Is it wrong to give to panhandlers?

The gift without the giver is bare.
Who gives himself with his alms feeds three —
himself, his hungering neighbor, and me.
         ==James Russell Lowell

It’s only during the past few years that I’ve started to give money to beggars.   Prior to that I budgeted certain sums of money for charity, including St. Joseph’s House and the House of Mercy, which serve the homeless poor and felt I had done my duty.

I don’t hold myself up as an example of how to give or how to live.   I am not saying you should give away anything at all—even assuming that you are well enough off that you have extra money to give.

I only say that if you act on a generous impulse, this is nothing to be ashamed of.

It is necessary to say this because of the prevailing neoliberal philosophy, exemplified in the Freakonomics books, that if you act on any motive except self-interest, this will backfire and you will do more harm than good.

These arguments came up in a reading group I belong to, currently reading Charles Dickens’ A Christmas Carol.   It begins with the Ebenezer Scrooge character refusing to contribute to a charity that buys Christmas dinners for poor people.

Scrooge says he pays taxes that pay for prisons and workhouses, where poor, unemployed people are sent.  He sees himself as a hard-working, self-supporting citizen, and sees no reason why he should contribute to support people who don’t work.

Some of us thought he had a point.  We also thought that giving to panhandlers was enabling alcohol and drug abuse habits.   One person even told a story about a street beggar in Washington, D.C., who was later found to have a vacation home in Florida.

I’ll use this blog to say what I should have said then.

First, panhandlers work.  They work hard.  I’ve never in my life worked as hard as they do, and for as little return.   Would you like to spend all day on the street, in all weathers, approaching strangers for money, risking humiliation and getting only small change or, at best, small bills in return?

It is true that panhandlers do no useful work.   But they are not unique in that respect.  Consider telemarketers, for example.   Some people are richly rewarded for doing harm.  Consider hedge fund managers and their role in the 2008 financial crash.

David Graeber wrote a good essay about the growing number of well-paid jobs that are considered meaningless even by people who do them.   He said as a general rule, the more obviously one’s benefits other people, the less likely one will be well paid for it

I myself get income without work, and more than a panhandler is likely to get.   I enjoy a Social Security pension, a company pension and income from savings and investments.

I could say the Social Security and company pensions are rewards for past work, although plenty of people who worked just as hard and created just as much value as I did receive no pensions.

But the income from savings and investments is simply a claim on the fruits of someone else’s labor.  Buying publicly traded stocks and bonds, in my case, in the form of mutual funds, adds nothing to the world’s total wealth.   It simply reflects the fact that, at a certain time in my life, I had more money than I needed.

I am not ashamed of investing in stocks and bonds.   A well-functioning free enterprise economy requires financial markets, and it might as well be me as somebody else who benefits from them.

But a well-functioning free enterprise system also requires that a certain percentage of people be unemployed.  Economists have a name for this, “the natural rate of unemployment.”

As to drug and alcohol abuse habits, these are found on all levels of society, including Hollywood and Wall Street.   In any case, if some panhandler has an alcohol or drug problem, the person isn’t going to change their life just because I refuse to give them anything.

Who should receive your charity?

A wise friend of mine ignores charitable solicitations that come in the mail.  Instead he gives exceptionally large tips to waiters and waitresses, hotel room cleaners and other hard-working poor people.

He says this has the advantage that his entire gift goes to the person to whom it is intended, without anything going to some organization’s administrative overhead or fund-raising expenses.  It also respects the dignity of the person receiving the money.  They don’t have to feel like objects of charity.

My wise friend gives generously to certain kinds of beggars – not the ones who come to you with some improbable tale of woe, but those who sell pencils or knickknacks, play a musical instrument or otherwise do something in return for what they receive.

When you stop and think about it, panhandling is hard work for low pay.  It does not contribute much to society, but it is more useful and less well-compensated than, say, being a hedge fund manager.