17 ms·

Want to Help People? Just Give Them Money

109 points by iProject 14y ago

galvanist 14y ago
This is the study they seem to rely on most: http://www.givedirectly.org/pdf/DFID%20cash-transfers-evidence-paper.pdf http://www.givedirectly.org/pdf/DFID%20cash-transfers-eviden...
mjs 14y ago
There's an intriguing exercise in Paul Heyne's "The Economic Way of Thinking" that asks, as a thought experiment, what would happen if a helicopter simply dropped cash on groups of people that needed it--the thinking being that if people have money, someone will figure out some way to get them the goods and services they need. (There's obvious security and fairness problems with this method of distributing aid, but if these could be solved somehow, this approach "fixes" some of the problems that afflict traditional approaches, such as the way in which they disrupt existing businesses, and make it difficult for new businesses to sustain themselves.)
- ptaipale 14y ago
  As in http://en.wikipedia.org/wiki/A_Financial_Fable http://en.wikipedia.org/wiki/A_Financial_Fable A great macroeconomic work by Barks.
- gojomo 14y ago
  I think that both (a) this is a great idea that would work; and (b) widespread taboos around direct cash aid will delay it from being tried. I doubt its 'security and fairness' problems are worse than traditional 'in-kind' aid to distressed areas. That often winds up controlled by parasitical elites, or is totally mismatched to local needs. A random spray winds up in the hands of anyone who can scramble, and some will reach the very neediest -- perhaps more than via traditional approaches, because local exploiters may be unable to monitor all transfers.
jorleif 14y ago
It's not entirely clear to me how givedirectly.org operates, but it seems they give in an unpredictable fashion, rather than continuously. That might make a big difference, since fixed amounts of money every week or so can lead to the receiver becoming dependent on the aid. But if receiving is not ongoing or predictable, this cannot really happen, while it might of course lead to stupid buying decisions when the money is received, that's not nearly as damaging, and might even stimulate the local economy.
digitalengineer 14y ago
I don't know about this. Didn't the aid from the '50/'60's work like this? How will you prevent an entire generation from growing up and expecting to receive money for nothing? Where is the pride in that? What kind of bahavior are you cultivating? I always assumed people were better of with a fishing pole than just fish, but maybe I'm wrong... Love to hear the opinions here.
- digitalengineer 14y ago
  Thanks for the reply's. Food for thought. Another side of 'aid' is the EU providing aid while at the same time dumping milk, butter, etc in Africa and forcing locals out of a living because of all the cheap Euopean products. Everyday goods such as bread, milk, sugar and chicken are all more expensive because of the payments made to British and European farmers. At the same time, dumping of subsidised produce in African countries is forcing local producers out of business. http://www.independent.co.uk/news/world/politics/eu-subsidies-deny-africas-farmers-of-their-livelihood-478419.html http://www.independent.co.uk/news/world/politics/eu-subsidie...
  - vidarh 14y ago
    Agree - agricultural subsidies are a massive problem. They're unfortunately also almost politically untouchable.
  - pjmlp 14y ago
    Fully agree. Another dark side of such issues is that when the production goes over the quotas, then the food is just dumped instead of being given to poorer countries. I know this can also affect the local farmers, but it just seems bad to throw food away when there is so much hunger in the world.
- jkn 14y ago
  I don't think this is about giving poor people a regular income, more like a one-time cash transfer. The idea is that money is a good "fishing pole".
  - 14y ago
davidvaughan 14y ago
The London homeless charity Broadway tried giving out money for a while. After a year, it was reported (independently) to have been a success, and in 2010 the Economist ran a feature on it. The idea was that you ask people what would most change their lives. One wanted a caravan to live in. Another wanted a pair of new trainers and a television. I'm unable to detect from Broadway's website whether or not they're still running this scheme. The idea has merit. Poverty is a trap, and you need a chunk of money just to get normal life running. You can't type a CV and check your email responses from a doorway. Let alone think clearly. The Fabians floated the idea way back. E M Forster: "Give them a chance. Give them money. Don't dole them out poetry-books and railway-tickets like babies. Give them the wherewithal to buy these things. When your socialism comes it may be different, and we may think in terms of commodities instead of cash. Till it comes give people cash, for it is the warp of civilisation, whatever the woof may be. The imagination ought to play upon money and realise it vividly, for it's the -- the second most important thing in the world. It is so sluffed over and hushed up, there is so little clear thinking -- oh political economy, of course, but so few of us think clearly about our own private incomes, and admit that independent thoughts are in nine cases out of ten the result of independent means. Money: give Mr Bast money, and don't bother about his ideals. He'll pick those up for himself".
tolmasky 14y ago
Milton Friedman was a proponent (an originator?) of the idea of a negative income tax (as opposed to services). The idea of course, is that the problem of being poor is money, not services. Rather than explain it here, you can see him summing it up: http://www.youtube.com/watch?v=xtpgkX588nM http://www.youtube.com/watch?v=xtpgkX588nM
- batgaijin 14y ago
  Huh... that's actually a pretty awesome capitalist solution. I just really hate how the poor are treated today... the level of desperation you see in a majority of America is incredibly depressing and seems like it could so easily be rectified by such a small tax increase.
  - netcan 14y ago
    What's capitalist about it?
    - InclinedPlane 14y ago
      It's voluntary.
      - icebraining 14y ago
        How is a tax voluntary?
        InclinedPlane 14y ago
        Sorry, I thought you were talking about the giving in the article.
    - Ankaios 14y ago
      Allowing the recipients to allocate the resources in the manner which they believe best benefits them.
rikacomet 14y ago
Direct Cash Transfer scheme in India has been touted as the biggest 2014 poll based factor by the educated class in India, with a subsidy system bigger than any other country in the world, India, has a lot of shortcomings in terms of how the subsidy reaches the poor. Subsidy is given for kerosene (household cooking needs for the extreme poor), rice/wheat as staple food, education (as weekly incentive to extreme risked kids), vaccines, salt, fertilizers, etc. This system is way different the way this article makes it look like, that just give money to those who need it. But in fact, the real factor for a subsidy system to work is, that people overtime accept, that they need help, for ex: like they accept over time, that they will spend their own money on other things, while use the medical subsidy on vaccines. This is fundamentally supported by the fact of efficiency, if they use that subsidy in any other way then it is meant, they would not get maximum efficiency. Corruption in this system is a given, whether it is India or US, it is a very hard "on the thin thread" system to maintain.
