image by Digital Explorer, some rights reserved

I remember my first encounter with beggars. It was, oddly enough, while I was accompanying my parents on a trip to England when I was ten years old. We passed a few on the stairs into the Tube, brown women sitting on blankets with cups out, obviously miserable. I remember expecting my parents to throw them some change as we approached them. It was so little money, and they obviously needed it so much, I thought. I knew we weren’t rich, not by a long shot, but come on, we wouldn’t miss a ten pence or two. But my parents just walked on by, like everyone else, carefully calculated aloofness in their faces. It was kind of shocking and disappointing to my 10-year-old heart. My parents are good, honest, compassionate people. They had always taught me that people deserved a fair shake in life. This seemed to be against everything I had learned in school, at camp, etc. What happened to the Golden Rule? Wouldn’t you want somebody to give you some money, if you were down on your luck like that? The whole thing just seemed so Wrong on so many levels.

Of course, as adults, we learn that things are a bit more complicated. Mostly, that there are perverse incentives to consider; if it becomes lucrative for people to solicit money on the subway, for example, then a lot more people will do it, making subway rides a lot less pleasant for everyone. And then of course there’s the whole question of what happens to the money after you give it. If you want to help the homeless, sensible voices intone, direct your money to an outstanding organization that helps alleviate the problem at its root and doesn’t just reward the squeakiest wheels.

But is it enough to listen to the sensible voices? What if they’re just a way of giving yourself an excuse not to do anything? A license to avert your eyes for now, and something to procrastinate endlessly on or forget about later?

*

For those of us in the business of generosity, as it were (i.e., the nonprofit sector), our expectations of others can sometimes make turning the mirror on ourselves an uncomfortable proposition. That was the position Brigid Slipka found herself in earlier this year, when she realized that despite spending her days cajoling other people to give money, she was parting with precious little of her own.

Everyday in my news feed I see folks in the philanthropy world debating the best nonprofits to support and fellow fundraisers offering strategies on how to garner more support.  I take all these suggestions to heart, affirming to myself that yes, giving is so critical right now.

This is what I’ve actually done about it:  Nuthin’.

Here’s a fun fact! I just calculated the Percent of Income Given (which henceforth shall be known as PIG!) by me last year.  Disturbingly, the relevant numbers were to the RIGHT of the decimal point.

Ouch.

This revelation was the impetus for 40 Days of Giving, a “generosity experiment” of sorts during which Brigid (a) gives some money to a charitable cause every day and (b) blogs about the experience in funny, self-deprecating style. The website is called Actually Giving.

It’s now getting towards the end of the 40 Days, and Brigid is feeling a little burned out. More about that in a bit.

*

As sensible as ignoring beggars on the street may be, it still takes a special kind of callousness to ignore (and worse, rationalize ignoring) the obvious suffering of people right in front of you. It’s that sense of collective negligence that leads to horrific human behavior like the bystander effect. Moreover, it offends the parts of our brains that apparently are upset by inequality.

A while back, I came across an interesting post by the Acumen Fund’s Sasha Dichter describing a “generosity experiment” he conducted:

The idea, sparked by a homeless man to whom I did not give, was to spend a period of time saying ‘yes’ to all requests to give – whether a person on the street, a donation request from a nonprofit, whatever.

Like Brigid, Sasha raises money for a living. He acknowledges that his experiment is at odds with an analytical approach to philanthropy, but says that misses the point:

The people who didn’t like my experiment all said something like, “If I pass a person on the street asking for money, I don’t give because I know it makes more sense to give to a homeless shelter.”  Put another way, one could better purchase social change for a homeless person by giving to a shelter or a food bank.   Objectively, that’s probably true (though one doesn’t know for sure).  However, it also misses something: first, because whether or not you give a dollar or two to a person on the street really doesn’t affect the larger donation you’ll hopefully make to the homeless shelter or the food bank; second, because the act of saying ‘no’ over and over again is reinforcing something in you and in me.

Sasha’s right. However true the argument may be that street charity is not an efficient use of funds, even for altruistic purposes, the habit of consistently refusing help when directly asked has the unfortunate side effect of codifying, even for the generous, the basic power imbalance between those of us with means and those of us without. It presumes that we, the rich, know what’s best for you, the poor, and what’s best for you is that you continue to suffer. I am not saying that this, on its own, is reason to follow Sasha’s lead and never say no; just that the issue is complicated.

For his part, Sasha believes we could do more:

I’m not saying give every time, I’m asking us to be honest about why we do and don’t give, and to recognize the effect it has on us.

Let’s take an extreme example: suppose that over the course of the year I’m asked to give 200 times – maybe 100 times directly and 100 times by various nonprofits in various ways.  And let’s say I have a limited amount of money to give, which I do.  Isn’t the practice of saying ‘no’ 195 times and ‘yes’ 5 times reinforcing a mindset and habit that I’m the kind of person who says no when people ask for help?  And couldn’t there be a way to say “yes” 15 or 50 or 100 times that would reinforce something else entirely?

[…]

Maybe a request for a gift isn’t always chance to analyze what is or isn’t the “best” use of my money.  Instead, maybe a request for a gift is an opportunity to practice being the person that I want to be – someone whose first response is to be open and generous.

Sasha conducted his experiment for a month, and reports a positive experience overall. He will continue to give more often when people ask than he did before, and will think of it as practice for self-improvement.

*

I had a different result when I conducted my own generosity experiment, five years before Sasha’s and Brigid’s. I was living in New York, making a pittance of a salary and losing most of my meager expendable income on my band. Still, I was doing better than the homeless people I kept passing on the subway, so I decided I would try saying yes for a change. My terms were similar to Sasha’s: I would always give something, no matter what. I’d give change if I had it, but if I didn’t and the smallest bill I had was a 10, they would get the 10. The differences were that I only gave in person, not to fundraising appeals, and I didn’t have a particular time frame in mind – I would simply keep giving until it actually started to hurt me in the pocketbook.

Like Sasha, I also had people warning me what a bad idea this was. They seemed genuinely freaked out that I was actually serious about doing this. And when I say “freaked out,” I mean that I don’t think their opposition was entirely on rational grounds. At some level they seemed to find it very threatening to the way they thought about the world. To be honest, I think that only egged me on more. (I do have a bit of a subversive streak.)

For the first week or so, I felt absolutely vindicated. I said yes to whoever asked me for money, and it felt great. I mean, seriously, so, so good. Not just because I was helping these people, but because it felt so liberating. I had broken free of the stern voice inside my head warning me that what I wanted to do was helping to reward bad behavior and upset the social order. I was just treating people as I would want to be treated were I in their shoes. It was Right.

