India's Experiment in Basic Income Grants
April 3, 2015 11:50 PM Subscribe
12 minute video on India’s Experiment in Basic Income Grants "cash transfers given to all citizens to ensure that they have a minimal income".
We studied the impact of the basic income grants over eighteen months, using randomized control trials (RCT) that compared the results in households and villages receiving basic incomes with the results in twelve other “control” villages where nobody received the basic incomes...(Previously 1, 2, 3, 4)
There was a shift from ration shops to markets...
Better health helped to explain the improved school attendance and performance...
The scheme had positive equity outcomes...
The basic income grants led to small-scale investments – more and better seeds, sewing machines, establishment of little shops, repairs to equipment...
Contrary to the skeptics, the grants led to more labor and work...
Those with basic income were more likely to reduce debt and less likely to go into greater debt...
I just don't see what it was supposed to prove, exactly.
There's this school of thought in international aid studies that direct income grant initiatives in developing countries are much more effective at combating poverty and preventing corruption than traditional aid programs that go through multiple layers of bureaucracy. It seems that when aid money goes directly to individuals, no only is there a decrease in individual poverty, but you start seeing communal improvements such as better food, sanitation, health, schooling, etc because people start pooling their resources. Even if each person's cash grant is small, the effects on a village can be profound in just a few years.
Studies like this one could radically change how billions of foreign aid money is managed in non-emergency situations. Ultimately, income grants could help millions out of poverty by empowering them on a individual and communal level.
posted by Foci for Analysis at 2:28 AM on April 4, 2015 [32 favorites]
There's this school of thought in international aid studies that direct income grant initiatives in developing countries are much more effective at combating poverty and preventing corruption than traditional aid programs that go through multiple layers of bureaucracy. It seems that when aid money goes directly to individuals, no only is there a decrease in individual poverty, but you start seeing communal improvements such as better food, sanitation, health, schooling, etc because people start pooling their resources. Even if each person's cash grant is small, the effects on a village can be profound in just a few years.
Studies like this one could radically change how billions of foreign aid money is managed in non-emergency situations. Ultimately, income grants could help millions out of poverty by empowering them on a individual and communal level.
posted by Foci for Analysis at 2:28 AM on April 4, 2015 [32 favorites]
Economists shocked to learn that the effects of poverty can be lessened by giving people money!
posted by Pope Guilty at 2:59 AM on April 4, 2015 [17 favorites]
posted by Pope Guilty at 2:59 AM on April 4, 2015 [17 favorites]
Heh, some economists. My first thought on reading the link was, "Oh, all those things Atrios has been saying about just giving people money for years."
posted by Drinky Die at 3:19 AM on April 4, 2015 [3 favorites]
posted by Drinky Die at 3:19 AM on April 4, 2015 [3 favorites]
If these grants became a regular practice ... price goes up. That's the way it works all over the world, but people often don't notice this.
TFA:
TFA:
6. The basic income grants led to small-scale investments – more and better seeds, sewing machines, establishment of little shops, repairs to equipment, and so on. This was associated with more production, and thus higher incomes. The positive effect on production and growth means that the elasticity of supply would offset inflationary pressure due to any increased demand for basic food and goods.posted by flabdablet at 3:37 AM on April 4, 2015 [7 favorites]
Another issue is that in every part of the world, fees are largely determined by how much money people make/have. So school fees for instance are as they are based on the income of the surrounding families. If these grants became a regular practice, the schools would simply raise their fees some because they now can. If they have bad intentions they'll do this for greed; if they have good intentions they'll do this because they figure they can now provide their students with more. Either way- price goes up. That's the way it works all over the world, but people often don't notice this.
I've seen this theory a couple of times on Metafilter and I'm not sure where it comes from. In simple mainstream economics, there is price competition: if one supplier raises their prices, consumers will just go to a competitor with lower prices. Marxist economics accepts this: in Marxism it's the relentless pressure of price competition that drives down wages to exploitative levels. More complex economic models acknowledge that markets are imperfect and that price competition can be weakened by factors like monopoly, cartels, and regulatory capture: but these are things that happen in particular circumstances and can be opposed, not the way it works all over the world.
This theory of profit margins always automatically rising doesn't seem to come from any school of economics that I've ever heard of, not even the fringe ("heterodox") ones.
posted by TheophileEscargot at 3:54 AM on April 4, 2015 [13 favorites]
I've seen this theory a couple of times on Metafilter and I'm not sure where it comes from. In simple mainstream economics, there is price competition: if one supplier raises their prices, consumers will just go to a competitor with lower prices. Marxist economics accepts this: in Marxism it's the relentless pressure of price competition that drives down wages to exploitative levels. More complex economic models acknowledge that markets are imperfect and that price competition can be weakened by factors like monopoly, cartels, and regulatory capture: but these are things that happen in particular circumstances and can be opposed, not the way it works all over the world.
This theory of profit margins always automatically rising doesn't seem to come from any school of economics that I've ever heard of, not even the fringe ("heterodox") ones.
posted by TheophileEscargot at 3:54 AM on April 4, 2015 [13 favorites]
If these grants became a regular practice ... price goes up
Also, this is SO typical econo-tard response. It's like, OH NOES, some inflation. Quick, put that back in the box, who cares if you were using it for education, sanitation and feeding your f'n family.
(ex-economist)
posted by Reasonably Everything Happens at 3:55 AM on April 4, 2015 [40 favorites]
Also, this is SO typical econo-tard response. It's like, OH NOES, some inflation. Quick, put that back in the box, who cares if you were using it for education, sanitation and feeding your f'n family.
(ex-economist)
posted by Reasonably Everything Happens at 3:55 AM on April 4, 2015 [40 favorites]
I suspect inflation and the Hawthorne effect are both things that would reduce the efficacy of this in a more widespread application. I also suspect that after accounting for it, it would still end up as the most effective poverty reduction strategy.
posted by ambrosen at 4:05 AM on April 4, 2015 [2 favorites]
posted by ambrosen at 4:05 AM on April 4, 2015 [2 favorites]
Inflation is like background EMF in that there's a bunch of people who don't understand that it's not inherently bad.
posted by Pope Guilty at 4:07 AM on April 4, 2015 [7 favorites]
posted by Pope Guilty at 4:07 AM on April 4, 2015 [7 favorites]
One can't view the whole world through the lens of domestic political squabbling. Leads to assumptions and ends up prejudicing worthy approaches that may be appropriate for an entirely different cultural and ideological climate.
