It’s an unprecedented – and massive – experiment: Since 2017 the U.S.-based charity GiveDirectly has been providing thousands of villagers in Kenya what’s called a “universal basic income” – a cash grant of about $50, delivered every month, with the commitment to keep the payments coming for 12 years. It is a crucial test of what many consider one of the most cutting-edge ideas for alleviating global poverty. This week a team of independent researchers who have been studying the impact released their first results.
Can’t wait for someone to dismiss a 12 year study over their feelings that this is wrong. Undoubtedly accompanied by “Don’t they have bootstraps in Kenya, pick yourself up!”
Just as with climate change, they’ll just keep shifting back and forth between “but there’s nothing wrong” to “it’s too expensive to implement this solution” to “Just give us a few years, we’ll come up with something better” in order to derail the argument because the point is to maintain the status quo.
The poorer the poorest are, the richer the wealth class feels by comparison. Inequality, separating the capital society generates from said society into the owner class’s private accounts, is the entire point of capitalism.
Why would capitalists want to mitigate the central social ill they literally engineered for their explicit, sole benefit?
You’re more correct than you know. The rich have been funding studies since the 1950s to prove that “how it is, will be the best we will ever have,” and consistently those studies keep showing that if the rich would just pay people a thriving wage, they’d be magnitudes richer than there are.
The only conclusion I can reach is that since they have been shown the data for decades before the rest of us got a hold of it, they have decided to see how much unnecessary and needless death and suffering they can create before we start sniping them.
Their latest attempt to completely disregard reality was entitled: “You’ll own nothing, and be happy.”
Or “this would never work in America because [litany of ridiculously crass and inaccurate racial stereotypes]”.
So poverty, which is caused by a lack of money, is solved by giving people money. Who knew?
But importantly, how that money is given is important to the outcome. It looks like lump sums are better than regular payments at creating new enterprise.
Most importantly is that money given to the poor is put directly back into the local economy vs squirreled away in an offshore account.
Every dollar in cash aid increased total economic activity in the area by $2.60.
It’s interesting, because this is a widely known concept in the finance world. Lump sum investing in the stock market is more profitable than dollar cost averaging that same amount over time ~66% of the time. It seems that holds true in non-stock market investments into people as well. They’re better off getting a lump sum investment into their accounts than having that money DCA’d to them.
The belief that poverty is caused by incompetence, laziness or rogue spending is still very widespread. A lot of aid programs are based on the idea that it takes western wisdom, education and discipline to really lift people out of poverty. Teach farming techniques to people who have been farming that land for generations. Give water saving advice to people who use a tenth of what westerners use. “Teach a man to fish” when that man has been living at the coast for all his life but never been able to afford a fishing boat.
It’s good to see clear evidence that it’s not a lack of education, discipline or intelligence that causes poverty, it’s that the system is rigged and people who start out in poverty can never escape it because you need to have money to make more money.
To be successful in capitalism you need some capital to start with. It’s in the damn name. That’s why behind every billionaire is a bunch of rich parents who bankrolled them.
The belief that poverty is caused by incompetence, laziness or rogue spending
I’m not sure how to reach people that believe this. Been dirt poor, now I’m well off. I know what that looks like. One thing is that so many first-world people think they’ve been poor. Well, poor relative to their previous circumstances, poor vs. their parents, etc.
Those sorts never had to steal napkins from McDonalds to wipe their ass. Never fried plain flour with the last of their oil. Never went hunting nuts for food and didn’t have any salt left. Fuck me, my roommate and I were figuring how to steal a duck or goose off the local college campus.
Can’t afford a washing machine? Go to the local laundromat, spend that money. Spend that time. My fridge has an issue with some sort of fan. I have the leisure time and tools to take it apart, figure it out and buy a new fan. If you’re poor? Oh well. Pay someone a load of money. $20 for me, $200 if you’re poor.
tl;dr: We need to be hammering home the fact that being broke is more expensive than having a little folding money. And just like having some money stacks in your favor, having none stacks against you.
😲
Truly a cutting-edge idea.
Have what you need, work for what you want.
That is such a good way to express the core concept. Well said.
That’s actually a good way to reword “From each according to their ability, to each according to their need.” for the modern day.
I’m super curious what this would look like in a western country where poverty is different. It would need a lot more money for the equivalent payment so I guess Kenya is easier to find money for, but for example I wonder if people are as likely to start a new business or do we not have the same market gaps due to large companies or franchises filling those gaps?
There have been trials in Western countries. Ontario, Canada ran a basic income trial that was stunningly successful until a Conservative government came in and shut it down.
My favourite bit of data from that trial was that employment actually went up, not down. More people were working once they started just giving people money. The only exceptions were amongst mothers of newborn children, and students (y’know, people who have much better things to be doing than working).
Sadly it was only one town, but the results we got before it was shuttered absolutely proved that the concept worked.
Ooh, do you happen to have a link to that study? I’d like to keep that for when certain acquaintances of mine start about how it won’t work. Will be fun to see their mental gymnastics (assuming they read the report, which they probably won’t).
Maybe, we saw a huge recovery with relatively small amounts given to regular people (and ridiculous amounts given to businesses). I can only imagine what the PPP loans would have done for poverty had we just given them to poor people instead of rich people.
This is roughly the equivalent of giving an American ~$42k. I think that amount of money would have a huge impact on people’s well being.
Note: I looked up Kenya’s per capital GDP which is ~$2k USD. Based on on the article stating they received $50 per month, than means the lump sum was 60% of the GDP. 60% of the US’s GDP per capita is ~$42k
$50 per month is $600 per year, or %30 of GDP.
So $21,000 for an American. Still a significant amount.
But they gave them 2 years worth of funds, so you would double the number.
You should read about the UBI experiment done in Finland
Yeah, I think it’s a bit different. The Kenya study showed the monthly payments for 2 years was the least effective, which is what the Finland study did. The Finland one was also only a small number of people, where the Kenya one did entire villiages.
Giving the entire society the payments is different than only certain people, so I’m keen to see a wider scale trial in a western country.
Though with that said, western countries and NGOs may well be able to fund widescale UBI for developing countries, and that may be more worthwhile on a global scale.
good point. most small businesses have been eliminated in the u.s. by the walmarts and the targets and new ones would do no better at competing. but ‘uplifting’ that it may work in less developed more poverty stricken countries.
Any ubi experiment will have positive outcomes but when the bi is truly u, you will see inflation in a capitalist system. My hope is we use this knowledge to transition away from the false scarcity of our current systems.
In a Western setting, for this to work as intended you also have to knee cap billionaires with a wealth tax and break up mega corporations. No single human being needs or has any use for the equivalent of a billion dollars. Those who hoard wealth hurt economies by depriving society of monetary liquidity and productive transactions. So, they should pay for the damage they cause with progressively higher taxes. Mix this with UBI and you’ll see literally no inflation and a healthier more resilient economic system where people are happier, healthier and more productive. But this is socialism or something, so the US would rather drag the world back to the stone age than to give money to a homeless person.
I agree with this. It’s going to take generations to accomplish.
I’ve been donating to this project for a few years, good to see the results.
