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In the Huffington Post article, you wrote: "Years of working with NGOs and government aid programs were convincing me that handouts are a dead end, temporarily

by David 13y ago

In the Huffington Post article, you wrote: "Years of working with NGOs and government aid programs were convincing me that handouts are a dead end, temporarily soothing the acuteness of the injustice but taking donor and recipient down a path of dependence that ultimately makes the international wealth divide even wider." Do you feel that way about a universal basic income? Does your statement only refer to single-recipient donations, that tend to cause dependence? I can't claim any personal experience, but from what I've read in e.g. [1] and [2], an unconditional basic income has positive effects on the community. The lesson I've taken from such pilot studies is that direct, conditionless donations are a very effective way to help the poor. I'm curious if I've learned the wrong lesson, and the benefits only appear if it's happening for a large population (or perhaps even that's not effective, and the studies are flawed or misleading). [1] http://www.bignam.org/BIG_pilot.html http://www.bignam.org/BIG_pilot.html [2] http://www.dominionpaper.ca/articles/4100 http://www.dominionpaper.ca/articles/4100

jkurnia 13y ago
Hi David, this is a complex question and I agree with you that a lot depends on the circumstances and details. My understanding is that many cash transfer programs have had measurable positive economic effects, both when they are targeted and when they are offered to an entire community. And there are obviously situations of humanitarian catastrophe, such as a natural disaster or a famine, where direct distribution of aid is the right answer. My objection to most handout programs is based on the negative psychological effects I experienced time and again while working with development assistance grants in Africa and Asia. The resources we distributed would certainly result in an economic boost, but they also fundamentally changed the way the recipients saw themselves, and the way we saw them. Handouts caused the recipients to view themselves as dependents whose fortunes were subject to the whims of luck and on pleasing donors, rather than on themselves as drivers of their own lives. When repeated enough, this psychological side effect can be devastating not only for the individual recipient, but for the broader community that has come to depend on the handouts. The dynamics in microfinance loans are much healthier in my experience - especially in a market-oriented community like Zidisha, where borrowers offer their own loan terms and lenders base their lending decisions on the borrowers' own demonstrated performance with past loans. It feels more like a business partnership than a handout.
yummyfajitas 13y ago
In the pilot studies, about 10% of people who would otherwise be working choose not to work and instead become dependent on the BI. So the BI pilot studies do agree with Julia's impression. https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00 https://decorrespondent.nl/541/why-we-should-give-free-money...
- rjtavares 13y ago
  That is a gross misrepresentation of the results: > The total amount of work hours decreased by only 13%. Breadwinners hardly cut down on their hours, women used the basic income for a couple of months of maternity leave and young people used it to do some extra studying. > Forget’s most remarkable discovery is that hospital visits went down by 8,5%. This amounted to huge savings (in the United States it would be more than $200 billion a year now). After a couple of years, domestic violence rates and mental health also saw improvement. Mincome made the entire town healthier. The basic income continued to influence following generations, both in terms of income and health.
  - yummyfajitas 13y ago
    You are correct - it was hours worked, not # of workers. Thanks for the correction. I'm not sure how it's a gross misrepresentation - Julia's impression was that free money induces people to become dependent and work less. How does the distinction in hours worked vs # of workers change that?
    - rjtavares 13y ago
      Taking care of a baby for a few months or getting back to studying is hardly becoming dependent on free money. Also, notice the last sentence: "basic income continued to influence following generations, both in terms of income and health." That was long after the pilot ended.
notahacker 13y ago
The Namibia study is interesting, but it's essentially attacking a different problem from the one Kidisha aims to address (lack of access to relatively high sums by local standards to do specific things) It's also unfortunately too short term and micro-scale to really address the main criticisms which are (i) prices of basic goods in short supply and ground rents will rise to the point very poor people are often not better off, and sometimes worse off (ii) trying to set the basic income sufficiently high to allow subsistence (which the Namibian study didn't) would cause massive economic instability even if it could effectively be funded (iii) without massive and relatively expensive administrative oversight, most of the money will be siphoned off by the corrupt in underdeveloped countries and regions and (iv) if you make payments for children you encourage even more excessive population growth and if you don't, families still suffer.

by David 13y ago

jkurnia 13y ago

Hi David, this is a complex question and I agree with you that a lot depends on the circumstances and details. My understanding is that many cash transfer programs have had measurable positive economic effects, both when they are targeted and when they are offered to an entire community. And there are obviously situations of humanitarian catastrophe, such as a natural disaster or a famine, where direct distribution of aid is the right answer. My objection to most handout programs is based on the negative psychological effects I experienced time and again while working with development assistance grants in Africa and Asia. The resources we distributed would certainly result in an economic boost, but they also fundamentally changed the way the recipients saw themselves, and the way we saw them. Handouts caused the recipients to view themselves as dependents whose fortunes were subject to the whims of luck and on pleasing donors, rather than on themselves as drivers of their own lives. When repeated enough, this psychological side effect can be devastating not only for the individual recipient, but for the broader community that has come to depend on the handouts. The dynamics in microfinance loans are much healthier in my experience - especially in a market-oriented community like Zidisha, where borrowers offer their own loan terms and lenders base their lending decisions on the borrowers' own demonstrated performance with past loans. It feels more like a business partnership than a handout.

yummyfajitas 13y ago

In the pilot studies, about 10% of people who would otherwise be working choose not to work and instead become dependent on the BI. So the BI pilot studies do agree with Julia's impression. https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00 https://decorrespondent.nl/541/why-we-should-give-free-money...

rjtavares 13y ago
That is a gross misrepresentation of the results: > The total amount of work hours decreased by only 13%. Breadwinners hardly cut down on their hours, women used the basic income for a couple of months of maternity leave and young people used it to do some extra studying. > Forget’s most remarkable discovery is that hospital visits went down by 8,5%. This amounted to huge savings (in the United States it would be more than $200 billion a year now). After a couple of years, domestic violence rates and mental health also saw improvement. Mincome made the entire town healthier. The basic income continued to influence following generations, both in terms of income and health.
- yummyfajitas 13y ago
  You are correct - it was hours worked, not # of workers. Thanks for the correction. I'm not sure how it's a gross misrepresentation - Julia's impression was that free money induces people to become dependent and work less. How does the distinction in hours worked vs # of workers change that?
  - rjtavares 13y ago
    Taking care of a baby for a few months or getting back to studying is hardly becoming dependent on free money. Also, notice the last sentence: "basic income continued to influence following generations, both in terms of income and health." That was long after the pilot ended.

notahacker 13y ago

The Namibia study is interesting, but it's essentially attacking a different problem from the one Kidisha aims to address (lack of access to relatively high sums by local standards to do specific things) It's also unfortunately too short term and micro-scale to really address the main criticisms which are (i) prices of basic goods in short supply and ground rents will rise to the point very poor people are often not better off, and sometimes worse off (ii) trying to set the basic income sufficiently high to allow subsistence (which the Namibian study didn't) would cause massive economic instability even if it could effectively be funded (iii) without massive and relatively expensive administrative oversight, most of the money will be siphoned off by the corrupt in underdeveloped countries and regions and (iv) if you make payments for children you encourage even more excessive population growth and if you don't, families still suffer.