RobinL 14y ago
I think in general this is a fantastic idea. Often, charity is too presumptuous: the giver purports to know what the receiver 'really needs', so rather than giving money they give something else. I think this is shortsighted as it's very difficult for relatively wealthy people to put themselves in the mindset of somebody who is living in extreme poverty, especially in a different country. This makes it even less plausible that the giver can make a better decision than the receiver as to what to do with additional resources. Put it this way: if you were really poor, would you rather be given money to help your sort your own life out, or for some charity to use the money for 'what's best for you'. I know what I'd want. I also think from the point of view of the giver, it might be nice to be less judgemental about how the money is used. Even if a very poor person 'wastes' the additional money on a little luxury for once (say, cosmetics), then I hope at least the giver has brought a little happiness into their lives, if only for a moment. That's enough for me, and is why around a year ago I switched all my charitable donations away from Kiva (which I still think is a good cause) to GiveDirectly. However, the idea is not without problems (as idenfied by Givedirectly). The biggest problem I think is that if some members of a poor community get help and others don't, it seems unjust and may lead to hostility.
- vidarh 14y ago
  > I think this is shortsighted as it's very difficult for relatively wealthy people to put themselves in the mindset of somebody who is living in extreme poverty, especially in a different country. I think the perfect example of this is the reaction whenever someone want to do something "techy" in Africa, where there's almost always a stream of "but they're all living in mud huts with dirty water and no food and haven't got electricity" type replies. Meanwhile Africa is expected to pass 80% mobile penetration this year - they might possibly have passed it already... Waste? Of course for some, but in many countries, SMS is the way for people to banking, for example.
- icebraining 14y ago
  Put it this way: if you were really poor, would you rather be given money to help your sort your own life out, or for some charity to use the money for 'what's best for you'. I know what I'd want. A problem is that people are often not free - due to family or social pressures or even plain violence (e.g. domestic) - to decide how to use money.
temphn 14y ago
Terrible idea. Charity runs out and therefore does not scale. Want to help people? Invest in them, as then they need to create wealth to provide a positive sum return. China did not become rich through communism or through charity, but through capitalism.
- netcan 14y ago
  Who says they can't invest in themselves with the money they get?
  - temphn 14y ago
    Because it's hard enough to make a positive return -- to make something people want -- when expectations are set up front and investments are filtered. If they want to do good by these people the investors need to expect (nay, demand) a return to at least break-even levels so that they can roll it over to help more people. Otherwise these NGOs are just indulging white Western guilt. Without positive sum return there is no scalability. It is like buying a t-shirt to save the whales, just feel good with no results. The people who sold cellphones at a profit to the poor (employing many of them as salesmen along the way) are doing a far better job than NGOs who gave things away, as selling things at a profit meant they could distribute millions of cellphones rather than just a few.
  - Jach 14y ago
    There are a lot of poor people, and a lot of them aren't distinguishable in terms of initial skills, and self-investing in learning new things is harder and riskier than self-investing in local farming when there aren't too many farmers. Only so many people can invest in land and livestock and farming and know-how before you reach local saturation, only so many people can invest in fishing equipment and know-how before they overfish the local areas, only so many people can invest in starting a business and that know-how and hire other poor people to do something that builds the economy, and so on. Once the low-hanging fruit of personal investment is taken, what then? Or as the economy improves slightly and the average person can more easily afford more vices, will they spiral down in that direction? Or is there a good argument that the low-hanging fruit won't disappear? Or will it not matter because through this type of aid the people will gain the skills necessary to compete in a global market, and that in a decade or two the average person can have a lifestyle approaching the average, say, Eastern European, without direct subsidization? I expect the 130 page report someone linked here addresses my concerns, and I'll add it to my reading queue, but it's not immediately obvious to me that this alone is a sustainable strategy in the sense that eventually no one will need a direct no-strings-attached cash transfer to survive. I think it will just create a dependency that will be perpetually (and increasingly in terms of dollar amount) funded by the richest individuals, corporations, and governments. Maybe that's not such a bad outcome if it's not too expensive relative to the total wealth of these funders and if many people's lifespans generally improve and contain more fun in them.
pratagarwal 14y ago
Most cash transfer research is based upon conditional cash transfers. Which are small monthly payments based upon education, health or nutrition goals. I actually like an organization called New Incentives that is able to uses the merits of cash transfers in a Watsi-like way...basically making it a conditional cash transfer. http://newincentives.org/transfers http://newincentives.org/transfers (fyi, this is not self-promotional but I connected with the founder because I like their concept).
mozboz 14y ago
Reframing required: give people money only when that is the most efficient option for helping them, given the risks of a no-strings cash donation. Otherwise, help them in a way that directly affects their wellbeing, causing a direct, measurable change in circumstance with decreased risk.
shanelja 14y ago
While I agree that these countries need helping, it always annoys me how so much is spent on foreign aid when people in our countries are still living on the streets and in relative poverty - we need to solve our own problems before we start giving money away willynilly. I've been homeless and unable to find a shelter because there were only 15 places in my town, I've known people who have been hospitalized because they couldn't afford food, how can we consider giving money to a foreign country when the people around us are struggling just to live?
- Joeboy 14y ago
  It's potentially far better value to help people in poorer countries. When you're talking about people with an income of $0.65 a day you probably don't have to give them much to help them out significantly. There's undoubtedly genuine need in your country but I doubt you can provide nearly as much assistance per thousand dollars. On the other hand it's much easier to audit the good / harm your charity is doing closer to home and you don't really have the whole neocolonialism concern, so there are arguments for and against both.