But it didn’t last. I ultimately had to cut my experiment short after a few weeks. Not because my generosity was a problem for me financially; even with my limited means, the pocket change I was giving out was insignificant in the context of my overall budget. No, it was because the pleasure I was getting from helping people soon dissipated. It dissipated because, given my regular route to and from work at similar times of the day, after a week I was no longer helping random people on the street and subway. I was helping the same people day after day. And our relationship was changing. They were beginning to recognize me as someone who gave them money, which led them to expect it when they saw me. I was becoming part of their revenue stream. This is not what I signed up for, I thought. It felt like too much responsibility, too much for me to do on my own. I wasn’t really going to change this person’s life, was I? A buck here or there was hardly going to do that. But there was an irrational element too. I began to feel disgust at seeing the same people ask me for money again and again. As soon as they were not anonymous, the image of the poor unfortunate soul was stripped away and all I saw was this person who was always bothering me on my way home from work. I grew impatient; I didn’t actually want to give them my money anymore.

And so I stopped. I can’t say that I’ve given to beggars that much more often than I did before since then. Maybe a little. I kept the wallet pretty closed when I was in school and unemployed after that; now that I have a job, I’m a little looser with my change. But most of the time, I say “sorry” and move on. Just like my parents did twenty years ago. And it doesn’t feel any better than it did then.

Maybe I could have done it differently. Maybe if I’d gotten to know them, it would feel more natural to help. But how do you get to know someone with whom you have so little in common?

*

My aunt Pam is a semi-retired financial advisor and consultant. She and her late husband started a business that made them both quite wealthy, to the point where she was inspired to write a book called How Much Is Enough? Before all that, though, she was a Peace Corps volunteer in Panama for two years in the late 1960s. During that time, she happened to rent a house from a local woman named Minga, who despite her third-grade education became a strategic partner of sorts for my young aunt during her stay.

Despite the close bond between Pam and Minga, they didn’t stay in touch after the Peace Corps gig was up. Pam wanted to return, but circumstances always got in the way. Then, four years ago, she found herself traveling to Panama City for work, and decided to pay a visit to the old village to look up Minga. Sure enough, her old friend was still there 40+ years later, and thus began a series of extended annual trips to Panama to spend time in a completely different environment than Rochester, NY, where Pam spends the rest of her year. And so was born the blog Pam Klainer’s Day, which is a beautifully-written travelogue and fascinating cultural study all in one. Pam Klainer’s Day began last year, during the third post-Peace Corps visit, and continues now as she prepares to wrap up her fourth.

One of the things that makes Pam’s blog so compelling is that she does not shy away in the least from the looming class issues that pervade her experience in Panama. In fact, I would go so far as to say that class is one of the central themes of her writing. (Not surprising for someone who has made a living talking and writing about the meaning of money in one’s life.)

Though Pam will sometimes assume the role of Lady Bountiful for the family, buying them computers and helping with one of the grandsons’ medical issues, for example, she is honest with us about the limits of her generosity and sacrifice. When she visits Panama, she does not stay with the family, but rather in a fancy villa with tourists and wedding parties. She has written about the barriers of class even when she is trying to help. Yet story after story demonstrates that in such a context, the simplest gifts can have the profoundest of impacts. Pam writes of two tear-jerking notes she received this year from two of Minga’s daughters that lay bare a sad reality: that simply by taking them seriously and showing concern, Pam sets herself apart from the other people in their lives.

Gloria’s note tells us that she was born into a poor and humble family. By the age of 14 she was working in Panama City as a servant, and suffering great humiliation – such as the employer who counted the slices of bread, and docked Gloria’s pay if she ate more than one piece for breakfast. From then until now, the blows have come often and hard. Moments of even slightly better fortune have been few.  People such as Gloria learn to keep their heads bowed, their eyes downcast, their shoulders bent, the better to escape the enmity of the world around them. One of her employers told Gloria that the problems between rich and poor are the fault of the poor, who envy all the blessings God has rightly bestowed on the upper class who know what to do with them.

Gloria asked me if I remembered 2008, when she and I first met. As I was leaving the villa, I gave her some money so that she would have a financial cushion of sorts. I told her that it pained me greatly to hear of her being treated badly by employers. I said that if people were unkind to her, she needed to be able to leave and find other work and not have to worry about whether her family would eat that night. And I told her that when she talks to people, she needs to keep her head up, her eyes looking straight ahead, and her shoulders back. The renters who followed me were, in fact, people she describes as “ogres”. Instead of crumbling, she called her supervisor in the rental management company and told her she wouldn’t work for these people if they continued to treat her badly. This was a first for Gloria, and the outcome was good. The supervisor spoke to the renters, and their demeanor improved.

The crux of Gloria’s letter today is that we have given back her dignity in small but enormously significant ways. I invite her not just to prepare the food, but to sit at the table with us and eat. I and my guests visit her home. We take her on outings with us: to the casino, the zip line, on shopping trips to Penonome. If she stays here late and misses the inexpensive transport I give her money for a taxi, instead of expecting her to walk the four miles to the village. Here, in her words, is the essence of the gift:

“Although I am born poor and humble, you and your friends have shown me that we are equal in the eyes of God. It doesn’t matter to you that I am dark, that I never got to study, that I wear inexpensive and poorly made clothing and shoes because that is what I can afford. It matters to you that I am a person, a wife and mother, a good worker, a person of faith. You care whether I have had breakfast, if I look tired, if I am preoccupied about something. When you can, you help. You care about me, and you have helped me care more about myself. Now I am a woman of boldness and courage, and not just an ungrateful servant.”

*

As compelling as my aunt’s own adventures in Panama are to read about, the latest plot twist has me thinking even more about beggars, misfortune, and generosity. About a month ago, Pam mentioned on her blog a “lost boy” who sometimes hangs around the neighborhood where Minga’s family lives. His father had abused and abandoned him (though he still would force him on occasion to scavenge for cans and bottles on his behalf so he could trade them for drugs), and no one else wanted anything to do with him. Gloria’s (the same Gloria quoted above) son Luis suggests that the family take the boy in, but Gloria demurs: “they have all they can do to keep themselves afloat.” But what do you know, two days later, the boy “who not only has no last name but has been called at various times by three different first names” found himself with a new home and a new family. Gloria spoke with his biological father and got him to agree to give her something akin to legal guardianship, which allows her to access his official records and assume care of him. As he is twelve years old but cannot read and write, Arturo (as he is now called) already been enrolled in a school for kids with special needs, been baptized, and generally welcomed into his new family.

