11 ms·

To help poor people, give them money

86 points by akbarnama 11y ago

PythonicAlpha 11y ago
The income of people has diverted more and more in the last decades. It is a fact, that countries really flourished (USA, Germany, other countries) with a bigger part of the society in the middle class and having a better living and education, when those countries managed to bring better income also to working-class people. Today's wealth in the US is for a big part because of the flourishing middle-class of the country shortly after the 2nd World-war. The same holds for Germany and other countries. Today, all over the world, the income diverts and education already is going down for normal people in many countries. Middle classes are melting away. Wealth of a society is not only to be measured by the wealthiest people in the society, but by the wealth of the middle class (and worker) people. Today, we waste the wealth created after the war and give it away to the <1% of people. Everybody should see this film: Inequality for All [1] that shows, the connections, that many are just ignoring today. To my opinion, to help poor people, raise wages of workers in all the world (thus making an end with a Globalization that just helps the rich). By raising the wages, you will not have people that just live on welfare, but that can be proud again for their work they do. [1] http://www.imdb.com/title/tt2215151/ http://www.imdb.com/title/tt2215151/
- peterfirefly 11y ago
  > The income of people has diverted more and more in the last decades. diverged. (In the hope that it helps another non-native speaker.)
kaa2102 11y ago
Conservatives, progressives, and libertarians call it different things. Basic income, negative tax rate, social safety net, etc. Milton Friedman advocated for a negative effective tax rate for low income folks. Rand Paul recommended not taxing (Federally) folks who make less than $50k USD. We also need to consider micro and macro-economics. Folks with less money have a high marginal propensity to consume or likelihood of spending most or all of the extra funds they receive. Also, consumer spending is a factor of economic output or GDP. Increasing consumer spending increases economic output. Q.E.D. Give people with no money enough money to not fall through the cracks.
- vezzy-fnord 11y ago
  Negative income tax is certainly a very interesting idea, but it is virtually unheard of as a position in any mainstream U.S. political compass. It's generally considered that you either want to expand the current, highly convoluted system, or that you loathe welfare entirely as a matter of principle.
  - rrss1122 11y ago
    I think tax credits already accomplish this to a degree. The poor are more likely to have children, and they can already claim those children for tax credit, for example.
    - dragonwriter 11y ago
      Child tax credits don't fully offset the cost of raising a child, so they aren't really a substitute for negative income tax.
    - joshuapants 11y ago
      It seems that you only get $1000 tax credit per child. That probably eases the burden on people who are going to have children in the first place, but is still net negative and doesn't do anything for people who aren't going to have children.
  - greeneggs 11y ago
    In the US, the Earned Income Tax Credit is similar to a negative income tax, and has bipartisan support (it was expanded under Clinton, Bush and Obama, for example). Economists love it, too.
    - dragonwriter 11y ago
      > In the US, the Earned Income Tax Credit is similar to a negative income tax EITC is like what a person who once heard of negative income tax but wanted to make a Rube Goldberg parody of it would create. A negative income tax would, in its simplest form, instead of limiting AGI to a minimum of zero after deductions, let it go negative, and treat the (negative) calculated liability on that income as a negative total tax liability. (Now, EITC helps a wider range of people -- with qualifying children, it hits about the same point for people without children -- than NIT would with the current deductions available for US taxes, but, that could be addressed by adding greater child deductions than the existing standard deduction.)
thedevil 11y ago
This article seems naive, at best. Time after time, when I've helped family members with cash, it winds up getting wasted horribly and helping them less than it hurt me to give it to them. When I help them with what they need, their situation improves. And logically, if the poor as a group were good with money, they wouldn't be poor. Yet the article asks me to abandon reason and experience because there's some "a growing body of evidence" somewhere out there which are not provided by the article.
- PythonicAlpha 11y ago
  > And logically, if the poor as a group were good with money, they wouldn't be poor. I am sorry, just this statement alone, disqualifies your whole argumentation. It is just a barroom cliche of the rich.
  - thedevil 11y ago
    Sometimes cliches are cliches because they're accurate. And who cares if you think my argument should automatically be "disqualified" because it doesn't match your politics.
    - PythonicAlpha 11y ago
      > Sometimes cliches are cliches because they're accurate. And sometimes they are cliches, because they match into politics of some people. It is always much better to have an argument, why you do better than others, than to admit, that you are lucky. But I guess, you are the one, who knows which ones are "accurate", because you know best. > And who cares if you think my argument should automatically be "disqualified" because it doesn't match your politics. Right. It is better, that your politics matches the politics of the rich and mighty.
    - deleted 11y ago
      [deleted]
      - thedevil 11y ago
walsh-cloonagh 11y ago
