13 ms·

Cash to the poor: Giving money directly works surprisingly well

133 points by aarghh 13y ago

frank_boyd 13y ago
As a matter of fact, society has not a single valid reason to allow concentration of excessive wealth on some kind of restricted group or "elite" (as, by the way, also promoted erroneously by the idea of the "American Dream"). Here are a few facts to explain that this concept is not sane at all: - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). - Excessive wealth ends up being used for corruption (famous example: the Koch brothers), simply because it can. You can not get rid of corruption without getting rid of excessive wealth concentration. - Excessive wealth could "morally"/"ethically" only be justified by the existence of "really free will" (a concept which we can never reasonably take as a basis, given the fact that this concept is of religious nature, not rational thinking): Free will -> free decision -> merit of the better decision -> excessive wealth. As noted, this is how society excuses the existence of excessively rich people, and it's completely flawed and wrong. - Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage. - A part of excessive wealth will always be used to protect the "unfair advantage", thus eliminating equality even more.
- thomasz 13y ago
  > Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Hell no. http://en.wikipedia.org/wiki/Savings_identity http://en.wikipedia.org/wiki/Savings_identity
  - nhaehnle 13y ago
    The savings identity is usually misinterpreted by laypeople, though. Here's a small story to illustrate why S=I can be very misleading: Company C has always produced some type gadgets, for many years. Demand for the gadget has been stable, they just keep producing to what the demand is, end of story. Sounds boring, but this is what 99% of the economy is. Now, for whatever reason (a recession, a policy change, it doesn't really matter), consumers want to save more. In doing so, they decide to reduce their purchase of C's gadget. What happens now? Well, saving S goes up. At the same time, company C involuntarily builds up an inventory of gadgets that they had already started producing but which they can no longer sell. This build-up of inventory is counted as investment in the national accounts! So I goes up, and the identity S=I is maintained. But S=I is maintained in a way that is in total conflict to the typical layperson's interpretation of the equation. So, yes, an exogenous increase in saving will tend to push up "investment" (in quotation marks because it is involuntary investment). When all is said and done, we may all well be poorer for it in real terms, because the level of economic activity may have been reduced. On the other hand, when there is an increase in voluntary investment, then I goes up. Then people's income increases, and that tends to lead to an increase in savings. So S=I is also maintained, but we tend to be richer for it in real terms due to a higher level of economic activity.
- ekianjo 13y ago
  > - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want your money. If not, it would be a simple cost for them with no value to have it there, and they would charge you to keep your money instead of rewarding you for it. > Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage. Nature is unfair. We don't have the same genes. We don't share the same risks for illness or reproduction. We are not all top athletes. Stop the egalitarian bullshit. The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be. Anything beyond is just a call for arms-race to make everyone the same in every aspect (and incidentally, to render everyone poor by default).
  - frank_boyd 13y ago
    > Another economical fallacy. What I meant is: this money is not used to promote consumption (which it were in the hands of poor people). It's consumption (of services or products) that creates jobs. Jobs get created because there is demand for something, not because some rich elite decides they can invest (because they have money). Investment does not depend on the existence of some rich elite. "Trickle down economics" was a joke created by a couple of rich people, to justify and protect the inequality. Investment can easily be accomplished by "the crowd", and it should.
    - ekianjo 13y ago
      > Jobs get created because there is demand for something In the modern society, you are beyond the natural "needs" of the population and you don't need any of the new products that are sold to you. Obviously nobody needed a iPhone pre-2007 and now suddenly everyone has to have one. There's nothing such as "fixed demand". Demand is created by new products, designed by rich elites or companies that can manufacture them and need significant investment to make them a reality. And the "crowd" investment system already exists, by the way. It's been around for 300 years, it's called the stocks exchange.
- emiliobumachar 13y ago
  pg once pointed out there may be far fewer startups in a society that does not allow concentration of excessive wealth. That's at least one single valid reason. http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html "People start startups in the hope of becoming much richer than they were before. And if your society tries to prevent anyone from being much richer than anyone else, it will also prevent one person from being much richer at t2 than t1."
  - pyoung 13y ago
    His logic is a bit off. In a truly efficient market (big if), if taxes were raised so significantly as to have a major impact on the rewards, then you would get a corresponding reduction in risk. I.E. Instead of having a 1 in 10 chance of a startup making it (as he claims in the post) you would probably end up with a 1 in 8 chance (or something similar) as the smaller rewards would, in theory, reduce the number of competitors. You would still end up with the same number of winners however. In reality, there are a number of intangible benefits to starting a business that will overpower any reduction in startups due to higher taxes. Autonomy, excitement, and having a large impact all contribute in the decision to take the risk. Additionally, starting a business is still one of the only ways to strike it rich (unless you get lucky in the athlete/musician/actor department). So for most people with sizable ambitions, a reduction in rewards due to higher taxes will not have any meaningful impact on their decision.