krzyk 14y ago
There is such saying in Poland (although the origin of it is India): give a man a fish and you will feed him for a day, give a man a fishing rod and you will feed him for a lifetime Yes, I know it's not scientific proof, but it comes to mind right away.
tow21 14y ago
I'm astonished by some of the reactions here. Giving money to the people who need it, means that the power to use that resource is directly in the hands of the people who have the most interest in using it well. Frankly, their incentives are much more aligned with their long-term wellbeing, than are the incentives of a faceless charity committee in a Washington office somewhere. Plus, you don't have to pay for the endless decision-making - and the unavoidable inefficiencies in decision-making far removed from the action. It's one of the reasons free markets win out over statist command economies - making much better use of information local to the decision.
- krzyk 14y ago
  But doesn't giving away money make the poor less interested in finding a job? Sooner or later they will get addicted to the free money.
  - colmvp 14y ago
    How does a poor person find a job when they don't have the money for basic necessities that include resources that help find and acquire a job?
    - sageikosa 14y ago
      Charity, not welfare. When it's welfare, you have one monopolistic "service" provider, which ends up getting managed by bureaucratic means (to ensure low graft and wastage, leading paradoxically to a specific and growing amount of wastage as the bureaucracy expands, but that's a different point). With charity, you have multiple providers, and they compete for funding from contributors so are incented to be as maximally efficient as the charitable services market allows. And quite frankly, I'd rather live in a charitable society than a welfare society.
  - salvadors 14y ago
    I'm pretty sure that the context here isn't about providing people with a constant income, but simply taking your comments at face value: Why would that be so bad? Why is it essential for everyone to have a job?
rimantas 14y ago
I sometimes have a very cynical thought that some places should be given condoms, not food or money :(
- Jach 14y ago
  The problem is many people won't use them even if they're free, or they think it's a conspiracy to give them HIV... When I consider all the benefits of well-managed genetic engineering and population control at just the level we could implement right now (i.e. no sci-fi tech), I sometimes wish RISUG[0] was mandatory for all males that have gone through puberty, with 5-7 year followups to redo the treatment unless the male both wants to have a child, and passes the thresholds of various requirements (maturity, responsibility, financial security, whether they have or should have partners or not, good genetics, etc.) to be allowed to have a child. (Though if they want a child and only fail because their genes (or the genes of their chosen mother) suck, there are others who don't want a child but have good genes that can be used as donors, and initially there's still all the currently unwanted babies, and there will inevitably be people who illegally slip through or reverse the enforced treatment.) [0] http://en.wikipedia.org/wiki/Reversible_inhibition_of_sperm_under_guidance http://en.wikipedia.org/wiki/Reversible_inhibition_of_sperm_...
  - precisioncoder 14y ago
    I used to subscribe to this belief until I had my eyes opened by a wise friend. Systems are always gamed by the powerful and a system like this could (and quite probably would) be gamed in order to suppress or even wipe out minorities. It's often best to favor the solution that requires the minimum reliance on an external authority. Currently the best proved solution for overpopulation seems to be increasing education, wealth, and life expectancy.
    - Jach 14y ago
      Some minorities should be eliminated. That's kind of the whole point of genetic engineering. Personally I'd be happy if the surface differences between humans were really just nothing more than cosmetics, rather than a non-negligible statistical correlate to other quite desirable/undesirable traits. I think the real danger of genetic engineering is humans creating an existential risk for themselves by doing it wrong, because maybe we're not smart enough right now to do the really cool stuff that goes well beyond simple, long-term projects like controlling who breeds with whom that we're already pretty good at with other lifeforms. Furthermore, having "minimum reliance on an external authority" would increase this risk, so long as humans as a species remain at the same general intelligence on the cross-species intelligence scale. It is a good thing that things such as nukes or highly contagious, highly deadly research viruses are entirely, maximally dependent on an authoritative process within each country that has them that you nor I have any influence over. It is a good thing high-energy physics experiments are restricted to the elite. Authority, and maximal reliance on it, aren't necessarily always bad. When humans become transhumans I'll likely think the average person should have far greater power--and therefore responsibility. By population control, I'm not so much concerned about overpopulation being a problem as I am of people in general giving birth when they probably shouldn't. All things equal more life is better than no life--an example of unequal being no life better than a life filled with 30 seconds of torture then extinguished--so nested in that I prefer "better" life over "worse" life, which I'm purposefully leaving undefined in the specifics (partly because I'm not certain myself about whether certain traits are better, worse, or insignificant, and whether and how much that value changes depending on the number of people with such traits). The earth can support many more humans, it's a shame highly intelligent people aren't having more/any kids. And when the earth does reach its limit, neighboring planets and beyond will be able to solve that problem.
opendomain 14y ago
This is not scalable. The problem with charitable giving is making sure the biggest percentage of the money given goes to helping people. First of all- a 10% fee is outrageous - the best charities have at least 97% going to the poor. Also, with cash it is MUCH harder to control corruption. I always believed it is better to teach a man to fish - the best use of this money is to fix the underlying problems. Lastly, it is more scalable to manufacture food and other goods in a factory. However, I can see how giving people money would help them better in some ways- they may know better how to spend it and they can invest it, improving more than themselves. Perhaps the best solution would be for a type of currency just for charities. Using this would allow for tracking, which would limit graft. It would also have a social stigma so no one would collect too much and could not be spent on luxury goods. This may be like food stamps- I am aware it is not a good system, but can anyone suggest a better alternative?
camus 14y ago
want to help people ? give them a job that can help them live.
bane 14y ago