Arturo’s story is inspiring to watch from afar. And it is humbling when I think about my discomfort with facing beggars on the street. I stopped my generosity experiment because I found myself resenting having to give a quarter or a dollar to the same strangers in the subway day after day. Gloria gave a stranger off the street not just a dollar, but her home, family, and unconditional love. Her generosity experiment will last a lifetime.

I suspect that economists of the traditional sort would have difficulty rationalizing Gloria’s decision. Gloria just made a huge sacrifice. She is not a woman of means. Just a few days before she took Arturo into her family, she declined because she said she couldn’t afford it. (Her own son, Luis, has suffered from a foot deformity since birth and is only now, at age fifteen and with Pam’s financial assistance, receiving proper treatment for it. Luis, you might recall, is the one who suggested taking Arturo in in the first place.) The economist’s first resort would be surmise that Gloria derives some large measure of utility from raising a child that had been abandoned by society, enough to outweigh the sacrifice involved. Fair enough, but if that’s the case, why didn’t she make the conscious decision to seek out and raise foster children before? Why did she wait until one fell in her lap? Were the transaction costs really that much of a factor? Does the high cost of adopting abandoned boys off the street make it a luxury good? And if so, why don’t more rich people do it?

My intuition is that Gloria made this decision, a decision that will irrevocably change her life as well as those of Arturo and everyone in her family forever, on the basis of her gut and her devotion to God. “Rational” is not really the framework to use here, nor, in a way, is “choice.” I wouldn’t be surprised, based on Pam’s writings, if Gloria felt almost compelled to do this by her religion and her moral compass.

Ironically, someone like Pam or I would be in a far better position to adopt a strange, abandoned child, but I suspect neither of us would ever consider doing so. I’m reluctant enough as it is to give a quarter to guys on the subway – not because I’d miss the quarter, but because facing up to how much luckier I am than they, even for a moment, would be too much of a bummer for my day. Does having more to lose make one less generous to one’s fellow human beings? And if so, what are the implications for philanthropy within a capitalist system that rewards the accumulation of wealth with more power, access, and wealth?

• For the next three weeks, UNESCO is holding an international email discussion on “Funding Culture, Managing the Risk,” leading up to an in-person symposium on April 16-17 at UNESCO headquarters in Paris. The discussion is being held in English, Spanish, and French (all three at once, it’s quite disorienting) and anyone can join – just click “Subscribe” on this page. (h/t Sherri Brueggeman)
• A cultural research bonanza: the Journal of Planning Education and Research has devoted its entire March 2010 issue to art and economic development. Edited by the University of Southern California’s Elizabeth Currid, the issue includes articles from Mark Stern, Susan Seifert, Richard Florida, Ann Markusen, and a host of other writers with whose work I’m not familiar. You can read the entire issue for free here, just don’t print out the articles for a class or post them on your own website without permission.
• Speaking of Markusen, she writes with Marcie Rendon about a new research piece on the plight of Minnesota’s Native artists at Springblog. And while we’re at it, don’t miss Caron Atlas on the arts and gentrification at Community Arts Network. And if you still want more, here’s Colin Mercer speaking on cultural mapping for an hour in Berlin.
• Know an outstanding young (under age 35) cultural policy researcher based in Europe? Tell them about the Cultural Policy Research Award (10,000 euros). Applications are due May 24.
• Out of the mouths of babes: Havard ’09 (yes, that’s Harvard College ’09) grad A. K. Barnett-Hart made the Wall Street Journal recently for her undergraduate senior thesis on the origins of the financial crisis, which “was awarded summa cum laude and won virtually every thesis honor, including the Harvard Hoopes Prize for outstanding scholarly work.” Shades of Emily Glassberg Sands notwithstanding, this effort apparently involved substantial original data collection which made the analysis possible. Barnett-Hart reports that “an overreliance on computer models with imprecise inputs” played a key role in the credit agencies’ failure to accurately represent the risk associated with collateralized debt obligations. Tsk, tsk…
• Ugh, my worst nightmare: If Economists Ran the Schools.
• You can catch Bay Area denizen Arlene Goldbard in New York tonight and tomorrow, and later this week in St. Louis. Also, Arlene alerts us to a fundraising campaign on behalf of Community Arts Network, which is in a transition period and looking to continue its excellent work in the meantime.
• Well, this is one way to get my attention. Guy Yedwab wants me to tell you about what looks like a massacre at the Los Angeles Department of Cultural Affairs (this is the city’s cultural agency – separate from the LA County Arts Council), which is losing half its staff and spinning off four city-operated buildings to private groups. Meanwhile, good news in Rhode Island – the elimination of the percent-for-art rule for public buildings is off the table. But the state arts council still faces drastic cuts.
• Bloomberg is pulling funding from the NYC arts community? Ruh roh!
• Should we subsidize the arts through vouchers? It would be more democratic, that’s for sure.
• El Sistema (the Venezuelan youth symphony matrix that produced the LA Philharmonic’s music director, Gustavo Dudamel) has received a ton of euphoric press in recent years, but Greg Sandow reports on a darker side of the movement: no new music!
• Not another one: Facebook co-founder creates new social networking site for philanthropists.
• You gotta love wacko foundations. The Judith Rothschild Foundation, which had of the most idiosyncratic grant programs in the arts until it abruptly stopped honoring grant commitments last year, is operated, governed, and evaluated by a single dude who – surprise! – has found himself greatly enriched as a result of his stewardship of his friend’s assets! I mean, a six-figure travel budget? Seriously?
• Two good posts from Seth Godin this week. In this one, he makes a surprisingly crotchety-old-man argument that “the endless search for wow further coarsens our culture at the same time it encourages marketers to get ever more shallow.” And in that one, he writes, “brilliant editors and venture capitalists have the ability to get excited about a project that perhaps doesn’t match their taste–or to criticize it based on experience, not selfishness.” I’d say the same is true for brilliant arts philanthropists.
• Looks like this is gonna be a blog to follow.
• Fascinating, and….a little creepy?

I decided to address Adam’s and Michael’s critiques together since there is some degree of overlap. Below, I’ll distill each man’s arguments into bullet-point form and number them so they can be addressed more clearly.