It is possible to save a life for $3,340 by donating to the Against Malaria Foundation [1]. Helping desperately poor people is a surely virtuous thing to do and helping them efficiently by giving them money via GiveDirectly, as suggested in this article and the linked 2003 NYT article, is all the better. But, right now there are worse things to be than desperately poor: like being a kid in Africa who dies of malaria for want of a malaria net. Given the poor state of medicine and public health in places where people are dying for want of a few thousand dollars, optimizing poverty relief programs seems premature. And for what it's worth the people you'll save are also desperately poor. [1] http://www.givewell.org/international/top-charities/AMF#Costperlifesaved http://www.givewell.org/international/top-charities/AMF#Cost...
- Mikeb85 11y ago
  Malaria generally kills only the young and weak. It's like the flu over here. The problem is malnutrition. Hence why a large amount of mosquito nets are never used to sleep under, but rather as fishing nets. I know people who have had malaria (family that lives in a tropical 3rd world country). All survived. Giving out mosquito nets to conquer malaria makes as much sense as giving out medical masks to conquer the flu. The answer of course is to be in good health, and to have access to medicine. But we don't live with malaria, so feel-good gestures are as far as we go.
  - JoeAltmaier 11y ago
    Confused: you can't 'have had' malaria, its a lifetime affliction isn't it?
    - Mikeb85 11y ago
      It can recur, and you can get it multiple times, but no, not a lifetime affliction.
    - zo1 11y ago
      You can get re-infected. As far as I know, it doesn't stay dormant in your body (like say Herpes). But I'm not a doctor, just had it a few mild times as a kid.
Shivetya 11y ago
Have to chastise you for one example, giving them money so they can buy a cell phone? Why? To be further in debt with monthly fees? There are programs for poor people to get a limited cell plan for free and government offices keyed to assisting the poor do direct them there. I would never give them cash. While you certainly cited all sorts of needs; this is not hard and runs along the lines of "for the children, no one is against children are they?" it doesn't solve the problem. There are two categories than need help and both can be helped the same way. First are the truly poor, they just cannot get past Go. Second are those whose decisions are making or keeping them poor. This usually involves getting tied in revolving credit, auto loans, lottery, and monthlies. Catastrophic causes that lead to the poor house need to be treated wholly separately; medical and death. So give them money the same way food stamps are administered. They are provided an allowance for specific expenditures. This cannot be converted to cash. No system is too complex to implement, the government already manages thousands of assistance programs and sends out tens if not hundreds of millions of checks for such each month. Basically the idea is to create purchasing groups which have similar expenses. Within these an amount is contributed monthly upto a maximum held for paying such expenses at approved retailers, service providers, etc. This covers the need side as well as hopefully teaches management of funds. Cash cannot be tracked, it can also be easily stolen, meaning its near impossible to verify it used as intended nor determining if the assistance is the proper type.
- Retric 11y ago
  If you hand someone a pound of rice they can convert it to money. So, in the end it's both cheaper and more Efficent to just hand them meant in the first place. PS: If you look a little deeper your advocating for a communist style demand economy which as we have seen just does not work long term.
- roel_v 11y ago
  "Have to chastise you for one example, giving them money so they can buy a cell phone? Why? To be further in debt with monthly fees?" I feel what you're saying, but in 2015, one needs a phone to get (and usually to hold) a job. Especially low-wage jobs. E.g. a temp agency might start calling at 7h30 because they're looking for someone to fill in. Don't pick up your phone? We'll just give the job to someone else, oh and we won't call tomorrow, because you don't pick up anyway.
ianferrel 11y ago
The best way to help poor people who make reasonably good decisions is to give them money. People who make bad decisions often end up poor. Giving them money will not help them make better decisions, and may make them worse off. How you think those two effects interact, and how much you value efficiency of donation vs. enabling people with poor decision making skills to waste probably determines where you stand on this issue.
- roel_v 11y ago
  This is a beautifully succinct summary of the issue. It explains why micro financing can elevate people in Africa from abject poverty, but why it's extremely hard to lift the bottom 5% in the West (apart from the fact that someone needs to be in the bottom 5%...)
- PythonicAlpha 11y ago
  > People who make bad decisions often end up poor. Giving them money will not help them make better decisions, and may make them worse off. But there are also many people who started poor and stayed poor, because they did not have the possibilities of the rich. Or is your argument, that somebody whose parents where rich, will stay rich, because he made all the good decisions himself? There are so many rich, that make bad decisions and stay rich, because they have so much, they always will stay afloat.
  - charlesdm 11y ago
    There are plenty of wealthy people (mainly inherited) who became poor after bad investments. But, obviously if you have significant amounts of capital, it's harder to lose it all.
    - PythonicAlpha 11y ago
      You can always find examples for all sides. But it is just a statistical fact, that moving up from being really poor today has become much more difficult than it was decades before, maybe with the exemption of being a computer scientists (but also there it is not so easy for a normally gifted person to finish studies and so on without help from the parents).
mangeletti 11y ago
