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

givedirectly.org

31–40 of 218 posts

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

#31

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…

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 consumers, creating more market opportunities, especially for the low-cost goods and services those consumers used to work to make.

Or maybe everything I've said is bullshit. Who knows? Only one thing is for sure: without experimentation, we only hurt ourselves in the long run.

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

#32
post #25

Letting markets function has helped poor countries like India, China and even North Korea. Making decisions on behalf of poor people has hurt poor even in the richest countries like USA. Common sense to me. There is always an issue of law and order though. If theft is a common problem then this may not work.

If people choose to donate, isn't that just the market working?

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

#33

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…

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.

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

#34
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…

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.)

Having sufficient passive income so as to not have to work is wealth.

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

#35
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…

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

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

#36
post #23
post #14

Earlier quoted context omitted.

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)

But why are they struggling so? Is it simply because of a lack of money?

Good point. They're struggling due to having unmet basic needs. Since money provides almost no nutritional value I can't see how it would help them. You've enlightened me; I'm now a social darwinist. /s

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

#38
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.

that other person was a lot more likely to figure it out anyway.

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

#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://www.youtube.com/watch?v=A9UmdY0E8hU

Just giving money may help in short term anyway, but I doubt it is one solution for everything.

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

#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 people entered the second phase of energy use (after basic necessities) their consumption would increase as their income increased.

What this company found though, was that very few customers followed this pattern. If people bought anything that increased their consumption, it was almost always a TV. This obviously didn't improve their income, so often their use would actually decrease because they can't afford the increased consumption.

Last I heard, they were having serious problems getting people in these villages to use more power.

Through some pricing campaigns, they discovered that people's energy use was almost directly correlated to the price. If you made the price similar to other well developed countries ($0.10-$0.30 kWh) people would use lots of energy, but the amount they paid was still relatively small. If you raise the energy price, people use much less, but end up paying almost the same amount per month. So if it costs $0.25 per kWh people will use 4kWh, but if it costs $1 per kWh they'll only use 1 kWh.

Since their model included batteries to cover the night load, they couldn't afford to sell the energy this inexpensively. Hence their wish to increase day time energy use among the villagers through equipment use (e.g. welding, grinding).

My expectation from this program: some small percentage of people will use the money to invest in tools and means to improve their economic situation. The vast majority though will waste the money on things which benefit them in the short term, but provide no long term economic benefit to them (e.g. better cell phone, television, or maybe a solar home system)

Also from hearing the horror stories of doing business in East Africa (draconian regulations + corruption) I'm sceptical if anywhere close to 90% can make it into the hands of normal people. Hopefully this isn't the reality...

Not sure why I'm getting down votes. I've worked with a company actually working in East Africa and I don't see people using the opportunity of energy to improve their economic situation. After basic necessities they seem to use it for leisure.

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