Re: Ethical Investment Gone Wild

From: Robin Hanson (rhanson@gmu.edu)
Date: Thu Jul 17 2003 - 18:38:48 MDT

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    At 05:21 PM 7/17/2003 -0400, Wei Dai wrote:
    > > In Miller's view, ethics is primarily about signaling, so whether the
    > > ethical investments are well spent is largely irrelevant to his story. ...
    >
    >Education signals intelligence, and conspicuous consumption signals
    >wealth. What does ethical investment signal? I guess it simultaneously
    >signals wealth and belief in an ethical system. For the signal to work,
    >the investments do have to be well spent, otherwise it only signals wealth
    >and we already have ways to do that.

    Not quite. People can signal a soft spot in their heart for certain causes
    as long as it looks plausible that the money might be spent on the cause,
    even if a closer examination shows that it doesn't have much effect.

    I sent Mr. Miller the following comments:
    ---------------------------------------------------------------------------
    I just came across http://psych.unm.edu/faculty/moral_vision.htm
    and found it to be thought-provoking. I've long been a big fan
    of your mating mind story, but even so I suspect that your scenario
    is very unlikely to happen. Let me try to explain why.

    Ethical signaling seems to be mostly about signaling how a person
    will later treat their spouse, children, and other associates.
    People who show a soft spot in their heart for children and needy
    folks around them may be expected to be similarly caring for your
    children if you should mate with them. People who show themselves
    to resist temptation to keep to their principles may be expected
    to resist cheating on you to keep to their principle of not
    cheating. And so on.

    The most powerful such signals are *combinations* of resources
    spent with personal context that is expected to trigger ethical
    feelings. This is why volunteering is such much more popular as
    an ethical signal than investing. If you spent time at the local
    school, you show both that you give up resources and that you have
    a soft spot in your heart for kids. If you do a charity jog you
    show both that you give up resources and that you prefer to hang
    around people like you (and that you are healthy).

    Just giving money to an ethical investment, in contrast, says only
    weak things about your personality and how your ethical feelings
    react to your immediate context. Such investment mainly just shows
    that you will give up resources for some abstract belief.

    While I could imagine a transition to a situation where people spend
    90% of their wealth doing ethical signaling, in that case I think
    most of this would be spent via local volunteering and the like,
    rather than via the elaborate division of labor that ordinary
    investments rely on. The division of labor is good for production,
    but mostly bad for ethical signaling.
    ---------------------------------------------------------------------------

    Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
    Assistant Professor of Economics, George Mason University
    MSN 1D3, Carow Hall, Fairfax VA 22030-4444
    703-993-2326 FAX: 703-993-2323



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