This works in small experiments because when you give money to a small group of poor people (A) within a larger group of poor people (B), group A gains leverage compared to their prior position and compared to group B. When you give money to all poor people, the net result is simply inflation[1]. If transfer payments were made to taper up from max(wealth) (receives $0) to min(wealth) (receives $average(wealth)), disparity would be brought to 0, which would naturally lead to everybody doing what they wanted rather than what earned them income. This would be a lot of fun, but it would unfortunately reduce the developmental value of humans to zero[2], and machines would evolve to replace us all (could be gray goo, could be the borg, etc.). The true path to freedom from work is to work collaboratively on a humanoid robot with some basic rules for human interaction: 1) A robot may not injure a human being or, through inaction, allow a human being to come to harm. 2) A robot must obey orders given it by human beings except where such orders would conflict with the First Law. 3) A robot must protect its own existence as long as such protection does not conflict with the First or Second Law. Those should suffice for a while, but I know not what will come of them down the line. That's all for now :) Have a great weekend, everyone! 1. http://www.physicsclassroom.com/class/newtlaws/Lesson-4/Newton-s-Third-Law http://www.physicsclassroom.com/class/newtlaws/Lesson-4/Newt... 2. http://econlog.econlib.org/archives/2011/05/robots_of_the_f.html http://econlog.econlib.org/archives/2011/05/robots_of_the_f....
- harrumph 11y ago
  Hahahahahahaha
- deleted 11y ago
  [deleted]
- dragonwriter 11y ago
  > When you give money to all poor people, the net result is simply inflation Obviously, redistributive tax + BI schemes that result in some group having more money than previously increases demand and market clearing prices for goods disproportionately demanded by that group (and does the reverse for goods disproportionately demanded by the people who are net payers.) So, clearly, the increase in effective buying power won't be as much as the increase in income compared to the pre-policy price levels would indicate. But that isn't sufficient to make the case that BI won't mitigate poverty, however. Just that the degree of mitigation will be less than the most naïve analysis conceivable might suggest. (Also, the link to Newton's third law to support this position was amusing.)
pdeuchler 11y ago
Giving money to the poor merely elevates those who received the money over a new generation of "poor" and does nothing to actually stop the systems that create poverty in the first place. If you would like to actually reduce the net amount of "poor people", instead of simply creating a revolving door for individuals, you give money to the middle class. Or, phrased differently: Give a man a fish and he eats for a day. Teach a man to fish and he feeds himself and his family while selling the excess for discretionary income :)
- mangeletti 11y ago
  +1, and if some of that discretionary income is saved, he can lease it out for rent (make loans). This trend can continue for generations until the snowball effect is such that majority of the world's wealth has been accumulated by about .001% of the population; but then, people will start talking about things like transfer payments[1] and basic income, etc. 1. https://en.wikipedia.org/wiki/Transfer_payment https://en.wikipedia.org/wiki/Transfer_payment
  - pdeuchler 11y ago
    I get what you're saying, but you are also ignoring my point about bolstering the middle class. A large and healthy middle class not only precludes unhealthy amounts of poverty (please keep in mind there will always be a "bottom 16%" [aka falling below < -1σ] no matter the level of wealth) but also precludes large concentrations of wealth by the upper class. EDIT: replied before you finished your edit, I see we're actually in agreement. Carry on...
- brandonmenc 11y ago
  > Giving money to the poor merely elevates those who received the money over a new generation of "poor" and does nothing to actually stop the systems that create poverty in the first place. If "the system" is giving people money to raise them out of poverty, how can it simultaneously be a "system that creates poverty?" Your logic implies that there is enough work to go around, and that's increasingly seeming to be not the case - if there's not enough good paying work, that's not anyone's fault.
gesman 11y ago
When some people ask money to buy the food and you give them food - they are quite often disappointed and turn away. When some people ask money and you give them some money - they are quite often disappointed because you are not giving them enough.
- alexnking 11y ago
  This is like a company saying "I know employees need food, but instead of giving you money, you'll be compensated in hamburgers". I'm tired of this stereotypical judgement that poor people are so bad with money that we'd be better off generously making purchasing decisions for them.
alejohausner 11y ago
I think a lot of folks here are missing the big question: charity involves an exchange. When you give to the poor, you get something back. It's subtle: The issue is not about eliminating poverty. It's about how to motivate rich people to part with their money. After all, aid to the poor comes from taxes, and the rich pay more taxes. So any kind of welfare has to give the donors of the money something in exchange for their donation. But the poor have nothing to trade for what they receive. Right? Wrong. The poor have their dignity. That's what they trade for donations. Every scheme for wealth distribution is informed by that fact. Rich people give money, and poor people abase themselves in exchange. That's why every welfare scheme always involves humiliation. That's why government housing for the poor looks different from ordinary houses: so the poor will stand out, so they can be shamed. That's why poor people have to endure long lineups at the welfare office: so they can be reminded that they are less worthy of decent consideration. That's why poor people have to endure invasion of their most private aspects of their lives, through visits by social workers: so they can be reminded that they don't deserve privacy. And that's why the rich don't like giving out cash: because cash is anonymous, and enables dignity, equality, and privacy. As long as this implicit bargain (money in exchange for dignity) goes unexamined, the cruelty of the social welfare system will seem mysterious.

