
Why Chris Hughes And Google Are Giving Cash Directly To The Poorest - hansy
http://www.forbes.com/sites/kerryadolan/2013/05/28/why-google-and-facebook-cofounder-chris-hughes-are-giving-cash-directly-to-the-poorest/
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FD3SA
Interesting that developed countries do not implement a similar system for
their own poor. Friedman and Hayek both believed such a system was superior to
merit-tested social assistance programs which require massive bureaucracy and
are prone to abuse.

Hopefully, with the success of such charities in developing countries we will
see increasing support for such systems here at home, allowing people to
escape the vicious unemployment trap of western economies.

(Edit) Additionally, the implementation of basic income at this point would be
extremely effective, as it would leverage the massive revolution in freely
available online education (e.g. Khan Academy, EdX, Udacity, Coursera) and
cooperative workspaces (e.g. hackerspaces). This would effectively transform
the entire country into a startup incubator, giving those with the desire and
talent to build new companies the resources to do so immediately, without
going through the excruciatingly slow, inefficient and oftentimes
counterproductive process of formal education.

~~~
a-priori
I've been thinking a lot about basic income schemes lately, which do exactly
that for everyone (not just the poor, though they'd benefit the most). You
calculate how much it costs a person to pay their basic living expenses: food,
a decent place to live, maybe a transit pass. Then you pay everyone in the
population that amount of money each month, unconditionally (no means
testing).

I once calculated that such a system, if applied in Canada, would require
something like a 36% flat income tax if it were entirely funded that way, and
it would have a break-even point at about $65k annual income (below that, you
receive more than you put in). I expect the situation in the US to be similar.

Part of that cost could be offset by reducing or eliminating existing welfare
and social security programs, including food stamps, employment insurance, and
subsidized housing. It would also let you eliminate minimum wage, since you no
longer have to be concerned about wages covering basic living expenses.

There are a lot of questions about how this would affect an economy. Would it
cause massive inflation? Unemployment? Substance abuse? Or would it be the
most effective social program ever? I have no idea. But I think it's worth a
try. My hunch is that you will see all of those negative effects increase
somewhat (inflation, unemployment, substance abuse) or in some people, but
that the positive effects will greatly outweigh the negatives.

You needn't implement it all at once. You could apply it first to a random
sample, say 1% of the population. Those people receive basic income and pay
the tax required to fund it. They would also become ineligible for the social
programs that would be removed if you rolled it out nationally (the details of
that part may be tricky). Only roll it out to the whole population if the
results are positive after a few years.

~~~
sliverstorm
If wages fall, particularly if we remove minimum wage, the required tax rate
to support the system will go up, as will the break-even point.

~~~
a-priori
This may be true. But there are also be factors that may cause people to
increase their income. Perhaps the extra money lets them invest in education
(everything from skills training to a university degree), relocate to
somewhere with a better market for the skills they have, or start a business
using the basic income as their bootstrapping fund.

It's hard to say how things will balance out. That's why I'm in favour of some
sort of systematic test of the concept.

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Mikeb85
This is a great idea. Giving directly to the poor will hopefully bypass
corrupt entities, and essentially injects cash directly into the economy
you're hoping to assist. In the case of a farmer or someone looking to start a
business, even a small cash injection can make a big difference, and will
immediately produce an impact.

The main risks of course to this plan is that the money could get spent on
imported goods, which would transfer the cash back out of the local economy,
or that it would get hoarded (or stolen). But cash injections are still the
most effective means to stimulate an economy, especially small, local
economies.

~~~
notahacker
" _cash injections are still the most effective means to stimulate an economy,
especially small, local economies._ "

The economist in me thinks _the effectiveness of cash stimulus is still mostly
inflated away if the economic problem is structural, especially when
injections are unrelated to any productive improvements in small, local
economies._ To the extent this scheme works because the cash injections are
occasional and unpredictable and landlords, local Big Men and monopoly local
goods suppliers haven't yet found a way of creaming off most of the cash
injection. I wish them all the best and hope the positive results their
followup studies have shown reflect something other than weaknesses in study
methodology, but unfortunately I think this is patching the symptoms and can't
scale without adding in some more precisely-targeted larger-scale aid.

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kvb
It's great to see GiveDirectly getting more attention. From my limited
interactions with Paul Niehaus, he seemed quite competent and rightly focused
on ensuring that the system remains free from corruption.

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maxharris
You know how Steve Jobs said, "Your time is limited, so don't waste it living
someone else's life"?

Well, I agree, and I take that idea very seriously. People should keep their
money (earned by trading time from their lives), and use it to make the most
of their own lives.

Moral credit ought to go to those who create the most, not to those that give
up everything. Contrary to what your mother will tell you, giving money to
charity does _not_ make you a better person. But creating things and otherwise
making the most of your life (you only have one), does.

If you want to give money to charity, make sure you're doing it for the right
reason (i.e., because you know that the specific cause you're supporting will
make your own life better), and that you have enough money so that you're not
sacrificing your primary values (your own goals, family, friends, for example)
by doing so.

Don't give up the one life you have, or any part of it - it's yours, and it's
all you've got.

~~~
Afforess
Not everyone subscribes to such a dark, cynical view of the world. I realize
that there are thousands of invisible advantages I have over an identical me
born in Africa. Giving to charity is a small way of shrinking the gap.

~~~
maxharris
There is nothing dark or cynical in what I have said. What is dark about "live
the best life you can live" and "make the most of what you've got"?

Fact: to achieve your own goals, you need 100% of your time, money and effort.

~~~
Afforess
Anyone who believes that charity and giving are not morally good actions
clearly has a warped and extremely cynical worldview.

