I went to Kibera today. Kibera is the biggest slum in Africa and one of the biggest in the world. It houses one million people in mud shacks that cost about $10 a month to rent. There are low electricity rates, no running water and few toilets. In the middle of the densely packed houses there is a river of grey water. New bridges to cross this ‘river’ are being built with government funding but nothing is being done to create roads through the city. It’s just a winding alleyway of dirt which connects the massive maze of shacks.

I left Kibera without handing any one person money, despite that there was a plentiful amount of encounters with friendly people who were obviously curious about the rich foreigners invading their space. After leading Kibera and ten minutes later, I purchased two $7 wine glasses on the rooftop bar of Best Western.

How is this possible?

How is it possible to rationalize a $7 glass of hotel wine and not a $7 handout to the poorest people in the world? In reality I had $20 (20,000 shillings) stuffed in my bra. I could have quickly snatched out a bill and slipped it quietly to the laughing small kid who tried to fist bump me as he was coming back from school.

But, in some ways this act of generosity would have felt like cheating.

I came to Kenya to help a micro insurance company design their insurance product. This product, if done right, will help thousands (millions??) of people be financially better off by giving them a way to handle financial shocks. By handing out $10 to one child and feeling GOOD about it, I would have been undermining my larger efforts that aim to systematically change the environment that creates this income injustice. By handing out $10, I would have been indulging in a non sustainable charity act. I would have been giving in to the identifiable victim effect that causes people to give more to Baby Jessica’s scholarship fund than to 200,000 hurricane victims in India.

Yet I confidently know that the person to whom I could have given the $10 to in Kibera would have felt great. And…I would have felt amazing.

But because of a moral high ground that says we need to be efficient and effective with our money…I did nothing. I did nothing except buy a glass of wine. Ok, two glasses of wine.

Interestingly, my decision to forgo giving $$ to a couple people in Kibera was actually in line with rational decision making.

As proven time and again in irrational (behavioral) research, we care a lot about individual life and we care less as the number of people becomes bigger. Economically, this makes no sense. As Stalin and Mother Theresa articulated, we believe that “one death is a tragedy, but a million deaths is a statistic."

From this angle, it seems that my rational decision to forgo the micro interaction of ‘one’ was the right decision.

But, as a thought exercise, what would happen if we discounted away these micro interactions in our life?

Imagine we spent time with all of the people we know at once. Then, from these group interactions we created a model of happiness that solved for the most people we could accommodate at one time. We’d focus on the masses and forgo 1:1 time with our besties. Or, even more extreme, what if instead of purchasing celebratory, birthday or wedding presents for our best friends we’d buy lower utility gifts for the everyone we knew.

This strategy would be compellingly effective from an economics perspective, but it would also leave us socially struggling and likely very much alone in the world. I would go as far to say —we would be lonely.

As such I wonder how my strategy to stick to the economically effective development strategy really fared in Kibara. I choose to forgo the emotionally appealing charity case of ‘one’ and opt for the economically appealing happiness of many. While this admittedly is the rational option, it just doesn’t feel like the best option.

Our day-to-day lives are built on micro interactions with our friends, our family and our baristas. In hindsight, I can’t help but regret not indulging in a micro interaction and pulling out $20 from my bra and handing it to two kids.

And, I probably would have still gotten the two glasses of wine.

Reference: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.319.2096&rep=rep1&type=pdf

Written by

Thinking about Irrationality. Behavioral Scientist. Co-founder of Irrational Labs and Common Cents Lab.

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