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

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

#61

Post by ultramancool »

dragonwriter wrote: post #52
ultramancool wrote: post #42

Earlier quoted context omitted.

> 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 gre…

> unless you explicitly inflation index the benefit

You can be 100% sure that unless this is specified you'll have people lobbying for it every year. Or just flat rate increasing the UBI, etc. I can envision a strong push from some political groups for this already.

> 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.

This is a good point, but in this case, everyone essentially loses value from savings to pay the UBI. Definitely not a hit I'm interested in taking.

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

#62

Post by MicroBerto »

kogepathic wrote: post #40

Interesting concept. I'll be interested to see if it works. I worked with a company building AC mini grids in East Africa. They connected around 130 households in each village to a 220V grid. The expectation was that people would use the electricity for basic needs (e.g. light, cell phone charging) but also for productive uses (e.g. grinding grain to flour, air compressors, saws, etc). The expectation was that as peo…

The pareto principle is everywhere. 90% of the productive activity will come from 10% of the people in a situation like that - if not more heavily slanted.

So is there a better way of finding that 10% and investing in them directly, without ridiculously wasteful organizations?? Do you force them to make ROI?

You are being downvoted because your real world experience violates the increasingly liberal tenets amongst HN readers lately. Free money for everyone means that I get to work on my killer app idea during the day, so free money for everyone is clearly a Good Thing(TM), right?

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

#63

Post by namenotrequired »

zardo wrote: post #20
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.

There's a big difference between an economy and a currency.

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

#64

Post by ultramancool »

refurb wrote: post #56
rm_-rf_slash wrote: post #31

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…

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.

I think the idea is that a UBI would increase the cost of labor by removing some people and some motivations from the work force and thus forcing a higher level of competition between employers.

Increasing the cost of labor increases the incentive for automation to remove the need for the labor.

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

#65

Post by nickff »

seizethecheese wrote: post #49
nickff wrote: post #17

Earlier quoted context omitted.

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, a…

I don't see how the parent comment is describing mercantilist development. My understanding is that mercantilist development implies that the subservient state is developed as an income source for the dominant state. Although traditional development may not be effective, it surely isn't meant to extract resources.

"Dumping" is a mercantilist theory; other schools of economics view the same phenomenon as a gift or subsidy (for the recipient). Bastiat wrote a famous criticism of proponents of "anti-dumping".[1]

[1] http://bastiat.org/en/petition.html

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

#66

Post by agrona »

GiveDirectly's previous work involves finding the poorest communities in the world and targeting the poorest members with direct cash transfers. I was turned on to them a few years ago by GiveWell (unrelated), which attempts to evaluate charities based on cost effectiveness and capacity for more funds.

In addition to the GiveWell reports, GiveDirectly also document and publish their work and research. It's exciting to see the impact that they are having (and how minimal the systemic abuse of the money is):

https://givedirectly.org/research-at-give-directly

https://givedirectly.org/research-on-cash-transfers

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

#67

Post by ultramancool »

dragonwriter wrote: post #55
maaku wrote: post #33

Earlier quoted context omitted.

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?

> What, people are going to stop wanting luxuries?

Not sure about you, but most of the luxuries I own, I've basically only bought because I had money for them. If I didn't have money to blow on them, they really don't bring me that much joy, relatively basic items would suffice.

So many things I think of as the real luxuries these days are free or basically free. I can spend hours watching youtube or playing games for extremely little cost.

I would not exert extra effort to buy better phone or a 4k monitor and a 980ti instead of settling for a weaker setup. Instead I only have these things because the money was there already and I had nothing better to do with it.

Basically, I'd drop out of the workforce in a heartbeat if I could afford living and a few minimal luxuries. $15-20k/year would do the job to split a cheap apartment with a friend and keep the rest under control. This is half of what some people have proposed as a UBI.

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

#68

Post by skewart »

kogepathic wrote: post #40

Interesting concept. I'll be interested to see if it works. I worked with a company building AC mini grids in East Africa. They connected around 130 households in each village to a 220V grid. The expectation was that people would use the electricity for basic needs (e.g. light, cell phone charging) but also for productive uses (e.g. grinding grain to flour, air compressors, saws, etc). The expectation was that as peo…

Yeah, I don't think you deserve downvotes either. Your skepticism is perfectly reasonable, and you explained it well.

I've never been to Kenya, but I have spent a lot of time in countries with roughly similar levels of development. I'm skeptical too. But I would love to be wrong. And I think it is awesome to run this experiment.

The reason that I'm a little skeptical is that a lot of the big obstacles to entrepreneurship and investing in long-term social improvements come from big structural challenges that having more money in your pocket doesn't necessarily fix. For example, government corruption, lack of a good justice system to enforce contracts, lack of physical infrastructure to allow people and goods and people to move around the country, lack of access to banking resources. Those problems kind of need to be tackled at a higher level, and giving random individuals either money or goods doesn't really solve them. UBI seems like it could be much more effective in countries that don't face as many of those structural problems.

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

#69

Post by dragonwriter »

ultramancool wrote: post #61
dragonwriter wrote: post #52

Earlier quoted context omitted.

> 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 gre…

> unless you explicitly inflation index the benefit You can be 100% sure that unless this is specified you'll have people lobbying for it every year. Or just flat rate increasing the UBI, etc. I can envision a strong push from some political groups for this already. > 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 inf…

I actually agree with a lot of what you say, which is why I prefer to start a UBI very low (not directly displacing existing programs, but since the income from it counts as income, gradually reducing eligibility for them), tied to a dedicated revenue stream that is expected to grow with productivity (which, unless something else is wrong, should over the long run grow substantially faster than inflation), rather than using a benefit-first calculation.

I'd really prefer to take strong steps to eliminate the risk of overshooting a sustainable benefit level, but -- while there are certainly costs to that -- the "mass exodus from the work force because benefits are too generous" problem is self-limiting.

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

#70

Post by noahlt »

thedevil wrote: post #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 tha…

> 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 think the majority of dissent in the United States would actually argue that free money is worse than no free money. (If this surprises you, you may also have been surprised that Trump is going to be the GOP nominee.)

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