How to Think about Collective Impact

When thinking about big social problems like climate change or factory farming, there are two especially common failure modes worth avoiding:

• Neglecting small numbers that incrementally contribute to significant aggregate harms. (The rounding to zero fallacy)

• Catastrophizing any actions that contribute (however trivially or justifiably) to significant aggregate harms. (The total cost fallacy)

These two mistakes are at opposite ends of the spectrum, and you can see how striving to avoid one might make you more susceptible to the other. The general challenge is that people struggle to determine which morally-mixed actions—acts that provide some benefit to the agent at some collective cost—are or are not worth the negative externalities.

The Ideal Solution: Economic Policy

It would be ideal to relieve consumers of the moral burden by internalizing the negative externalities into the cost of consumption, e.g. via carbon taxes and such. It’s really bizarre to me that this is not more popular. If you oppose such Pigouvian taxes, you’re effectively saying, “I want to be able to impose costs on others for the sake of a lesser benefit to myself,” which seems blatantly unreasonable. I guess most people just aren’t that committed to being even minimally reasonable (or avoiding egregious selfishness, so long as it’s normal), which is a depressing thing to realize. But for those of us who actually want to make reasonable tradeoffs, it would obviously help if the true costs were reflected in the price, so we could simply judge whether or not the price was personally worth paying in any given case.

Individual Estimates in a Bad Policy Environment

Given that we don’t have such helpfully informative policies instituted, we’re left having to guess at how the social costs of our actions compare to the personal benefits. Since calculation is hard, many instead resort to the lousy heuristics mentioned in our introduction—either rounding to zero or focusing on the total cost—to get an indiscriminate verdict that your action is either clearly fine or clearly problematic. The first thing I want to draw attention to is that such indiscriminacy is surely wrongheaded. It’s just not true that all actions that contribute to collective harms—e.g. by using energy—are normatively the same (either all worth it, or all not). Some but not all such actions are worth the costs!1 The answer isn’t fixed in advance, so if