  - subsystem 13y ago
    It would be a much better argument without the strawman of absolute equality.
    - emiliobumachar 13y ago
      From the same reference: "This argument applies proportionately. It's not just that if you eliminate economic inequality, you get no startups. To the extent you reduce economic inequality, you decrease the number of startups."
      - 13y ago
- venomsnake 13y ago
  The real problem is not excessive wealth but generational transfer of such. Let someone reap the benefits. BUT then take away the majority of the wealth away upon death so he could not transfer it. Let his decendands be able to inherit total value of 100 each (whatever the poverty line is that year) and take away the rest. This way we make the emerging of elites harder and falling out of them easier.
  - mantas 13y ago
    Not only wealth is transferred from generation to generation. Jewellery, old family houses, paintings and lots of other possibly expensive stuff. For many people, it's not about money. It's memories and other non-financial stuff. That 200 years old watch from your grand-grand-grand-father? Whoopsie, it's expensive these days! If you try to take away that, people won't be happy. If you try to loopholes to allow that kind of transfer, people will use that to transfer wealth to their children. Even if you don't add them, there're many ways to work around that. For example, parents may sell stuff to their children for many times less than market value. You can't deny people rights to sell stuff for whatever they want, do you? There's no law that can't be worked around. Some people want laws to hide real world from themselves. Other people accept reality.
linux_devil 13y ago
Can't agree more. Myself and few friends are part of an "AAD" initiative where we visit deprived and apart from donating money for basic amenities, we take care of school fees and other things. We make sure to visit and actually engage with people other than third party donations. I am sure there are others who do the same.
irollboozers 13y ago
It's also pretty interesting to look at the other side of this: the person giving away the money. Michael Norton and a group of researchers (http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf) at HBS have found that giving away money increases happiness, and that happier people give away more money. This logic is awesome.
Gustomaximus 13y ago
Would this reduce administration cost also? We always hear of charities where 20 cents on the dollar actually makes it to the people. If this can reduce admin cost by not having to make, control or follow up on conditions it could really help more money get to where it is needed.
- rjtavares 13y ago
  Yes, that's one of the main advantages. Also an advantage is that no money is lost dealing with the corruption that is so rampant in many underdeveloped countries. There's a great Planet Money/This American Life episode about this topic: http://www.npr.org/blogs/money/2013/08/16/212645252/episode-480-the-charity-that-just-gives-people-money http://www.npr.org/blogs/money/2013/08/16/212645252/episode-... http://www.thisamericanlife.org/radio-archives/episode/503/i-was-just-trying-to-help http://www.thisamericanlife.org/radio-archives/episode/503/i...
- aaron695 13y ago
  The article states the UCT's have less admin costs but are still not as good as CCT. Which is the point of admin costs, the money goes where's it's needed and not wasted. This article is just about the fact UCT's are not a total waste of money, they are not the best way, but people are quite surprised they are better than just burning it. Perhaps it can be used as food for thought for future CCT hybrids.
- anExcitedBeast 13y ago
  That's not usually the best way to think about charity overhead. Check out this TED talk: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...
lazylizard 13y ago
in singapore you can see the effects of all that economic growth besides the billion dollar gardens and F1 races and casinos...in residential areas many old folks collect empty cans and cardboard for a living. despite laws that compel offspring to financially support parents. you don't see beggars on the street, nor homeless people. and unemployment is super low. its..fairly interesting.
tgandrews 13y ago
Not to be a downer but an academic study found this to have limited effect. I heard about it on freakonomics so can't vouch for how biased it was. Just an interesting point against the economist article. http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cash-really-change-your-life-a-new-freakonomics-radio-podcast/ http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas...
- DanBC 13y ago
  The Economist article talks about someone in Kenya being given $1000USD. That's about 84800KSH. Minimum wage for Kenya varies, but 4855KSH ($57USD) per month is what a general laborer gets.[1] That person is getting very roughly 17 months income. That's very different to "winning the lottery". But perhaps this man is one of the 50% of Kenyans living below the poverty line.[2] ($2USD per day) So, if he gets $1.25USD per day a $1000USD lump sum would be a bit more than 2 years income. Microfinance is not the wonder that people once thought it was[3], but giving money to people directly seems to work quite well. [1] http://www.wageindicator.org/main/salary/minimum-wage/kenya http://www.wageindicator.org/main/salary/minimum-wage/kenya http://www.ruralpovertyportal.org/country/home/tags/kenya http://www.ruralpovertyportal.org/country/home/tags/kenya [2] http://c2050922.cdn.cloudfiles.rackspacecloud.com/images/172/original/Kenya%20Statistics.pdf?1286826616 http://c2050922.cdn.cloudfiles.rackspacecloud.com/images/172... [3] http://www.irinnews.org/report/95067/development-microfinance-possibilities-and-limitations http://www.irinnews.org/report/95067/development-microfinanc...
pratyushag 13y ago
New Incentives is an organization that only gives money through CCTs and has seen exceptional results!! newincentives.org.
goggles99 13y ago
Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to help with it. Of course those who were receiving it would have to fulfill certain requirements, but wow what a concept. How about deducting some amount from that mandatory contribution of the person were to volunteer in the community? We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services. Many people may even give the money as cash to some people - personally. Have government oversight review and publish how well any charitable organization is doing at helping people become self reliant financially and socially (this will separate the wheat from the chaff). People may actually become caring and have empathy for these people that they are helping. When people help others, they become happier people. Many people may even donate more money on top of the required amount and volunteer or switch careers to one that helps those in need. Imaging that. That is something that no government could ever accomplish. The government really de-humanizes people. It takes our money and does some things to help people. We never see this happen directly. The government keeps the bums and beggars out of sight so we never even see them. The government jails drug attics and other impoverished criminals so we never see them either. All we ever see from the media is bad news. We never see lives being turned around from welfare or other social services. My money says that once people start taking care of each other, their humanity will grow 1000% ala the Grinch.
- wikiburner 13y ago
  I've had similar thoughts on social security. It would make a lot of sense to simply require citizens to save or invest a certain portion of their annual income. You could have enforced diversification (certain percentages allowed for high vs. low risk), and accreditation boards to vet and approve mutual and index funds. Also, the investment would have a very stimulative effect on the economy, and you could probably also set it up in such a way that it works on autopilot (like a 401(k)) for those that can't be bothered.. It would be quite a bit less draconian than the government simply confiscating the money. In the private sector, the current setup would rightly be called a ponzi scheme.
aaron695 13y ago
TL;DR Giving money directly without conditions isn't the best way to donate funds.
exit 13y ago
http://en.wikipedia.org/wiki/Basic_income http://en.wikipedia.org/wiki/Basic_income
- mseebach 13y ago
  Read the article. It is about a single, one-time, no-strings-attached payment, requiring a business plan to qualify (Although there is no follow up on the plan). It is not an ongoing payment. "Recipients spent a third of the money learning a trade (such as metalworking or tailoring) and much of the rest on tools and stock."
PauloManrique 13y ago
It works when there a private companies giving the money. When it's the government, like here in Brazil, it turns into vote buying, they start to scare the poor saying if the other party wins the elections, they will stop giving money and shit.
wahsd 13y ago
Those who have for centuries fooled the rest of humanity into believing that their unearned, illegitimate, and unwarranted elevated status is justified know the findings of this painfully obvious fact to be true. Which is why they pull out all and every stop to prevent the majority from realizing it by vilifying anyone and anything that could spread that realization.
- RodericDay 13y ago
  Also, if you agree with the above sentiment and are getting frustrated replying to all the shallow and cynical comments riffing on "wage slavery and welfare may be bad but it's the best system we can come up with", just read this other topic on the front page with people opening up about their skepticism towards something as banal as Dropbox: https://news.ycombinator.com/item?id=6625306 https://news.ycombinator.com/item?id=6625306
- giardini 13y ago
  "Those who have for centuries fooled the rest of humanity ..." I don't understand the above. Are you speaking of economists, politicians, academia in general, or all of these perhaps? Please clarify.
  - sjg007 13y ago
    The rich.
- kbutler 13y ago
  I assume you're including yourself in that - I bet you're in the top 1/10 of 1% of income globally: http://www.globalrichlist.com/ http://www.globalrichlist.com/ I am far from asserting that we have a fully equitable system, of either opportunity or outcome, but remember that inequality is an unavoidable result of private property and freedom of choice. (For example, give everyone $100,000 and freedom to spend or save as they will, and check back in ten years.) If there can be any voluntary spending for the benefit of your children, then inequality will persist and be magnified across generations.
known 13y ago
To really alleviate global poverty, every https://en.m.wikipedia.org/wiki/Third_world https://en.m.wikipedia.org/wiki/Third_world nation Currency should be pegged to https://en.m.wikipedia.org/wiki/Opec https://en.m.wikipedia.org/wiki/Opec Oil for 4 years due to https://en.m.wikipedia.org/wiki/Triffin_dilemma https://en.m.wikipedia.org/wiki/Triffin_dilemma
Unnatural_Log 13y ago
"most of the payments went to mothers" Because that's what we need: to incentivize reproduction. Because we don't have enough people destroying the planet as fast as they possibly can with their arrogant, self-indulgent, human-centric, bullshit belief systems. I'll say it once more: you are not the special darlings of a doting white god, you arrogant assholes, you are just another animal in a chaotic universe. This planet was not put here for you to do whatever you want with it, and you are going to discover that shortly if you don't smarten up and realize the obscene waste and destruction you are perpetrating. You are, collectively, so fucking stupid that you cannot even grok the simple concept, "don't shit where you eat". Fuckers.
- adwf 13y ago
  Your apparent misanthropy aside, every study I've ever heard of links increased wealth, health and prosperity with declining birth rates. By improving the lot of these women, you decrease their need to have large numbers of children (to work for them), you increase their education (so they understand why large numbers of children are unnecessary) and you also put power into the hands of the women rather than the men (so that they have a choice).

