Want to help the poor and transform your economy? Give people cash.

http://chrisblattman.com/2013/05/23/dear-governments-want-to-help-the-poor-and-transform-your-economy-give-people-cash/

by nkoren • 13 years ago

146 109 13 years ago

swalsh• 13 years ago

Though its not exactly what the article is talking about, I accept the idea of a basic income in some form as almost inevitable... but it'll have to wait until after the baby boomers loose power.

tomjen34• 13 years ago

I doubt it will ever be accepted and I hope it isn't. Basic income is a waste of money -- a stack of clothing, a toothbrush and deodorant, 3 meals a day and a bed to sleep in could be provided to any citizen who asked for it for a lot cheaper and it would prevent anybody from dying in the streets (the scenario welfare proponents argue necessitates the governments involment), yet would also provide maximum incentives to get of welfare and to find a job.

(since I don't think this should be means-tested, I guess you could argue it is a form of basic income, although usually basic-income is paid in some form of cash).

azundo• 13 years ago

Read the article. This is exactly what NGOs attempt to do right now, figure out exactly which things people need and provide the bare minimum. It doesn't work. The point of the article and paper is that people with choice actually do make good decisions and turn that money into economic growth.

While you may think that handing out a bunch of stuff to people (even if that stuff is the bare minimum) would provide incentive to move off of such assistance it doesn't. It strips people of any interest in agency and has them believe they don't control their own well-being. This is exactly what the development sector has gotten wrong for several decades and until things change, not much good will come out of it.

justin662• 13 years ago

> Basic income is a waste of money -- a stack of clothing, a toothbrush and deodorant, 3 meals a day and a bed to sleep in could be provided

If it's saving money you're worried about, just giving them the money is probably a lot more efficient. Whatever that crap you listed is worth? Give them the cash instead, let them handle the logistics of buying it (or buying something else they need, a determination they're in a much better position to make than you are), and save the substantial amount of money involved in having an entire apparatus for handing out crap.

DenisM• 13 years ago

Where are you going to get that stuff you're going to give people? A giant government procurement contract? Who will decide what goes into it? The problem with your suggestion is you're trying to do soviet-style central planning of consumption, even if only at "basic needs" level. As history shows, it will be both cost-inefficient and not inadequate at meeting the basic needs.

pocvmbcxvb• 13 years ago

How do I start earning money with only the items you listed?

I need a PC, internet connection, VPS server, appstore developer account, and smartphone.

Your list doesn't have any of those.

eli_gottlieb4• 13 years ago

Oh please, as if there will be jobs for most of the population in the future.

kefka• 13 years ago

I came here too to discuss a mincome system as well. But alas, your comments about the baby boomers seems spot on.

ams6110• 13 years ago

There is a difference though between giving someone a year's income in a 3rd world country like Uganda, where there is no other safety net, where as the OP states, nobody is "unemployed" because everybody has to find a way to scrape by, or die. So everyone is essentially an entrepreneur. Their mindset is that they need to work to survive. When they get cash, they do what entrepreneurs do, invest it in things that will let them generate more income.

In a developed country like the USA, if you gave a person on welfare a pile of cash, they'd most likely just go mad with it until it was all spent, then revert to their prior welfare lifestyle. This has been studied, though I can't find the citation I'm specifically thinking of. People who live in long-term poverty in the USA see money as something to be spent for immediate gratification. The idea of saving it and investing it is foreign to them.

Zigurd• 13 years ago

> In a developed country like the USA, if you gave a person on welfare a pile of cash, they'd most likely just go mad with it until it was all spent, then revert to their prior welfare lifestyle.

Some people surely will. The question is, are those the outliers, or the mainstream? And, even if people do that, is that a cheaper way than the current social welfare provider industry structure to keep them out of prisons or emergency rooms or other expensive institutions?

nitrogen• 13 years ago

People who live in long-term poverty in the USA see money as something to be spent for immediate gratification. The idea of saving it and investing it is foreign to them.

