Centralized empathy and the philanthropic calculation debate: “man plans, God laughs”

Robert Graboyes:

The greatest economics lesson of all may reside in the Yiddish expression, “Der mensch tracht, un Gott lacht” (“Man plans, and God laughs.”)That, writ small, is the message of Friedrich Hayek’s broadsides against central planning in The Fatal Conceit and “The Use of Knowledge in Society.” The latter was one of the most influential economic essays of the 20th century, and in a gentler time, when philosophical adversaries actually listened to one another (some, at least), a significant number of socialists and would-be planners found the anti-socialist Hayek’s arguments persuasive (or at least informative). Hayek dedicated his The Road to Serfdom “to the socialists of all parties,” and he wrote that dedication with respect. Hayek, ever-generous of spirit, had no interest in “owning the libs.”

In recent years, the impulse to apply central planning techniques to charitable endeavors has taken form in the Effective Altruism (EA) movement. The movement has been defined by its own adherents as: 

“Effective altruism is a research field and practical community that aims to find the best ways to help others, and put them into practice.” 

Ostensibly, the idea is to think systematically about charity, to develop metrics concerning the relative effectiveness of different charitable outlets, and to use those metrics to apply cost-effectiveness analysis to help allocate resources across charitable institutions. Both the goal and the mathematical approach of EA appeal to me as an economist, but I’m always aware of economists’ chronic overconfidence in the ability of mathematical tools, created and operated by a clerisy of “experts,” to optimize over complex human behavior.