133 points by aarghh 13y ago

As a matter of fact, society has not a single valid reason to allow concentration of excessive wealth on some kind of restricted group or "elite" (as, by the way, also promoted erroneously by the idea of the "American Dream"). Here are a few facts to explain that this concept is not sane at all: - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). - Excessive wealth ends up being used for corruption (famous example: the Koch brothers), simply because it can. You can not get rid of corruption without getting rid of excessive wealth concentration. - Excessive wealth could "morally"/"ethically" only be justified by the existence of "really free will" (a concept which we can never reasonably take as a basis, given the fact that this concept is of religious nature, not rational thinking): Free will -> free decision -> merit of the better decision -> excessive wealth. As noted, this is how society excuses the existence of excessively rich people, and it's completely flawed and wrong. - Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage. - A part of excessive wealth will always be used to protect the "unfair advantage", thus eliminating equality even more.

thomasz 13y ago
> Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Hell no. http://en.wikipedia.org/wiki/Savings_identity http://en.wikipedia.org/wiki/Savings_identity
- nhaehnle 13y ago
  The savings identity is usually misinterpreted by laypeople, though. Here's a small story to illustrate why S=I can be very misleading: Company C has always produced some type gadgets, for many years. Demand for the gadget has been stable, they just keep producing to what the demand is, end of story. Sounds boring, but this is what 99% of the economy is. Now, for whatever reason (a recession, a policy change, it doesn't really matter), consumers want to save more. In doing so, they decide to reduce their purchase of C's gadget. What happens now? Well, saving S goes up. At the same time, company C involuntarily builds up an inventory of gadgets that they had already started producing but which they can no longer sell. This build-up of inventory is counted as investment in the national accounts! So I goes up, and the identity S=I is maintained. But S=I is maintained in a way that is in total conflict to the typical layperson's interpretation of the equation. So, yes, an exogenous increase in saving will tend to push up "investment" (in quotation marks because it is involuntary investment). When all is said and done, we may all well be poorer for it in real terms, because the level of economic activity may have been reduced. On the other hand, when there is an increase in voluntary investment, then I goes up. Then people's income increases, and that tends to lead to an increase in savings. So S=I is also maintained, but we tend to be richer for it in real terms due to a higher level of economic activity.
ekianjo 13y ago
> - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want your money. If not, it would be a simple cost for them with no value to have it there, and they would charge you to keep your money instead of rewarding you for it. > Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage. Nature is unfair. We don't have the same genes. We don't share the same risks for illness or reproduction. We are not all top athletes. Stop the egalitarian bullshit. The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be. Anything beyond is just a call for arms-race to make everyone the same in every aspect (and incidentally, to render everyone poor by default).
- frank_boyd 13y ago
  > Another economical fallacy. What I meant is: this money is not used to promote consumption (which it were in the hands of poor people). It's consumption (of services or products) that creates jobs. Jobs get created because there is demand for something, not because some rich elite decides they can invest (because they have money). Investment does not depend on the existence of some rich elite. "Trickle down economics" was a joke created by a couple of rich people, to justify and protect the inequality. Investment can easily be accomplished by "the crowd", and it should.
  - ekianjo 13y ago