This is partly because they don't have enough money to take care of their immediate needs and save for something better, and partly because nobody they trust has shown them any other way of living.

Imagine you have a choice between paying for a flat screen TV and starving, and eating high quality food for a month. You have no social connections outside your economic class, thus no evidence that any action you can take will lead to your situation changing. If you are poor, you will choose the TV because it guarantees a baseline level of pleasure indefinitely, while the food will run out after a month and you'll be back where you started. Since you're constantly coping with the stress of being on the edge of survival, your willpower is continually depleted. Congratulations, you're now stuck.

mc-lovin6• 13 years ago

This is a great article. Not because it proves a particular point (we should accept the evidence no matter where it leads) but because of the clarity of the article, and the fact that it accurately represents the academic paper: on a cursory reading of the academic paper, the randomization is truly as good as they sell it in the linked article.

I think this is potentially a big step forward in our understanding of development. It challenges the assumption that the main thing holding back development is a lack of investment in human capital (training) rather than a lack of access to physical capital.

The only issue I have is whether you can expect the same results from one-off payments, as an ongoing basic income, and whether we can expect the same results for the whole population as the group that was selected, who seem to form a very specific group.

bdcs3• 13 years ago

If I recall correctly, it has been shown that Basic Income Guarantees[1] (free cash without means testing besides citizenship) works incredibly well for both developed and developing countries. This article comes as no surprise, but is well-written and compelling which is a great boon to BIG. Despite stereotypes of poor people, basic income is used very effectively with little administrative cost (not for booze and gambling? how bizarre!): - People work more and for a higher wage (exceptions: recently pregnant mothers and students) - Domestic abuse plummets - People are unemployed LONGER, but use that time to find a job they like more (or create their own!)

This form of welfare has been supported by people on the right (Friedman, Hayek) and left (Russell). I'm really disappointed it isn't used to greater effect. Voters and tax-payers have simply no faith in those damned poor people to make the right decision it seems.

Here's a great story from in Canada, where it was referred to as Mincome [2]

BIG also works well in India, where women, in particular, benefit[3]. A further benefit is it is highly corruption resistant. There are no tests, forms, etc. If you're a citizen, you get cash. Done.

Please, anyone, show me some research that shows BIG doesn't work well. Cheers

[1] http://en.wikipedia.org/wiki/Basic_income_guarantee

[2] A town without poverty? http://www.dominionpaper.ca/articles/4100

[3] http://www.soas.ac.uk/news/newsitem84314.html

mc-lovin6• 13 years ago

You are making very big claims without adequate references. The study shows the effects of a one-off payment, to a highly selective group (note that I'm not implying their randomization was bad, but that both treatment and control groups were very special relative to the whole population), an a particular developing country.

You may personally believe that this is part of a general phenomenon that applies to highly developed countries, to all groups of people in that country, and in the long term not just the short term, but you have presented little evidence for the claims in your first paragraph (I read all the links).

You seem to view BIG as somehow unique, when in fact it is functionally equivalent to progressive taxation plus welfare, when welfare is only conditional on income. It is also hard to argue against because it treats redistribution, which is a sliding scale, as something absolute: it suggests an (imaginary) bar for "basic" income.

I personally believe systems where welfare is primarily conditional in income, but weakly conditional on searching for work or getting training (such as Australia's) are optimal for developed countries. The government can be far more generous when it adds some strings to welfare, than when it is simply giving out money. The only issue is whether countries with different governmental frameworks can copy Australia's model.

In short, you seem to be overlooking what I consider the real interest of this study, which is its specific relevance to developing nations.