An example would be the attempts to use abstinence as Aids prevention tool or, in this case, overlooking the decades of socialism (OMG better pink than dead or whatever the auto response is) that deliberately sought pro-poor policies
posted by infini at 4:08 AM on April 4, 2015 [2 favorites]
An example would be the attempts to use abstinence as Aids prevention tool or, in this case, overlooking the decades of socialism (OMG better pink than dead or whatever the auto response is) that deliberately sought pro-poor policies
posted by infini at 4:08 AM on April 4, 2015 [2 favorites]
Rancher, "In areas like these there are no fancy clothes shops or gadget stores or anything of the like, so there is no such temptation to spend on those things anyway. " - but what about alcohol and socialising? Even in tiny villages, there seems to be access and income spent significantly on alcohol, linked somewhat to socialising. If you have more money, you hold more celebrations for events, invite more people and increase your social standing. Spending money on social things like publically-seen almsgiving at temples/churches, splashy celebrations with big invitation lists and so on means building social capital long-term. If healthcare is free or unavailable as a large expense and consumer items aren't available, there's still social spending - my kid just participated in seven days of feasting visiting relatives recently in a dinky little farm with no sanitation in the back of nowhere because people came from all over for family visiting as there was spare cash to pay for transport/meals for hosting a big family gathering.
I love direct cash transfers because of the stability it provides, and the necessary Hawthorne effect resulting in people stopping to think and plan about their spending because they're being asked what to do about it, but I'm prejudiced because it has worked very well for some people I personally know, and doing it on an individual level is much harder practically and emotionally than on a state or organisational level in my direct experience.
posted by dorothyisunderwood at 4:15 AM on April 4, 2015 [2 favorites]
I love direct cash transfers because of the stability it provides, and the necessary Hawthorne effect resulting in people stopping to think and plan about their spending because they're being asked what to do about it, but I'm prejudiced because it has worked very well for some people I personally know, and doing it on an individual level is much harder practically and emotionally than on a state or organisational level in my direct experience.
posted by dorothyisunderwood at 4:15 AM on April 4, 2015 [2 favorites]
the basic idea of the basic income is that poor people wouldn't be poor if they could buy the goods and services they need on the market... not that the fundamental nature of the market is why they are poor.
it's a distillation of why liberals and the left are in fact opposite each other ideologically.
There's this school of thought in international aid studies that direct income grant initiatives in developing countries are much more effective at combating poverty and preventing corruption than traditional aid programs that go through multiple layers of bureaucracy.
because government is the problem, not the solution! scratch a basic income proposal and you find a little milton friedman homonuculus curled up inside.
posted by ennui.bz at 4:26 AM on April 4, 2015 [1 favorite]
it's a distillation of why liberals and the left are in fact opposite each other ideologically.
There's this school of thought in international aid studies that direct income grant initiatives in developing countries are much more effective at combating poverty and preventing corruption than traditional aid programs that go through multiple layers of bureaucracy.
because government is the problem, not the solution! scratch a basic income proposal and you find a little milton friedman homonuculus curled up inside.
posted by ennui.bz at 4:26 AM on April 4, 2015 [1 favorite]
if one supplier raises their prices, consumers will just go to a competitor with lower prices.
In these villages there are often no competitors to things like schools. The "private" schools you hear them mentioning in the videos are most likely run by charitable foreign organizations. At least that is often the case. Evangelical or Christian organizations will set up schools and though they do the best they can, they often do have to charge fees.
I've seen this theory a couple of times on Metafilter and I'm not sure where it comes from.
It comes from real life experience. One only needs to look at our own economy in the Western world. When more and more women began going to work and families started having two incomes instead of one, real estate shot up.... largely in part because landlords knew they could charge more than they had in the past where the norm was one income. However in larger economies like in the west this fact can sometimes be covered up by various other multitudes of the complex economy. In these villiages however, those complexities do not exist so it's much much easier to see it happen first hand right before your eyes as the years move forward.
Even in as small of an environment as a restaurant - it has been seen repeatedly that when managers find out their waiters are getting large tips, they respond by charging more for their food. Figuring, if their customers have enough to pay that much in tips, surely they can pay more for the food.
posted by rancher at 4:27 AM on April 4, 2015
In these villages there are often no competitors to things like schools. The "private" schools you hear them mentioning in the videos are most likely run by charitable foreign organizations. At least that is often the case. Evangelical or Christian organizations will set up schools and though they do the best they can, they often do have to charge fees.
I've seen this theory a couple of times on Metafilter and I'm not sure where it comes from.
It comes from real life experience. One only needs to look at our own economy in the Western world. When more and more women began going to work and families started having two incomes instead of one, real estate shot up.... largely in part because landlords knew they could charge more than they had in the past where the norm was one income. However in larger economies like in the west this fact can sometimes be covered up by various other multitudes of the complex economy. In these villiages however, those complexities do not exist so it's much much easier to see it happen first hand right before your eyes as the years move forward.
Even in as small of an environment as a restaurant - it has been seen repeatedly that when managers find out their waiters are getting large tips, they respond by charging more for their food. Figuring, if their customers have enough to pay that much in tips, surely they can pay more for the food.
posted by rancher at 4:27 AM on April 4, 2015
Inflation is like background EMF
No, it's really not. Especially for people like in this video, they have a highly attuned sensitivity to pricing and you can bet your ass they would quickly couple anything like that with the income.
The only way that it is like EMF is that there's a pretty good chance that the benefit of whatever is causing it is probably greater than the harm.
posted by Reasonably Everything Happens at 4:38 AM on April 4, 2015
No, it's really not. Especially for people like in this video, they have a highly attuned sensitivity to pricing and you can bet your ass they would quickly couple anything like that with the income.