    > Jobs get created because there is demand for something In the modern society, you are beyond the natural "needs" of the population and you don't need any of the new products that are sold to you. Obviously nobody needed a iPhone pre-2007 and now suddenly everyone has to have one. There's nothing such as "fixed demand". Demand is created by new products, designed by rich elites or companies that can manufacture them and need significant investment to make them a reality. And the "crowd" investment system already exists, by the way. It's been around for 300 years, it's called the stocks exchange.
emiliobumachar 13y ago
pg once pointed out there may be far fewer startups in a society that does not allow concentration of excessive wealth. That's at least one single valid reason. http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html "People start startups in the hope of becoming much richer than they were before. And if your society tries to prevent anyone from being much richer than anyone else, it will also prevent one person from being much richer at t2 than t1."
- pyoung 13y ago
  His logic is a bit off. In a truly efficient market (big if), if taxes were raised so significantly as to have a major impact on the rewards, then you would get a corresponding reduction in risk. I.E. Instead of having a 1 in 10 chance of a startup making it (as he claims in the post) you would probably end up with a 1 in 8 chance (or something similar) as the smaller rewards would, in theory, reduce the number of competitors. You would still end up with the same number of winners however. In reality, there are a number of intangible benefits to starting a business that will overpower any reduction in startups due to higher taxes. Autonomy, excitement, and having a large impact all contribute in the decision to take the risk. Additionally, starting a business is still one of the only ways to strike it rich (unless you get lucky in the athlete/musician/actor department). So for most people with sizable ambitions, a reduction in rewards due to higher taxes will not have any meaningful impact on their decision.
- subsystem 13y ago
  It would be a much better argument without the strawman of absolute equality.
  - emiliobumachar 13y ago
    From the same reference: "This argument applies proportionately. It's not just that if you eliminate economic inequality, you get no startups. To the extent you reduce economic inequality, you decrease the number of startups."
    - 13y ago
venomsnake 13y ago
The real problem is not excessive wealth but generational transfer of such. Let someone reap the benefits. BUT then take away the majority of the wealth away upon death so he could not transfer it. Let his decendands be able to inherit total value of 100 each (whatever the poverty line is that year) and take away the rest. This way we make the emerging of elites harder and falling out of them easier.
- mantas 13y ago
  Not only wealth is transferred from generation to generation. Jewellery, old family houses, paintings and lots of other possibly expensive stuff. For many people, it's not about money. It's memories and other non-financial stuff. That 200 years old watch from your grand-grand-grand-father? Whoopsie, it's expensive these days! If you try to take away that, people won't be happy. If you try to loopholes to allow that kind of transfer, people will use that to transfer wealth to their children. Even if you don't add them, there're many ways to work around that. For example, parents may sell stuff to their children for many times less than market value. You can't deny people rights to sell stuff for whatever they want, do you? There's no law that can't be worked around. Some people want laws to hide real world from themselves. Other people accept reality.

linux_devil 13y ago

Can't agree more. Myself and few friends are part of an "AAD" initiative where we visit deprived and apart from donating money for basic amenities, we take care of school fees and other things. We make sure to visit and actually engage with people other than third party donations. I am sure there are others who do the same.

irollboozers 13y ago

It's also pretty interesting to look at the other side of this: the person giving away the money. Michael Norton and a group of researchers (http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf) at HBS have found that giving away money increases happiness, and that happier people give away more money. This logic is awesome.

