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Metus comments on A Guide to Rational Investing - Less Wrong Discussion

26 Post author: ColbyDavis 15 September 2014 02:36AM

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Comment author: Metus 15 September 2014 09:56:00AM *  2 points [-]

According to the Solow model economic growth rate is primarily determined by saving rates. Economic performance itself is correlated with virtually anything we deem good. So extreme savings increase economic growth benefiting society and increasing personally available capital for later donation.

The effect can be enhanced by funds that invest donated money and use most of the interest earned to benefit the intended cause, thus circumventing personal willpower to save, permanently locking up capital and perpetually benefiting a particular cause - assuming the funds statute does not provide for a case where a cause ceases to exist.

Actually the question is quite non-trivial and worthy of proper analysis.

Comment author: gjm 15 September 2014 10:46:10AM 3 points [-]

Extreme saving may well be good for the societies in which the resulting investment happens. But a key idea in effective altruism is that there's far more benefit-per-buck available in other places, where everyone is much poorer. If that's true then the "benefiting society" effect of saving more (or the reverse, if it turns out that actually reduced consumption outweighs it -- I'm no economist and don't know how plausible that is) is probably small in comparison with the tradeoff between giving earlier and giving more to help people whose situation is much worse.