Adam thinks that I am overstating my case and “foster[ing] false hope in a bogus alternative.” He claims:

• My example of the Costner memorabilia auction is undermined because the dotty old rich guy does not realize what he’s buying, and thus does not have perfect information. (1)
• The goods cited in the examples given are “luxury goods” (goods in limited supply that have high demand), and thus do not typify markets in general (though Adam allows that the normal rules of supply and demand do not apply to luxury goods). (2)
• I’m missing the point of Baumol and Bowen’s argument; the real point is that producers should have the option of claiming the full value generated by their product, and they do not have the option to do so if prices are regulated. (3)
• Anyway, instituting a lottery system for ticket distribution just randomizes wealth, it doesn’t equalize it. (4)

Michael says that I’m too mean to economists and that most of them do have a heart. He writes:

• Libertarians’ arguments don’t deserve to be taken seriously, so why am I even bothering? (5)
• He doesn’t know “serious” non-libertarian economists who disagree with a vision of good policy that includes (among other things) a progressive income tax, publicly-provided health care and dental services, and public pre-school, along with most other things that the U.S. government currently provides. (6)
• Most goods in a marketplace are run-of-the-mill products that are regulated by supply and demand, and that’s okay; the things I’ve mentioned are exceptions. (2)
• “Efficiency” is a separate concept from “justice” in economics. (7)
• Instituting a lottery system for ticket distribution just randomizes wealth, it doesn’t equalize it. (4)

OK, let’s see, taking these in order from least salient to most:

First, the appropriateness of using lotteries to distribute expensive tickets to arts events (arguments #3 and 4). Adam & M-Rush’s point that lottery systems randomize wealth rather than equalize it is fair enough – I didn’t necessarily mean to hold lotteries up as the be-all and end-all, but only mentioned them since Baumol & Bowen specifically seemed to think their solution (let the free market decide) was fairer than the lottery. To Adam’s point about commercial operators having the opportunity to claim their own value, I am more sympathetic, though even in the case of some commercial entities the question may not be as easy as all that (e.g., the Red Sox employ a lottery system for distributing hot-ticket items like Yankees games; one might argue that this would be justified as an enforced policy because baseball enjoys an antitrust exemption from the government which allows the Red Sox to have the grip on Bostonians’ identity that they do). And in an environment where nonprofit arts administrators across the country are tearing their hair out trying to understand how to reach new, younger, and more diverse audiences, a lottery system is perhaps a fairer way to distribute scarce resources than relying on market forces to distribute them according to society’s existing unfairnesses.

But I don’t want to let the lottery issue distract from what I see as the bigger fish. The real question here is how well what Adam calls the price =value equation (aka neoclassical pricing theory) describes the real world and how much it influences mainstream economic thought. So let’s begin.

Regarding argument #1, I thought about the issue of perfect information, but I could just as easily have made it a situation where he was buying the memorabilia as a gift for his wife, who divorced him a year later and threw out everything he had ever given to her; or if that’s not good enough, just that it pleased him in the moment to own this item and that he bought it for no real reason other than that he could. Either way, the point still stands, if not quite as dramatically. But this is supposed to be an extreme case for purposes of illustration. The price = value equation is challenged in much subtler ways all the time.

Which brings us to #2: I’m not convinced that these “luxury goods,” and the attendant supply-and-demand weirdnesses that go along with them, are such edge cases after all. Adam goes so far as to say, “while Price = Value in the aggregate, the formula doesn’t necessarily hold for any individual purchaser.” Huh? If the formula doesn’t hold for any individual purchaser, why would we assume that it holds in the aggregate? I’m open to the possibility that it could, if confronted with irrefutable empirical evidence, but I have a hard time believing a priori that the disconnect between utility and willingness-to-pay for individual market players doesn’t bias and shape the market in specific, systematic ways. And if anything, this seems like it would be especially true in the arts. After all, the original discussion that led to all this was about whether unpaid internships were a threat to diversity in the arts because low-income individuals could not afford to take them (and thus were at risk to remove themselves from contention at the front end for an important career stepping-stone towards more potential income later on). One might think of this “willingness-to-accept” problem as a kind of corollary to the “willingness-to-pay” issue that I pointed out with my post. We also looked recently at the possibility of pernicious effects on the socioeconomic diversity of artists that compete for recognition through competitions if entry fees were raised to nontrivial prices. And it doesn’t end there, certainly. Think about what kinds of investments are needed or helpful to jumpstart an artistic career: training, documentation (e.g., recording), production values, marketing, travel, living expenses in expensive cities, time not spent earning income. If anything, in many of these situations willingness-to-pay may be inversely correlated with utility/personal value, not one and the same–not even close.

Do economists understand this? Here’s where Michael Rushton and I just don’t see eye-to-eye (arguments #5, 6, and 7). I applaud his list of policy recommendations–clearly, he is living proof that not all economists are heartless bastards. And surely there are others – Paul Krugman, for one, and the fact that the latter won the Nobel Prize speaks volumes. Perhaps the kinds of economists I want to see are more in evidence in the international community. But here in the US, I wish I could believe they were as mainstream as he says. I mean, really? No serious economists would dispute that we need government-provided universal health care and a no-fucking-around progressive income tax? Has Michael Rushton not heard of the Chicago School? Are these people not mainstream? Have they not had a tremendous formative impact on public policy in this country over the past 30 years? The foundation of their philosophy is the very libertarian principles that Michael is so quick to reject as not being worthy of debate. Yet the shadow they cast over the national discussion of economics is tremendous.

Interestingly, my two contenders reserve their strongest criticism for things I didn’t even say.

Adam, for example, concludes:

Ultimately my concern with your line of reasoning here is that I can’t see how it leads to anything but trouble. Markets are deeply imperfect, but they’re the best tool we have. To the extent that they result in undesirable outcomes, then we should seek to tweak their functioning, not abolish them in favor of some kind of centralized arbiter of happiness.

OK, so I never suggested that we abolish markets. That would be pretty nonsensical of me–after all, markets are there whether we like it or not; they happen. I think of marketplaces like biological ecosystems. Sometimes, depending on what’s going on inside of them, they work extraordinarily well, with everything going according to Nature’s plan in a sustainable, virtuous cycle. Other times, though, again depending on what’s going on a the micro level, they get out of balance; portions flourish while others flounder, leading to displacement or the loss of biodiversity or even wholesale collapse. To fix the imbalance, one must help the system to function again. Whether we call it a market or not doesn’t really matter; it is what it is.

Meanwhile, Michael thinks that I want to achieve utopia through micro-manipulation of the prices of everyday goods.