>Please, anyone, show me some research that shows BIG doesn't work well. Cheers

That's a very asymmetric way to think about the evidence for and against a particular policy.

edit: The specific problem with your evidence, is that on a such a broad topic, I would expect to see an academic review of the literature. What you provided was [1] wikipedia, [2] an interesting example with no control, and [3] something that wasn't an actual academic study, but a description of a program and it's alleged benefits without any peer-reviewed study demonstrating these benefits.

pkulak• 13 years ago

There was just a very good Planet Money that came to many of the same conclusions:

http://www.npr.org/blogs/money/2013/05/21/185801589/episode-...

joezydeco• 13 years ago

I caught this episode a few days ago and I totally didn't expect this conclusion. Planet Money does a superb job of coming up with relevant topics and episodes way way beyond their original mission of explaining the 2007 meltdown.

jaggederest• 13 years ago

Interesting how nearly a hundred and fifty years after Marx wrote "Das Kapital", it comes down to access to and ownership of the means of production in poor countries.

josh26002• 13 years ago

Sort of. Owning the means of production is the answer when other productive means of earning a living are not. That is to say, if you can't earn a living working for someone else's production, it makes sense to own your own.

Ergo, you don't necessarily need to own the means of production, you just need access to meaningful, productive and well-compensated positions. Owning your own production is one way to achieve this.

bct2• 13 years ago

It also helps ensure that it stays achieved.

Cushman9• 13 years ago

I'm very predisposed to believe this. In fact, I'll go further and say I'm not sure I can think of a friend of mine who wouldn't do something really cool if you gave them a year's income in cash.

My friends, generally speaking, spent a lot of money on a very good education that's not valued by the labor market. To put that another way: My friends are wildly overqualified for what they do, and many of them are poorer than broke.

Those without a lot of ambition are pretty much the millenial layabouts you imagine. They're working median-wage retail jobs to pay the rent, smoking a lot of weed, and just generally hanging out. They don't want to work more, and they couldn't really work any less, but they seem pretty happy.

Those with ambition aren't living much different. They're working median-wage retail jobs to pay the rent, working second jobs to try to pay down their debt faster, smoking a lot less weed, and using the rest of their time trying hard to find a job in their field of expertise that wouldn't pay much more even if it did exist. These people could easily work a lot less if they wanted to, but they don't. They want to work more, and work harder, but they cannot find work to do. They seem like they're struggling.

So say we gave them all an unconditional grant which erases their debt and provides some capital. (A year's income wouldn't do this for most, but set that aside.) Most of the first group, maybe it wouldn't affect that much. They might quit their jobs or cut down on hours, but actually they don't mind their jobs that much. They might smoke more weed, but that's probably not possible. More likely they'll spring for a car or a house or a home theater and just keep on keepin' on.

For those in the second group, though, this changes everything. They've instantly jumped a decade into their own future. They'll quit their jobs the same day, immediately start planning a move to where they really want to live. They'll immediately open small businesses. They'll collaborate on epic works of art. Some of them will buy boats; some of them will buy farms. They'll travel, volunteer, teach, research, write, direct, design, produce, and make things. And you know what? They'll probably smoke even less weed.

It's just a wishful thought experiment, but it does seem plausible the overall economic effect would be massively positive. The argument against basic income seems to be basically that it would move people from the second category into the first category. Maybe that's the case for people in general, I don't know, but for the poor young people I know it seems far more likely to do the opposite.

jamesaguilar5• 13 years ago

I think this is extremely applicable in inefficient third world economies, but I can think of a few reasons it might not be as applicable in a first world country like the United States.

    - Most basic skilled services already have many providers.
    - The startup costs for these services are significantly higher in first world countries.
    - The expectations of consumers are also (probably) much higher.

So, I want to believe, but I'd like to see some evidence of broader applicability before we leap to conclusions. That brings up another problem, though: this is so much harder to do in a developed country because it is prohibitively expensive.

bdcs3• 13 years ago

It works resoundingly well in developed countries, see my comment here: https://news.ycombinator.com/item?id=5769233

randomknowledge• 13 years ago

I the united states, studies have indicated that food stamps produce an economic return of $1.85 for every dollar spent. I would imagine additional cash spending could have a similar effect.

wildgift3• 13 years ago

Could you clarify? What are basic skilled services?

dools4• 13 years ago

There is a big difference between being broke in the first world and poverty stricken in the 3rd world. Even in developed nations this article isn't talking about breaking the cycle of minimum wage retail, it's talking about breaking the cycle of poverty. Your friends aren't poverty stricken. They might be having a tough time and feeling regrets about over capitalising on an education they can't use but I sorely doubt that giving them an average year's wage would solve their problems because they already have all the opportunities that the years' wage buys the ugandan farmers.

