling on how one donates their money. The topic is how one spends their money. In my opinion, capitalism (as it so often does) holds the answer here. I totally agree with everything Tyler said, but to add to his argument, I'd point out that if shipbuilders are underpaying their employees, then the employees would quit and go find a better job. Consequently, the shipbuilders would have to offer more money to their workers in order to recruit a workforce to meet the demand. The price of the product would go up, and demand would dictate whether or not the Speilbergs of the world are willing to pay the "fair" price.
If yacht-buyers think the yacht is overpriced, they won't buy it, and the invisible hand of the market will push shipbuilder wages back down to where they belong. There's no need to debate or regulate all of this – capitalism is a wonderful model that is basically economic democracy in action.
This, of course, applies to the broader question being asked by the letter writer. If a substantial number of people really care about organic this and fair-trade that, and living-wage widget factories in China, then the people producing those products will be able to do so while still generating a fair profit. If not enough people care, then they won't.
I'm not picking sides, but I will point out that Wal-Mart is an extremely large, extremely profitable company, and it has built its entire model on producing the cheapest possible product, without regard to environmental concerns, wage fairness, or any other touchy-feely factors. They focused entirely on getting the price as low as possible, and the market has rewarded them richly for it.
I would argue that the distinction between donate and spend is incorrect. Giving to a charity is a form of consumption, just as buying a movie ticket is. The moral dilemma, if there is one, is whether it is better to spend more of (or all of) your disposable income on charity than it is on entertainment, luxury goods or on any other non-life sustaining purchase.
For me, it boils down to how much of my prosperity/income do I think I should be spending on other people/the community/ causes. Once the amount is chosen then I decide where it goes and the rest of my income is spent along other value lines such as x % for taking care of myself in old age, x % for education savings for my son, x% for housing, x % for groceries and entertainment, etc. All of these percents are bounded by my total income. Over time the balance of where my money goes will change. Ten years ago I wasn't giving money to a "charity" at all. 10 years from now I may be giving more than 10% to various people/causes.
Don't know about shipbuilding, but in a lot of industries if the workers feel they are underpaid, they get chained to their sewing machines, or locked into the factory, or targeted by paramilitary militias. Or the employer goes out and hires or buys some children to do the work. Even here in the US a number of industries rely on prisoners, illegal immigrants (who can be reported to authorities who will imprison or deport them if they speak up or try to leave) or in a recently-uncovered case near here, mentally disabled people who were housed in squalor and didn't know they could leave.
Absent good labor laws and strong enforcement, you can't trust that the invisible hand is guiding the labor market.