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

givedirectly.org

51–60 of 218 posts

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

#51
post #28

Earlier quoted context omitted.

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.

The wealth of a society is a reflection of the quality of the people in the society. 10 million in my hands isn't worth as much as 10 million in the hands of warren buffet.

You're making a good point, and I'm sad that you're being downvoted.

People who win a fortune by the lottery often lose all their money shortly afterwards, even those people who intend to save and invest it. The reality is that some people are better than others at turning capital into gains through investment. There's definitely luck involved too, but Buffet knows how to buy a business, be its steward, and generate growth, not just for his business but for the economy in which it resides too. Simply investment in diversified mutual funds is not the same thing.

If you pick a typical poor person and give them $10m, they probably won't have the education or discipline even (to know how to) live off investment proceeds, much less grow the amount substantially. (See the outcome of most lottery winners)

That being said, basic income is talking about something different entirely, which is giving a lot of people a little bit of money. I think that could have a positive effect, although for all we know it may be transitive and only lasts as long as the money is being supplied. I think the question is whether the money helps people lift themselves out of poverty, and educate themselves or their children so as to enter the middle or upper class.

I think you could have expressed your first post more clearly -- I assume your point is that transferring wealth from one person to another in a particular society does not make that society as a whole better off. On a micro scale this is correct, but it may in fact make society more wealth if it leads to a more productive population in the long term. But it could just as equally lead to a less productive population. We'll have to see.

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

#52

Earlier quoted context omitted.

Basic income could just as likely increase productivity. Without the need to work, there is a greater incentive to automate jobs. People don't work crap jobs because they like to, they do it because they have to. Anyone who wants a higher standard of living than the basic income minimum can improve their skills while they're sustained by their safety net. Meanwhile, basic income puts more money in the pockets of cons…

> Meanwhile, basic income puts more money in the pockets of consumers, creating more market opportunities I worry that it would be a lot worse than that - that we could create a class of non-workers and workers. Some products would only be affordable to workers and if, like you're saying, those workers are only those working high paying jobs, this is probably how it'd work out. It could perpetually shrink the labor f…

> I worry that it would be a lot worse than that - that we could create a class of non-workers and workers.

UBI is intended to alleviate the problem with means-tested social welfare programs in doing that by reducing the disincentive to taking action which would produce additional income faced by those on means-tested benefits where any additional income results in substantial (sometimes even dollar-for-dollar or greater) reduction in value of benefits received.

And, in any case, economically its somewhat self-limiting (unless you explicitly inflation index the benefit, in which case you are just asking for disaster if you set it wrong initially -- which is why I prefer tying benefits to a defined revenue stream, rather than a set benefit level): if too many people drop out of the work force because the benefit level is too generous given the current level of productivity, it will accelerate inflation, reducing the real level of the benefit, leading more people back into the workforce.

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

#53
post #43

Earlier quoted context omitted.

Please transfer all your money to me. As you say, it will not make you less wealthy.

In the longer & broader view, it may well not, I think that's the OP's point. This could be due to second-order effects such as the wealthy (= productive) people losing incentive (due to taxation) to work as hard, or inflation.

I am willing to face that danger in OPs stead!

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

#54
post #39

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…

Just giving money will not work, see Saudi Arabia. They have all the money they can dream of and did not evolve. If you want it to work it needs 3 things: 1) Free Education 2) High Taxes 3) Strong Unions Sounds leftist? It may astonish you which countries have the highest ratio of rich persons per capita live. This and a good explanation can be found in "Where in the world is it easiest to get rich? (TEDxOslo)" https…

Just giving money will not work, see Saudi Arabia. They have all the money they can dream of and did not evolve.

What do you mean didn't evolve?

My understanding is a lot of stuff is free in Saudi Arabia. Oil money is used to fund education and cash is given to citizens.

Not sure I understand your point.

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

#55
post #33

Earlier quoted context omitted.

Basic income could just as likely increase productivity. Without the need to work, there is a greater incentive to automate jobs. People don't work crap jobs because they like to, they do it because they have to. Anyone who wants a higher standard of living than the basic income minimum can improve their skills while they're sustained by their safety net. Meanwhile, basic income puts more money in the pockets of cons…

Why wouldn't I just let someone else figure out how to automate jobs? I've got my income. Let someone else figure that out.

> Why wouldn't I just let someone else figure out how to automate jobs? I've got my income.

Empirically, people often expend effort to increase their income when there are opportunities available, even if their current income meets basic survival needs. I don't see why that wouldn't continue to be the case with basic income. What, people are going to stop wanting luxuries?

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

#56

Earlier quoted context omitted.

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…

Basic income could just as likely increase productivity. Without the need to work, there is a greater incentive to automate jobs. People don't work crap jobs because they like to, they do it because they have to. Anyone who wants a higher standard of living than the basic income minimum can improve their skills while they're sustained by their safety net. Meanwhile, basic income puts more money in the pockets of cons…

Without the need to work, there is a greater incentive to automate jobs.

How do you figure? If that were true then that means companies are currently thinking "I could automate all these human jobs, but these guys need work so I won't"?

Not sure I've ever heard a business make that decision.

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

#58
While it's noble to give away $30M, it won't necessarily give strong support for universal basic income. In order to have an effective experiment, you need to also tax those people $30M and redistribute it. That's missing from their checklist.

Of course free money is better than no free money! That's all this will prove and few will debate that. The real questions are: 1) is it worth the cost, and 2) is it better than alternatives?

I would personally donate to a large-scale A/B experiment where you give one group cash and the other group food, housing and education worth an equal amount and see which works better.

I worry that the recipients are going to be better off (because you just gave them $30M) and then everyone is going to want to implement a huge, risky (and fundamentally different) program in the US.

Note to avoid excessive downvotes: I like the idea of UBI in theory and I will support it one day but I think we're not there yet. I think we need more automation and more overall wealth before it makes economic sense - before benefits > costs.

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

#59
"It is provided to everyone, regardless of need, forever."

How long will the experiment last? I feel like the recipients knowing they are guaranteed a payout for at least a decade will result in very different behavior than only knowing you have it this year and maybe next year, even if you do for it a decade.

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

#60

Can someone point me to any unbiased research on the micro/macro effects of basic income vs raising minimum wage? I've been struggling to find non-hyperbolic politically laden information on the subject.

In my perfect world, most human work is automated away. What's the point of minimum wage if there are no jobs to do?
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