Diversify Your Moral Risk Portfolio

Lots of people have two conflicting desires:

1. Do the most good.
2. Make sure you do some good.

These are in conflict. Sometimes the thing that does the most good in expectation has a low chance of doing any good.

I think the desire people in the effective altruism community have besides doing the most good is not so much making sure they do some good, but making sure they are overall doing good instead of harm. Doing some good, but lots of harm would not be appealing.

As it happens, I don’t think this attempt to make sure you do some good, rather than maximizing expected good, is rational. I think one should just try to do the most expected good without worrying about the probability that they do good.

I also believe trying to do the most expected good makes more sense because it can vary a lot across portfolios, whereas these being net positive or negative in expectation will in my mind remain very unclear. I think electrically stunning shrimp is one of the interventions outside research which more clearly increases welfare in expectation, and I would say it is still unclear whether it increases or decreases welfare in expectation due to effects on soil animals, and even more so accounting for microorganisms. For my individual welfare per animal-year proportional to "number of neurons"^0.5, I determined electrically stunning shrimp increases the welfare of these by 0.00144 QALY/shrimp. There are 94.3 shrimps per shrimp-kg. So infer electrically stunning shrimp increases the welfare of these by 0.136 QALY/shrimp-kg (= 0.00144*94.3). For my individual welfare per animal-year proportional to "number of neurons"^0.5, I estimate replacing farmed shrimp with farmed fish changes the welfare of soil ants, termites, springtails, mites, and nematodes by 364 QALY/shrimp-kg (= 522 - 158). So I conclude electrically stunning farmed shrimp changes the welfare of soil animals more than it increases the welfare of shrimps if it results in the replacement of more than 0.0374 % (= 0.136/364) of the consumption of the affected farmed shrimp by farmed fish. I can easily see this happening for even a slight increase in the cost of shrimp.

Thanks for the post, Matthew.

So what should one do in a situation like this? Well, we can take our cue from people in finance. What do finance people do when there is a risky business that might fail but might become worth a lot? They diversify! They invest in a hundred companies like this, knowing that though 90 of them may fail, the rest will succeed enough to make it worth it.

Investing in many companies to increase the chance of a big win makes sense because each investment has a potentially very large upside, but limited downside. In contrast, I believe charitable donations can have both a large upside and downside. For example, my best guess is that GiveWell's top charities increase the welfare of soil animals 610 k times as much as they increase the welfare of humans in expectation, but that the probability of them increasing welfare is only slightly above 50 %. They decrease soil-animal-years, but my probability for soil animals having negative lives is only slightly below 50 %.

But it’s also partly for reasons of moral uncertainty—while I am a utilitarian, it wouldn’t be completely shocking if deontology turned out to be right. If deontology is right and animals have rights, then eating meat is about as bad as being a serial killer.

It seems pretty clear to me that more animal farming decreases animal deaths due to increasing animal-years of soil animals way more than it decreases the animal-years of farmed animals, and soil animals having shorter lives than farmed animals ("number of deaths" = "animal-years"/"life expectancy"). Moreover, I also think animal farming decreases animal deaths weighted by the absolute value of the expected welfare per animal-year of the animals involved. I estimate animal farming changes the welfare of soil animals much more than it decreases the welfare of farmed animals.

My guess would be others are the same; if people could only give to one charity, probably very few people would go all in on the shrimp.

@Bentham's Bulldog, why farmed shrimps instead of soil animals? I estimate soil ants, termites, springtails, mites, and nematodes have 8.89 M (= 1.76*10^23/(1.98*10^16)) times as many neurons in total as farmed shrimps, and I think the total number of neurons underestimates the importance of soil animals relative to shrimps. You assume you agree with this too? In the post linked above, you say the "estimate that shrimp suffer about 3.1% as intensely as humans" "is a highly conservative estimate", whereas Rethink Priorities (RP) estimates shrimps have 10^-6 as many neurons as humans (see Table 5 here).

What matters is increasing welfare as much as possible per $, and this need not imply prioritising increasing the welfare of the animals accounting for the vast majority of total welfare in absolute terms. However, I estimate the Shrimp Welfare Project’s (SWP’s) Humane Slaughter Initiative (HSI) increases the welfare of shrimps only 0.0292 % as cost-effectively as the Centre for Exploratory Altruism Research’s (CEARCH’s) High Impact Philanthropy Fund (HIPF) increases the welfare of humans, and soil animals due to it decreasing 5.07 billion soil-animal-years per $. 

Suppose there are three possibilities which entail surprising moral conclusions. Suppose you give them each 30% odds. You might be tempted to dismiss them because any individual one is likely false. But the odds are ~2/3 that one of them is right. So if you diversify, if you take lots of high risk but high reward morally speculative actions, odds are decent that some of your actions will do lots of good!

Agreed. At the same time, taking more actions also means a higher chance of some doing lots of harm.

Now, this isn’t the best way to maximize expected value. If you were an expected value maximizing robot, you would not pursue this strategy. You would say “bleep bloop, this brings about 93.5 fewer expected utils than the other strategy.” But I assume you are not an EV maximizing robot.

Hmmm. This is interesting, as diversification is expected utility maximizing in the finance context. The fact that it is not EV maximizing in the utilitarian framework makes me wonder if there is something wrong with the framing.

The obvious difference is that EV is risk-neutral. I think this is usually justified by the fact that we are counting utils, whereas in finance, we are counting dollars. Arguably, it makes sense that utility is concave in dollars, but not that utility is (strictly) concave in itself.

Intuitively, this seems wrong to me. Imagine a choice set {A, B}. Choice A has a 50% chance of resulting in a world with 1 million sentient beings, all with 100 utils each, and a 50% chance of resulting in a world with zero sentient beings. Choice B results with certainty in a world with 500 thousand sentient beings, all with 100 utils each. I strictly prefer Choice B to Choice A, implying that I have a moral meta utility function that is concave in utils. This is sufficient to derive that diversification is optimal.

Executive summary: The post argues that while pure expected value reasoning suggests focusing on a single best option, human motivation and moral uncertainty make it more practical and effective to diversify charitable giving and actions across speculative but potentially high-impact causes.

Key points:

1. People often want to maximize both the expected good and ensure they do some good, but these aims conflict when speculative high-EV activities cause risk yielding no benefit.
2. Though expected utility maximization is rational in theory, the author finds it psychologically difficult to act on when there’s a high chance of “wasting” effort or donations.
3. A pragmatic solution is to diversify, analogous to financial portfolios: spread donations across multiple speculative causes (e.g., shrimp welfare, longtermism, chicken welfare, wild animal suffering, even Pascal’s wager) to increase confidence that some will have a significant impact.
4. Diversification helps overcome motivational barriers, making it easier to act on “weird” philosophical arguments without committing all resources to them.
5. Moral uncertainty further supports diversification, both by avoiding actions that could be extremely wrong from some ethical perspectives (e.g., eating meat, opposing religions, and abortion work) and by hedging across plausible moral frameworks.
6. Even if ideal rational agents would concentrate on a single best charity, accounting for human fallibility and motivational limits, spreading resources may in practice lead to more effective giving.

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I was reminded of this post (Purchase Fuzzies and Utilons Separately), and it's something I do myself: work in some speculative EV-maximising space, but donate to "definitely doing good" things.

As somewhat of an amateur, it's good to hear I'm on the right track taking expected value as a core concept of EA, factoring it in with stuff daily. I'm reassured when I read the experts lend the same level of credence to it: a way of doing things that likely does an astronomical amount of good. Thank you for another contribution of great, well-written wisdom, Bentham! 🦐