86 points by akbarnama 11y ago

The income of people has diverted more and more in the last decades. It is a fact, that countries really flourished (USA, Germany, other countries) with a bigger part of the society in the middle class and having a better living and education, when those countries managed to bring better income also to working-class people. Today's wealth in the US is for a big part because of the flourishing middle-class of the country shortly after the 2nd World-war. The same holds for Germany and other countries. Today, all over the world, the income diverts and education already is going down for normal people in many countries. Middle classes are melting away. Wealth of a society is not only to be measured by the wealthiest people in the society, but by the wealth of the middle class (and worker) people. Today, we waste the wealth created after the war and give it away to the <1% of people. Everybody should see this film: Inequality for All [1] that shows, the connections, that many are just ignoring today. To my opinion, to help poor people, raise wages of workers in all the world (thus making an end with a Globalization that just helps the rich). By raising the wages, you will not have people that just live on welfare, but that can be proud again for their work they do. [1] http://www.imdb.com/title/tt2215151/ http://www.imdb.com/title/tt2215151/

peterfirefly 11y ago
> The income of people has diverted more and more in the last decades. diverged. (In the hope that it helps another non-native speaker.)

kaa2102 11y ago

Conservatives, progressives, and libertarians call it different things. Basic income, negative tax rate, social safety net, etc. Milton Friedman advocated for a negative effective tax rate for low income folks. Rand Paul recommended not taxing (Federally) folks who make less than $50k USD. We also need to consider micro and macro-economics. Folks with less money have a high marginal propensity to consume or likelihood of spending most or all of the extra funds they receive. Also, consumer spending is a factor of economic output or GDP. Increasing consumer spending increases economic output. Q.E.D. Give people with no money enough money to not fall through the cracks.

