Objections to basic income typically follow a colonialist mentality. Like parents dispensing an allowance, those holding the purse strings are certain that they know best about how funds should (or if they should) be purposed. Detractors believe that the recipients will misspend the money, stop working, and/or become permanent dependents of the state. Expensive administrative constraints have been placed on who receives aid and how it should be delivered, for instance in the form of food stamps or welfare. However, the amounts proposed for basic income are rarely enough to support a family, but are only intended to help people buy the necessities without the need for complex and inefficient delivery systems.
Donors also prefer to give tangible goods, such as clothing, equipment or food for the same paternalistic reasons. Distributing aid, particularly in developing or underserved countries, has grown into a multibillion dollar industry. Although the assistance of non-profits and NGOs can be instrumental in overcoming the immediate aftermath of catastrophic events, recent studies have shown that their prolonged presence can have a larger negative impact on the economy. Poverty, Inc. documented that the good intentions of these organizations can starve local businesses and entrepreneurs by flooding the market with free products and services, forcing long-term dependence on aid, the exact opposite of their mission.
Another concern is where to set the bar for who receives aid. Establishing a threshold can create scenarios that fuel economic disparity tensions that basic income is supposed to help reduce. GiveDirectly, a non-profit that delivers currency as aid, faced this challenge when it gave money to individual families in Kenyan settlements. Designating which families received aid, and which did not, created tensions between neighbors. Universal basic income eliminates this threshold, but some estimates put the cost of distributing even small amounts at 5 percent or more of GDP.
Eliminating poverty is Sustainable Development Goal 1 and basic income is one way achieve that end. The Brookings Institution released a report on how much it would cost to close the poverty gap for the world and estimated that lofty goal at $66 billion; half of the world’s annual budget for foreign aid.
When GiveDirectly realized they were dividing communities with their aid they took another approach. They searched for entire villages in Kenya to grant money to every adult for a period of 12 years. An estimated 96 percent of Kenyans households use a bankless means of transferring money, M-Pesa, which was leveraged to transfer Kenyan shillings to the residents. These small amounts helped lift an entire community with limited employment options out of extreme poverty. The residents are given the freedom to choose how the money is used, which has sparked the local economy with the increased sale of food, materials, school fees, and has allowed many residents to begin their own small businesses. Trickledown economics have been proven to be ineffective at helping the general population, but trickleup economics has the capacity to lifts all boats.
Taking this income model one step further, Ashley Dawson has suggested granting basic income to the indigenous populations of environmentally sensitive areas in order to inspire them to stay on and take care of the ecosystem. Most of these people have lived in tandem with the land for generations, but are often pushed out to clear cut the forests for farming or livestock, or are forced to leave their homes to pursue work in the urban areas, where they add to overcrowded informal settlements. This approach could also be an inexpensive way to fund participants in environmental projects, such as the Great Green Wall, which is trying to plant millions of trees across sub-Saharan Africa to restore the ecosystem; many saplings died from lack of care. Taken further, basic income could also reduce the need for poor people to turn to poaching to sell animal parts on the black market, or reduce civil unrest when otherwise hungry bellies force people to fight for basic needs.
Can basic income save the world? Maybe not, but it is an affordable alternative to aid people in need and can have a broader impact on the local economy at a fraction of what we are currently spending. It will require many industries to change, but the current trials underway may spotlight a more equitable path forward.
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