Cushman9• 13 years ago

I certainly don't mean to equivocate developed and developing poverty, but I also don't agree with the inverse. Yes, we are not starving or threatened, for the most part. But in both worlds, poverty means dependence. It means not having options, or not having the ability to take opportunities. It means being stuck in a bad situation because anywhere else is worse.

My friend who works at Macy's does have clean water coming out of her tap, and that's something to be very thankful for, but that by itself doesn't make her free.

hcarvalhoalves• 13 years ago

Why the obsession with weed?

Cushman9• 13 years ago

Do you mean for me rhetorically, or in my peer group? Rhetorically, the common emotive argument against social welfare programs is that they enable the poor to do drugs all day rather than doing productive work (I suppose this is also an argument against drug use). Personally I feel that contradicts reality, and since marijuana use is a fact of life among the people I went to college with I think it's useful to bring it front and center now and again.

Why weed itself? Well it's an analgesic, euphoric, prosocial, psychedelic, stimulating, sedating, relatively non-addictive plant that will grow in most parts of the world, may actually be healthier for you than not using it, and to top it off has been a cornerstone of youth culture for fifty-odd years. One's mileage may vary, but it is hard for one not to see the appeal.

antoviaque• 13 years ago

There is an ongoing petition to the European Union ("Citizen initiative") for basic income: https://ec.europa.eu/citizens-initiative/REQ-ECI-2012-000028...

"On January 14th 2013, the European Commission accepted our European Citizens’ Initiative hence triggering a one-year campaign involving all countries in the European Union."

"If we collect one million statements of support for Basic Income from the 500 million inhabitants of the European Union, the European Commission will have to examine our initiative carefully and arrange for a public hearing in the European Parliament."

http://basicincome2013.eu/ubi/

coob• 13 years ago

How pointless, the EU couldn't impose this even if they wanted to. It'd be up to national governments.

sliverstorm6• 13 years ago

There is a fucking huge problem with this idea (excuse my french). The majority of jobs in this country, nobody wants to do- but they need to be done. If we just freely hand out a living wage to everybody, nobody will be working the crappy jobs and our world will fall apart.

eli_gottlieb4• 13 years ago

So you believe that not only does money have a diminishing marginal utility, the utility drop-off that comes just after not starving to death on the street is so strong that, should we abolish Slow-Death-by-Poverty, nobody would do certain jobs?

You know, as opposed to low-level employers just having to raise wages and automate more?

scarmig2• 13 years ago

Supply and demand.

If they're jobs that need to be done, wages will rise until they're sufficient to either convince labor to allocate itself to the problem or convince capital to be substituted for it.

Cushman9• 13 years ago

Capitalism, hey? The garbage will pile up until somebody is willing to take away the garbage for what you are willing to pay. Then you will know what the real value of garbage removal is to you, when you can no longer use the inhumanities of poverty as a bargaining chip.

wildgift3• 13 years ago

So raise the wages on those necessary jobs.

jchrisa• 13 years ago

Maybe cleaning toilets should pay better than Wall Street.

zurn• 13 years ago

Look how things work out in places with a working social safety net, state unemployment benefits pay for rent, public healthcare and gives enough money for food and basic comforts.

Basically it works pretty well, people want to feel like productive members of society and do something for a living, and employers end up having to treat employees with more respect since the threat of unemployment isn't so terrifying.

dools4• 13 years ago

There was a very similar article here a few weeks (months?) ago about a startup Give Directly (or something like that) ... Perhaps they referenced this research.

it may seem like a tautology to say this but this only works where the root cause of poverty is lack of capital.

