A New Constitution, Part 8

This is part 8 of the series; part 7 is here.

In the last part of this series I proposed that instead of the government helping poor people via welfare, the community could do a better job via charity. Before I describe a specific mechanism for doing this, here are some thoughts on welfare and charity:

Welfare

• not an act of free will, since the money is taken from you via tax
• inefficient; the government is an intermediary with a monopoly
• the recipients don't know who to thank and so usually don't thank anyone
• the givers don't know who got what and so don't receive any thanks
• influenced my government ideologies that you may or may not agree with

Charity

• an act of free will
• giver can choose to fund only organizations that are efficient and accountable
• recipients can sometimes thank the givers directly
• givers can sometimes see the receivers directly
• joyful; giver can donate to causes that align with their belief system

From an emotional perspective, I have found donating to charities to be a very enjoyable and satisfying experience. This is no surprise, since I'm helping organizations that directly support my value system and I receive regular reports on how my money is being spent. In addition, I'm free to change the organizations that I support based on new information or a change in my values.

On the flip side, I get no enjoyment from my tax money that is spent anonymously on my behalf for things that I either don't know about or disagree with. For example, it annoys me that the US government spends hundreds of millions of dollars funding abstinence-only programs that have been shown to be both ineffective and misleading.

My idea for a better and realistic alternative to government welfare was inspired by a micro-loan site called Kiva. This company lets you learn about people in developing countries who are looking for small loans for their small business.

For example, here's some background on Peter Okalang of Uganda who would like to borrow $500 for his chemical business. If you like what you see, you can lend him a small amount of money and he'll try hard to pay you back within the specified time period. (I liked him and lent him $100; it felt good to help a hard working guy halfway around the world.) The system tracks the repayment histories of loan recipients, and the amounts are small enough that even if you lose the money, it's not a big deal.

The next part of this series will build upon the Kiva idea and describe a site for managing charitable donations on a nationwide scale.

Comments

[David Weber]

I like the "small government" theme to your constitution.

While charity is a good and noble thing, it only treats the symptoms of poverty, not the root cause. Sadly, fixing the root cause may well be impossible.

Cheers,
David

[Daniel]

While you're idea's here are very interesting, I feel that they are a bit overly optimistic, maybe even a bit utopian. Let's face it that the primary "value" of capitalism is to make as much money as possible. The richest people are the best at making money, and giving to charity goes directly against their "get rich" value system. This means that those most able to give will be the least likely to do that if they truly live by the values of capitalism and the free market. While giving to charity may be a "good thing", I don't think there's enough goodwill amoung those who can give to support those who don't have enough.

[Graham Glass]

Hi Daniel,

I don't think this system is anti-capitalistic. I simply think that charity would be a more efficient way to help those in need that the current government system. If for any reason this theory is wrong, then it's not a big deal. However, I'd point out to the citizens that they will in fact lose money by not funding their values, since the alternative is to introduce government mandates instead. So the real choice is:

1. fund your values directly and efficiently, see where your money goes, and pay no tax.

2. fund other people's values indirectly and inefficiently, don't see where your money goes, and pay tax.

Being a capitalist myself, I'd pick (1).

Cheers,
Graham