How Do You Raise a Trillion Dollars?

I had been looking forward to reading the full, book-length version of Rowan Hooper’s How to Spend a Trillion Dollars  ever since I read the shortened version that appeared as an article in New Scientist.

In that article, Hooper explored three of the biggest problems that we might solve with a trillion dollars: world poverty, climate change, or disease.  A letter to New Scientist the following week commented that the only one worth doing out of these was halting climate change, as poverty would always exist as long as some people had more money than others, and there was no point in eradicating deadly diseases like polio and malaria because everyone dies of something eventually.

I got the impression that the letter-writer had missed the point.  Hooper wasn’t claiming that sharing a trillion dollars between the world’s poorest 760 million people (giving them on average $1,315 each) would eradicate relative poverty and make them as rich as Bill Gates.  But it could give them the money they need to start a farm or a small business, install solar panels, educate their children, or avoid becoming trapped in debt bondage.  The point is that what in a wealthy country would buy a holiday could be life-changing in a poor country.

Still, if we can’t alleviate climate change, poverty is just going to increase, as more of the world around the equator becomes uninhabitable.  No, the fact that colder bits of tundra are opening up and becoming farmable doesn’t balance this out, because they’re proportionately much smaller (not to mention the problem that they are releasing methane fuelling much more global warming to come).  Besides, if you’re a poor subsistence farmer struggling to grow enough food to live on in a drought-stricken part of Africa, you aren’t likely to have the money to relocate to Siberia.  Without a grant, you may not even have the money to switch to growing a more resilient crop where you are.

Consequently, four chapters of the book version of How to Spend a Trillion Dollars explore different ways of tackling environmental issues.  We could invest in alternatives to fossil fuels (Chapter 3: ‘Go Carbon Neutral’), protect ecosystems such as rainforests, and coral reefs (Chapter 4: ‘Save Life on Earth’), which, if we protect peat bogs and whales and also plant far more trees and kelp forests, could remove excessive carbon dioxide from the atmosphere (Chapter 7: ‘Redesign Our Planet’), and work at making vegetarian food, insect-based food and lab-grown meat a more appealing alternative to farming huge numbers of cows (Chapter 8: ‘Turn the World Vegan’).

Some of the other chapters are concerned with further-off scientific projects – building a base on the moon, finding out whether aliens exist, physics research to help us understand the nature of the universe, creating sentient artificial intelligence.  You may or may not consider some of these worth doing – but, as Hooper admits, right now they’re not as urgent as solving the problems of poverty and climate change.

What I had been hoping to see more of was practical suggestions on where the money would actually come from.  Hooper imagines, for the purposes of this book, that you could just conjure it up through quantitative easing.  But in practice, this would just drive up inflation, so that a trillion dollars wouldn’t be worth as much, and wouldn’t do as much.

So, suppose we stop fantasising and dig into our pockets?  A few weeks ago, I posted three questions on Quora:

If I wanted to raise a trillion dollars to help the poorest billion people in the world out of poverty, would I be more likely to raise it by asking the richest billion people for a thousand dollars each, or the richest thousand people for a billion? 

If I wanted to raise a trillion dollars to mitigate climate change, would I be more likely to raise it by asking the richest billion people for a thousand dollars each, the richest million for a million, or the richest thousand for a billion? 

If I wanted to raise a trillion dollars for scientific/medical research, would I be more likely to raise it by asking the richest billion people for a thousand dollars each, the richest million for a million, or the richest thousand for a billion? 

Nobody answered, perhaps because they assumed that posting three near-identical questions meant I was just trolling.  I had been hoping to see how the answers might differ – would ordinary people like us, rich by world standards but medium-income or poor by the standards of developed countries, be more interested in helping the poor?  Would billionaires be more interested in funding exciting projects like settlements on the moon?

However, posting those questions did bring up pages of answers to similar questions that other people had posted, so it’s worth clicking on these links to read those.  For example, in response to the question

How can someone with a billion dollars in the bank not help the hundreds of thousands, even millions of children suffering on the planet? 

Mike Richmond replied:

The billionaire's reaction is identical to that of the thousandaire who is buying a Starbuck's coffee rather than donating that £3/$5 to buy a malaria net for a child in Africa.

There is a direct moral equivalence between your cup of unnecessary coffee and the billionaire's vanity private jet. Yes, his jet costs a million times more, but your coffee is equally unnecessary, and a child's life hangs on it.

