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If everyone was a perfectly rational altruist

Economics often starts with the outlandish assumption that everyone was perfectly rational and perfectly egoistic. Let’s reverse the second part and start with the following, perhaps even more outlandish counterfactual situation:

  • Everyone is perfectly rational
  • Everyone is a perfect altruist

In that hypothetical scenario, what would be the most effective economic system? How would people get organized to reach their altruistic goals as effectively as possible?

Some more specific questions:

  1. Would markets work worse or better in that scenario?
  • Is there a need for taxation, if everyone is rational and altruistic? Wouldn’t people just allocate their resources optimally without the need for a government?
  • Would people fund a basic income voluntarily, or would they settle for a different approach?
  • How would the monetary system work?
  • Would there be banks that handed out loans?
  • What kinds of organizations would provide goods and services?
  • How would those organizations be structured?
  • What level of economic inequality would there be? Where would that inequality come from?
  • Would people implement a working gift economy?
  • Would they implement some kind of meritocracy?

Or you could just ignore those questions and start thinking about economic activity from scratch given the basic assumption that people are perfectly altruistic (even if they aren’t perfectly rational at the same time).

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i would do the other scenario: given the basic assumption that people are perfectly rational. altruism is a strange idea. it implies that egoism is wrong and i don´t believe that. the only thing that is wrong is stupidity. and if i define rationality as awareness of ones own motives and goals, rationality would suffice for everything …to make the world a better place.

Yes, it may seem strange for rationalists. You are not the first who made this comment. My definition of “altruism” is rather unusual. It might be to call it “cosmic egoism”. The “cosmic ego” would be your extended self, which included all other sentient beings, due to the universality of consciousness. If you define yourself via your consciousness, then this core, consciousness is the same in every conscious being (even though you can’t actually perceive the contents of the consciousnesses of others). Why should the contents of “your” consciousness count more than those of “others”? They may count more for “you”, but from a cosmic perspective there is no way to single out any individual that should count more, because their consciousness is more “special” or “close”.

It is probably very confusing that I conflate my concept of cosmic egoism with the “common” interpretation of altruism.

The more enlightened egoism is, the less stupid it is. Long-term egoism (what people may call “enlightened” egoism), which includes long term thinking and indirect effects of your actions is smarter than short-term egoism. I think that cosmic egoism is the most enlightened form of egoism. So, I’m basically agreeing with you, but I call my advanced form of egoism “altruism” for simplicity (a simplicity that backfired, because my premise was questioned, rather than accepted and taken as basis for further analysis).

Oh, and cosmic egoism is pretty much the way that utilitarianism works: You assume a “cosmic” perspective in utilitarianism, rather than trying to figure out how to maximize happiness for one specific being.

However, this is a very challenging topic, so I would prefer not to use this thread for exploring that in depth. If anyone is really interested in deeper discussion of “cosmic egoism”, replying in a related thread, or asking me to make a thread for that would be preferred.

More related to the original topic, there is an interesting part of a PhD thesis by Cliff Landesman that concerns itself with altruism and how it could affect economic affairs. While researching altruism in the context of economics, I have found a quite fascinating Guardian article: Extreme altruism: should you care for strangers at the expense of your family?

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ok, since you explained in detail, what you mean with altruism, i can answer your first post with the idea in mind that the scenario would be that people are perfectly rational following cosmic egoism.

the most effective economic system would be decentralised, self-organized, equal and without existential fears.

