WSF and Altruism vs. Economics

John Elkington

January 31, 2010

Having given up Economics after a year of university-level study in 1968, I have remained interested in the dismal science – indeed helped develop The Other Economic Summit (TOES) in the early 1980s. Though these days I expect to find more of direct relevance coming out of the World Economic Forum (WEF) than out of the rival World Social Forum (WSF), the Other News service covered the question of whether another sort of economics might be possible earlier this week – and suddenly a series of things I have ben reading have converged into this space.

As Other News reported: Democratising economics as well as politics is essential for ending irrationality and discrimination as part of the struggle for social and environmental justice, said participants at one of the panels of the seminar assessing the World Social Forum’s (WSF) first 10 years. The field of “the gratis economy” or “freeconomics” is “expanding dramatically” with the rising importance of knowledge as a major component in goods and services, economist Ladislau Dowbor, a professor at the Catholic University of São Paulo, said in his presentation.

Using a street is free, and no one wonders about the cost of construction and maintenance. The same is true of vaccines, state schools and a wide range of public goods supplied at no cost to the user.

But of course these do have costs, which are usually paid through taxes contributed by the general population, or surcharges on other products, he said. Vaccines save so much in health costs that it would make no sense to charge individual beneficiaries.

As the knowledge society advances, freeconomics is expanding, based on relations that are entirely different from those derived from material goods, he said.

All of which plays very much into the original TOES agenda, as did the first thing I read in today’s Davos issue of the FT Weekend Magazine, published by the Financial Times. This was the charming story of Michael Swaine, who some nine years ago began setting up his sewing machine in the street, in San Francisco’s troubled Tenderloin district, noted for street crime and prostitution, and offering to mend people’s clothes for free. The results are reported here.

So far, so good. But then I flicked three pages forward and find the latest piece by ‘Undercover Economist’ Tim Harford, at which point the pendulum began to swing again. His argument is that altruism is over-rated. The idea, for example, that by underpaying nurses we select for those with a true sense of vocation is blatantly false, he says. Sometimes, he concludes, the way to get the results you want is to pay for them.

The distinction between private and public goods is one that has been central to the sustainability agenda, but one that I have often struggled to get my brain around. Basically, like many people, I would love to live in a world driven by altruism, and come across endless examples of extraordinary people doing unbelievably altruistic things in the world, but suspect that, once again, this isn’t going to turn out to be either/or, either altruism or payment, but both/and. The challenge is to find out which approach is best suited to the task in hand – and to be aware that the appropriate solution may well change over time as the scaling of solutions proceeds. The way that we come to resolve such tensions is not just a question of our individual values, but a central, determining feature of any culture, any civilization.