When I was in my early 20s I found myself married to a wife who was a full-time student who couldn't work (due to brain dead immigration law), a $900 a month apartment, a car, an almost full-time job and a full-time class load doing my undergrad. I made, in my best year during that time, $16000. To say that we were poor was an understatement. An extravagant meal for us might be ordering the deluxe tacos at taco bell, or for an anniversary splitting an all you can eat pasta dinner at Olive Garden. But we managed to just squeak by every month with about $5-10 in the bank at the end of the month. We arrived at a point where we had to make a choice, have health insurance (the cheap one through the school) or pay rent and buy groceries. We chose food and shelter. It was the wrong choice. I came down with a mystery pain in my abdomen after recovering from a bad bout with the flu (which I had to work through or we couldn't eat). A night in the ER and a $10k bill later, it was looking like both my wife and I were going to have to drop out of school, we were going to have to break the lease on our apartment and move in with relatives, sell one of our cars and I was going to have to take on a second job sanding decks for $7 an hour. It was too much to bear, my marriage went on the rocks, the relationship with my family and friends went to shit, I mentally shut down. All those years of effort, of dragging myself up the socioeconomic ladder. I became severely depressed. Aggressive negotiation with the hospital saw the bills lowered to a still bankrupting but better $5k and a payment plan. It was the difference between dropping out of school entirely or dropping out for a semester. Then the stars aligned. The bill finally showed up right before the summer break, meaning I could ramp up my work hours and work weekends and nights on a second job. My wife got her work permit which let her take on a part-time job. I got a dollar an hour raise. We crunched the numbers and with aggressive belt tightening we were going to be able to pay off the bill and not drop out of school or leave our apartment. We worked like crazy, fevered, insane people. And then it happened. We didn't know at the time, but the ER bill was not the final bill, some of the specialists also charged their own bill, and they wouldn't negotiate. Two 10 minute consultations with a surgeon turned into $500. An x-ray here and a couple lab tests and we were still out $1000. We were broken people when those bills came. It was the last straw. Then the next day, out of nowhere, a check from my uncle showed up in the mail for $1000. No strings attached. Pure charity. He had passed the collection plate at his church and asked for help, and those kind people each pitched in a few dollars to help people they'd never met before. And it was that church check that popped out of that envelope. Everything turned around after that. Freed of the crushing medical bills, but now with two people working and one less car payment, we finished off our last year of school at a sprint, both got full-time jobs and never looked back. A year out of college we were making enough to buy a house and a second car again. Two years after that we moved up to a nicer house and a better neighborhood and have had amazing careers since then. That $1000 kept my marriage together, got me a degree, kept me from possible suicide, it meant no turning back or crushing dreams, it was the difference between weathering the storm or being blown away by it. Another job wouldn't have helped, I was working over a hundred hours a week. A loan just meant more debt I couldn't pay off. It was pure charity that saved the day and I'll never forget that life lesson.
wfunction 14y ago
The scary part is that the poor aren't necessarily uneducated -- read this article, for example, on PhDs who can only get by with food stamps: http://chronicle.com/article/From-Graduate-School-to/131795/ http://chronicle.com/article/From-Graduate-School-to/131795/
- twoodfin 14y ago
  The people given as examples in that article appear to have made astonishingly bad career decisions. Medieval history and film studies? Yes, there are a few people who do quite well in those disciplines, but surely not enough to justify pinning your future earnings on the odds you'll be one of them.
goggles99 14y ago
Sure - This would be of great help to people in other countries, because they are not filled with lazy free-loaders like the western world. Westerners will blow the money and hold out their hand for more all they will promise in return is a vote to whoever promises to keep that free money coming...
- psionski 14y ago
  Funny you should say that, I'm from a former communist country (so nothing Western here) and we always thought WE were filled with free-loaders, while the Western world was hard-working and disciplined... Guess the grass is always greener on the other side ;)
someri 14y ago
Give it the fishing rod to the wrong guy, he will pawn it, use the money to buy a fishing app.
logn 14y ago
That's an interesting take. I think Americans are probably biased against directly giving money because of experiences with homeless beggars here. Often the money does go directly toward alcohol and cigarettes or is otherwise spent foolishly. But in the US I'd argue that people living on the street usually have some sort of disability or personality problem whereas in a poor country, all the normal people who could do well with extra cash are extremely poor.
DanielBMarkham 14y ago
"Recipients, who are often living on less than 65 cents a day..." People living in Kenya on 65 cents a day is a completely different situation than, say, a homeless person in San Francisco. I applaud the emphasis on data, but I'd be really careful with painting this issue with a broad brush. If anything, the roadways are littered with the corpses of programs that tried applying simplistic ideas too broadly. You also want to make sure you are measuring something that actually means something and not just something that's easy to measure.
- cjbprime 14y ago
  > People living in Kenya on 65 cents a day is a completely different situation than, say, a homeless person in San Francisco. That's true, this is why we usually mention the Purchasing Power Parity (PPP) converted number -- for example, a billion people live on less than the PPP-converted equivalent of USD $2/day. That means they can afford to buy what we can afford to buy in the US for less than $2/day, which is to say almost nothing. It's easy to look up the PPP ratio for Kenya, which is 0.5 -- i.e. $0.65/day in Kenya buys roughly the same as $1.30/day would in the US. http://data.worldbank.org/indicator/PA.NUS.PPPC.RF http://data.worldbank.org/indicator/PA.NUS.PPPC.RF
  - schraeds 14y ago
    Data trumps speculation.
ctdonath 14y ago
Define "poor". The more I read discussions about poverty, the more I realize people are conflating wildly different definitions of "poor". The article is referring to $0.65/day, people who in no way can afford to squander a generous influx of cash. World median income is $2/day; if you're making more than half the people on the planet, I contend you're not "poor". The USA official "poverty line" is 20x world median income, and welfare ensures anyone under that line will be given enough to get there; special cases aside, that's enough that "poor" is more a matter of poor choices than poor cash flow, a life where a burst of cash can easily be spent on pleasure instead of leveraging already-neglected advancement opportunities.