Gustomaximus 13y ago

Would this reduce administration cost also? We always hear of charities where 20 cents on the dollar actually makes it to the people. If this can reduce admin cost by not having to make, control or follow up on conditions it could really help more money get to where it is needed.

rjtavares 13y ago
Yes, that's one of the main advantages. Also an advantage is that no money is lost dealing with the corruption that is so rampant in many underdeveloped countries. There's a great Planet Money/This American Life episode about this topic: http://www.npr.org/blogs/money/2013/08/16/212645252/episode-480-the-charity-that-just-gives-people-money http://www.npr.org/blogs/money/2013/08/16/212645252/episode-... http://www.thisamericanlife.org/radio-archives/episode/503/i-was-just-trying-to-help http://www.thisamericanlife.org/radio-archives/episode/503/i...
aaron695 13y ago
The article states the UCT's have less admin costs but are still not as good as CCT. Which is the point of admin costs, the money goes where's it's needed and not wasted. This article is just about the fact UCT's are not a total waste of money, they are not the best way, but people are quite surprised they are better than just burning it. Perhaps it can be used as food for thought for future CCT hybrids.
anExcitedBeast 13y ago
That's not usually the best way to think about charity overhead. Check out this TED talk: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

lazylizard 13y ago

in singapore you can see the effects of all that economic growth besides the billion dollar gardens and F1 races and casinos...in residential areas many old folks collect empty cans and cardboard for a living. despite laws that compel offspring to financially support parents. you don't see beggars on the street, nor homeless people. and unemployment is super low. its..fairly interesting.

tgandrews 13y ago

Not to be a downer but an academic study found this to have limited effect. I heard about it on freakonomics so can't vouch for how biased it was. Just an interesting point against the economist article. http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cash-really-change-your-life-a-new-freakonomics-radio-podcast/ http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas...

DanBC 13y ago
The Economist article talks about someone in Kenya being given $1000USD. That's about 84800KSH. Minimum wage for Kenya varies, but 4855KSH ($57USD) per month is what a general laborer gets.[1] That person is getting very roughly 17 months income. That's very different to "winning the lottery". But perhaps this man is one of the 50% of Kenyans living below the poverty line.[2] ($2USD per day) So, if he gets $1.25USD per day a $1000USD lump sum would be a bit more than 2 years income. Microfinance is not the wonder that people once thought it was[3], but giving money to people directly seems to work quite well. [1] http://www.wageindicator.org/main/salary/minimum-wage/kenya http://www.wageindicator.org/main/salary/minimum-wage/kenya http://www.ruralpovertyportal.org/country/home/tags/kenya http://www.ruralpovertyportal.org/country/home/tags/kenya [2] http://c2050922.cdn.cloudfiles.rackspacecloud.com/images/172/original/Kenya%20Statistics.pdf?1286826616 http://c2050922.cdn.cloudfiles.rackspacecloud.com/images/172... [3] http://www.irinnews.org/report/95067/development-microfinance-possibilities-and-limitations http://www.irinnews.org/report/95067/development-microfinanc...

pratyushag 13y ago

New Incentives is an organization that only gives money through CCTs and has seen exceptional results!! newincentives.org.

goggles99 13y ago

Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to help with it. Of course those who were receiving it would have to fulfill certain requirements, but wow what a concept. How about deducting some amount from that mandatory contribution of the person were to volunteer in the community? We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services. Many people may even give the money as cash to some people - personally. Have government oversight review and publish how well any charitable organization is doing at helping people become self reliant financially and socially (this will separate the wheat from the chaff). People may actually become caring and have empathy for these people that they are helping. When people help others, they become happier people. Many people may even donate more money on top of the required amount and volunteer or switch careers to one that helps those in need. Imaging that. That is something that no government could ever accomplish. The government really de-humanizes people. It takes our money and does some things to help people. We never see this happen directly. The government keeps the bums and beggars out of sight so we never even see them. The government jails drug attics and other impoverished criminals so we never see them either. All we ever see from the media is bad news. We never see lives being turned around from welfare or other social services. My money says that once people start taking care of each other, their humanity will grow 1000% ala the Grinch.

