You are walking down the street in New York City with $10 of disposable income in your pocket. You come to a corner with a hot dog vendor on one side and a beggar on the other. The beggar looks like heâs been drinking; the hot dog vendor looks like an upstanding citizen. How, if at all, do you distribute the $10 in your pocket, and why? Arthur Brooks: We face this situation all the time â both literally and figuratively. If you live in a city, you are frequently confronted by needy winos. Do you give to them, or not? In your heart, you fear that they will just ruin their lives further with your pocket change. But it feels hard-hearted not to give. This dilemma goes beyond just how we treat the homeless. In our public policies, we see parts of the population which, we fear, might become dependent on the government âdoleâ if we provide that kind of help to people in need. Some even argue that whole nations can lose their self-sufficiency through foreign aid. This is why we have metaphors about giving fish versus teaching people to fish, and so forth. Furthermore, some people worry a lot about the dignity of folks in need. For some, that means we should give them whatever they ask for. For others, it means charity is degrading and no good, and should be replaced totally by government programs. As the Inuits say, âGifts make slaves, as whips make dogs.â So how does all this help me figure out what to do as I approach the tipsy beggar and the upstanding hot dog vendor? I have to figure out whether I care about a) the desires and sovereignty of the beggar; and b) the impact and effectiveness of my gift to do good in the world. There are four possibilities, with four different associated actions: 1. I care about the beggarâs sovereignty, but not the impact of my gift. I give him some cash, which he will probably spend on booze. But hey, we all have free will, right? I didnât force him to buy booze instead of food. 2. I care about the impact of my gift but not the beggarâs sovereignty. I buy him a hot dog â or better yet, I donate the money to a cause to help the homeless. 3. I care about both the beggarâs sovereignty and the impact of my gift. This is the toughest case, and usually involves the futile exercise of trying to convince the beggar to âget some help.â Imagine trying to have an intervention on the street. 4. I donât care about either the beggarâs sovereignty or the impact of a gift. This is the easiest case of all. I buy myself a hot dog and ignore the wino. Put some kraut on that and give me a Diet Pepsi, too. Which is my choice? I usually take number two, unless Iâm feeling really lazy or Iâm with somebody who knows I write books about charity â in which case I sometimes choose number one. Tyler Cowen: Iâm not keen on giving the money to the beggar. In the long run, this only encourages more begging. If you imagine a beggar earning, say, $5,000 a year, over time would-be beggars would invest about $5,000 worth of time and energy into being beggars. The net gain is small, if indeed there is one. It is rumored that in Calcutta people cut off body parts to be more effective beggars; that is a polar example of this phenomenon. I explain this logic in more detail in my new book, Discover Your Inner Economist. Oddly, the case for giving to the beggar may be stronger if he is an alcoholic. Alcoholism increases the chance that he is asking for the money randomly, rather than pursuing some well-calculated strategy of wastefully investing resources into begging. But in that case, I expect the gift will be squandered on booze, so I still donât want to give him the money. If I liked hot dogs, I would buy a hot dog from the vendor rather than giving him the money for free. At the end of the day, heâll probably throw out food. Heâs going to get the money in any case, so why waste a hot dog? A third option, only implied in the question, is to simply rip up the money. This will make the currency of others worth proportionately more and spread the gains very broadly. Since many dollar bills are held by poor foreigners (most of all in Latin America), the gains would go to those who are able to save in terms of dollars. This would include many hard-working poor people, a group I regard as worthy recipients. I have two worries about this option, however. First, drug dealers and other criminals hold lots of cash â why should I help them out? Second, the Federal Reserve might (if only in the probabilistic sense) reverse the effect of my actions by printing more currency. The bottom line: Buy a hot dog. The second bottom line: Donât exercise your charity in New York City.