109 points by iProject 14y ago

This is the study they seem to rely on most: http://www.givedirectly.org/pdf/DFID%20cash-transfers-evidence-paper.pdf http://www.givedirectly.org/pdf/DFID%20cash-transfers-eviden...

mjs 14y ago

There's an intriguing exercise in Paul Heyne's "The Economic Way of Thinking" that asks, as a thought experiment, what would happen if a helicopter simply dropped cash on groups of people that needed it--the thinking being that if people have money, someone will figure out some way to get them the goods and services they need. (There's obvious security and fairness problems with this method of distributing aid, but if these could be solved somehow, this approach "fixes" some of the problems that afflict traditional approaches, such as the way in which they disrupt existing businesses, and make it difficult for new businesses to sustain themselves.)

ptaipale 14y ago
As in http://en.wikipedia.org/wiki/A_Financial_Fable http://en.wikipedia.org/wiki/A_Financial_Fable A great macroeconomic work by Barks.
gojomo 14y ago
I think that both (a) this is a great idea that would work; and (b) widespread taboos around direct cash aid will delay it from being tried. I doubt its 'security and fairness' problems are worse than traditional 'in-kind' aid to distressed areas. That often winds up controlled by parasitical elites, or is totally mismatched to local needs. A random spray winds up in the hands of anyone who can scramble, and some will reach the very neediest -- perhaps more than via traditional approaches, because local exploiters may be unable to monitor all transfers.

jorleif 14y ago

It's not entirely clear to me how givedirectly.org operates, but it seems they give in an unpredictable fashion, rather than continuously. That might make a big difference, since fixed amounts of money every week or so can lead to the receiver becoming dependent on the aid. But if receiving is not ongoing or predictable, this cannot really happen, while it might of course lead to stupid buying decisions when the money is received, that's not nearly as damaging, and might even stimulate the local economy.

digitalengineer 14y ago

I don't know about this. Didn't the aid from the '50/'60's work like this? How will you prevent an entire generation from growing up and expecting to receive money for nothing? Where is the pride in that? What kind of bahavior are you cultivating? I always assumed people were better of with a fishing pole than just fish, but maybe I'm wrong... Love to hear the opinions here.

digitalengineer 14y ago
Thanks for the reply's. Food for thought. Another side of 'aid' is the EU providing aid while at the same time dumping milk, butter, etc in Africa and forcing locals out of a living because of all the cheap Euopean products. Everyday goods such as bread, milk, sugar and chicken are all more expensive because of the payments made to British and European farmers. At the same time, dumping of subsidised produce in African countries is forcing local producers out of business. http://www.independent.co.uk/news/world/politics/eu-subsidies-deny-africas-farmers-of-their-livelihood-478419.html http://www.independent.co.uk/news/world/politics/eu-subsidie...
- vidarh 14y ago
  Agree - agricultural subsidies are a massive problem. They're unfortunately also almost politically untouchable.
- pjmlp 14y ago
  Fully agree. Another dark side of such issues is that when the production goes over the quotas, then the food is just dumped instead of being given to poorer countries. I know this can also affect the local farmers, but it just seems bad to throw food away when there is so much hunger in the world.
jkn 14y ago
I don't think this is about giving poor people a regular income, more like a one-time cash transfer. The idea is that money is a good "fishing pole".
- 14y ago

davidvaughan 14y ago

The London homeless charity Broadway tried giving out money for a while. After a year, it was reported (independently) to have been a success, and in 2010 the Economist ran a feature on it. The idea was that you ask people what would most change their lives. One wanted a caravan to live in. Another wanted a pair of new trainers and a television. I'm unable to detect from Broadway's website whether or not they're still running this scheme. The idea has merit. Poverty is a trap, and you need a chunk of money just to get normal life running. You can't type a CV and check your email responses from a doorway. Let alone think clearly. The Fabians floated the idea way back. E M Forster: "Give them a chance. Give them money. Don't dole them out poetry-books and railway-tickets like babies. Give them the wherewithal to buy these things. When your socialism comes it may be different, and we may think in terms of commodities instead of cash. Till it comes give people cash, for it is the warp of civilisation, whatever the woof may be. The imagination ought to play upon money and realise it vividly, for it's the -- the second most important thing in the world. It is so sluffed over and hushed up, there is so little clear thinking -- oh political economy, of course, but so few of us think clearly about our own private incomes, and admit that independent thoughts are in nine cases out of ten the result of independent means. Money: give Mr Bast money, and don't bother about his ideals. He'll pick those up for himself".

tolmasky 14y ago

Milton Friedman was a proponent (an originator?) of the idea of a negative income tax (as opposed to services). The idea of course, is that the problem of being poor is money, not services. Rather than explain it here, you can see him summing it up: http://www.youtube.com/watch?v=xtpgkX588nM http://www.youtube.com/watch?v=xtpgkX588nM

batgaijin 14y ago
Huh... that's actually a pretty awesome capitalist solution. I just really hate how the poor are treated today... the level of desperation you see in a majority of America is incredibly depressing and seems like it could so easily be rectified by such a small tax increase.
- netcan 14y ago
  What's capitalist about it?
  - InclinedPlane 14y ago
    It's voluntary.
    - icebraining 14y ago
      How is a tax voluntary?
      - InclinedPlane 14y ago
        Sorry, I thought you were talking about the giving in the article.
  - Ankaios 14y ago
    Allowing the recipients to allocate the resources in the manner which they believe best benefits them.

rikacomet 14y ago

Direct Cash Transfer scheme in India has been touted as the biggest 2014 poll based factor by the educated class in India, with a subsidy system bigger than any other country in the world, India, has a lot of shortcomings in terms of how the subsidy reaches the poor. Subsidy is given for kerosene (household cooking needs for the extreme poor), rice/wheat as staple food, education (as weekly incentive to extreme risked kids), vaccines, salt, fertilizers, etc. This system is way different the way this article makes it look like, that just give money to those who need it. But in fact, the real factor for a subsidy system to work is, that people overtime accept, that they need help, for ex: like they accept over time, that they will spend their own money on other things, while use the medical subsidy on vaccines. This is fundamentally supported by the fact of efficiency, if they use that subsidy in any other way then it is meant, they would not get maximum efficiency. Corruption in this system is a given, whether it is India or US, it is a very hard "on the thin thread" system to maintain.