In cases where the root cause of poverty is deeply entrenched social disadvantage, mental illness, substance abuse or corruption then handing out cash will do little to solve poverty.

easymovet3• 13 years ago

Agreed, in those places you need to have a min wage that's higher than the poverty level and higher than any wellfare traps.

Aeiper• 13 years ago

This reminds me of myself because I've been trying to get $100 to make a website, but not one person has given me a single dollar...

easymovet3• 13 years ago

We are so hung up on the idea that "you can teach a man to fish and that will feed him for a lifetime" in reality if you give a man a boat and fishing gear he will figure out how to fish on his own. The US doesn't have the same credit issues as uganda but we instead have the wellfare trap which could be easily solved by raising the minimum wage to above poverty level, heck raising the minimum wage to $30/hr would solve a lot of our economic problems.

ctdonath• 13 years ago

Raising minimum wage to $30/hr would soon be followed by the price of basic essentials quadrupling. Money is just a medium of exchange, a convenient way of saying 20 minutes of floor sweeping is about equal in value to one gallon of gasoline; raise the pay for the former and the cost of the latter will rise in kind.

easymovet3• 13 years ago

That sounds very reasonable but it actually isn't true see this MIT study: http://www.irle.berkeley.edu/workingpapers/157-07.pdf

peripitea• 13 years ago

Some economists look at basic income as a theoretically superior alternative to minimum wage, i.e. with a basic income you would not need a minimum wage at all. I think the idea is that the supply of labor exceeds the demand, which necessitates a minimum wage. The basic income solves this by reducing the supply of labor. This post (and parent thread) talks about it a bit more: https://news.ycombinator.com/item?id=5657604

kevinconroy• 13 years ago

Some professors at Yale had a similar idea and set up a charity that allows you to directly transfer cash to very low income families in Kenya. They're doing a bunch of randomized control trials (RTCs) which are the NGO equivalent of A/B testing for outcomes. Highly recommend them if you're looking to support something like this directly (no pun intended).

http://www.givedirectly.org/

thenomad2• 13 years ago

REALLY?

This is about the best news I've heard all week. Thank you VERY much for pointing us to this.

The costs of Basic Income test programs in the third world are SO damn low that I've been thinking for a while that it's possible to run some fairly credible privately-funded trials. Really pleased to find someone else doing it so I don't have to try to learn the NGO side of things :)

wittysense• 13 years ago

I'm not sure what to say to this, honestly, and I technically mean that, given my background in philosophy. I see the Sorite's Paradox pop up everywhere, and I'm frankly surprised to see it uniquely apply here.

How Much do I give? I frequently hand out $5s, $20s, on the principle that at that given time, given what is in my pocket and on my (spontaneously emerging) schedule, this cash would better service this chap, bloke, schizo, street-ranter, street-cryer, snot driveling, moaning, wailing, decaying, wasting -- stop me when you get my point.

Whence cometh Jesus?

On every occasion I give large sums, thinking "not too large" because well -- [insert tangent:] Today I stopped for a BIT too long to hand a bloke on the street a cigarette. I'm wearing my usual dapper attire. A second person accosts me. Then a third. Before I knew it, I had half a pack of cigarettes. I was handing out the first as a romantic gesture, latent in capitalism: "Here's yr last cig, mate." We all do it. Are you ready to buy a pack, walk out, hand them all out, and sleep without absurdity?

Are you calling for decentralized, anarchism liquidation? If you are, fucking say so. Because I've been fucking waiting for this day. If you tell me to fucking burn down a bank, don't leave it to my imagination to make out that you're trying to say that. This is becoming infuriating the way we programmers are writing.

I dropped a street violinist a $20. He MOANED at me, and STOPPED playing. I had to REMIND him that I listened to him from a hotel room from which I was staying for 45 minutes. He kept me sane, as a programmer isolated and stranded in a remote city. I could not communicate this to him.

Do you think green bills with "God" printed on them are the solution? This is NOT mature thinking. I just don't care.