My problem with IDM is that he wants to achieve income equality through a lottery of opera tickets, where poor winners could keep them or sell them, and the rich could still obtain them. But that’s…well, goofy. This just randomizes wealth, handing out valuable tickets to a lucky few and letting them trade them. I have a better idea…

Of course a lottery of tickets isn’t going to achieve income equality. At best these measures are a small band-aid on a much larger problem, and I’m planning to address that problem in a future post. In the meantime, though, a band-aid is better than salt, is it not?

If anything, in the last two years, my orientation towards markets has become more positive, not less; I now believe that markets are one of the most efficient and effective ways of advancing the social good, when they work. So I think Adam, Michael, and I are actually in quite similar places here after all, broadly speaking. It’s just that I think of markets as systems that occasionally bear a resemblance to the idealized marketplace seen in economics textbooks, but much more often don’t.

*

Here’s the point in all of this.

I have all the respect for Adam in the world (love ya too, boss!), but I remain convinced (or at any rate, I strongly suspect) that it’s the neoclassical model that’s the edge case, not luxury goods. How common is it, really, for people to have full and relevant information on what they’re getting? How common is it that their preferences are really rational? Just because your mind works that way doesn’t mean most people’s do. Likewise, I think Michael Rushton is a smart, smart cookie, but his campaign to limit the discussion to (what seems to me) a relatively narrow group of middle-of-the-road, professional academic economists does a disservice by ignoring the vastly disproportionate impact that the free-market purists have on the national conversation. Dude, if you want to call yourself an economist and be proud of it, you need to take some responsibility for the damage your crazy-ass colleagues are doing to the credibility of your profession.

Rushton thinks it’s unfair that I implied that William Baumol and William Bowen don’t care about poor people, when clearly they do. I agree that it’s an unfair characterization. But I need to explain something about that quote in my last post. For those who have not had the opportunity to read Performing Arts: The Economic Dilemma, the book is through most of its pages a model of “telling it like it is” understatement: the authors clearly identify the limits of their knowledge and analysis, every assertion is thoroughly documented, a host of alternative explanations are examined at every turn, and issues of class, race, and gender are given fairly enlightened treatment by 1966 standards. In short, they approach the issues at hand exactly in the way I would ask.

The outburst I quoted on page 286 is not an offhand remark taken out of context; it is part of an impassioned five-page rant that is completely at odds with the tone seen in the rest of the book. The authors offer no empirical evidence for their claims in this section, only a few quotes from historians and their own very obvious frustration (some of it perhaps justified) at overzealous regulation of ticket prices. Clearly, one if not both of the authors felt very strongly about this issue, strongly enough to break with decorum and tone to take a stand. That they did it while disparaging the notion of “public virtue” and ignoring the very obvious benefits to access for lower-income people (remember, it’s not like these were considered and dismissed, they weren’t even discussed) from one of the suggested solutions, a lottery system, is telling to me. It’s like even Baumol and Bowen suffered from a temporary bout with Econ 101 disease.

*

I’ve used the words “sickness” and “disease” before to describe what I feel is wrong with the economics profession. I do not use these terms lightly. I use them because, though I am ready to believe that the field has no shortage of thoughtful, level-headed, and compassionate people working diligently within it, I truly believe that as a field itself its foundations are rotten at the core. The neoclassical pricing model is not just some important but outdated anachronism in the history of intellectual thought, like Freud’s Oedipal complex or Marx’s proletariat. It is the active basis of the majority of economists’ working lives. It is the foundation of all economists’, and a lot of non-economists’, first instruction in the field. This conversation, again, was prompted by a debate about the minimum wage. If Wikipedia is to be believed, the empirical evidence that a minimum wage is even marginally detrimental to employment totals is inconclusive at best. Yet according to the same source, nearly all economics textbooks have a nice, neat graph that explains exactly why a minimum wage is detrimental to employment totals. It generally looks something like this:

That graph is in my textbook, too, Pindyck and Rubinfeld 5th Edition, right on page 299. I believe that practices like this foster an anti-scientific a priori mindset in the economics profession that hamstrings progress. It empowers those with libertarian leanings to pollute and distract the conversation with theorems proving the supposed moral righteousness of their views, and forces even economists who stray from the neoclassical model to define themselves in opposition to it, to acknowledge its primacy in the face of competing evidence. Assuming for the moment that textbooks are a reflection of what a field thinks about itself, if the textbooks started from the premise of, “this is how markets might work in a laboratory, but we recognize that real life is much more complicated than that,” I would be satisfied. If the textbooks started out by asking questions rather than providing answers, I would be satisfied. If textbooks treated micro and macro as the same thing on different scales rather than two totally separate disciplines, I would be satisfied. If textbooks addressed the issue of externalities and public goods sooner than page 621 (which is where they first pop up in mine), I would be satisfied. If every graph in an economics textbook was taken from an empirical study with true causal implications rather than from a calculus problem set, I would be satisfied. But so long as these things remain the way they are, no, I will not be satisfied with the economics profession.

My around the horn post from this week included an item on the ethics of offering unpaid internships and a proposal under consideration across the pond to force arts organizations (and other employers, presumably) to pay interns the minimum wage if the engagement is longer than a month. This sparked a lively discussion, first on Michael Rushton’s Arts Admin blog, and subsequently on a site that’s new to me called Art and Avarice, written by young voice teacher and entrepreneur Milena Thomas.

The discussion quickly involved into a debate on basic economic principles, and I don’t know why, but such topics always get me riled up. I found myself debating with a pseudonymous libertarian purist, the worst kind of people to argue with because the moral nihilism underlying their ideology amounts to a cop-out from considering society’s best interests at all.

In the course of doing some research a few weeks ago I came across a devastating takedown of libertarian ideology in, of all places, The American Conservative. Called “Marxism of the Right” (there’s an attention-getter for you), Robert Locke’s article argues that libertarianism is seductive on the surface but riddled with internal contradictions. Here are some of my favorite quotes:

If Marxism is the delusion that one can run society purely on altruism and collectivism, then libertarianism is the mirror-image delusion that one can run it purely on selfishness and individualism. Society in fact requires both individualism and collectivism, both selfishness and altruism, to function. Like Marxism, libertarianism offers the fraudulent intellectual security of a complete a priori account of the political good without the effort of empirical investigation.

Empirically, most people don’t actually want absolute freedom, which is why democracies don’t elect libertarian governments. Irony of ironies, people don’t choose absolute freedom. But this refutes libertarianism by its own premise, as libertarianism defines the good as the freely chosen, yet people do not choose it. Paradoxically, people exercise their freedom not to be libertarians.