vezzy-fnord 11y ago
Negative income tax is certainly a very interesting idea, but it is virtually unheard of as a position in any mainstream U.S. political compass. It's generally considered that you either want to expand the current, highly convoluted system, or that you loathe welfare entirely as a matter of principle.
- rrss1122 11y ago
  I think tax credits already accomplish this to a degree. The poor are more likely to have children, and they can already claim those children for tax credit, for example.
  - dragonwriter 11y ago
    Child tax credits don't fully offset the cost of raising a child, so they aren't really a substitute for negative income tax.
  - joshuapants 11y ago
    It seems that you only get $1000 tax credit per child. That probably eases the burden on people who are going to have children in the first place, but is still net negative and doesn't do anything for people who aren't going to have children.
- greeneggs 11y ago
  In the US, the Earned Income Tax Credit is similar to a negative income tax, and has bipartisan support (it was expanded under Clinton, Bush and Obama, for example). Economists love it, too.
  - dragonwriter 11y ago
    > In the US, the Earned Income Tax Credit is similar to a negative income tax EITC is like what a person who once heard of negative income tax but wanted to make a Rube Goldberg parody of it would create. A negative income tax would, in its simplest form, instead of limiting AGI to a minimum of zero after deductions, let it go negative, and treat the (negative) calculated liability on that income as a negative total tax liability. (Now, EITC helps a wider range of people -- with qualifying children, it hits about the same point for people without children -- than NIT would with the current deductions available for US taxes, but, that could be addressed by adding greater child deductions than the existing standard deduction.)

thedevil 11y ago

This article seems naive, at best. Time after time, when I've helped family members with cash, it winds up getting wasted horribly and helping them less than it hurt me to give it to them. When I help them with what they need, their situation improves. And logically, if the poor as a group were good with money, they wouldn't be poor. Yet the article asks me to abandon reason and experience because there's some "a growing body of evidence" somewhere out there which are not provided by the article.

PythonicAlpha 11y ago
> And logically, if the poor as a group were good with money, they wouldn't be poor. I am sorry, just this statement alone, disqualifies your whole argumentation. It is just a barroom cliche of the rich.
- thedevil 11y ago
  Sometimes cliches are cliches because they're accurate. And who cares if you think my argument should automatically be "disqualified" because it doesn't match your politics.
  - PythonicAlpha 11y ago
    > Sometimes cliches are cliches because they're accurate. And sometimes they are cliches, because they match into politics of some people. It is always much better to have an argument, why you do better than others, than to admit, that you are lucky. But I guess, you are the one, who knows which ones are "accurate", because you know best. > And who cares if you think my argument should automatically be "disqualified" because it doesn't match your politics. Right. It is better, that your politics matches the politics of the rich and mighty.
  - deleted 11y ago
    [deleted]
    - thedevil 11y ago

walsh-cloonagh 11y ago

It is possible to save a life for $3,340 by donating to the Against Malaria Foundation [1]. Helping desperately poor people is a surely virtuous thing to do and helping them efficiently by giving them money via GiveDirectly, as suggested in this article and the linked 2003 NYT article, is all the better. But, right now there are worse things to be than desperately poor: like being a kid in Africa who dies of malaria for want of a malaria net. Given the poor state of medicine and public health in places where people are dying for want of a few thousand dollars, optimizing poverty relief programs seems premature. And for what it's worth the people you'll save are also desperately poor. [1] http://www.givewell.org/international/top-charities/AMF#Costperlifesaved http://www.givewell.org/international/top-charities/AMF#Cost...

Mikeb85 11y ago
Malaria generally kills only the young and weak. It's like the flu over here. The problem is malnutrition. Hence why a large amount of mosquito nets are never used to sleep under, but rather as fishing nets. I know people who have had malaria (family that lives in a tropical 3rd world country). All survived. Giving out mosquito nets to conquer malaria makes as much sense as giving out medical masks to conquer the flu. The answer of course is to be in good health, and to have access to medicine. But we don't live with malaria, so feel-good gestures are as far as we go.
- JoeAltmaier 11y ago
  Confused: you can't 'have had' malaria, its a lifetime affliction isn't it?
  - Mikeb85 11y ago
    It can recur, and you can get it multiple times, but no, not a lifetime affliction.
  - zo1 11y ago
    You can get re-infected. As far as I know, it doesn't stay dormant in your body (like say Herpes). But I'm not a doctor, just had it a few mild times as a kid.