Are you telling me I need a GTD strategy to liquidating my hard-earned, mentally crippling, psychologically and socially handicapping means for a living through this computer such that everyone on my street gets the average? Should I become a servant to the masses, when I'm already working for them in my own form of labor that I know?

Not to mention the opportunities for factionism and favoritism. Perhaps it's time for this. Perhaps this is what you are saying. But do I still have to accept that anarchism only works on paper? If I hand someone a bill and say, "Thank Anarchism, not God. Thank the realization of postscarcity."

I'll get slapped by mothers and gang members alike. It's just going to get spun as a hand out.

tnuc• 13 years ago

As much as I would like to say this is a good idea, it probably isn't.

Most "grants" that the world bank gives are usually as a supplement to some loan that they are giving to a country.

Think of it as Ford/World Bank funds a loan for a new road so they can sell cars. The world bank gives a loan for the road, Ford sells the cars. And on the side the world bank sets up a little side thing to show statistics by training existing motor mechanics how to fix Fords by giving them money for parts/tools and minimal support. The money is given out piece meal to ensure they spend it on the right things, like Ford parts.

World bank builds the road, Ford sells the cars, some small figure is given to keep the mechanics happy and help fudge figures. The road builders are from a foreign country and get a tax break as does Ford.

Some years down the track, after the professors go home, the road falls into disrepair. The government/people owe money for the loan for the road, and the Ford/Car owners are in debt to the banks for their vehicles. Poverty cycle starts again.

The only part of the road that is kept in good shape is the road from some mine to the port/market, if at all.

The figures presented in the article look at a small part of the larger picture. The countries that "fund" the world bank benefit as they use it prop up their own industries to the detriment of the developing country.

The long term figures on most of these "aid" programs are mostly awful. Most countries would be better off accepting no aid and building what they need.

I have spent too many years working with shit like this. The world bank and the IMF are much the same.

Note: Ford is an example, please replace it with any car company.

Edit/update: The author of the article is Chris Blattman; He is most likely going to say great things about any project that he writes about. If you write bad things you don't get invited back to write again/get paid more money.

yarou• 13 years ago

Upvoted you because it's a very good analogy. The Washington Consensus and neoliberal trade theory have wrecked developing economies by at least 10-20 years. It's no surprise that the developing economies doing well right now accepted little to no aid. Reading up on structural adjustment policies give a good insight into what the consequences are of seemingly benevolent loans. It's basically like a mafiosi loan shark giving you a desperately needed loan, then threatening to break your legs because you don't have the means to pay it back, forcing you to do whatever they ask of you.

mc-lovin6• 13 years ago

>It's basically like a mafiosi loan shark giving you a desperately needed loan, then threatening not to make any loans to you in the future because you don't have the means to pay it back, forcing you to do whatever they ask of you.

Fixed that for you

davidandgoliath• 13 years ago

Want to transform your economy? Instead of bailing out banks, bail out student loans. :)

wildgift3• 13 years ago

Uhhhh. No kidding. It's cash that created the prosperity in the 1st world. It wasn't really wages but labor unions that could force wages to rise and conditions to ease up so that people had more free time that really did it. It rebalanced the workday so that the high wages could be spent on acquiring capital, and thus be redeployed into other activities that, among other things, started new businesses and broke up market monopolies.

thenomad2• 13 years ago

Those of you who are opposed to Basic Income Guarantees or cash transfers on the basis that you believe they don't work:

Can you define the assumptions / beliefs that make you think they don't work, in a testable fashion? (Ideally in a fashion which would be testable on as small and cheap a scale as possible.)

I'm not asking this because I'm planning to rubbish those assumptions or beliefs. I'm asking because this is an area of enough interest to me that I may look into organising fundraising for trials in the future, and it'd be useful to know what the most compelling hyphotheses to test would be.

mseebach3• 13 years ago

The problem is the erosion of morals, and that is obviously difficult to test. It's not about what happens if someone gets a grant for a couple of years to do whatever, it's waking up in the morning, every morning, and knowing that even if you never lift a finger to do a single thing for someone else, you're guaranteed a minimum quality of life.

