The Road to Hell

My wife tells the story of periodically flying out to Kenya for her archaeological research. She would inevitably would be seated next to some missionary from a megachurch in Texas, flying out to Nairobi with a group of sloe-eyed, blond-haired, hopeful kids up to their eyeballs in self-importance, headed out to the countryside to build a school for the poor kids in Africa. This is the point at which my wife would usually put her AirPods in, knowing how this was going to turn out. So the missionaries would indeed go out to the countryside outside of Nairobi, build a ramshackle school with cinder blocks and whatever materials they could cobble together, stand back and marvel at their accomplishment, and head back to Danny Gokey country with the knowledge that they saved the world, and an Instagram timeline full of White Savior Barbie pictures with undernourished African children.

Then the school would become a goat storage unit.

What the missionaries would not and did not consider that they didn’t provide anything in the way of compensation for a teacher to actually work at the school, so it just became a convenient place to keep goats. In fact, if you are on the outskirts of Nairobi and look out across the horizon, you will see dozens of such goat storage units built by missionaries. I even heard of an instance where the Kenyans waited until the middle of the night to rebuild one of the schools before the concrete set while the Americans slept. The Keynans take a dim view of all of this, and the high-BMI Americans in their jorts typically make an easy target for the muggers, scammers, and street criminals of Nairobi.

This is an instance where people set out to do good and end up not doing good. It is more common than you think. It is said that the road to hell is paved with good intentions. Does that mean that all charity is bad, or misguided? Of course not. But there are certainly unintended consequences to charity. There are unintended consequences to all charity. The city of San Francisco, in handing out money and drug paraphernalia (and actual drugs), is trying to do good. They are trying to ease the burden of the homeless people in the city. But there are unintended consequences. Really what they are doing is incentivizing homelessness, and there is a lot of evidence that most of the homeless population in San Francisco is not even from San Francisco. They go there for the free stuff. Until San Francisco makes it inhospitable to be homeless, they will have a homeless problem. But that is mean. Locking up people for petty drug offenses is mean. So it’s an endless do-loop of altruism that you used to construct in Applesoft Basic. Oftentimes, being mean to people is actually helping them out. In the 80s, there was a book about this—it was called Toughlove. A much longer discussion.

A few glaring examples of doing bad while trying to do good: the food stamp program. 20% of food stamp benefits are obtained fraudulently, which amounts into the tens of billions. And for those that are obtained legitimately, they provide a powerful disincentive to escape from indigence, because the benefits phase out when you reach a certain level of income. An economist would say that a food stamp beneficiary, on the cusp of earning more money, faces an implied marginal income tax rate of over 100%. Food stamps may temporarily ease one’s financial burden, but they are trapping generations of people in poverty. The PPP loans were another example—hundreds of billions gone to fraud, and there isn’t a lot of evidence that jobs would have been lost without the existence of the PPP loans. This isn’t an argument for Milei-style minarchism, as this is not a political essay, only to point out that when we set out to do good, we often do bad.

It happens on a micro level, too. Your brother-in-law has fallen on hard times and is asking for $25,000 to pay off some debt and get back on his feet. The reason he is coming to you is because he has exhausted all other possibilities. He’s maxed out his credit cards, banks won’t lend to him, and he’s faced with asking you for money or getting the triple-digit interest rates from a payday lender. This time is different, he says. Okay. If you help him, do it with your eyes open, and know that the 25 grand is a gift, not a loan, and it’s effectively going to ruin your relationship with him, because you’re going to want the money back, and he’s going to be avoiding you. It’s going to create some other ugly family dynamics, too, like envy and jealousy. If you just tell him to fuck off, he’ll be butthurt about it for a few days, and then eventually go find another host. Being mean has its advantages. I run into this in teaching all the time. Deep down, students really want to be challenged. I get high marks from my students, and I do not give especially high grades.

So how does one perform acts of charity? First, recognize that much of charity creates dependence. I am not one for volunteering at the soup kitchen. Fill a void, make a turd. Where would these people be, without the existence of the soup kitchen? Confronted with the realities of their situation, they would have to scramble. People are resourceful. They will find ways to make money when their next meal depends on it. Democratic president Bill Clinton drastically cut welfare benefits in his first term. It was the zeitgeist at the time, the crack-addicted “welfare queens” that were mooching off taxpayer dollars—if you were around in the early 90s, you probably remember the prevailing mood. What happened when the welfare benefits disappeared? Did millions of people starve to death, and get piled high into a giant pyramid in Nebraska? Not a single person. People are resourceful when they have to be.

I’ll also add that any charity that is done by a third party payer will always backfire. If you want to give food or money to a crack addict, that has an infinitely better chance of helping than the government taking money from you in the form of taxes and giving it to the crack addict. Of course, these programs have the best of intentions, which is why they fail. The only charity that ultimately works is done on a person-to-person basis. People have become skeptical of the giant nonprofits, the Wounded Warrior Project and the ASPCA, where a huge percentage of donations go to administration. If you want to help a Wounded Warrior, go help a wounded warrior. If you want to help cats, there are plenty of local organizations in your area. Nobody wants to get their hands dirty. I don’t want to get my hands dirty. But that’s what you have to do, if you want to do good.

There is an area deadlifter who talks about the phenomenon of naïve intervention. When you intervene naively in a system that you do not understand, you are bound to cause unintended consequences. Like the missionaries with their goat storage units. They know nothing about Kenya and its people and culture. They think schools are needed, when what is actually needed is money for people to teach in the schools. The government naively intervenes in things all the time. The Federal Reserve naively intervenes in things all the time. How do you think we got so much inflation? I mean sure, any newsletter writer could have told you that doing trillions of QE and holding rates at zero for ten years would have consequences. The Federal Reserve really does believe that it can plan an economy, something that is as intricate and beautiful as a spider web. We’re veering back into minarchism here. We could talk about the unintended consequences of our interventions in Ukraine, too, which were based on the best of intentions.

My philosophy on charity is my philosophy on life in general—it’s not for the people who need it, it’s for the people who want it. Help those deserving of help. I am an investor, and I think about charity much in the same way as investing—where will the world get the highest rate of return? Hire the poor, smart, and determined. Lift up those who have hit bottom, and are willing to make profound changes in their life. No person on earth has been attacked more than the queen of selfishness, Ayn Rand. Ayn Rand gave to charity, you know. You know what she gave to? Cats. I don’t care what kind of person Beth Stern is in her personal life; in my book, she is an absolute saint. There is no naïve intervention in helping animals, they truly are grateful for it, and you will always be doing good.