  1. local. the main supply for people would be local products, because it is not rational to transport things hundreds of kilometres which are available the next corner als well. ( like tomatos from spain although we have our own tomatos).
  2. fair. we would value exotic imports like bananas and coffee much more and pay a fair price for it ( which has to be much higher than it is now).
  3. calculating. we could not be tricked to buy the same cheap product every year instead of the expensive quality version of it, that lasts much longer and therefore is much cheaper ( if we divide the costs by the years). producers of inferior goods would not stand a chance to survive.
  4. active. we would be able to cook for ourselves and wouldn´t depend on convenience food, frozen pizza or takeaways and canteens. (those businesses could not spring up like mushrooms, like today and they would be something special we only enjoy once in a while. and because we would be much more discerningly, they would be much better than they are now). so our local food supply would provide us with very good ingredients.
  5. independent. because we would be able to clean up every place we use, we would not need private charwomen. and we are able to do minor repairs with our house and belongings, so that many services would go extinct. we would not need debt advisors because we are skilled enough to care for our life ourselves.
  6. healthy. if we would become much more emotionally stable than we are, addictions (like drug addiction or shopaholism) would not be a mass phenomenon and big pharma would be much smaller and frills and furbelows wouldn´t be produced.
  7. sustainable. in this time even our furnitures and houses are throwaway products. we would be skilled enough not to let anybody sell us worthless shit or destroy quality to replace it with inferiority. we would cherish old quality houses and build new ones in the same rational way with good materials and we would send companies like ikea packing. planned obsolescence would be considered a crime.
  8. varied. we would experience true variety because every place would have local specialties to offer due to decentralised economies. ( not like it is today: “we are at the other end of the world, now where is my mc donalds, my starbucks and my ikea so i can make myself at home”)
  9. ethical. with 1. and 2. we would not rely on child labour and cheap things from the third world anymore. ( there would not be a third world anymore, because all people would have enough ressources for a good life) and we would not buy anything from factory farming.
  10. autonomous. our local energysupply would be different due to different environmental conditions. places with water would use hydropower, places with wind, sun and so on…we wouldn´t be that irrational to import energy from other countries. we would give the old otto engine and the oil-based car industry a one-finger salute and drive e-cars. and we would not let a king or a queen dictate which transportationmethods we will use.
  11. equal. it would never be considered a good idea that leads to cheer and promotion, to tranfer a production to a country where cheaper slaves will do the same job ( which is standard nowadays). cosmic egoism would lead to the insight, that “i don´t want to be a wage- slave, but when i spread the method of wage slavery into the world, the day will come, when it will reach me.” no hierarchies. there is no logical cause to consider one needed work more valuable than another. all humans have a limited lifetime and limited power to do a job. and it is not rational to pay much more for eight working hours of a ceo than for eight working hours of a caretaker. the principle of calculating ( 3.) could only lead to the conclusion that the revenues of a company have to be shared equally. and if the idea to expand would make any sense, all workers could vote, if they want to give some of their wages to a company fund.
  12. free. every single entrepreneur has the right to try whatever he wants to sell to other people ( goods and services) and no king or queen or mother and father ( state control or lobbyists, which is nearly the same) has to stop him. there is no justification for it because all customers are rational and skilled. as for bigger companies the freedom is limited to the democratic decision of all involved , from the caretaker to the charwoman. ( this would eliminate the possibility that there are single people who could decide about big companies alone: one of the biggest faults of our current “neoliberalism”.)
  13. conscious. the world belongs to all. it is not possible to sell land to a single person for arbitrary transformation. the use of land has to be a democratic and scientific decision.
  14. intelligent. we would not kill people like aaron swartz or inventors of new healing methods although they put profits of old lobbyists in jeopardy. we would not put new technologies in jeopardy although they would kill old jobs. because we would want the best, that works for the many, instead what works best for the wealth of the few.
  15. clear. we would imagine what it means if tomorrow all medical personell, all charwomen, all caretakers and bin men would stop working and compare it to the case what it would mean, when all ceos, finacial consultants and stock exchange speculators would give up, what they do. a space clearing would help us to keep all needed jobs and get rid of those, nobody ever needed.
  16. consistent. if we admire aaron swartz and anonymous we couldn´t support google and facebook at the same time. we would realise that goverments are only a danger to our freedom and our achievements because they support the interests of rich big bosses (who just swallow our achievements and transform them against our interests like capture our digital abundance, anonymity, freedom of speech and advertising-freedom we once had in the www).
  17. disobedient. we would realise that it is irrational to obey kings and queens ( governments) or mothers and fathers ( big bosses and ceos) because they don´t act in the interest of cosmic egoism. they are not wise, have no clue, what is best for all and have no intention to make the world a better place. they are just shortsighted and greedy which only means: stupid.

i don´t know how to call such an economic system…fractal rationalism, stupidity avoidism, conscious equalism, intelligent shareism, active disobedientism, independent ethicalism, fair localism :wink: or better : local fairism, whatever.

you ask the question about an effective economy? effective for what? our current economy is effectice for the profits of the few, for the mere survival of many for a shortened lifetime and for the depression and suffering of the most. but since economy has the purpose of division of labour, to help humanity to progress to achieve a better quality of living, our current system is not effective to achieve that purpose, because it is flawed. the idea of profits, that leads to the allocation of resources that allows accumulation on a single side, depriving the whole system of it´s power, is the major flaw of it. but this problem is not so easy to solve, because every single human being learned that system and therefore is psychologically incentivised, to do what the whole system does: accumulate. everybody tries to grab what he could get ( no matter if he really needs it or not), everybody fears to lose and because of that everybody tries to outsmart the next fellow human being. and trying to change, what everybody does, is only possible with a change of the human consciousness. how could we eliminate the fear that leads to so much irrationality? how could we eliminate the greed, that leads to so much violence and depression?

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