~~~
maxharris
Straw man. Charity and giving are morally neutral actions. On its own, charity
doesn't improve your life.

Remember, the purpose of morality to guide you so that you can enjoy a good
life. A morality (that's good for life) should not tell you to suffer, give up
what you care about and die.

~~~
dragonwriter
> Remember, the purpose of morality to guide you so that you can enjoy a good
> life.

This statement itself is a controversial _moral_ position, rather than a
universally-accepted statement of the purpose of morality.

~~~
maxharris
It depends. In America, most people agree with my statement. Elsewhere,
sometimes, but not necessarily.

But so what? There is no universally-accepted statement of anything, anywhere.
The choice each of us has when reading anything is: "well, what do _I_ think
about this?" And for that, the number of people that agree or disagree is
irrelevant.

~~~
dragonwriter
> It depends

No, claims about the "purpose of morality" are non-factual statements of
personal preference in any context. It doesn't depend.

> In America, most people agree with my statement.

Aside from the fact that this is irrelevant, I see no evidence that this is
true.

> But so what? There is no universally-accepted statement of anything,
> anywhere.

There's a categorical difference between logical claims (which are abstract
and which are true or false independent of factual context), fact claims
(which are, in principal at least, subject to objective validation as true or
false), and value (including moral) claims (which are statements of personal
preference).

The problem with your claim about the purpose of morality is that it presented
a value claim as if it were a true statement of fact.

~~~
maxharris
_No, claims about the "purpose of morality" are non-factual statements of
personal preference in any context._

Well, you lost me there. When I choose not to lie to my family and friends, or
when I deal with others justly, I am behaving that way (i.e., morally) because
I want a good, long, happy life. It is _not_ a matter of "personal
preference." (It is absurd to say, "It is merely my personal preference to
live well by honest means. Others may choose differently, and live well by
dishonest means.") If I lied to my wife, or cheated a customer out of money,
_I_ would suffer, and that's an inescapable fact. (If you don't understand
this point, just ask and I'll explain why.)

Show me someone, out here in _reality_ that lives a good, long and happy life
by lying to his spouse, cheating his customers, and stealing to top it off at
night. Or even someone that just does one of the three, occasionally.

 _There's a categorical difference between logical claims (which are abstract
and which are true or false independent of factual context), fact claims
(which are, in principal at least, subject to objective validation as true or
false), and value (including moral) claims (which are statements of personal
preference)._

Sigh. In relation to an individual person's life, for every _is_ , this is an
_ought._ For example, suppose that I am driving my car down the highway. There
_is_ a giant boulder in the middle of the road ahead. If I want to live, I
_ought_ to slow down and turn to avoid it. So much for Hume!

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joyeuse6701
Pretty sure that almost all charities and welfare related groups see a spike
in improvement of the lives of individuals on the onset of their service. The
problem usually becomes dependence on the system. Could someone illustrate how
this implementation solves the issue of dependence?

~~~
kvb
The payments are of a fixed amount ($1K, spread over 1-2 years), so recipients
know that they won't continue to receive money indefinitely. It probably also
helps that a significant fraction of the money appears to be spent on durable
home improvements (e.g. tin roofs) rather than ongoing costs. See the FAQ
(<http://www.givedirectly.org/faqs.php>) for more details.

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curiousDog
Excellent. Having grown up in East Africa and seeing first hand how UNHCR,
WHO, UNICEF etc actually worked; I've always thought this would be the best
way.

Kudos to Google's top brass, you employees should be proud to work for a
company like this!

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pkulak
A recent Planet Money talked about this exact issue:

[http://www.npr.org/blogs/money/2013/05/21/185801589/episode-...](http://www.npr.org/blogs/money/2013/05/21/185801589/episode-460-its-
hard-to-do-good)

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laserDinosaur
"Typically people who live in mud huts with thatched roofs – and uses a system
called M-Pesa, run by Vodafone , to transfer money to their cell phones."

People in mud huts have cell phones?

~~~
marssaxman
The phrase "mud huts" evokes a primitive pastoral lifestyle, but there are a
lot of places where mud brick is simply a sensible building material. I have
stayed in a "mud hut" in Africa which had running water and electricity; this
was common to all the houses in the neighborhood. They were nice big places,
plenty of air and light, with ordinary doors and furniture and whatnot, that
just happened to be built out of great big slabs of mud. They build this way
not because they lack more sophisticated technology, but because mud bricks
are an effective, economical technology well suited to their environment.

------
gesman
Disadvantage of charities is that only approximately 10% of donated money are
making it directly to the cause.

Disadvantage of giving money directly to the poor is that half of them will
end up buying pot, booze or getting robbed.

~~~
IanCal
> Disadvantage of charities is that only approximately 10% of donated money
> are making it directly to the cause.

93% of a donation to GiveDirect will end up in the hands of the recipient.

> Disadvantage of giving money directly to the poor is that half of them will
> end up buying pot, booze or getting robbed.

Nope to the first two, I don't know about theft, but they have no reported
incidents of violence (they perform follow up calls)

<http://www.givedirectly.org/pdf/litreview_2.pdf>

They've performed randomised trials to see if the money makes a difference,
and find that it's making a huge difference to peoples lives.

~~~
nknighthb
Even in the "robbed" case, as a general rule, the wealthy aren't wandering the
streets mugging people. That money is going to get spent on goods and services
somewhere along the way, at least providing economic stimulus.

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ape4
If they want to "give directly" why not just hand people cash?

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robodale
What the actual fuck?

~~~
sliverstorm
Well that was constructive

