It’s an unprecedented – and massive – experiment: Since 2017 the U.S.-based charity GiveDirectly has been providing thousands of villagers in Kenya what’s called a “universal basic income” – a cash grant of about $50, delivered every month, with the commitment to keep the payments coming for 12 years. It is a crucial test of what many consider one of the most cutting-edge ideas for alleviating global poverty. This week a team of independent researchers who have been studying the impact released their first results.
I’m super curious what this would look like in a western country where poverty is different. It would need a lot more money for the equivalent payment so I guess Kenya is easier to find money for, but for example I wonder if people are as likely to start a new business or do we not have the same market gaps due to large companies or franchises filling those gaps?
There have been trials in Western countries. Ontario, Canada ran a basic income trial that was stunningly successful until a Conservative government came in and shut it down.
My favourite bit of data from that trial was that employment actually went up, not down. More people were working once they started just giving people money. The only exceptions were amongst mothers of newborn children, and students (y’know, people who have much better things to be doing than working).
Sadly it was only one town, but the results we got before it was shuttered absolutely proved that the concept worked.
Ooh, do you happen to have a link to that study? I’d like to keep that for when certain acquaintances of mine start about how it won’t work. Will be fun to see their mental gymnastics (assuming they read the report, which they probably won’t).
Maybe, we saw a huge recovery with relatively small amounts given to regular people (and ridiculous amounts given to businesses). I can only imagine what the PPP loans would have done for poverty had we just given them to poor people instead of rich people.
This is roughly the equivalent of giving an American ~$42k. I think that amount of money would have a huge impact on people’s well being.
Note: I looked up Kenya’s per capital GDP which is ~$2k USD. Based on on the article stating they received $50 per month, than means the lump sum was 60% of the GDP. 60% of the US’s GDP per capita is ~$42k
$50 per month is $600 per year, or %30 of GDP.
So $21,000 for an American. Still a significant amount.
But they gave them 2 years worth of funds, so you would double the number.
You should read about the UBI experiment done in Finland
Yeah, I think it’s a bit different. The Kenya study showed the monthly payments for 2 years was the least effective, which is what the Finland study did. The Finland one was also only a small number of people, where the Kenya one did entire villiages.
Giving the entire society the payments is different than only certain people, so I’m keen to see a wider scale trial in a western country.
Though with that said, western countries and NGOs may well be able to fund widescale UBI for developing countries, and that may be more worthwhile on a global scale.
good point. most small businesses have been eliminated in the u.s. by the walmarts and the targets and new ones would do no better at competing. but ‘uplifting’ that it may work in less developed more poverty stricken countries.
Any ubi experiment will have positive outcomes but when the bi is truly u, you will see inflation in a capitalist system. My hope is we use this knowledge to transition away from the false scarcity of our current systems.
In a Western setting, for this to work as intended you also have to knee cap billionaires with a wealth tax and break up mega corporations. No single human being needs or has any use for the equivalent of a billion dollars. Those who hoard wealth hurt economies by depriving society of monetary liquidity and productive transactions. So, they should pay for the damage they cause with progressively higher taxes. Mix this with UBI and you’ll see literally no inflation and a healthier more resilient economic system where people are happier, healthier and more productive. But this is socialism or something, so the US would rather drag the world back to the stone age than to give money to a homeless person.
I agree with this. It’s going to take generations to accomplish.