RobinL 14y ago

I think in general this is a fantastic idea. Often, charity is too presumptuous: the giver purports to know what the receiver 'really needs', so rather than giving money they give something else. I think this is shortsighted as it's very difficult for relatively wealthy people to put themselves in the mindset of somebody who is living in extreme poverty, especially in a different country. This makes it even less plausible that the giver can make a better decision than the receiver as to what to do with additional resources. Put it this way: if you were really poor, would you rather be given money to help your sort your own life out, or for some charity to use the money for 'what's best for you'. I know what I'd want. I also think from the point of view of the giver, it might be nice to be less judgemental about how the money is used. Even if a very poor person 'wastes' the additional money on a little luxury for once (say, cosmetics), then I hope at least the giver has brought a little happiness into their lives, if only for a moment. That's enough for me, and is why around a year ago I switched all my charitable donations away from Kiva (which I still think is a good cause) to GiveDirectly. However, the idea is not without problems (as idenfied by Givedirectly). The biggest problem I think is that if some members of a poor community get help and others don't, it seems unjust and may lead to hostility.

vidarh 14y ago
> I think this is shortsighted as it's very difficult for relatively wealthy people to put themselves in the mindset of somebody who is living in extreme poverty, especially in a different country. I think the perfect example of this is the reaction whenever someone want to do something "techy" in Africa, where there's almost always a stream of "but they're all living in mud huts with dirty water and no food and haven't got electricity" type replies. Meanwhile Africa is expected to pass 80% mobile penetration this year - they might possibly have passed it already... Waste? Of course for some, but in many countries, SMS is the way for people to banking, for example.
icebraining 14y ago
Put it this way: if you were really poor, would you rather be given money to help your sort your own life out, or for some charity to use the money for 'what's best for you'. I know what I'd want. A problem is that people are often not free - due to family or social pressures or even plain violence (e.g. domestic) - to decide how to use money.

temphn 14y ago

Terrible idea. Charity runs out and therefore does not scale. Want to help people? Invest in them, as then they need to create wealth to provide a positive sum return. China did not become rich through communism or through charity, but through capitalism.

netcan 14y ago
Who says they can't invest in themselves with the money they get?
- temphn 14y ago
  Because it's hard enough to make a positive return -- to make something people want -- when expectations are set up front and investments are filtered. If they want to do good by these people the investors need to expect (nay, demand) a return to at least break-even levels so that they can roll it over to help more people. Otherwise these NGOs are just indulging white Western guilt. Without positive sum return there is no scalability. It is like buying a t-shirt to save the whales, just feel good with no results. The people who sold cellphones at a profit to the poor (employing many of them as salesmen along the way) are doing a far better job than NGOs who gave things away, as selling things at a profit meant they could distribute millions of cellphones rather than just a few.
- Jach 14y ago
  There are a lot of poor people, and a lot of them aren't distinguishable in terms of initial skills, and self-investing in learning new things is harder and riskier than self-investing in local farming when there aren't too many farmers. Only so many people can invest in land and livestock and farming and know-how before you reach local saturation, only so many people can invest in fishing equipment and know-how before they overfish the local areas, only so many people can invest in starting a business and that know-how and hire other poor people to do something that builds the economy, and so on. Once the low-hanging fruit of personal investment is taken, what then? Or as the economy improves slightly and the average person can more easily afford more vices, will they spiral down in that direction? Or is there a good argument that the low-hanging fruit won't disappear? Or will it not matter because through this type of aid the people will gain the skills necessary to compete in a global market, and that in a decade or two the average person can have a lifestyle approaching the average, say, Eastern European, without direct subsidization? I expect the 130 page report someone linked here addresses my concerns, and I'll add it to my reading queue, but it's not immediately obvious to me that this alone is a sustainable strategy in the sense that eventually no one will need a direct no-strings-attached cash transfer to survive. I think it will just create a dependency that will be perpetually (and increasingly in terms of dollar amount) funded by the richest individuals, corporations, and governments. Maybe that's not such a bad outcome if it's not too expensive relative to the total wealth of these funders and if many people's lifespans generally improve and contain more fun in them.

pratagarwal 14y ago

Most cash transfer research is based upon conditional cash transfers. Which are small monthly payments based upon education, health or nutrition goals. I actually like an organization called New Incentives that is able to uses the merits of cash transfers in a Watsi-like way...basically making it a conditional cash transfer. http://newincentives.org/transfers http://newincentives.org/transfers (fyi, this is not self-promotional but I connected with the founder because I like their concept).

mozboz 14y ago

Reframing required: give people money only when that is the most efficient option for helping them, given the risks of a no-strings cash donation. Otherwise, help them in a way that directly affects their wellbeing, causing a direct, measurable change in circumstance with decreased risk.

shanelja 14y ago

While I agree that these countries need helping, it always annoys me how so much is spent on foreign aid when people in our countries are still living on the streets and in relative poverty - we need to solve our own problems before we start giving money away willynilly. I've been homeless and unable to find a shelter because there were only 15 places in my town, I've known people who have been hospitalized because they couldn't afford food, how can we consider giving money to a foreign country when the people around us are struggling just to live?