The only way that it is like EMF is that there's a pretty good chance that the benefit of whatever is causing it is probably greater than the harm.
posted by Reasonably Everything Happens at 4:38 AM on April 4, 2015
So REH, to your mind inflation is always bad?
posted by Pope Guilty at 4:58 AM on April 4, 2015
posted by Pope Guilty at 4:58 AM on April 4, 2015
Inflation is like background EMF in that there's a bunch of people who don't understand that it's not inherently bad.
there's a difference between a price-wage spiral and the fact that cash transfers will change pricing in local markets, namely: there is no economic reason why the BI would increase in response to price increases for things like school and housing due to a having the BI... which gets to the core problem with the BI which is it's politics i.e. on what political and economic basis will a "democratic" capitalist government institute a BI?
In most areas of receiving international development aid, governance actually isn't good, and building good institutions is very, very difficult.
especially difficult if those institutions would stand in the way of resource grabs, regional military interventions, one-sided trade relationships, etc. But for Modi's India you are absolutely fooling yourself if you think basic income experiments aren't about dismantling what's left of Indian social democracy.
posted by ennui.bz at 5:27 AM on April 4, 2015
there's a difference between a price-wage spiral and the fact that cash transfers will change pricing in local markets, namely: there is no economic reason why the BI would increase in response to price increases for things like school and housing due to a having the BI... which gets to the core problem with the BI which is it's politics i.e. on what political and economic basis will a "democratic" capitalist government institute a BI?
In most areas of receiving international development aid, governance actually isn't good, and building good institutions is very, very difficult.
especially difficult if those institutions would stand in the way of resource grabs, regional military interventions, one-sided trade relationships, etc. But for Modi's India you are absolutely fooling yourself if you think basic income experiments aren't about dismantling what's left of Indian social democracy.
posted by ennui.bz at 5:27 AM on April 4, 2015
the basic idea of the basic income is that poor people wouldn't be poor if they could buy the goods and services they need on the market... not that the fundamental nature of the market is why they are poor.
it's a distillation of why liberals and the left are in fact opposite each other ideologically.
because government is the problem, not the solution! scratch a basic income proposal and you find a little milton friedman homonuculus curled up inside.
posted by ennui.bz at 7:26 AM on April 4 [1 favorite +] [!]
Then keep pounding away on the keyboard and keep planning the revolution which does nothing and helps no one except your own egos, and us liberals over here will be finding and planning ways to actually help people live better lives. I know which side I'm on.
posted by MisantropicPainforest at 5:35 AM on April 4, 2015 [10 favorites]
it's a distillation of why liberals and the left are in fact opposite each other ideologically.
because government is the problem, not the solution! scratch a basic income proposal and you find a little milton friedman homonuculus curled up inside.
posted by ennui.bz at 7:26 AM on April 4 [1 favorite +] [!]
Then keep pounding away on the keyboard and keep planning the revolution which does nothing and helps no one except your own egos, and us liberals over here will be finding and planning ways to actually help people live better lives. I know which side I'm on.
posted by MisantropicPainforest at 5:35 AM on April 4, 2015 [10 favorites]
But for Modi's India you are absolutely fooling yourself if you think basic income experiments aren't about dismantling what's left of Indian social democracy.
Don't know about the Indian experiment. In Pakistan, a similar program is the brainchild of the one populist party, the PPP, and for now, the effects seem to be quite positive.
posted by bardophile at 5:36 AM on April 4, 2015
Don't know about the Indian experiment. In Pakistan, a similar program is the brainchild of the one populist party, the PPP, and for now, the effects seem to be quite positive.
posted by bardophile at 5:36 AM on April 4, 2015
Pressed post too quickly. The support for the Benazir Income Support Program comes from Pakistan's left, rather than from liberals.
posted by bardophile at 5:37 AM on April 4, 2015
posted by bardophile at 5:37 AM on April 4, 2015
us liberals over here will be finding and planning ways to actually help people live better lives. I know which side I'm on.
but do you know which side you are on?
there's this persistent belief that somehow you can institute BI proposals without affecting coincident and older social welfare policies. but, in as much as supporters of BI have grandiose beliefs about it's effectiveness, what is the argument that you shouldn't replace other policies (i.e. food subsidies) with a BI? You end up supporting the friedmanites and other libertarians who want to dismantle the whole of idea of government social welfare... but you really really sincerely just want to make those poor peoples lives better so it doesn't matter.
posted by ennui.bz at 5:42 AM on April 4, 2015
but do you know which side you are on?
there's this persistent belief that somehow you can institute BI proposals without affecting coincident and older social welfare policies. but, in as much as supporters of BI have grandiose beliefs about it's effectiveness, what is the argument that you shouldn't replace other policies (i.e. food subsidies) with a BI? You end up supporting the friedmanites and other libertarians who want to dismantle the whole of idea of government social welfare... but you really really sincerely just want to make those poor peoples lives better so it doesn't matter.
posted by ennui.bz at 5:42 AM on April 4, 2015
Its not about winning an argument, its about making peoples lives better.
And you do realize that there is a wealth of experimental evidence that this works, right? its not some made up thing that liberals use to massage their egos.
Can I just restate your argument so I get it right: we shouldn't use direct cash transfers because libertarians could use their existense to distmantle government social welfare?
posted by MisantropicPainforest at 5:52 AM on April 4, 2015 [9 favorites]
And you do realize that there is a wealth of experimental evidence that this works, right? its not some made up thing that liberals use to massage their egos.
Can I just restate your argument so I get it right: we shouldn't use direct cash transfers because libertarians could use their existense to distmantle government social welfare?
posted by MisantropicPainforest at 5:52 AM on April 4, 2015 [9 favorites]
Another issue is that in every part of the world, fees are largely determined by how much money people make/have. So school fees for instance are as they are based on the income of the surrounding families. If these grants became a regular practice, the schools would simply raise their fees some because they now can. If they have bad intentions they'll do this for greed; if they have good intentions they'll do this because they figure they can now provide their students with more. Either way- price goes up. That's the way it works all over the world, but people often don't notice this.
