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GiveDirectly Planning to Give $30M in Basic Income to East Africa

givedirectly.org

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Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#11

Post by NhanH »

awt wrote: post #5

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now have of the nature of money. Consider that basic income works when you think of money in the micro context as a means of exchange for goods and services, but not when you think of it in the macro context as a reflection of the wealth of a society. Simply tran…

Actually it does due to the very fundamental principle of economy: the same goods will have different utilities, and hence different values to each individual human being (and why trading IS creating value).

2000 calories to a starving person helps them alive, which translate to more wealth they can generate later on. 2000 calories to fat people is worth much less, if not harmful. Capital is just an abstraction of goods, and certainly their usage will have vastly different effectiveness depending on situation.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#12

Post by ThrustVectoring »

awt wrote: post #5

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now have of the nature of money. Consider that basic income works when you think of money in the micro context as a means of exchange for goods and services, but not when you think of it in the macro context as a reflection of the wealth of a society. Simply tran…

Money is not wealth - it is debt. That's what the fundamental purpose of money is: instead of trading your stuff for other things, you trade it for a certain value of things at an unspecified later time.

With this perspective, there's no distinction between micro and macro contexts for money. It's all a unit of account for how the economic output of a society gets distributed. Transferring money from one group to another is the exact same thing as transferring real goods and services, except that the recipient gets to choose what slice of the economic pie to receive (by paying for it).

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#13

Post by ultramancool »

geekfactor wrote: post #3

FYI the April 13 show of the Freakonomics Podcast takes on the question "Is the World Ready for a Guaranteed Basic Income?" and mentions some of the prior studies noted in this article. [1] http://freakonomics.com/podcast/mincome/

A few more good podcast links here, 2 episodes of NPR's Planet Money about GiveDirectly's results:

http://www.npr.org/sections/money/2013/11/08/243967328/episo...

http://www.npr.org/sections/money/2013/08/16/212645252/episo...

Overall the basic income idea... I don't like it in a lot of ways, I just can't see it resulting in a productive society personally. But that's just my gut reaction and I could be wrong, so far the data I've seen is a pretty mixed bag.

I think things like this are a great way to experiment with it though (and without tax payer money). I might change my mind if there's more good data.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#14

Post by mbil »

awt wrote: post #7
dragonwriter wrote: post #6

Earlier quoted context omitted.

Basic income isn't designed to make the recipients wealthier directly (OTOH, access to greater goods and services produces more opportunities to become wealthier over time, which is more the point.)

This implies that they're not wealthy because they don't have access, would you agree? Is it possible they're not wealthy because of some other reason?

I find it hard to imagine that if you're struggling to attain your own bare necessities you're going to have the energy or wiggle room to generate more wealth (e.g. to start a business)

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#15

Post by nicksellen »

troycarlson wrote: post #4

Recently fascinated by the thought of piping donations directly to poor populations and allowing them to use it as they wish. I watched the documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless foreign aid in these countries is killing the economy. If Toms shoes dumps 1,000 pairs of shoes in the city center every week, how the hell would a cobbler stay in business. Or if the U.S. pumps an end…

You can extend this argument to banking though:

If the U.S. pumps an endless supply of money into Haiti, how could Haitian banks hope to compete with their loan offers?

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#16

Post by mac01021 »

awt wrote: post #5

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now have of the nature of money. Consider that basic income works when you think of money in the micro context as a means of exchange for goods and services, but not when you think of it in the macro context as a reflection of the wealth of a society. Simply tran…

Why doesn't transferring money from you to me make me wealthier? It allows me greater access to goods and services, which seems to me to be almost the definition of greater wealth.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#17

Post by nickff »

troycarlson wrote: post #4

Recently fascinated by the thought of piping donations directly to poor populations and allowing them to use it as they wish. I watched the documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless foreign aid in these countries is killing the economy. If Toms shoes dumps 1,000 pairs of shoes in the city center every week, how the hell would a cobbler stay in business. Or if the U.S. pumps an end…

What you are describing is a mercantilist theory of development.[1]

Giving people free things usually helps them; what doesn't help them is the way that the 'gifts' are chosen, whom the 'aid' is given to, and how the poor are treated.[2] The gifts are usually chosen based on which companies and unions the 'giving' country wants to promote and help, instead of what the poor need. The 'aid' is often given to tyrants, and is a substitute for tax income, which disconnects the ruler from their populace and local accountability. The poor are then often treated like sheep who need to be told what to do, and can't figure out what to do with themselves, so they are the subject of government theft and general injust treatment.

[1] https://en.wikipedia.org/wiki/Mercantilism

[2] https://en.wikipedia.org/wiki/The_Elusive_Quest_for_Growth

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#18

Post by awt »

ThrustVectoring wrote: post #12
awt wrote: post #5

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now have of the nature of money. Consider that basic income works when you think of money in the micro context as a means of exchange for goods and services, but not when you think of it in the macro context as a reflection of the wealth of a society. Simply tran…

Money is not wealth - it is debt. That's what the fundamental purpose of money is: instead of trading your stuff for other things, you trade it for a certain value of things at an unspecified later time. With this perspective, there's no distinction between micro and macro contexts for money. It's all a unit of account for how the economic output of a society gets distributed. Transferring money from one group to ano…

So let's say you give 1 bar of gold each to a group of 50 year olds, and 1 gold bar each to a group of 12 year olds. Each group is now equally wealthy and could each produce a cathedral of the same quality?

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#19

Post by cowsandmilk »

nicksellen wrote: post #15
troycarlson wrote: post #4

Recently fascinated by the thought of piping donations directly to poor populations and allowing them to use it as they wish. I watched the documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless foreign aid in these countries is killing the economy. If Toms shoes dumps 1,000 pairs of shoes in the city center every week, how the hell would a cobbler stay in business. Or if the U.S. pumps an end…

You can extend this argument to banking though: If the U.S. pumps an endless supply of money into Haiti, how could Haitian banks hope to compete with their loan offers?

It depends on the size and the stability of the basic income. If a bank knows a customer will get $X/year for the next 5 years, giving an upfront loan to allow that person to create a business becomes a lower risk proposition. A basic income could easily expand the number of low to medium-risk borrowers and expand the amount of savings present to use as a base for lending.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#20

Post by zardo »

troycarlson wrote: post #4

Recently fascinated by the thought of piping donations directly to poor populations and allowing them to use it as they wish. I watched the documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless foreign aid in these countries is killing the economy. If Toms shoes dumps 1,000 pairs of shoes in the city center every week, how the hell would a cobbler stay in business. Or if the U.S. pumps an end…

>Economies don't spring up out of a pile of free rice.

Rice is a viable basis for a currency, it worked for China for a thousand years. Maybe the free rice piles just aren't big enough.

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