Joeboy 14y ago
It's potentially far better value to help people in poorer countries. When you're talking about people with an income of $0.65 a day you probably don't have to give them much to help them out significantly. There's undoubtedly genuine need in your country but I doubt you can provide nearly as much assistance per thousand dollars. On the other hand it's much easier to audit the good / harm your charity is doing closer to home and you don't really have the whole neocolonialism concern, so there are arguments for and against both.

krzyk 14y ago

There is such saying in Poland (although the origin of it is India): give a man a fish and you will feed him for a day, give a man a fishing rod and you will feed him for a lifetime Yes, I know it's not scientific proof, but it comes to mind right away.

tow21 14y ago

I'm astonished by some of the reactions here. Giving money to the people who need it, means that the power to use that resource is directly in the hands of the people who have the most interest in using it well. Frankly, their incentives are much more aligned with their long-term wellbeing, than are the incentives of a faceless charity committee in a Washington office somewhere. Plus, you don't have to pay for the endless decision-making - and the unavoidable inefficiencies in decision-making far removed from the action. It's one of the reasons free markets win out over statist command economies - making much better use of information local to the decision.

krzyk 14y ago
But doesn't giving away money make the poor less interested in finding a job? Sooner or later they will get addicted to the free money.
- colmvp 14y ago
  How does a poor person find a job when they don't have the money for basic necessities that include resources that help find and acquire a job?
  - sageikosa 14y ago
    Charity, not welfare. When it's welfare, you have one monopolistic "service" provider, which ends up getting managed by bureaucratic means (to ensure low graft and wastage, leading paradoxically to a specific and growing amount of wastage as the bureaucracy expands, but that's a different point). With charity, you have multiple providers, and they compete for funding from contributors so are incented to be as maximally efficient as the charitable services market allows. And quite frankly, I'd rather live in a charitable society than a welfare society.
- salvadors 14y ago
  I'm pretty sure that the context here isn't about providing people with a constant income, but simply taking your comments at face value: Why would that be so bad? Why is it essential for everyone to have a job?

rimantas 14y ago

I sometimes have a very cynical thought that some places should be given condoms, not food or money :(

Jach 14y ago
The problem is many people won't use them even if they're free, or they think it's a conspiracy to give them HIV... When I consider all the benefits of well-managed genetic engineering and population control at just the level we could implement right now (i.e. no sci-fi tech), I sometimes wish RISUG[0] was mandatory for all males that have gone through puberty, with 5-7 year followups to redo the treatment unless the male both wants to have a child, and passes the thresholds of various requirements (maturity, responsibility, financial security, whether they have or should have partners or not, good genetics, etc.) to be allowed to have a child. (Though if they want a child and only fail because their genes (or the genes of their chosen mother) suck, there are others who don't want a child but have good genes that can be used as donors, and initially there's still all the currently unwanted babies, and there will inevitably be people who illegally slip through or reverse the enforced treatment.) [0] http://en.wikipedia.org/wiki/Reversible_inhibition_of_sperm_under_guidance http://en.wikipedia.org/wiki/Reversible_inhibition_of_sperm_...
- precisioncoder 14y ago
  I used to subscribe to this belief until I had my eyes opened by a wise friend. Systems are always gamed by the powerful and a system like this could (and quite probably would) be gamed in order to suppress or even wipe out minorities. It's often best to favor the solution that requires the minimum reliance on an external authority. Currently the best proved solution for overpopulation seems to be increasing education, wealth, and life expectancy.
  - Jach 14y ago
    Some minorities should be eliminated. That's kind of the whole point of genetic engineering. Personally I'd be happy if the surface differences between humans were really just nothing more than cosmetics, rather than a non-negligible statistical correlate to other quite desirable/undesirable traits. I think the real danger of genetic engineering is humans creating an existential risk for themselves by doing it wrong, because maybe we're not smart enough right now to do the really cool stuff that goes well beyond simple, long-term projects like controlling who breeds with whom that we're already pretty good at with other lifeforms. Furthermore, having "minimum reliance on an external authority" would increase this risk, so long as humans as a species remain at the same general intelligence on the cross-species intelligence scale. It is a good thing that things such as nukes or highly contagious, highly deadly research viruses are entirely, maximally dependent on an authoritative process within each country that has them that you nor I have any influence over. It is a good thing high-energy physics experiments are restricted to the elite. Authority, and maximal reliance on it, aren't necessarily always bad. When humans become transhumans I'll likely think the average person should have far greater power--and therefore responsibility. By population control, I'm not so much concerned about overpopulation being a problem as I am of people in general giving birth when they probably shouldn't. All things equal more life is better than no life--an example of unequal being no life better than a life filled with 30 seconds of torture then extinguished--so nested in that I prefer "better" life over "worse" life, which I'm purposefully leaving undefined in the specifics (partly because I'm not certain myself about whether certain traits are better, worse, or insignificant, and whether and how much that value changes depending on the number of people with such traits). The earth can support many more humans, it's a shame highly intelligent people aren't having more/any kids. And when the earth does reach its limit, neighboring planets and beyond will be able to solve that problem.

opendomain 14y ago

This is not scalable. The problem with charitable giving is making sure the biggest percentage of the money given goes to helping people. First of all- a 10% fee is outrageous - the best charities have at least 97% going to the poor. Also, with cash it is MUCH harder to control corruption. I always believed it is better to teach a man to fish - the best use of this money is to fix the underlying problems. Lastly, it is more scalable to manufacture food and other goods in a factory. However, I can see how giving people money would help them better in some ways- they may know better how to spend it and they can invest it, improving more than themselves. Perhaps the best solution would be for a type of currency just for charities. Using this would allow for tracking, which would limit graft. It would also have a social stigma so no one would collect too much and could not be spent on luxury goods. This may be like food stamps- I am aware it is not a good system, but can anyone suggest a better alternative?

camus 14y ago

want to help people ? give them a job that can help them live.

