The article's title is misleading - it is not about not working, it's about giving money directly to poor villages for 12 years to provide what is similar to basic income but meeting fundamentally different needs in a very different part of the world. That said, I think it is a fascinating anthropological read.
We often do not realize how many layers of wealth we had to stand on to possess our current wealth.
What's most fascinating to me is the dollar amount: $22/month ==> $264/year. It's almost unfathomable from a Western perspective that this could cover someone's basic living expenses for a year.
I wish there were a simple way to participate as an individual. You don't have to be rich to cover one (or more) people's basic living expenses at this rate.
Yes. Recently I've been realizing that humans can live off of very little but we pay for a lot of things that aren't so obvious.
For instance, the people in the village were paying to get iron sheets for roof covers, and if you expense the cost over it's lifetime, it comes out to maybe an extra $1 a month. In the US, you pay $400-2000 a month in rent per person but you get a building that has central air, a solid roof, comes with a kitchen & bathroom with modern plumbing, fulfills building safety codes, and probably a lot more.
The people in the village were also buying access to wealth generation. One person went to invest in a fishing net and hired labor. He went from receiving $20 a month to potentially making $20 dollars a day. It underlines to me that investment is needed to unlock more productivity and better growth. It is sustained periods (decades) of this kind of continual investment that allows leap frogging from one income level to the next that turns a village into a modern city.
It's almost unfathomable from a Western perspective that this could cover someone's basic living expenses for a year.
That is, at least partially, because it can't cover someone's basic living expenses for a year. According to the World Bank, the global poverty line was US$1.90/day in 2015, after adjusting for purchasing power.[0] This amounts to $694/year or roughly $57/month. Of course, while it is possible that, after adjusting for purchasing power, those 2280 shillings amount to $60 or more of purchasing power.
I think most Western grocery bills amount to more than $60/person/month; never mind shelter and clothing. And yet, for all of our society's wealth, I wouldn't be surprised if the average Kenyan had a greater net worth than the average American. Without much wealth to speak of, access to debt is likely to be greatly limited.
Are you suggesting that the article is mistaken for calling this amount a basic income?
> The nonprofit is in the process of registering roughly 40 more villages with a total of 6,000 adult residents, giving those people a guaranteed, 12-year-long, poverty-ending income. An additional 80 villages, with 11,500 residents all together, will receive a two-year basic income. With this initiative, GiveDirectly — with an office in New York and funded in no small part by Silicon Valley — is starting the world’s first true test of a universal basic income.
In any case, the basic income is big enough to give people a lot more freedom and security than they had before. It's empowering.
Young people and whole villages can use it to bootstrap: things like proper cell service, internet, and healthy food become affordable where before they were not.
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GiveDirectly is my charity of choice right now. I have a $1000 monthly recurring with them.
The difference in cost of living between San Francisco and rural Kenya is vast. The upshot is that an amount that many of us here on HN can handle is life changing for a lot of people on the other end.
I live in a co-op, so I save more than that every month compared to many of my friends in rent alone, and still we all have ridiculously comfortable lives.
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Poverty exists here too, but a lot of it's entrenched and intractable. It has complex causes like bad urban design, bad schools, and political gridlock. It's hard to create improvement with a donation. It requires creative activism.
Rural Kenya and Uganda, on the other hand, have lots of communities full of bright young people where the main thing holding them back really is just an abject lack of resources.
That means there's an opportunity, and I think GiveDirectly is the best organization right now to take it.
- They are effective. They don't do virtue signaling. They don't helicopter in, build a cinderblock schoolhouse, and then pose for photos with smiling kids. They measure outcomes.
- They are efficient. They stick to cash transfers, the most direct way of giving. They track and advertise the fraction of their income that they lose to corruption and overhead. Most charities are worse on those metrics and don't talk about them.
- They are rational. They don't do sob stories. They don't spam. They are run like a startup, by economists.
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Be an activist locally. Be a donor globally. Many of us are extremely lucky and, by global standards, powerful. Wield it well :)
Yes. The region of Kenya described in the article is the Western part of the country near Lake Victoria. The national average monthly consumption per person in Kenya is 9,237 shillings.[0] 42% of the population of Kenya lives below the poverty line.[1] It is not a stretch to say that the poverty line in Kenya is going to be at least 6000 shillings a month, most likely closer to 7-8000 shillings per month. The 2280 shillings per month is great but it isn't a life-changing amount for a region where average monthly consumption is in the 6-8k shillings a month range. [0] It will most likely bring the poorest in this region up to the median level of wealth enjoyed by their neighbours.