Just like the way we raise taxes on the rich because we can. Oh wait, silly me, theoretical economic abstractions only apply to the 99%.
posted by srboisvert at 6:14 AM on April 4, 2015 [1 favorite]
Just like the way we raise taxes on the rich because we can. Oh wait, silly me, theoretical economic abstractions only apply to the 99%.
posted by srboisvert at 6:14 AM on April 4, 2015 [1 favorite]
Damn. I'm all emotional now. I guess that was the point of the video too, but there's something about people going all "I bought myself teeth", "I bought a sewing machine for my unemployed daughter" that really gets to me.
posted by ipsative at 6:46 AM on April 4, 2015 [2 favorites]
posted by ipsative at 6:46 AM on April 4, 2015 [2 favorites]
ennui.bz, basic guaranteed incomes have been studied before. The results are always the same: improved health, happier people, not fucking worrying about roofs over heads or food on tables or heat or electricity or water.
Extending a livable basic income to everyone would, yes, necessarily lead to dismantling many social benefits. Because they won't be needed. The only thing I can think of that would need to stay is disability programs, at a higher rate than guaranteed income, because most people can work--and the studies that have been done before show that workforce participation drops only slightly, and it drops in people for whom it is a societal good to not be working: highschool students and new mothers. (Stipulating that said studies took place in a time when women were expected to stay home with children by default; these days we'd probably see some men staying home depending on circumstances.)
Basic/MINCOME/call-it-what-you-will is not a new concept. We don't have 'grandiose beliefs,' we have actual hard data. One study was done over five years in Manitoba, another compared programs in Seattle and Denver.
The bottom line is this: if you put money in the hands of people who have little to none, they will spend it, because they need to. This has beneficial knock-on effects for society.
posted by feckless fecal fear mongering at 6:49 AM on April 4, 2015 [30 favorites]
Extending a livable basic income to everyone would, yes, necessarily lead to dismantling many social benefits. Because they won't be needed. The only thing I can think of that would need to stay is disability programs, at a higher rate than guaranteed income, because most people can work--and the studies that have been done before show that workforce participation drops only slightly, and it drops in people for whom it is a societal good to not be working: highschool students and new mothers. (Stipulating that said studies took place in a time when women were expected to stay home with children by default; these days we'd probably see some men staying home depending on circumstances.)
Basic/MINCOME/call-it-what-you-will is not a new concept. We don't have 'grandiose beliefs,' we have actual hard data. One study was done over five years in Manitoba, another compared programs in Seattle and Denver.
The bottom line is this: if you put money in the hands of people who have little to none, they will spend it, because they need to. This has beneficial knock-on effects for society.
posted by feckless fecal fear mongering at 6:49 AM on April 4, 2015 [30 favorites]
I'm all for it. It's inhuman to make these people live in poverty. Simple. This has been a dark age in economics.
posted by brainimplant at 6:52 AM on April 4, 2015 [8 favorites]
posted by brainimplant at 6:52 AM on April 4, 2015 [8 favorites]
the basic idea of the basic income is that poor people wouldn't be poor if they could buy the goods and services they need on the market... not that the fundamental nature of the market is why they are poor.
Markets have a number of fundamental features. I don't believe they have a fundamental nature, singular.
One of the fundamental features of a market is that it devolves decision-making to the greatest possible extent. That's a good thing, because nobody really enjoys being told what they must do; people are generally less unhappy to operate under resource constraints than to have fundamental life choices dictated to them by other people.
Another fundamental feature of a market is that free exchanges of value for value benefit both parties. If you want my computer repair skills more than you want that six-pack in your refrigerator, and I want the six-pack more than I want to keep my next half-hour free, an exchange leaves us both better off. The ability to make such exchanges as and when we both see fit is clearly a good thing.
Another fundamental feature of a market is that it naturally operates as a wealth multiplier: people who enter a market with more end up with much more. That wouldn't be a bad thing, except that once people have much much much more, they (a) become politically powerful (b) tend to treat people who have much much much less as morally inferior and/or unworthy of consideration and (c) start to behave as if whatever marketplace they're getting wealthy within is an absolute good in its own right, regardless of the effects that their activities might be having on people not participating directly in that market's transactions.
It seems to me that one way to keep the good features while limiting the damage done by the bad ones would be to make markets more "leaky": the more money involved in any given market transaction, the higher should be the proportion of that transaction that ends up diverted away from the transacting parties and sprayed around indiscriminately. I can see no reason why such an arrangement should be conceptualized as "theft" to any greater extent than the existing rules around private property generally.
The amount of money a person has is a measure of the extent to which society as a whole recognizes that person's entitlement to choose what to do. If the rules were set up in such a way that concentration of wealth via the exercise of market power spread that entitlement around more widely than it does now, I think we'd all be better off.
posted by flabdablet at 6:53 AM on April 4, 2015 [15 favorites]
Markets have a number of fundamental features. I don't believe they have a fundamental nature, singular.
One of the fundamental features of a market is that it devolves decision-making to the greatest possible extent. That's a good thing, because nobody really enjoys being told what they must do; people are generally less unhappy to operate under resource constraints than to have fundamental life choices dictated to them by other people.
Another fundamental feature of a market is that free exchanges of value for value benefit both parties. If you want my computer repair skills more than you want that six-pack in your refrigerator, and I want the six-pack more than I want to keep my next half-hour free, an exchange leaves us both better off. The ability to make such exchanges as and when we both see fit is clearly a good thing.
Another fundamental feature of a market is that it naturally operates as a wealth multiplier: people who enter a market with more end up with much more. That wouldn't be a bad thing, except that once people have much much much more, they (a) become politically powerful (b) tend to treat people who have much much much less as morally inferior and/or unworthy of consideration and (c) start to behave as if whatever marketplace they're getting wealthy within is an absolute good in its own right, regardless of the effects that their activities might be having on people not participating directly in that market's transactions.
It seems to me that one way to keep the good features while limiting the damage done by the bad ones would be to make markets more "leaky": the more money involved in any given market transaction, the higher should be the proportion of that transaction that ends up diverted away from the transacting parties and sprayed around indiscriminately. I can see no reason why such an arrangement should be conceptualized as "theft" to any greater extent than the existing rules around private property generally.