bane 14y ago

When I was in my early 20s I found myself married to a wife who was a full-time student who couldn't work (due to brain dead immigration law), a $900 a month apartment, a car, an almost full-time job and a full-time class load doing my undergrad. I made, in my best year during that time, $16000. To say that we were poor was an understatement. An extravagant meal for us might be ordering the deluxe tacos at taco bell, or for an anniversary splitting an all you can eat pasta dinner at Olive Garden. But we managed to just squeak by every month with about $5-10 in the bank at the end of the month. We arrived at a point where we had to make a choice, have health insurance (the cheap one through the school) or pay rent and buy groceries. We chose food and shelter. It was the wrong choice. I came down with a mystery pain in my abdomen after recovering from a bad bout with the flu (which I had to work through or we couldn't eat). A night in the ER and a $10k bill later, it was looking like both my wife and I were going to have to drop out of school, we were going to have to break the lease on our apartment and move in with relatives, sell one of our cars and I was going to have to take on a second job sanding decks for $7 an hour. It was too much to bear, my marriage went on the rocks, the relationship with my family and friends went to shit, I mentally shut down. All those years of effort, of dragging myself up the socioeconomic ladder. I became severely depressed. Aggressive negotiation with the hospital saw the bills lowered to a still bankrupting but better $5k and a payment plan. It was the difference between dropping out of school entirely or dropping out for a semester. Then the stars aligned. The bill finally showed up right before the summer break, meaning I could ramp up my work hours and work weekends and nights on a second job. My wife got her work permit which let her take on a part-time job. I got a dollar an hour raise. We crunched the numbers and with aggressive belt tightening we were going to be able to pay off the bill and not drop out of school or leave our apartment. We worked like crazy, fevered, insane people. And then it happened. We didn't know at the time, but the ER bill was not the final bill, some of the specialists also charged their own bill, and they wouldn't negotiate. Two 10 minute consultations with a surgeon turned into $500. An x-ray here and a couple lab tests and we were still out $1000. We were broken people when those bills came. It was the last straw. Then the next day, out of nowhere, a check from my uncle showed up in the mail for $1000. No strings attached. Pure charity. He had passed the collection plate at his church and asked for help, and those kind people each pitched in a few dollars to help people they'd never met before. And it was that church check that popped out of that envelope. Everything turned around after that. Freed of the crushing medical bills, but now with two people working and one less car payment, we finished off our last year of school at a sprint, both got full-time jobs and never looked back. A year out of college we were making enough to buy a house and a second car again. Two years after that we moved up to a nicer house and a better neighborhood and have had amazing careers since then. That $1000 kept my marriage together, got me a degree, kept me from possible suicide, it meant no turning back or crushing dreams, it was the difference between weathering the storm or being blown away by it. Another job wouldn't have helped, I was working over a hundred hours a week. A loan just meant more debt I couldn't pay off. It was pure charity that saved the day and I'll never forget that life lesson.

wfunction 14y ago

The scary part is that the poor aren't necessarily uneducated -- read this article, for example, on PhDs who can only get by with food stamps: http://chronicle.com/article/From-Graduate-School-to/131795/ http://chronicle.com/article/From-Graduate-School-to/131795/

twoodfin 14y ago
The people given as examples in that article appear to have made astonishingly bad career decisions. Medieval history and film studies? Yes, there are a few people who do quite well in those disciplines, but surely not enough to justify pinning your future earnings on the odds you'll be one of them.

goggles99 14y ago

Sure - This would be of great help to people in other countries, because they are not filled with lazy free-loaders like the western world. Westerners will blow the money and hold out their hand for more all they will promise in return is a vote to whoever promises to keep that free money coming...

psionski 14y ago
Funny you should say that, I'm from a former communist country (so nothing Western here) and we always thought WE were filled with free-loaders, while the Western world was hard-working and disciplined... Guess the grass is always greener on the other side ;)

someri 14y ago

Give it the fishing rod to the wrong guy, he will pawn it, use the money to buy a fishing app.

logn 14y ago

That's an interesting take. I think Americans are probably biased against directly giving money because of experiences with homeless beggars here. Often the money does go directly toward alcohol and cigarettes or is otherwise spent foolishly. But in the US I'd argue that people living on the street usually have some sort of disability or personality problem whereas in a poor country, all the normal people who could do well with extra cash are extremely poor.

DanielBMarkham 14y ago

"Recipients, who are often living on less than 65 cents a day..." People living in Kenya on 65 cents a day is a completely different situation than, say, a homeless person in San Francisco. I applaud the emphasis on data, but I'd be really careful with painting this issue with a broad brush. If anything, the roadways are littered with the corpses of programs that tried applying simplistic ideas too broadly. You also want to make sure you are measuring something that actually means something and not just something that's easy to measure.

cjbprime 14y ago
> People living in Kenya on 65 cents a day is a completely different situation than, say, a homeless person in San Francisco. That's true, this is why we usually mention the Purchasing Power Parity (PPP) converted number -- for example, a billion people live on less than the PPP-converted equivalent of USD $2/day. That means they can afford to buy what we can afford to buy in the US for less than $2/day, which is to say almost nothing. It's easy to look up the PPP ratio for Kenya, which is 0.5 -- i.e. $0.65/day in Kenya buys roughly the same as $1.30/day would in the US. http://data.worldbank.org/indicator/PA.NUS.PPPC.RF http://data.worldbank.org/indicator/PA.NUS.PPPC.RF
- schraeds 14y ago
  Data trumps speculation.

ctdonath 14y ago

Define "poor". The more I read discussions about poverty, the more I realize people are conflating wildly different definitions of "poor". The article is referring to $0.65/day, people who in no way can afford to squander a generous influx of cash. World median income is $2/day; if you're making more than half the people on the planet, I contend you're not "poor". The USA official "poverty line" is 20x world median income, and welfare ensures anyone under that line will be given enough to get there; special cases aside, that's enough that "poor" is more a matter of poor choices than poor cash flow, a life where a burst of cash can easily be spent on pleasure instead of leveraging already-neglected advancement opportunities.