It’s not clear to me how charitable giving is any more or less distortionary than government spending or any other sort of largely non-markety behavior.

For one thing, the Salvation Army guy in the Santa suit doesn’t point a gun at my head.

But those are characteristics that we commonly associate with government, and it’s no coincidence. Politics is status seeking leveraged by a society’s institutionalized network. A “perfect libertarian” society where such behavior is tolerated and even encouraged is more vulnerable to becoming a political society than one where showing off is viewed with suspicion. One more interesting way in which morals and political economy are intertwined.

Project idea for someone looking for a paper: estimate the rate of return on the Salvation Army holiday bell-ringing campaign.

Only an academic would recommend such a complete waste of time.

Most of us are not Koch funded. We have to do stuff that other people are willing to pay for.

charity is great, but not all charitable endeavors are created equal. There is an opportunity cost associated with using resources for one charitable purpose and not another, and careful economics can help us maximize the bang we get from our charitable bucks. I explain further here.

Your article you link to makes good points, ones wasted on the people who I think give most of the charity money.

The money we are giving to charity has to come from somewhere, and it isn’t always clear that it will do more good, socially, if it is given to someone than it would if it were left in a bank account and lent to an entrepreneur….If you just want to give people stuff, though, then your charity is most effective when it is given in secret.

I do in fact think that the kind of charity which dominates – where you give to a central organisation that is large rather than local and small – is actively counter-productive. They cater for the incentive of most givers ie. social status – they are buying a pass card to the conversations at dinner parties they go to and the more public and self-designated do-gooding the organisation is, the more value the status seeker gets.

The charities who don’t have time to be public because they spend their money and time on helping people instead of marketing and collecting expenses receipts don’t usually provide the same bang for the buck for the Guardian readers. Imagine a charity lobbying for the repeal of the minimum wage for example?

And those who are genuine but just don’t know anything about economics end up giving to these large organisations too, because they’re there and convenient.

Unless you’re explicitly trying to change people’s incentives, you do the most good when your charity is kept quiet.

Indeed – the celebrities are always “raising awareness”. How much awareness raising do we need – what is the economic calculation that says to someone weighing up some possible awareness raising “it’s ok, we have a enough awareness raising, please pick up a shovel?”.

I think none – I think large charity organisations are frauds and that all money would be better in the bank (not the banks we have now ideally but you get my drift) providing capital to allow people in general to have cheaper stuff and have more free money to help people they want to more directly and locally.

I think this idea should be promoted and the givers who are not just phoneys might wake up and change their ways. Might – I’m not holding my breath. If I ever get invited to one of the Guardian readers social events again, I think I’ll go and suffer the wonder-government stuff just to make this argument to see what response I get.