Am I interpreting the data correctly to say this?: The 2280 shillings may provide (or very nearly provide) a poverty-ending income level in one of the poorest regions of Kenya relative to the local standard for poverty, however, this amount would be below the national standard poverty line. Or is that this amount eliminates extreme poverty but not all poverty?
I didn't see the specific region named in the NYT article.
The poorest regions of Kenya are the arid northern regions (per the Daily Nation article I linked above). Admittedly, I want to take that article with a grain of salt, but it does make sense to me that the most difficult regions to farm would be the poorest. This region near Lake Victoria probably around the middle of the pack when it comes to ranking regions of Kenya from rich to poor.
2280 shillings is about 28-38% of the amount needed to get above the (absolute) poverty line, with the true number likely being closer to the middle or lower end of that range. It likely brings the people whom they chose out of poverty and around on-par with their just-above-poverty neighbours but not much more. I'm inclined to believe that they chose a region of Kenya where there was a good mix of people living just below the poverty line and people living just above the poverty line for exactly this reason.
I'm not sure about the distinction between extreme poverty, regular poverty and a national standard poverty line (in Kenya). When so much of your population is in absolute poverty, I don't think that a national standard line makes much sense. It does, of course, make more sense in the developed world where shelter alone will cost more money than the median Kenyan spends in a year; the median Kenyan is not below the global poverty line.
From the NYT article:
Kogelo, where Obama’s father was born, is just 20 miles from the village, which lies close to the banks of Lake Victoria. (This is the first village mentioned)
We took off at dawn from Kisumu, a bustling industrial city on the banks of Lake Victoria, and followed a two-lane highway to Bondo, a small trading city filled with cattle, bicycles and roadside food stands. From there, we turned inland from the lake and drove into a lush agricultural region. (This is the second village mentioned)
All across the villages of western Kenya, it was clear to me just how much aid money was wasted on unnecessary stuff.
>It's almost unfathomable from a Western perspective that this could cover someone's basic living expenses for a year.
While the lifestyles of people in those countries probably are unfathomable to wealthy westerners, don't forget the cost of living is way lower too. Comparing the converted to dollars incomes is not enough to give one the right perspective on how much they can buy. On 264/year in the US one might literally starve to death; clearly the millions of citizens of those countries are not all starving to death. The cost of food, shelter, etc. are all lower in dollar terms in those countries. They are still impoverished in terms of material quality of life though, of course.
I remember that back in 1990 or so, here in Estonia, which was becoming independent from Soviet Union, my parents (a doctor and a historian) made about $20 per month in Western currency. That bought yo plenty of food and local produce, or anything locally made. Something imported was still just as much as it was in Western countries. Today the average monthly salary is about $1200.
As someone who occasionally publishes in minor publications, I know editors pick headlines and don't always do the best job of reflecting the content. I think editor's goal is to get as many people to read it as possible so they might take some liberties.
> In technical stuff I've written using feminine pronouns I've had editors change to masculine.
Speaking as someone who has had to write headlines, there can be very strict guidelines we have to adhere to. Masculine is still the default neutral in professional English, in a number of places I've worked at.
I agree, and I think the misleading headline is aligned with traditional resistance to consider BI as a serious economic policy.
In fact, what seems to be a common story in the article is that giving money directly in a way that is sustained over time allows people to plan long-term, stand on their feet and find better work or start businesses, making better long-term financial decisions to reverberate to the whole of the community.
The easy resistance to BI is to say that it will remove incentives to work, and that is what the headline seems to imply. The content of the article seems to suggest the opposite.
I came to the comments before reading precisely to find a post like this. So often these articles have a lofty title that is unrelated to the content, and I'm increasingly clicking on the comments first to verify the headline against the article.
As Milton Friedman would say we are standing on the shoulders of the giants. People who came to these shores with almost nothing and built this amazing economy.
You're standing on the shoulders of giants but not in the way that you think.
The modern anomalous rise in wealth is directly correlated to an increase in the use of fossil fuels since the beginning of the 20th century. So if you want to talk about giants, you should mean to say you're standing on the shoulders of trillions of carbon lifeforms condensed into coal, oil and natural gas over hundreds of hundreds of millions of years.
What people have accumulated in wealth between when life arose and 1850 is entirely insignificant than what was built in the last 167 years (roughly).
I am aware the original phrase belongs to someone else but mentioned milton here because he said in the exact specific context of economic situation in USA.
This is essentially describing charity to poor communities. That's not new. The article's connection between it and "basic income" is tenuous. To be fair, that's not the fault of the article as much as the program itself.
How is charity to poor rural communities with collectivist leanings a test of the vague notion of basic income? Or what will this program tell us about basic income in the US with 300 million people and a much higher standard of living?
Admirable social program, yes. A test of the viability of basic income worldwide? Not so much.