Shivetya 11y ago

Have to chastise you for one example, giving them money so they can buy a cell phone? Why? To be further in debt with monthly fees? There are programs for poor people to get a limited cell plan for free and government offices keyed to assisting the poor do direct them there. I would never give them cash. While you certainly cited all sorts of needs; this is not hard and runs along the lines of "for the children, no one is against children are they?" it doesn't solve the problem. There are two categories than need help and both can be helped the same way. First are the truly poor, they just cannot get past Go. Second are those whose decisions are making or keeping them poor. This usually involves getting tied in revolving credit, auto loans, lottery, and monthlies. Catastrophic causes that lead to the poor house need to be treated wholly separately; medical and death. So give them money the same way food stamps are administered. They are provided an allowance for specific expenditures. This cannot be converted to cash. No system is too complex to implement, the government already manages thousands of assistance programs and sends out tens if not hundreds of millions of checks for such each month. Basically the idea is to create purchasing groups which have similar expenses. Within these an amount is contributed monthly upto a maximum held for paying such expenses at approved retailers, service providers, etc. This covers the need side as well as hopefully teaches management of funds. Cash cannot be tracked, it can also be easily stolen, meaning its near impossible to verify it used as intended nor determining if the assistance is the proper type.

Retric 11y ago
If you hand someone a pound of rice they can convert it to money. So, in the end it's both cheaper and more Efficent to just hand them meant in the first place. PS: If you look a little deeper your advocating for a communist style demand economy which as we have seen just does not work long term.
roel_v 11y ago
"Have to chastise you for one example, giving them money so they can buy a cell phone? Why? To be further in debt with monthly fees?" I feel what you're saying, but in 2015, one needs a phone to get (and usually to hold) a job. Especially low-wage jobs. E.g. a temp agency might start calling at 7h30 because they're looking for someone to fill in. Don't pick up your phone? We'll just give the job to someone else, oh and we won't call tomorrow, because you don't pick up anyway.

ianferrel 11y ago

The best way to help poor people who make reasonably good decisions is to give them money. People who make bad decisions often end up poor. Giving them money will not help them make better decisions, and may make them worse off. How you think those two effects interact, and how much you value efficiency of donation vs. enabling people with poor decision making skills to waste probably determines where you stand on this issue.

roel_v 11y ago
This is a beautifully succinct summary of the issue. It explains why micro financing can elevate people in Africa from abject poverty, but why it's extremely hard to lift the bottom 5% in the West (apart from the fact that someone needs to be in the bottom 5%...)
PythonicAlpha 11y ago
> People who make bad decisions often end up poor. Giving them money will not help them make better decisions, and may make them worse off. But there are also many people who started poor and stayed poor, because they did not have the possibilities of the rich. Or is your argument, that somebody whose parents where rich, will stay rich, because he made all the good decisions himself? There are so many rich, that make bad decisions and stay rich, because they have so much, they always will stay afloat.
- charlesdm 11y ago
  There are plenty of wealthy people (mainly inherited) who became poor after bad investments. But, obviously if you have significant amounts of capital, it's harder to lose it all.
  - PythonicAlpha 11y ago
    You can always find examples for all sides. But it is just a statistical fact, that moving up from being really poor today has become much more difficult than it was decades before, maybe with the exemption of being a computer scientists (but also there it is not so easy for a normally gifted person to finish studies and so on without help from the parents).

mangeletti 11y ago

This works in small experiments because when you give money to a small group of poor people (A) within a larger group of poor people (B), group A gains leverage compared to their prior position and compared to group B. When you give money to all poor people, the net result is simply inflation[1]. If transfer payments were made to taper up from max(wealth) (receives $0) to min(wealth) (receives $average(wealth)), disparity would be brought to 0, which would naturally lead to everybody doing what they wanted rather than what earned them income. This would be a lot of fun, but it would unfortunately reduce the developmental value of humans to zero[2], and machines would evolve to replace us all (could be gray goo, could be the borg, etc.). The true path to freedom from work is to work collaboratively on a humanoid robot with some basic rules for human interaction: 1) A robot may not injure a human being or, through inaction, allow a human being to come to harm. 2) A robot must obey orders given it by human beings except where such orders would conflict with the First Law. 3) A robot must protect its own existence as long as such protection does not conflict with the First or Second Law. Those should suffice for a while, but I know not what will come of them down the line. That's all for now :) Have a great weekend, everyone! 1. http://www.physicsclassroom.com/class/newtlaws/Lesson-4/Newton-s-Third-Law http://www.physicsclassroom.com/class/newtlaws/Lesson-4/Newt... 2. http://econlog.econlib.org/archives/2011/05/robots_of_the_f.html http://econlog.econlib.org/archives/2011/05/robots_of_the_f....