The amount of money a person has is a measure of the extent to which society as a whole recognizes that person's entitlement to choose what to do. If the rules were set up in such a way that concentration of wealth via the exercise of market power spread that entitlement around more widely than it does now, I think we'd all be better off.
posted by flabdablet at 6:53 AM on April 4, 2015 [15 favorites]
But for Modi's India you are absolutely fooling yourself if you think basic income experiments aren't about dismantling what's left of Indian social democracy.
Yes, on the surface of the underlying motivations, yes.
but "India" is a multi headed hydra and has survived teh depredations of those at the helm
The concept of "Aam Aadmi" is in many ways no different than mom and apple pie. And as easily dismantled.
posted by infini at 7:56 AM on April 4, 2015 [1 favorite]
Yes, on the surface of the underlying motivations, yes.
but "India" is a multi headed hydra and has survived teh depredations of those at the helm
The concept of "Aam Aadmi" is in many ways no different than mom and apple pie. And as easily dismantled.
posted by infini at 7:56 AM on April 4, 2015 [1 favorite]
Near the end of the video, one of the women being interviewed says "Fools will remain foolish, but the wise ones will make good use of the money for their work." Which sounds about right.
Not to mention, the amount of money having this impact is, by the standards of anyone posting on Metafilter, tiny. Rs 200 is, what, less than four dollars? These people were able to make major, lasting changes in their lives for about forty dollars each, over the course of the year.
posted by nonasuch at 8:08 AM on April 4, 2015
Not to mention, the amount of money having this impact is, by the standards of anyone posting on Metafilter, tiny. Rs 200 is, what, less than four dollars? These people were able to make major, lasting changes in their lives for about forty dollars each, over the course of the year.
posted by nonasuch at 8:08 AM on April 4, 2015
Inflation is largely irrelevant. Inequality otoh has a huge impact on health, schooling, small business investment, labor productivity, etc. so your economic theories break down. A basic income levels the playing field so that capitalism can actually work.
posted by jeffburdges at 8:16 AM on April 4, 2015 [1 favorite]
posted by jeffburdges at 8:16 AM on April 4, 2015 [1 favorite]
Doesn't some of this rely on working capitalist infrastructure (meaning that somewhat free markets already exist?)
Otherwise, cash grants without discretionary spending ability seems like a road to an outcome that would be just another on this old foreign aid joke, quoted from NYT:
posted by lon_star at 9:13 AM on April 4, 2015 [1 favorite]
Otherwise, cash grants without discretionary spending ability seems like a road to an outcome that would be just another on this old foreign aid joke, quoted from NYT:
Many Asian nations were famously corrupt while channeling substantive resource to build out their infrastructure and health systems. There’s an old development joke about a couple wealthy guys – one from Africa, one from Asia – who go to university together and years later meet up in their respective nations. The African arrives at the Asian’s residence – a massive estate with a few smart cars in the driveway and remarks, “You’ve done well, how’d you do it?” The friend replies, “You notice that superhighway you rode in on from the airport?” “Yes, it was stunning!” “5 percent of that project went in my pocket.” A few months later the Asian finds himself in Africa and heads out to his friend’s residence. It’s gigantic with dozens of Rolls Royces and sports cars scattered around. “Wow, I thought I had done well, but you’ve certainly beaten me. How’d you do it?” The African responds: “See that superhighway you rode in on?” “No,” he replies, “The road was atrocious!” “Ahh,” replies the African, “100 percent of that project in my pocket!”http://kristof.blogs.nytimes.com/2014/10/16/step-one-to-fighting-ebola-start-with-corruption/
posted by lon_star at 9:13 AM on April 4, 2015 [1 favorite]
Y'all forgetting this isn't about money, it's about moral worth. To most rich people, economists, yuppies, libertarians, and assholes everywhere, their wealth isn't about money, god no, it's about being "worthy". Being wealthy is just a by-product of bein Morally Righteous, and if you're poor, well, there must be a reason. Bootstraps, all that.
You cannot just hand out worthiness! It must be done so grudgingly and with as much humiliation as possible.
Plus, how can we make sure as much of the money designated just makes it back into the well-off who administer programs if we just hand out cash?
posted by maxwelton at 9:15 AM on April 4, 2015 [10 favorites]
You cannot just hand out worthiness! It must be done so grudgingly and with as much humiliation as possible.
Plus, how can we make sure as much of the money designated just makes it back into the well-off who administer programs if we just hand out cash?
posted by maxwelton at 9:15 AM on April 4, 2015 [10 favorites]
Friend of mine in college offered the opinion that instead of bombs, American war planes operating over third world countries should just drop the monetary value of each bomb in $1 bills.
I've long since thought that would be an interesting thing to try.
posted by flabdablet at 9:29 AM on April 4, 2015 [22 favorites]
I've long since thought that would be an interesting thing to try.
posted by flabdablet at 9:29 AM on April 4, 2015 [22 favorites]
"Fools will remain foolish, but the wise ones will make good use of the money for their work."
The problem here is that too many people believe all the poor are fools. There couldn't possibly be smart responsible people who happen to also be poor. That is kind of an extreme but even most people believe that there are too many fools for something like this to work in the US, which is really too bad because I want to see what would happen and I don't see the harm in trying.
posted by LizBoBiz at 9:29 AM on April 4, 2015 [4 favorites]
The problem here is that too many people believe all the poor are fools. There couldn't possibly be smart responsible people who happen to also be poor. That is kind of an extreme but even most people believe that there are too many fools for something like this to work in the US, which is really too bad because I want to see what would happen and I don't see the harm in trying.
posted by LizBoBiz at 9:29 AM on April 4, 2015 [4 favorites]
what is the argument that you shouldn't replace other policies (i.e. food subsidies) with a BI?
I don't consider myself a libertarian, but what is that argument? Because the way food subsidies exist in its current form, I can't think of a more paternalistic, wasteful, humiliating way to provide food to those that need it, from beginning to end, and replacing that system with BI sounds great.
