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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

#71

Post by gshulegaard »

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…

Article you may be interested in from 2013: http://www.economist.com/news/international/21588385-giving-...

Basically UCT (Unconditional Cash Transfers) work well when lack of capital is the primary problem.

But often times the cycle of poverty is self-reinforcing because of deeper issues and UCTs don't fix those (such as undervaluing education). Instead CCT (Conditional Cash Transfers) can often be more corrective to enact lasting change to poverty cycles.

Ultimately, I think some sort of UCT and CCT combination would be the best and least overhead form of welfare. But that is just IMO.

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

#72

Post by dragonwriter »

ultramancool wrote: post #67
dragonwriter wrote: post #55

Earlier quoted context omitted.

> 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 fo…

You might accurately describe what you would do, but I think the evidence from the world around us is that most people in the US do see sufficient marginal utility in things beyond what it takes $15K-$20K -- or even $30K-$40K -- to afford to exert additional effort to earn beyond that level given the opportunity. So even if we could somehow establish a UBI that would (after accounting for whatever inflationary effect the UBI itself had) provide a standard of living comparable to $30K-$40K in current dollars (which I don't think we can come anywhere close to today), I don't think you'd see a whole lot of people who were had job prospects not working.

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

#73

Post by tryitnow »

nickff wrote: post #65
seizethecheese wrote: post #49

Earlier quoted context omitted.

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

Famous? Among whom? Other than libertarians who already agree with that point of view.

I didn't read everything Bastiat wrote, but he appears to be describing either the absolute or the comparative advantage of trade (e.g. the first few sentences of the last paragraph).

But trade is different than a gratuitous gift. Trade is part of the free market economy of mutually beneficial exchange. So trade is stimulating production in other areas and it's also allocating goods based on aggregated preferences, not the arbitrary whims of philanthropists.

I'm pretty sure Bastiat and other libertarians would agree that cash is much, much better gift than specific goods.

Finally, the jury is out on dumping. Most mainstream economists will admit there are instances where dumping should be prohibited.

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

#74

Post by danielweber »

ultramancool wrote: post #64
refurb wrote: post #56

Earlier quoted context omitted.

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.

Why is the idea of a permanent underclass unable to work appealing to anyone?

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

#75

Post by dv_dt »

okket wrote: post #39
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…

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…

Who has control of the money in Saudi Arabia, is it in a few hands, or broadly distributed in a stable way so people can make good consistent long term decisions?

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

#76

Post by tryitnow »

gshulegaard wrote: post #71
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…

Article you may be interested in from 2013: http://www.economist.com/news/international/21588385-giving-... Basically UCT (Unconditional Cash Transfers) work well when lack of capital is the primary problem. But often times the cycle of poverty is self-reinforcing because of deeper issues and UCTs don't fix those (such as undervaluing education). Instead CCT (Conditional Cash Transfers) can often be more corrective t…

Makes sense. I like the UCT in principle, but I can't argue with the evidence that CCT does have positive effects.

Of course, CCTs may eventually have the same problem as traditional welfare policies: self-perpetuating bureaucracies, contradictory incentives, resource misallocation, etc, etc.

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

#77

Post by mathattack »

skybrian wrote: post #30
mathattack wrote: post #26

Seems like a great experiment. I think this will do wonders for both the people, and our knowledge of how to best provide aid. 2 things I'm interested in seeing: 1 - Does it make a difference if it's USD sent over, versus local currency? (Is it a cash shortage, or a foreign cash shortage?) 2 - How much inflation will occur?

1. The donations will likely be in local currency (via mobile phone payments), but the charity needs to exchange dollars for local currency. So it helps somewhat with the exchange rate if the country is short on foreign currency, but I'd guess the scale is not nearly enough to have any significant effect. 2. It doesn't increase the amount of currency in the country as a whole. Locally, if the economy is doing better,…

So to be the devils advocate, why wouldn't the country print more money rather than rely on money from abroad?

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

#78

Post by ultramancool »

dragonwriter wrote: post #69
ultramancool wrote: post #61

Earlier quoted context omitted.

> 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 tha…

Yeah, that's a fair assessment. I think more research needs to be done in this direction, there's got to be a good way to determine initial parameters for this sort of thing.

But I can't help but think that it'll be too politically charged to follow any sort of logical regime that might result from research, which makes it sort of scary to approach. You'd basically need the public to agree on the terms and limits of a well-defined system without turning it into a partisan mess. Unfortunately I can't think of many examples of this currently in existence.

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

#79

Post by narrator »

gshulegaard wrote: post #71
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…

Article you may be interested in from 2013: http://www.economist.com/news/international/21588385-giving-... Basically UCT (Unconditional Cash Transfers) work well when lack of capital is the primary problem. But often times the cycle of poverty is self-reinforcing because of deeper issues and UCTs don't fix those (such as undervaluing education). Instead CCT (Conditional Cash Transfers) can often be more corrective t…

Bolsa Familia[1] in Brazil was a pretty succesful program. Poor families get money as long as the children go to school and get vaccinated. Money is distributed to the female head of the household by a debit card network which helps to reduce corruption and theft.

[1] https://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia

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

#80

Post by dragonwriter »

ultramancool wrote: post #64
refurb wrote: post #56

Earlier quoted context omitted.

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.

> I think the idea is that a UBI would increase the cost of labor

Different UBI proponents (which come from across the left-right spectrum) have different ideas, but none of them that I've heard from has favored UBI for the purpose of increasing the cost of labor generally. Especially on the right, but also usually on the left as well, reducing the disincentive to work inherent in means-tested social benefit programs, and avoiding the same problems that minimum wages seek to address while not limiting the minimum economic value a job can produce and be worth offering are frequently cited motivations.

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