A major reason for this is that libertarianism has a naïve view of economics that seems to have stopped paying attention to the actual history of capitalism around 1880. There is not the space here to refute simplistic laissez faire, but note for now that the second-richest nation in the world, Japan, has one of the most regulated economies, while nations in which government has essentially lost control over economic life, like Russia, are hardly economic paradises. Legitimate criticism of over-regulation does not entail going to the opposite extreme.

This contempt for self-restraint is emblematic of a deeper problem: libertarianism has a lot to say about freedom but little about learning to handle it. Freedom without judgment is dangerous at best, useless at worst. Yet libertarianism is philosophically incapable of evolving a theory of how to use freedom well because of its root dogma that all free choices are equal, which it cannot abandon except at the cost of admitting that there are other goods than freedom.

Anyway, I thought this would be a good time to break out a post I’ve been meaning to write for a while. I’ve gone on at great length about my various problems with the neoclassical economic model (someday I’ll collect them all into one place), but one I haven’t touched upon much yet is the way that economists deal with income.

Consider two people who are participating in an auction for a rare piece of Kevin Costner memorabilia. One is a billionaire who happens to be staying at the hotel where the event is held. The other is a teenager who has spent her (life) savings on the plane ticket that allows her to be at this event in person. She has a shrine to Kevin Costner in her room at home, and this is the one item that will complete her collection. If she misses out on it, she’ll never have another chance. Not only has she scrounged up all of her own savings, but she’s spent a month fundraising pledges from her friends and family to help her buy this item. After exhausting every avenue she can possibly think of, she comes to the auction with $3,000 to spend.

The auction begins, and she and the rich guy are the only two bidders. The price quickly gets up to her maximum of three grand, and she keeps going. It’s up to $4,000, $5,000—at this point she has no idea what she’s even bidding with, all she knows is that she has to have this item. After a while, though, it becomes obvious that she’s not going to win this contest, and she runs from the room in tears and defeat. She commits suicide the next day out of grief.

The rich guy, meanwhile, a big NBA fan, is a little dotty and thought it was an article of Kevin Johnson memorabilia. He takes it home and means to resell it, but he forgets about it (again, he’s a dotty billionaire) and it sits in his closet until he dies, whereupon it’s found by his son who doesn’t realize what it is and tosses it in the trash.

According to the neoclassical economic model, the above is a just and efficient outcome of a fair transaction. The rich guy prevailed in the auction because his willingness-to-pay, as judged by the price he actually paid, was higher than the teenager’s willingness-to-pay (as judged by the price she didn’t pay). Thus, economists would say, the dotty old rich guy “valued” the item more.

This absurd result is made possible because the neoclassical method of modeling demand has no real way of distinguishing between “don’t want” and “can’t afford.” All it sees is that a transaction didn’t happen, and the default assumption on the part of economists is that it must be because the girl didn’t want it as much as the rich guy. The economist’s response to “but I couldn’t afford it!” is, essentially, to say that if she’d really wanted it, she would have proven it by finding some way, somehow, to afford it, even if that meant selling her body or stalking the dude for another 15 years until she could buy it back from him. That the rich guy faces no such great sacrifice to obtain the item is irrelevant to them.

“But Ian,” I hear you thinking, “no one could possibly be that stupid. Real economists know what income effects are and of course they wouldn’t make policy recommendations based on what, on its own, seems like a blunt instrument for estimating demand.”

Ah, if only it were that simple! Alas, economists (with the exception of behavioral economists) all too often have a nasty anti-scientific habit of prescribing policy based solely on their flawed and incomplete theories rather than empirical observation and testing. It’s ingrained into them from their earliest training. And despite Michael Rushton’s protests that “only a fringe” of economists fail to understand the criticisms that I hurl against the neoclassical model, we’re not talking about wackos—these are mainstream, well-regarded figures in the field. I give you William J. Baumol and William G. Bowen, authors of the seminal study on the economics of the performing arts:

Not that [ticket scalping] is necessarily undesirable – indeed, as we have maintained, it is part of the normal allocation process. Suppose only one seat is left for a particular performance and two persons wish to buy it – a visitor to New York who will have no other opportunity to see the show and a native New Yorker who can attend almost any performance. If the two contenders have roughly equal incomes, the visitor will offer to pay more because the seat at this particular performance is of greater value to him; and we see nothing “immoral” in this act. Things go wrong only when someone tries to maintain a “just price” artificially, either through legislation or through self-denial on the part of the supplier in response to a questionable notion of public virtue. If those who supply the product are unwilling or unable to collect what would normally be its market price, invariably someone else will volunteer to take their place. The speculator who had nothing to do with the production will then reap the rewards which would otherwise have gone to those who contributed their labor and resources to the performance.

Nice trick there, guys, to cherry-pick the one extremely rare situation in which your logic actually works. In practice, of course, the two individuals’ incomes or asset levels will almost never be equal, and they could just as well be as divergent as our Kevin Costner-obsessed teenager and dotty old rich guy above. If the authors had stopped there, of course, that would have been fine—but they go on to disparage the “questionable notion of public virtue” that benefits “speculators” rather than “those who contributed their labor and resources to the performance,” completely ignoring the fact that some of those “speculators” might be people who actually really want to see the show who otherwise would not be able to. And sure, there would be some reselling on the secondary market, but if, say, legislation put in place a lottery system, that would arguably result in a more just sorting of tickets – because the lower-income people who wanted the tickets would keep them, while higher-income people who wanted tickets would still be able to obtain them. If the tickets are all uniformly at a high price, you would have some higher-income people with tickets who don’t actually want them as much as some lower-income people who don’t have a chance to access them.

Or take Tyler Cowen, a tenured professor and author of a fantastically popular economics blog:

One way of measuring the value of health insurance is by its market price and by that standard many of the current uninsured just don’t value health insurance very much.  That’s why they don’t buy it.

Riiiight, because the cost of health insurance strains people’s family finances beyond what is feasible, that means they don’t value health insurance at all. Having been uninsured for extended periods twice in my life (most recently just this past fall), I can serve as my own counterexample on this one – I certainly would have bought myself insurance had I the money.

Cowen goes on to qualify his statements in a way that makes it clear he is open to other interpretations. But that’s not good enough. To me, the notion that “the value of a poor man’s life is not measured by his money” is even a question up for debate is the ultimate sign of economics’ sickness. That Cowen has to lead off with the neoclassical interpretation almost apologetically before presenting alternative views shows how much weight that framework, with all its flaws, still carries with his readers.