Food subsidies benefits are already difficult to get. You start with the byzantine bureaucracy and the rules that govern it, and the money spent to administer to process applications and benefits and ensure people lose them quickly for the slightest of infractions. Then the drug tests. Then the humiliation of shopping at the grocery store with food stamps where it's made well known to everyone in line behind you you're using welfare checks. Then the actual limitations of the food that you can buy with the subsidies, that are actually there to prop up your domestic agricultural industries and further enforce moral views about what poor people can and cannot eat - not actually help people.
That isn't to say that our politicians wouldn't fuck up a BI proposal with the same sort of dumb politics and hoop jumping, but as proposed, a basic minimum income (that everyone gets, not just the poor), I have zero problems replacing the current system of food subsidies we have with a basic income.
posted by Karaage at 10:18 AM on April 4, 2015 [7 favorites]
I don't consider myself a libertarian, but what is that argument? Because the way food subsidies exist in its current form, I can't think of a more paternalistic, wasteful, humiliating way to provide food to those that need it, from beginning to end, and replacing that system with BI sounds great.
Food subsidies benefits are already difficult to get. You start with the byzantine bureaucracy and the rules that govern it, and the money spent to administer to process applications and benefits and ensure people lose them quickly for the slightest of infractions. Then the drug tests. Then the humiliation of shopping at the grocery store with food stamps where it's made well known to everyone in line behind you you're using welfare checks. Then the actual limitations of the food that you can buy with the subsidies, that are actually there to prop up your domestic agricultural industries and further enforce moral views about what poor people can and cannot eat - not actually help people.
That isn't to say that our politicians wouldn't fuck up a BI proposal with the same sort of dumb politics and hoop jumping, but as proposed, a basic minimum income (that everyone gets, not just the poor), I have zero problems replacing the current system of food subsidies we have with a basic income.
posted by Karaage at 10:18 AM on April 4, 2015 [7 favorites]
Inflation is like background EMF in that there's a bunch of people who don't understand that it's not inherently bad.
When trying to explain social phenomena, it's always useful to ask "Who benefits?"
Inflation tends to benefit debtors and hurt lenders. You ought not be surprised that powerful groups are paranoid about even the possibility of a little inflation.
posted by LastOfHisKind at 10:52 AM on April 4, 2015 [7 favorites]
When trying to explain social phenomena, it's always useful to ask "Who benefits?"
Inflation tends to benefit debtors and hurt lenders. You ought not be surprised that powerful groups are paranoid about even the possibility of a little inflation.
posted by LastOfHisKind at 10:52 AM on April 4, 2015 [7 favorites]
Friend of mine in college offered the opinion that instead of bombs, American war planes operating over third world countries should just drop the monetary value of each bomb in $1 bills.
I've long since thought that would be an interesting thing to try.
But then they would be SO much richer than us...if they didn't die from being buried under money.
posted by sexyrobot at 11:02 AM on April 4, 2015
I've long since thought that would be an interesting thing to try.
But then they would be SO much richer than us...if they didn't die from being buried under money.
posted by sexyrobot at 11:02 AM on April 4, 2015
fuck up a BI proposal with the same sort of dumb politics and hoop jumping
If it has hoop jumping, it isn't a BI. That's kind of the point.
posted by flabdablet at 11:02 AM on April 4, 2015
If it has hoop jumping, it isn't a BI. That's kind of the point.
posted by flabdablet at 11:02 AM on April 4, 2015
This puts me in the mood to tell y'all about the Asian Infrastructure Investment Bank. Lemme go rustle up some mozzarella, tomato & avocado drizzled with sesame oil first.
posted by infini at 11:15 AM on April 4, 2015
posted by infini at 11:15 AM on April 4, 2015
I now like the idea of describing it as a dividend instead of an income. Humans can no longer go into the wilds and carve out a farm or live off the land. It shouldn't be just the land owners and the wealthy who receive the benefits of our civilization.
posted by GregorWill at 1:27 PM on April 4, 2015 [5 favorites]
posted by GregorWill at 1:27 PM on April 4, 2015 [5 favorites]
GregorWill: Thomas Paine made the same basic argument in 'Agrarian Justice'. Where he was proposing, basically, a Social Security style pension fund for the elderly and the disabled, paid for out of estate taxes with the justification that civilization owed compensation to people for the dispossession of their natural right to the earth that occurred with cultivation and farming.
posted by Grimgrin at 2:38 PM on April 4, 2015 [3 favorites]
posted by Grimgrin at 2:38 PM on April 4, 2015 [3 favorites]
Its not about winning an argument, its about making peoples lives better.
And it's more and more pressing that the experiments are done to find out what's most effective and corruption-free.
Because automation is increasing and robots are on the way. And without income, "leisure" is another name for death.
posted by Twang at 3:14 PM on April 4, 2015 [3 favorites]
And it's more and more pressing that the experiments are done to find out what's most effective and corruption-free.
Because automation is increasing and robots are on the way. And without income, "leisure" is another name for death.
posted by Twang at 3:14 PM on April 4, 2015 [3 favorites]
After somewhat strange attempts at counter-argument, great points being made in this thread. Thank you snickerdoodle for sharing your moving personal experience that exactly backs up the point.
BI may have some downsides and unintended consequences, sure, but it seems by far the best, and the way things are going, only, option.
posted by blue shadows at 4:36 PM on April 4, 2015
BI may have some downsides and unintended consequences, sure, but it seems by far the best, and the way things are going, only, option.
posted by blue shadows at 4:36 PM on April 4, 2015
also btw...
just as a point of hopeful clarification i don't think the (false ;) gov't vs. markets dichotomy is very helpful given there are 'technological' prerequisites for each to work effectively (and in tandem) and the mixed economies that most of the world finds itself in -- with n.korea and somalia at either ends? -- function better or worse _for the majority_ (with minority protections?) given their respective institutions of legitimacy, accountability and regulation.
so to take a relevant example that i find interesting at least is the idea of gov't-issued money (used for market transactions and to pay taxes) with the centralplanning committee bank setting the price of money to those with access at zero (or negative)* [1,2,3] which in effect: "The International Monetary Fund has estimated that the big US banks received possibly more than all of their profits from the implicit subsidies associated with being 'too important to fail', as opposed to actually producing anything of value."
that is, for those following along, direct cash transfers or a basic income for the banking system of tens of billions of dollars every year. that is why i think it behooves us to end banking and implement a quantitative easing for the people.