The promises of the vast european welfare systems were similar to those of the basic income guarantee proposals: That people's morals are fundamentally wired to be ashamed of idleness and eagerness to contribute to society, so if you just remove the negative spirals of poverty, everything will fix itself.

The lessons from the european welfare systems, however, shows something quite different: Plenty of people are happy never to lift a finger, either for themselves or anyone else, and a culture of entitlement has blossomed.

EliRivers2• 13 years ago

"Plenty of people are happy never to lift a finger, either for themselves or anyone else, and a culture of entitlement has blossomed."

Nothing we can do about that. They will continue to do so no matter what the system is. So, we can either keep going as we are, or we can have a basic income.

Keep going as we are; these people who won't lift a finger continue to do so. All the people who would use a basic income to better themselves and thus improve society are also still screwed. Society does not benefit.

Have basic income; these people who won't lift a finger continue to do so. All the people who would use a basic income to better themselves and thus improve society do so. Society benefits.

Is it fair? No. Given the choice between more fair, or less fair and a better society (by which I mean an actual opportunity for people to build themselves better lives, because no matter what propaganda we hear about "American dream" the evidence clearly indicates it's just that - a dream), which should we pick? That's a personal choice, but I know which I'd go for.

scotty792• 13 years ago

European welfare systems are not BI because you loose the benefits if you go to work. They penalize getting a job hence people are disincentivised to get one. At leas legal one.

yummyfajitas2• 13 years ago

I believe that expanding the BI would reduce the amount of work performed, thereby destroying wealth.

Assumptions: most people prefer not to work, and most people gain diminishing marginal utility from income. A lot of people will be satisfied to relax and produce nothing while enjoying merely the BI.

Evidence in support of this hypothesis: poor Americans already have a BI [1] and choose not to work. See some numbers here: http://www.chrisstucchio.com/blog/2011/why_the_poor_dont_wor...

In contrast, poor folks in many other nations (e.g., India) have a much lower BI and choose to work.

scotty792• 13 years ago

Business prefers not to hire a lot of people because their work is worth for the economy less then what they have to pay for their food and shelter.

Wealth does not come from human work. It comes from machine work. Business is no longer in recession. It produces as much as before 2008 but with much less people. Manufacturing just used the recession to shed off unnecessary workers.

spiritplumber• 13 years ago

I tried this with two homeless girls and it literally mostly went up in smoke. Giving them anything but (groceries, parts for their projects, etc) worked a lot better,

youngerdryas• 13 years ago

We have structural unemployment that is only going to get worse so something will have to change but idle hands being the devil's workshop I think some minimum of productive output will have to be required if only for their own sake. Volunteer charity work or art, anything but total sloth.

michelpereira2• 13 years ago

In Brazil there is a government initiative named Bolsa Família that gives US$ 45,00 per child on school. It's removing proplr from poverty and increasing the local market in some cities.

The main benefit is that the people doesnt want to earn this money from govern, so they stsrt to look at job opportunities.

michelpereira2• 13 years ago

More information about the program: http://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia

zamalek• 13 years ago

Living in a 3rd-world socialist country has taught me one thing: "you do not multiply wealth by dividing it." Capatalism breeds in an ethos of elitism, the ratio of motivated:lazy seems to be driven by the possibility of dire failure.

Put another way, my government spends ridiculous amounts of money (as much as 20% of the salaries of the earners) on "people," and all they get in return is an unmotivated nation. The only people that are truely motivated are the demographic that are excluded from the government assistance (and I think that they would stand to be unmotivated in the event that they government gave them money instead).

The only way to transform the economy would be to give money to people that are deeply motivated; people who do what they do because they believe it is what is needed (religeous for want of a better word). The problem is that those people need to be identified.

Instead of discussing "give everyone money," I think it's better to instead discuss "identify who deserves gratis money." Universities play a pretty big role in our current grant system; unfortunately they are broken beyond all hope - they are doing a terrible job at it.

Want to help the poor and transform your economy? Give people cash.

Related Stories