harrumph 11y ago
Hahahahahahaha
deleted 11y ago
[deleted]
dragonwriter 11y ago
> When you give money to all poor people, the net result is simply inflation Obviously, redistributive tax + BI schemes that result in some group having more money than previously increases demand and market clearing prices for goods disproportionately demanded by that group (and does the reverse for goods disproportionately demanded by the people who are net payers.) So, clearly, the increase in effective buying power won't be as much as the increase in income compared to the pre-policy price levels would indicate. But that isn't sufficient to make the case that BI won't mitigate poverty, however. Just that the degree of mitigation will be less than the most naïve analysis conceivable might suggest. (Also, the link to Newton's third law to support this position was amusing.)

pdeuchler 11y ago

Giving money to the poor merely elevates those who received the money over a new generation of "poor" and does nothing to actually stop the systems that create poverty in the first place. If you would like to actually reduce the net amount of "poor people", instead of simply creating a revolving door for individuals, you give money to the middle class. Or, phrased differently: Give a man a fish and he eats for a day. Teach a man to fish and he feeds himself and his family while selling the excess for discretionary income :)

mangeletti 11y ago
+1, and if some of that discretionary income is saved, he can lease it out for rent (make loans). This trend can continue for generations until the snowball effect is such that majority of the world's wealth has been accumulated by about .001% of the population; but then, people will start talking about things like transfer payments[1] and basic income, etc. 1. https://en.wikipedia.org/wiki/Transfer_payment https://en.wikipedia.org/wiki/Transfer_payment
- pdeuchler 11y ago
  I get what you're saying, but you are also ignoring my point about bolstering the middle class. A large and healthy middle class not only precludes unhealthy amounts of poverty (please keep in mind there will always be a "bottom 16%" [aka falling below < -1σ] no matter the level of wealth) but also precludes large concentrations of wealth by the upper class. EDIT: replied before you finished your edit, I see we're actually in agreement. Carry on...
brandonmenc 11y ago
> Giving money to the poor merely elevates those who received the money over a new generation of "poor" and does nothing to actually stop the systems that create poverty in the first place. If "the system" is giving people money to raise them out of poverty, how can it simultaneously be a "system that creates poverty?" Your logic implies that there is enough work to go around, and that's increasingly seeming to be not the case - if there's not enough good paying work, that's not anyone's fault.

gesman 11y ago

When some people ask money to buy the food and you give them food - they are quite often disappointed and turn away. When some people ask money and you give them some money - they are quite often disappointed because you are not giving them enough.

alexnking 11y ago
This is like a company saying "I know employees need food, but instead of giving you money, you'll be compensated in hamburgers". I'm tired of this stereotypical judgement that poor people are so bad with money that we'd be better off generously making purchasing decisions for them.

alejohausner 11y ago

I think a lot of folks here are missing the big question: charity involves an exchange. When you give to the poor, you get something back. It's subtle: The issue is not about eliminating poverty. It's about how to motivate rich people to part with their money. After all, aid to the poor comes from taxes, and the rich pay more taxes. So any kind of welfare has to give the donors of the money something in exchange for their donation. But the poor have nothing to trade for what they receive. Right? Wrong. The poor have their dignity. That's what they trade for donations. Every scheme for wealth distribution is informed by that fact. Rich people give money, and poor people abase themselves in exchange. That's why every welfare scheme always involves humiliation. That's why government housing for the poor looks different from ordinary houses: so the poor will stand out, so they can be shamed. That's why poor people have to endure long lineups at the welfare office: so they can be reminded that they are less worthy of decent consideration. That's why poor people have to endure invasion of their most private aspects of their lives, through visits by social workers: so they can be reminded that they don't deserve privacy. And that's why the rich don't like giving out cash: because cash is anonymous, and enables dignity, equality, and privacy. As long as this implicit bargain (money in exchange for dignity) goes unexamined, the cruelty of the social welfare system will seem mysterious.