---
*fwiw, i think a negative 'natural' rate of interest speaks to milton friedman's (redistributive!) negative income tax proposal :P oh and speaking of the increasing elision between monetary and fiscal policy... under secular stagnation: "So Ben Bernanke, the former central banker, sees monetary policy and structural reforms as the way forward. Larry Summers, the former Treasury Secretary, sees fiscal policy as the way forward."
cf. Politicians or Technocrats: Who Splits the Cake? "Monetary policymakers can no longer ignore the distributional effects of monetary policy -- and neither can voters and politicians."
posted by kliuless at 11:11 PM on April 4, 2015 [3 favorites]
- Audacity in India: Significant steps towards reform - "Here the fingerprints of Arvind Subramanian, the former IMF staffer who is the government's chief economic adviser, are clearly visible. He has advocated such a policy since long before low prices made it a politically easier measure to take. (He has also recommended direct distribution of natural resource revenues to the public in resource-rich countries, another excellent idea.)"
- Free Lunch: God's work - "Early research on which the boasts of microfinance were based has been discredited... "
- Bill Gates on Mobile Banking: A big bet on improving the lives of the poor - "The Gates Foundation has a video of transactions in the undeveloped world five years from now that seems much more advanced than what’s in the United States now. Will poorer African and Asian countries actually leapfrog us by widely adopting these mobile transactions first?" viz. Bill Gates at [the SWIFT International Banking Operations Seminar]: Banking is Changing
- Surprising political momentum for a basic income: The most exciting proposal of the GOP presidential campaign so far - "Marco Rubio and Mike Lee proposed a seemingly technical change that could be the start of something much, much bigger."
The Economist a while back wrote this good introduction to cash transfer programmes. They started some 15-20 years ago in Mexico's Progresa (later renamed Oportunidades) programme and Brazil's Bolsa Família. The original design would give regular cash payments to poor families with some simple conditions on children's school and health check attendance. There is by now overwhelming evidence that such programmes do a lot of good, and they have accordingly been implemented in dozens of countries.
The latest generation of cash transfer approaches drop even these conditions. The reasoning is that if poverty is a problem of lack of resources, then provide the resources and trust the poor to put them to good use. One should expect some difference from conditional models, of course: incentives work. One study found, unsurprisingly, that dropping a school attendance condition meant dropout rates did not fall - but in turn it did more to help those who did drop out of school.
Unconditional cash transfers have extraordinarily positive effects. A carefully run study in Kenya found that the windfall of free cash to the poor was not, as some might have feared, wasted. If it was not spent on necessities, it was saved and invested in capital goods such as better housing or livestock. The cash transfer programme led to higher consumption, less hunger, more psychological wellbeing and, most amazingly, greater investment and revenue from small business activity. In other words, just what microfinance had promised to do.
In the rich world the switch to pure digital, which should have a lower fee structure, hasn’t happened. The average transaction size is high, partly because of the complicated way that banks have bundled products together. Our challenge is to make very small transactions, well under a dollar, be able to happen in huge volume and yet bear less than a two percent fee. So we’re a little bit more demanding. It does mean there’s a chance in some of these [other] countries—particularly if we get this thing to critical mass in India. Our top two priorities, although we’re working in dozens of countries, the two that we’re putting the most resources into right now are India and Nigeria. If we got to critical mass in those two countries, that would be really dramatic.
just as a point of hopeful clarification i don't think the (false ;) gov't vs. markets dichotomy is very helpful given there are 'technological' prerequisites for each to work effectively (and in tandem) and the mixed economies that most of the world finds itself in -- with n.korea and somalia at either ends? -- function better or worse _for the majority_ (with minority protections?) given their respective institutions of legitimacy, accountability and regulation.
so to take a relevant example that i find interesting at least is the idea of gov't-issued money (used for market transactions and to pay taxes) with the central
that is, for those following along, direct cash transfers or a basic income for the banking system of tens of billions of dollars every year. that is why i think it behooves us to end banking and implement a quantitative easing for the people.
---
*fwiw, i think a negative 'natural' rate of interest speaks to milton friedman's (redistributive!) negative income tax proposal :P oh and speaking of the increasing elision between monetary and fiscal policy... under secular stagnation: "So Ben Bernanke, the former central banker, sees monetary policy and structural reforms as the way forward. Larry Summers, the former Treasury Secretary, sees fiscal policy as the way forward."
cf. Politicians or Technocrats: Who Splits the Cake? "Monetary policymakers can no longer ignore the distributional effects of monetary policy -- and neither can voters and politicians."
posted by kliuless at 11:11 PM on April 4, 2015 [3 favorites]
kliuless, keep the gates out of my sight, thanks.
In the meantime, what looks to be an interesting book review, covering many of the issues raised in this thread.
posted by infini at 2:27 AM on April 5, 2015
In the meantime, what looks to be an interesting book review, covering many of the issues raised in this thread.
posted by infini at 2:27 AM on April 5, 2015
Not to mention, the amount of money having this impact is, by the standards of anyone posting on Metafilter, tiny. Rs 200 is, what, less than four dollars? These people were able to make major, lasting changes in their lives for about forty dollars each, over the course of the year.
Thank you for articulating this. I just got back from my first trip to India, and I found it sobering to see the number of people whose lives could be drastically improved by the purchase of a new tarp to cover the roof of the paper shack they were living in. I read so many travel guides and forums before I went, and they're full of "don't let the bike rickshaw guy rip you off - if you pay more than Rs 20 he's practically stealing from you". I can personally afford to pay the bike rickshaw guy a dollar instead of 32 cents.