We’ve learned this week that our aversion to economic inequality is not just a philosophical abstraction; it may in fact be hardwired into our brains. Human beings have a need for moral fairness and just desserts as part of our biological makeup, it seems, just like sex and food. But it’s no surprise that our economic models don’t take this into account; after all, it seems the people we put in charge of telling us how the world works are the rare people who don’t share this characteristic. In short, it’s true: economists really don’t care about poor people. It’s time we had a framework for understanding our actions that speaks for the rest of us.

It seems that in order to enter the competition, composers have to pay a fee of $50 per work considered. There is a longstanding anathema towards competition entry fees in composer circles, however, and a post on Sequenza21 drawing attention to the situation has drawn a firestorm of over 100 comments.

It’s bad enough, according to composers, that there’s an entry fee charged at all. When I worked at the American Music Center, there was standard language in our monthly newsletter listing competition opportunities that cast a stern frowny-face on those that charged entry fees. The ones that did were actually relegated to their own section, after the entry-fee-free listings, and preceded by a clear statement that AMC did not endorse the practice. Several other composer service organizations take more or less the same stance. What’s really astonishing about this competition, however, is the size of the fee in combination with the financial reward provided to the winner. Composers are asked to pay $50 for each work submitted (up to two submissions allowed); yet the single prize awarded consists of $1000 cash, a day of rehearsal time with eighth blackbird, a single performance and promotional recording, and $500 for travel, totaling on the order of $2000 in direct expenses associated with this competition. It doesn’t take a math genius to realize that this competition may well pay for itself or even make a tidy profit, a huge no-no from the perspective of composers. I have heard of calls for scores with no prize money at all attracting upwards of 300 submissions; it’s possible that the high entry fee will counteract the effects of the award and the much higher profile of eighth blackbird, but even half that figure would yield 8bb’s members several grand for themselves on top of what they spend on the competition.

In one sense, it’s odd for composers to be angry about paying fees, even at $50 a pop, to have their work considered. The culture of not paying entry fees for composer competitions is, if anything, unusual even for the nonprofit sector; composers’ cousins in music, instrumentalists, have competitions of their own and almost always have to pay high entry fees to enter (as several commenters in the Sequenza21 thread were quick to point out). Fees for consideration are common in workshops, summer programs, etc., not to mention of course the granddaddy of them all, college and graduate school applications. The fact is, sifting through hundreds of applications, work samples, and other materials and giving them thoughtful consideration takes time and has real costs, especially if the sifter is busy with other things. The composer may not always have to pay for this service, but it’s never free.

On the other hand, there are real problems with this line of thinking. The first is that it’s not consistent. As a society, we seem to find application fees for the above situations, especially college admissions, perfectly acceptable and normal. But imagine the uproar if foundations started requiring fees to apply for a grant, or if employers tried instituting a fee for sending in a job application? There’s really no vast difference in the resource demands or relationship between applicant and adjudicator between this curatorial process and the ones mentioned just above – yet the culture around entry fees is completely different. Why? Secondly, I’ve written at length on this blog (and will continue to do so) about how class differences give certain artists enormous advantages in an unforgiving market for their work, and competition entry fees are a prime example of why this is a problem. A commenter on Sequenza21, defending the practice, illustrates the point:

$50 is a lot for an entry, but consider your average weekend. Perhaps you go to out to eat, perhaps with your significant other. At most restaurants your looking at around $25-$30 for dinner for two. Maybe you wanna catch a movie so you can hear that new Hans Zimmer score. Tickets for one or two could range anywhere from $10-$20, plus popcorn, candy, drinks. What if instead of a movie you went to a ballgame? Or a play? Or (most hopefully) a symphony concert?

$50 is not a ton to spend on a weekend if you have a secure, full-time job that pays you at least $40,000 a year. For many composers, however, especially the sort that is still entering competitions to gain exposure, the situation is quite different. I recall a period of time during my days in New York when, because of the money I was losing on composing, I ate out approximately once a month, took girls on dates to pizza places, etc. – and I did have a full-time job. Furthermore, this is not just about one competition. Realistically, a composer has little chance of winning the prize, so she has to enter numerous such competitions in order to contemplate the possibility of making her money back in prize winnings. If all of those opportunities have $50 entry fees, only the composers with a secure flow of cash will be able to persevere.

Finally, we have the differential in the valuation of the composer’s time and the ensemble’s time. By setting up the competition as a potential profit-making enterprise, eighth blackbird implicitly states that its time is too valuable to devote in-kind to this relationship, yet it expects the winning composer to donate, at a minimum, their time spent applying to the competition and their time coaching the rehearsal and being present at the performance, and possibly the time writing or adapting a piece specifically for the ensemble as well. This valuation differential frustrates composer Dennis Báthory-Kitsz so much that it inspired him to create the Báthory-Kitsz Performing Ensemble Competition 2010, wherein ensembles apply to him (with entry fee, natch) for the privilege of playing his music.

What many composers in the Sequenza21 thread miss, though, is that there’s good reason for a power differential in this particular case: i.e., to put it bluntly, that eighth blackbird is famous and they are not. Báthory-Kitsz’s proposal would make more sense and the argument would carry more weight if his name were Osvaldo Golijov or John Adams, but it’s not. This is essentially the argument put forth by eighth blackbird’s administrative director, Chris Richardson, in defending his decision to set up the competition this way:

A few have said or implied that the award isn’t sufficient. I’m rather surprised by this contention. I truly thought being the sole winner of an annual contest personally judged by eighth blackbird, plus having the piece performed, plus travel and lodging, plus $1,000 cash, was rather significant.

But eighth blackbird is not blameless in this scenario either. Richardson explains the origins of the competition as follows:

First, it should be worth noting that the contest emerged as a response to a single issue: a growing number of unsolicited submissions. As David wrote above, there is a large pile of scores and recordings in the studio. The group does not want to simply ignore the hard work of composers, and yet they simply do not have time to review them. The question became, ‘how do we rationally manage submissions?’ Having an annual contest provides just such a system. Now there is a simple and objective determination for whether a score is reviewed or not.

[…]

I argued very strongly there be a fee. I believe it encourages self-selection, and as has been repeated above, it just seems to be the standard model. I’m more familiar with the screenwriting world than that of composing, and I have never heard of a screenplay contest that didn’t have a fee. Further, we wanted there to be a significant prize, so the contest would have to pay for itself….Perhaps we’re naive, but we are anticipating about 35-50, which at $50 per application would be just enough to break even, with perhaps a little bit for our time if we’re lucky. I hope we’re wrong and you’re right. This is the first time we’ve done this, so we really have no idea.

