What I'm Reading
By Arnold Kling
Uncharitable, by Dan Pallotta. Recommended by Amy Willis with regard to my discussion of nonprofits.
So far (I am less than 1/4 through), the book says the following:
1. Organizations that seek to achieve charitable ends should be permitted to use capitalist means. That is, charities should be able to pay high salaries, advertise, make long-term investments, and earn a profit. If you eradicate third-world poverty or cure cancer, why should it be a problem that in the process somebody earned a large salary or a high return on investment?
2. The reason that we do not let charities do this is that our concept of charity is derived from Puritan beliefs. According to Pallotta, Puritans believe in what Dierdre McCloskey would call bourgeois dignity. Hard work and commerce are virtuous. However, they lead to rewards, and the Puritanical outlook is that humans are fundamentally sinful, so that they do not deserve rewards. They need to offset their rewards by working for charity. Furthermore, charitable work must not earn rewards. Hence, nonprofits and the restrictions thereon.
On (1), I think that the distinction between ends and means is interesting. It certainly points out the difficulty of segregating profits from non-profits. If an office at a non-profit has a working lunch, can they order in from a for-profit pizza place? Or does doing so corrupt the non-profit.
Pallotta speaks as if people make a clean distinction between a commercial sector, where it is ok to get rewards and a charitable sector where it is not ok. I am not sure that the distinction is quite that sharp. For example, in health care, Marcia Angell and others will argue that it is immoral for money to go to advertising and profits in the pharmaceutical industry.
On point (2), I will grant the descriptive value of associating our ethics regarding charity with Puritan values. But as far as saying that our views on charity definitely trace back to Puritanism, I think that is a lot of weight to put on one variable. I would look to other countries or parts of the U.S. where Puritan influence is weak, and then I would see whether similar sentiments about commerce and charity can be found. If so, then Puritanism per se is not the causal factor.
Pallotta points out that among Puritans, men tended to dominate the commercial sector while women were more prominent in the charitable sector. He assumes that this reflects cultural factors. However, the gender differences may be related to the finding that women use volunteer activity as a mating signal. Of course, this finding might be a product of culture. But it could be that what Pallotta ascribes to Puritan religion might in fact be explained by evolutionary psychology at some level.
UPDATE: corrected (I hope!) multiple misspellings of author’s name