Well, let’s say the difference in charity between the teacher and the bonds trader in my example is $5000. Each year, if the teacher teaches 5 classes with 20 students each, then he probably has 100 students. If 100 students have a significantly better education that year then they otherwise would, then I would think that would be worth more utility in the long run then $50 per student, wouldn’t you?
We don’t want to compare education with dollars here, we want to compare education with the best thing you can easily buy with a charitable donation, and that’s probably mosquito nets which save one child’s life per $2500.
Yes, it’s much cheaper to save lives in the third world than in the first world, but that obviously doesn’t mean that we should stop investing resources into education in the first world.
If you want to figure out the value of an education in the first world, you would have to take the cost of the education and compare it to the amount of added value that that person will produce over the course of his lifetime because of that education.
Obviously something like mosquito nets to a third world country is an area where not as many resources are being invested as should be invested, but that doesn’t mean that you drop all other investments in order to only do that.
I’m not sure if your objection is that our economy should put nonzero resources into first-world education. But if it is, note that the issue is where the next marginal $5000 should go — whether, given the current allocation of resources, marginal dollars do more good in first-world education than in third-world health. If our hypothetical teacher/trader’s donation is somehow matched by our entire economy, or even by all philanthropists, the AMF’s room for more funding would be instantly exhausted.
If you want to figure out the value of an education in the first world, you would have to take the cost of the education and compare it to the amount of added value that that person will produce over the course of his lifetime because of that education.
Agreed, and on the other side one should likewise add up all the value that two saved children in Africa would produce over their lifetimes. As I said, I’m not sure I agree that the education intervention produces more total value, but perhaps I could be persuaded of this.
But if it is, note that the issue is where the next marginal $5000 should go — whether, given the current allocation of resources, marginal dollars do more good in first-world education than in third-world health.
I don’t think that’s the most important issue here. If teacher A is creating more value at teaching than he would be as a bond salesman donating to charity, then the government could (in theory) then shift $5000 worth of resources from education over to foreign aid as the teacher is generating more then $5000 worth of extra education value. Or Bill Gates could donate a little more to third world charities instead of US education charities (since he does both), ect. That is, if it would cost the government more money to create as much educational improvement as person X can then it would cost them to create as much third world charity improvement as person X can. then person X is probably doing more good in education.
I realize that in practice that’s not necessarily going to happen, but fundamentally, dollars are fungible; if person A can create more dollars worth of education value then he can create dollars worth of third world charity value, then that’s what he should do, and let someone else who can more efficiently give dollars to a third world charity then they can to first world education do that instead.
I agree that if the economy reliably distributes resources in a manner which is fair and is best for everyone, then fungibility of money implies that the most altruistic thing to do would be to create the most value as measured in dollars.
However, the economy is in fact not like this (and you seem to agree). I don’t understand why our hypothetical teacher/trader should act like it is.
Well, let’s say the difference in charity between the teacher and the bonds trader in my example is $5000. Each year, if the teacher teaches 5 classes with 20 students each, then he probably has 100 students. If 100 students have a significantly better education that year then they otherwise would, then I would think that would be worth more utility in the long run then $50 per student, wouldn’t you?
We don’t want to compare education with dollars here, we want to compare education with the best thing you can easily buy with a charitable donation, and that’s probably mosquito nets which save one child’s life per $2500.
Yes, it’s much cheaper to save lives in the third world than in the first world, but that obviously doesn’t mean that we should stop investing resources into education in the first world.
If you want to figure out the value of an education in the first world, you would have to take the cost of the education and compare it to the amount of added value that that person will produce over the course of his lifetime because of that education.
Obviously something like mosquito nets to a third world country is an area where not as many resources are being invested as should be invested, but that doesn’t mean that you drop all other investments in order to only do that.
I’m not sure if your objection is that our economy should put nonzero resources into first-world education. But if it is, note that the issue is where the next marginal $5000 should go — whether, given the current allocation of resources, marginal dollars do more good in first-world education than in third-world health. If our hypothetical teacher/trader’s donation is somehow matched by our entire economy, or even by all philanthropists, the AMF’s room for more funding would be instantly exhausted.
Agreed, and on the other side one should likewise add up all the value that two saved children in Africa would produce over their lifetimes. As I said, I’m not sure I agree that the education intervention produces more total value, but perhaps I could be persuaded of this.
I don’t think that’s the most important issue here. If teacher A is creating more value at teaching than he would be as a bond salesman donating to charity, then the government could (in theory) then shift $5000 worth of resources from education over to foreign aid as the teacher is generating more then $5000 worth of extra education value. Or Bill Gates could donate a little more to third world charities instead of US education charities (since he does both), ect. That is, if it would cost the government more money to create as much educational improvement as person X can then it would cost them to create as much third world charity improvement as person X can. then person X is probably doing more good in education.
I realize that in practice that’s not necessarily going to happen, but fundamentally, dollars are fungible; if person A can create more dollars worth of education value then he can create dollars worth of third world charity value, then that’s what he should do, and let someone else who can more efficiently give dollars to a third world charity then they can to first world education do that instead.
I agree that if the economy reliably distributes resources in a manner which is fair and is best for everyone, then fungibility of money implies that the most altruistic thing to do would be to create the most value as measured in dollars.
However, the economy is in fact not like this (and you seem to agree). I don’t understand why our hypothetical teacher/trader should act like it is.