wikiburner 13y ago
I've had similar thoughts on social security. It would make a lot of sense to simply require citizens to save or invest a certain portion of their annual income. You could have enforced diversification (certain percentages allowed for high vs. low risk), and accreditation boards to vet and approve mutual and index funds. Also, the investment would have a very stimulative effect on the economy, and you could probably also set it up in such a way that it works on autopilot (like a 401(k)) for those that can't be bothered.. It would be quite a bit less draconian than the government simply confiscating the money. In the private sector, the current setup would rightly be called a ponzi scheme.

aaron695 13y ago

TL;DR Giving money directly without conditions isn't the best way to donate funds.

exit 13y ago

http://en.wikipedia.org/wiki/Basic_income http://en.wikipedia.org/wiki/Basic_income

mseebach 13y ago
Read the article. It is about a single, one-time, no-strings-attached payment, requiring a business plan to qualify (Although there is no follow up on the plan). It is not an ongoing payment. "Recipients spent a third of the money learning a trade (such as metalworking or tailoring) and much of the rest on tools and stock."

PauloManrique 13y ago

It works when there a private companies giving the money. When it's the government, like here in Brazil, it turns into vote buying, they start to scare the poor saying if the other party wins the elections, they will stop giving money and shit.

wahsd 13y ago

Those who have for centuries fooled the rest of humanity into believing that their unearned, illegitimate, and unwarranted elevated status is justified know the findings of this painfully obvious fact to be true. Which is why they pull out all and every stop to prevent the majority from realizing it by vilifying anyone and anything that could spread that realization.

RodericDay 13y ago
Also, if you agree with the above sentiment and are getting frustrated replying to all the shallow and cynical comments riffing on "wage slavery and welfare may be bad but it's the best system we can come up with", just read this other topic on the front page with people opening up about their skepticism towards something as banal as Dropbox: https://news.ycombinator.com/item?id=6625306 https://news.ycombinator.com/item?id=6625306
giardini 13y ago
"Those who have for centuries fooled the rest of humanity ..." I don't understand the above. Are you speaking of economists, politicians, academia in general, or all of these perhaps? Please clarify.
- sjg007 13y ago
  The rich.
kbutler 13y ago
I assume you're including yourself in that - I bet you're in the top 1/10 of 1% of income globally: http://www.globalrichlist.com/ http://www.globalrichlist.com/ I am far from asserting that we have a fully equitable system, of either opportunity or outcome, but remember that inequality is an unavoidable result of private property and freedom of choice. (For example, give everyone $100,000 and freedom to spend or save as they will, and check back in ten years.) If there can be any voluntary spending for the benefit of your children, then inequality will persist and be magnified across generations.

known 13y ago

To really alleviate global poverty, every https://en.m.wikipedia.org/wiki/Third_world https://en.m.wikipedia.org/wiki/Third_world nation Currency should be pegged to https://en.m.wikipedia.org/wiki/Opec https://en.m.wikipedia.org/wiki/Opec Oil for 4 years due to https://en.m.wikipedia.org/wiki/Triffin_dilemma https://en.m.wikipedia.org/wiki/Triffin_dilemma

Unnatural_Log 13y ago

"most of the payments went to mothers" Because that's what we need: to incentivize reproduction. Because we don't have enough people destroying the planet as fast as they possibly can with their arrogant, self-indulgent, human-centric, bullshit belief systems. I'll say it once more: you are not the special darlings of a doting white god, you arrogant assholes, you are just another animal in a chaotic universe. This planet was not put here for you to do whatever you want with it, and you are going to discover that shortly if you don't smarten up and realize the obscene waste and destruction you are perpetrating. You are, collectively, so fucking stupid that you cannot even grok the simple concept, "don't shit where you eat". Fuckers.

adwf 13y ago
Your apparent misanthropy aside, every study I've ever heard of links increased wealth, health and prosperity with declining birth rates. By improving the lot of these women, you decrease their need to have large numbers of children (to work for them), you increase their education (so they understand why large numbers of children are unnecessary) and you also put power into the hands of the women rather than the men (so that they have a choice).