Fortunately, some billionaires, like Gates, Buffett, Zuckerberg, Soros, and others, are giving substantially. The ones who aren't (and there is an interesting list just being made available from Panama) are showing the same moral delinquency as the person in the Starbuck's queue who doesn't donate to effective charities.

People are very good at living with our own lack of generosity. It really isn't hard. I do it all the time, and I am no billionaire.

In practice, as he mentions in response to a comment, Mike Richmond does donate to Oxfam.  So he clearly doesn’t believe that if he doesn’t give all his money away, he might as well not donate anything.

The fact is that, while nobody strictly ‘needs’ luxuries like a drink in a café to survive, allowing yourself small treats rather than giving every penny to charity probably makes much more difference to your own personal happiness than having more money than you can spend on your own luxuries, and which is simply invested in making more money, does for the richest billionaires.  But it’s a question of priorities.

Suppose you earn £15,000 per year, of which you donate £1,500 shared between Plan or ActionAid to sponsor a child in a poor community, Practical Action to help poor people to start up small businesses, and Tree Aid to plant fruit trees to provide a more reliable source of income than annual crops for farmers in drought-stricken parts of Africa. 

You also spend £150 a year on going out for a coffee with a friend once a week.  Maybe you don’t go to a big chain like Starbucks, but to a local independent café like The Hive or Art Bank Café  in Shepton Mallet, or Madhatter’s if you want somewhere cheap, so spending money there keeps the local economy going.  Maybe you go a community café like Swallow in Peasedown St John, which provides work experience for adults with learning disabilities, or Oakleaf Community Café in Ashwick and Oakhill Village Hall, which raises funds to improve public amenities (like a free outdoor gym). 

So your money is doing some good, and in the meantime, it gives you time to chat with your friend and hear their worries.  I’m certainly not going to condemn that (especially as I work in Oakleaf Community Café).

But still, that doesn’t make it a substitute for giving to charity, and, in particular, helping people in the poorest parts of the world.  How much can you afford to give?  Well, there is a handy site called How Rich Am I? which helps to calculate how rich you are by world standards, and what giving 10% of your income could achieve.

So, for example, if you are part of a British household with two adults and no children, whose household income after tax is £19,000, then you are in the richest 12.6% of the world population – or, in other words, among the richest billion people on Earth.  In this case, if you donated £1,900 per year, you would still have £17,100 to live on, leaving you in the richest 14.2% of the global population, and, according to How Rich Am I’s calculations, you could save the equivalent of 0.8 healthy lives per year.

When I showed this article to PDB11, he rightly pointed out that it isn’t always as simple as that.  For one thing, your expenses after paying tax differ from one country to another.  If you live in Britain, your tax bill covers your health insurance.  If you live in America, you need to buy health insurance separately – and if you can’t afford it, tough luck.

Also, prices vary from one country to another.  However, that doesn’t mean that in a country with low wages, everything is necessarily cheap.  In some countries where a labourer might earn only £1 per day, this is just about enough to buy a loaf of bread – which isn’t very different from the typical price of a supermarket loaf in Britain.

Equally, ‘poverty’ defined simplistically as living on less than $2 per day can be misleading.  If you measure it in terms of cash income, a self-sufficient farmer who grows his own food and has a nourishing and varied diet and surplus food to share with poorer neighbours, but just doesn’t use money, counts as ‘poor’, but a beggar who gets given perhaps £10 per day, but can’t afford shelter and has to spend the money on takeaway snacks and coffee because he has nowhere to cook, doesn’t.  Still, it isn’t hard to find a billion people who are living in dire need, and another billion who have the resources to help them.

As you can see, asking the richest billion people to donate 10% of their income to charity means asking for rather more than the hypothetical $1000 (£810.18) that I suggested in my Quora question.  Probably asking for more is inevitable, as many people will probably refuse to give.  (In fairness, some people already give considerably more than 10% of their income, if they have enough to live on and fairly simple tastes.)  But if we all (or, let’s say, everyone in the richest billion people) gave at least 10% of our income to overseas aid and development, to medical charities, and to conservation – we might achieve more than even Rowan Hooper dares dream of.

Incidentally, PDB11 is now considering writing a post on his own blog, Theological Engineer, about attitudes to tithing among Christians.  If he hasn’t written this one yet, don’t worry – there are plenty of interesting ideas to read there (and he isn’t the sort of Christian who assumes, ‘This is in the Bible therefore it must obviously be true,’).