I totally get that it's not as easy as handing people money, but look at the good that can be done by handing people money.
posted by ersatzkat at 5:19 AM on April 5, 2015 [2 favorites]
Thank you for articulating this. I just got back from my first trip to India, and I found it sobering to see the number of people whose lives could be drastically improved by the purchase of a new tarp to cover the roof of the paper shack they were living in. I read so many travel guides and forums before I went, and they're full of "don't let the bike rickshaw guy rip you off - if you pay more than Rs 20 he's practically stealing from you". I can personally afford to pay the bike rickshaw guy a dollar instead of 32 cents.
I totally get that it's not as easy as handing people money, but look at the good that can be done by handing people money.
posted by ersatzkat at 5:19 AM on April 5, 2015 [2 favorites]
it's not just gates [pdf; 1,2,3]
-Democracy, Inclusion, and Prosperity [pdf]
-Indian Central Banker Ranges Far From Monetary Policy to Shape Nation's Debates
-Rajan’s Wins at India’s Central Bank Hint at Broader Ambitions
posted by kliuless at 9:54 AM on April 5, 2015
- Mobile group Bharti Airtel to apply for limited banking licence: "Bharti Airtel, India’s leading telecoms operator by revenue, has announced plans to apply for a limited banking licence, in a potential breakthrough for the country’s under-developed mobile-banking industry."
- Indian billionaire Ambani pushes into banking: "Mukesh Ambani, India's richest man, may be about to enter the banking business - following hot on the heels of telecoms tycoon, Sunil Bharti Mittal."
-Democracy, Inclusion, and Prosperity [pdf]
-Indian Central Banker Ranges Far From Monetary Policy to Shape Nation's Debates
-Rajan’s Wins at India’s Central Bank Hint at Broader Ambitions
posted by kliuless at 9:54 AM on April 5, 2015
True but they've taken a trend that's been visible for almost 10 years and pwned it.
posted by infini at 10:29 AM on April 5, 2015
posted by infini at 10:29 AM on April 5, 2015
vendor financing goes back a long way :P the revolution will come when _they_ we the people vote to hook it up to central banking an ATM at the fed![pdf; 1,2,3] with the gov't as 'vendor' (which of course it already is!)
#endofbanking, pg. 160:
-Should central banks adopt a green agenda?
-How to eat a banker’s lunch
-The Rise of the Tech Model May Soon Make You Obsolete
-The Future of Fintech and Banking
-An Uber-Type Situation In Financial Services
-The One Bank [of England] Research Agenda Launch
posted by kliuless at 12:21 PM on April 5, 2015 [2 favorites]
#endofbanking, pg. 160:
A functioning price system is a classic public good, as undistorted prices are neither rivalrous nor excludable. Besides its public-good character, a functioning price system is also a network good. As such, the provision of a price system can be considered a natural monopoly. One functioning price system is more efficient than many price systems. Both network effects and the public-good nature of a functioning price system suggest that organizing money is a public affair.also btw...
Monetary policy is already in public hands today. Yet, it has to be adapted to a financial system without banking. The currently used tools of monetary policy are no longer an option. In a financial system without banking, central banking makes no sense. There is no reason for a central bank to act as a lender of last resort and to offer privileged access to money to a selected group of private institutions. Both the tools of monetary policy and the institutional setup of the monetary authority need to be reconsidered.
-Should central banks adopt a green agenda?
We know central banks have the power to support asset classes and to move markets, and do so frequently in the name of financial stability.-The BoE on fundamental digital change in central banking
But are there other social threats that could be stabilised or mitigated by central banks in a similar way?
For example, should central bank monetary policy be charged with a green agenda? Should central banks take it upon themselves to encourage and support the formation of liquid environmentally-focused markets?
-How to eat a banker’s lunch
-The Rise of the Tech Model May Soon Make You Obsolete
"We write algorithms that take observational data from satellites, pixels, and turn them into real-time insights about our world. The applications for this technology extend from farming to government and, as you might expect, finance. We've got hedge funds knocking on our door almost every day, but our ambitions will take us far beyond the business of investing."-Disrupting Banking: The FinTech Startups That Are Unbundling Wells Fargo, Citi and Bank of America
"We use artificial intelligence, via evolutionary algorithms, to explain and predict complex ecosystems, such as patient outcomes in health care. Our platform does a good job of predicting financial markets. Still, we're not interested in being a financial services company in the long run. We're interested in explaining complexity and predicting successful outcomes in a range of domains."
"We model trust among entities in a network by examining social connections, online interactions and backgrounds. Our ability to predict trust- and creditworthiness will have a huge impact on the peer-to-peer industry that's developing, such as in ride sharing or apartment renting. And, of course, it'll also create a massive opportunity in financial services, but that's not our focus."
-The Future of Fintech and Banking
-An Uber-Type Situation In Financial Services
-The One Bank [of England] Research Agenda Launch
posted by kliuless at 12:21 PM on April 5, 2015 [2 favorites]
Make an FPP, this thread is about Basic Income Grants. Not "financial inclusion", "banking the unbanked" or " sub prime microfinancing" as brought to you by MsaterCrad and the Doors
posted by infini at 12:42 PM on April 5, 2015
posted by infini at 12:42 PM on April 5, 2015
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-knew that the money would run out in a year and therefore had to invest wisely.
-were constantly being interviewed and therefore understood their spending was being put under a microscope.
My grandparents & parents grew up in similar circumstances to the people in the video so I remember the first years of my life where there was no toilet in the home and the only "toilet" was a large pit in the ground about 20 yards away from my grandfather's home. In areas like these there are no fancy clothes shops or gadget stores or anything of the like, so there is no such temptation to spend on those things anyway.
Another issue is that in every part of the world, fees are largely determined by how much money people make/have. So school fees for instance are as they are based on the income of the surrounding families. If these grants became a regular practice, the schools would simply raise their fees some because they now can. If they have bad intentions they'll do this for greed; if they have good intentions they'll do this because they figure they can now provide their students with more. Either way- price goes up. That's the way it works all over the world, but people often don't notice this.
I'm glad these folks enjoyed the experiment though. Watching the video really brought back memories. I just don't see what it was supposed to prove, exactly.
posted by rancher at 1:56 AM on April 4, 2015 [9 favorites]