There are two things to talk about here. First, Richardson explains in no uncertain terms that this competition is meant to replace, not augment, the band’s consideration of unsolicited scores. In the past, they would receive hundreds of scores from composers, and devoted their time and attention gratis to seeing whether they wanted to perform any of them. Now, suddenly, they are saying they need to be paid for their time spent doing so. Fair enough – but then it’s disingenuous for Richardson or the ensemble to frame this competition, as they have, as some wonderful gift to composers. It’s not. It’s a business decision designed to cut down on their own costs, and composers are smart enough to realize that and treat it accordingly.

Secondly, it’s obvious that Richardson and the ensemble did almost no research on composer competitions before releasing theirs into the world. If they had devoted even an hour’s worth of time to perusing publications listing such opportunities and talking to colleagues who had organized similar competitions in the past, they would have known that $50 is considered a very high entry fee, that it’s very uncommon to expect composers to fully subsidize the competition’s costs, and that large numbers of composers apply for competitions. That they did not do so is pretty much a public relations/business 101 bungle.

(Update: Isaac at Parabasis weighs in here.)

Stephen Colbert is ready for the Olympics…are YOU?

• Did you know the Olympics used to award medals to artists between 1912 and 1948? Germany led with 24 in all.
• Holy moly data gold mine ahead: PeteSearch has been writing a program to scrape the public Facebook profiles off the web and analyze their connections and fan pages. Read about his findings here and entertain yourself for hours with the interactive maps over here.
• Rocco (Let’s just ditch the last name entirely from now on, don’t you think?) scores a fawning interview in Newsweek, and manages to piss off Scott Walters even more royally this time. (For the record, in Scott’s defense, one of the things I’m finding during my BACAM work is that there really are arts organizations and arts activities everywhere.) For more Rocco, check out his interview with Barry Hessenius from last week. Encouraging sign: they’re holding staff meetings at the NEA to discuss the ideas and proposals that were put forth as part of Barry’s six-week megablogasm last fall.
• The NEA has also released an update to its study on unemployment rates for artists in the recession. Seems architects and designers are getting hit particularly hard due to halted and canceled construction projects, and actors’ unemployment is through the roof (as it always is). Overall, artists face higher unemployment than the overall population, though the difference, about a percentage point, is not as drastic as one might expect.
• Don’t look now, but it sounds like the BAM Cultural District in Brooklyn might finally be getting off the ground.
• Createquity contributor Guy Yedwab (did you catch his latest?) has an interesting idea: adapt Atul Gawande’s Checklist Manifesto to diversity initiatives in the arts. (I think such things are actually fairly commonplace in the corporate world, but less so among the nonexistent HR departments of nonprofit and informal arts orgs.)
• Video of an event at Duke with the President of the Knight Foundation.
• A customer service orientation for funders? Perish the thought!
• Hear, hear!
  

  Since the publication of the Hewlett study, there has been a groundswell of activity in directing resources and energies at providing services, infrastructure, guidance and counsel to the next generation of arts leadership – all across the country. But I don’t yet see much energy, resources and thinking directed at educating the current leadership as to how they might better and more effectively manage the generational divide in the workplace of the average arts organization.

  Managing subordinates is a skill, a specialized one, and it’s high time we start treating it that way. It’s not the sort of thing anyone can just “pick up” on the fly.

• GiveWell, ever the tough evaluator of charitable impact, takes a look in the mirror and declares itself not (yet) a success. Speaking of evaluation, Mark Kramer’s most significant contribution of the week at the Intrepid Philanthropist was this essay on the inadequacy of linear logic models for describing the change that foundations want to achieve. I agree, even though I’m a big fan of those logic models – describing the process of “contributing incrementally to the possibility of change that may or may not ultimately take place,” which is really what we mean almost every time we talk about “impact,” remains one of the hardest challenges for the sector.
• There’s something called the Secret Society for Creative Philanthropy? Sign me up!
• Pictures worth a thousand words, etc.
• Via Chris Ashworth, a nice video about the Baltimore Symphony’s Rusty Musicians program (interesting how none of the pro musicians are interviewed, however).
• Arts marketers may want to take note of Wolf Trap Opera’s rollout strategy for their new season. It demonstrates a much more astute understanding of how the blogosphere works than I usually see from institutional presenters (no surprise, then, that the idea is borrowed from Seth Godin). You can read an interview with WTO director Kim Witman about the concept at the Technology in the Arts blog.
• I have some issues with the piece, but I will say that it’s nice to see the Gray Lady sending her classical music critics to West Village clubs on a seemingly regular basis. This is maybe the fourth time in the last couple of months that LPR has gotten the NYT treatment. Also on the subject of “it’s nice they’re finally paying attention,” I enjoyed this paean to the art of video games in the Boston Globe. I haven’t played computer/video games on a regular basis in about a decade, but during my teenage years when I was an avid gamer I could have told you that some of them rose to the level of art. Hell, moral dilemmas and complex narrative in computer games are at least as old as Ultima and the original Infocom text adventures, respectively.
• Check out this great list of financial resources for artists from Arwen Lowbridge. You may need them, if the Atlantic‘s apocalyptic vision of the recession’s impact on this country is to be believed.
• If you’re interested in happiness economics, as I am, don’t miss this interview with Wharton School professor Betsey Stevenson in my alma mater’s quarterly magazine. She basically gives a five-minute lit review on topline findings from the field, including that:
  • Happiness is correlated with wealth, both on a personal and societal level, but it’s correlated with the log of income rather than on a per-dollar basis. So in other words, an extra twenty bucks will make a poor person much happier than it will make a rich person, but an extra 10% of income will affect both the same.
  • Self-reported happiness turns out to be a fairly robust indicator, but there’s lots of debate over whether it’s the same as utility or total life satisfaction.
  • People have been getting happier as wealth has been rising in every country in the world except the United States, where despite massive aggregate growth in the last 40 years we haven’t gotten any happier.
  • Since the 1970s, what had been a huge gap between the happiness of whites and African Americans has closed by two-thirds. On the other hand, women have become less happy than they used to be both on an absolute basis and relative to men. Stevenson throws out a couple of theories for this (which both involve some form of higher expectations than previous generations).
• Are you a nonprofit executive who’s ready to (figuratively) slit your wrists in this tough economy? Don’t do it! Call up the New York Community Trust’s emergency hotline! (yes, seriously.)