With each step, we shall come closer to a test which is applicable to the USA's poor. For now, we are establishing whether the concept works at all. The article described several previous tests, each of smaller scale and with flaws which this new test aims to eliminate.
This program will tell us what the next test should look like.
Do you mind pointing out where? I went back through the article and found:
With this initiative, GiveDirectly — with an office in New York and funded in no small part by Silicon Valley — is starting the world’s first true test of a universal basic income.
As you stated, there have been other attempts, so I don't know what the definition of "first true test" is.
A universal basic income has thus far lacked what tech folks might call a proof of concept. There have been a handful of experiments, including ones in Canada, India and Namibia. Finland is sending money to unemployed people, and the Dutch city Utrecht is doing a trial run, too. But no experiment has been truly complete, studying what happens when you give a whole community money for an extended period of time — when nobody has to worry where his or her next meal is coming from or fear the loss of a job or the birth of a child.
The Mincome experiment was 5-years. Why was it not "truly complete"?
That, surprisingly, worked well enough to give them the confidence to start a threadbare randomized control trial the year they graduated. It found that the recipients, who received an average of $500, saw excellent outcomes: Their children were 42 percent less likely to go a whole day without eating. Domestic-violence rates dropped, and mental health improved.
Not trying to be argumentative, just not sure what this is testing. What is it controlling for? What is it doing different from previous experiments? What does giving money to every person in a poor community tell you that giving money to poor people in a wealthy community doesn't?
These are very rural and impoverished communities by developed standards. Giving money to the poorest of the poor seems like an obvious improvement for them. What it doesn't say is how you can do it anywhere else.
Mincome guaranteed an income floor but it was not UBI. It was a means-tested income supplement to ensure that someone's income didn't fall below $16K year. If they already made $16K they didn't get any Mincome. If they made $8K, they got $8K Mincome.
GiveDirectly gives everyone in the community who registers $22 month. The amount doesn't go down if the person starts to independently generate income. It will be universal, not means-tested.
This isn't necessarily a better experiment, but it is a different one.
What does giving money to every person in a poor community tell you that giving money to poor people in a wealthy community doesn't?
Well, we don't know. Hence this experiment. Mincome, however successful, was basically a deluxe "welfare" program with all the negative baggage that comes with it. If we're giving a supplement to the poor, and taking away that supplement if they become wealthy, some argue it functions as a 100% tax on work, hence functioning as a disincentive. (That's in addition to the "disincentive" of not forcing poor people to work to meet their basic needs.) If you're in Mincome, why take an $8,000 yr. side job? It would be like working for free. But a person on GiveDirectly, if they get a $10/month side job, their total income will be $32. Side work will continue to be a financially productive investment. It's a different type of experiment.
It looks to me like you are correct the Canadian thing looks like a universal income. So it could be just a garden variety error on the part of the NYT journalist to say it was the first. I'm happy there are other tests going on. Maybe I'm a hopeless idealist but I've always been optimistic about the future but that optimism has been pushed to the wall lately. This was the first thing I've read I while that made me think maybe the future isn't going to be a total dystopian nightmare. Maybe there's hope.
No, it's not just "describing charity to poor communities". It's about efficiently jump-starting them. Sure, ~$1 per day is very little. But in Kenya, it's enough to start small businesses. And with no need assessment or repayment management, the overhead is very low. Also, I suspect that at least some successful recipients would willingly become donors, making the system somewhat self-supporting.
Average incomes in the US are much greater, for sure. But there are places in the US where average income is just as small, relative to the national average. And what will happen when trucking is fully automated? What would prevent parts of the US from becoming as impoverished as this area in Kenya?
A lovely asymmetry: econ research on people living in the west is assumed to be generalizable and applicable to populations worldwide, while research on non-westerners is assumed not to be general in scope...
I may be repeating myself but I think aid programs and welfare programs usually aren't as efficient as cash transfers and usually include a means test. The vision, at least, of this program is cash and no means test.
There's the classic problem of the leaky bucket, meaning that overhead drains some resources before they reach the problem itself. Cash is about as efficient as it gets.
Because it's cash on the barrelhead. Most aid of all sorts and most social safety net programs are not that straight forward. Also, universal basic income presumably won't penalize people for working or starting a business.
I don't understand your point with regard to charity. What's your objection if this is charity?
I understand your concern about messy legislation but is that an argument against it? I see your point, though. I'm guessing, possibly wrong, that the people involved in this have considered or at least will consider how this will be implemented and will fund lobbying to try to get this done as cleanly as possible. I realize I'm making some assumptions here but people aren't going to invest boatloads of money in testing a concept than just let it fail during deployment.
We often do not realize how many layers of wealth we had to stand on to possess our current wealth.