
Unconditional handouts benefit recipients and their neighbours: study - known
https://www.economist.com/middle-east-and-africa/2019/11/23/unconditional-handouts-benefit-recipients-and-their-neighbours-too
======
Jamwinner
*in certain parts of kenya, according to one study.

Does anyone have a link to the actual paper? I think HN knows by now that most
publications miss the nuance of most publishings.

~~~
darksaints
Yeah, that's the real problem here. We've long known that limited forms of
communism, such as cooperatives and communes, can function extremely well in
small self selected populations, but fall apart when they get big enough to be
taken advantage of by bad actors. I think there's a future for basic income,
but I'm not going put faith in it for broader adoption without vastly broader
study.

~~~
farrarstan
And capitalism?

~~~
nine_k
Capitalism is a system that builds some form of increasing prosperity using
people's selfish behaviors.

Historically, outright capitalism at scale had outperformed outright communism
at scal. Europe is actively experimenting with small admixtures of communism /
socialism to overcome some of the shortcomings of capitalism, as they see it.

~~~
farrarstan
how long do you think history is?

~~~
nine_k
Capitalism proper only exists for a few centuries.

------
H8crilA
If you want a serious analysis of money handouts by a macro hedge fund
manager, including how it worked in the past, look up Dalio's PDF on the
topic:

[https://economicprinciples.org/downloads/MMT_%20MP3_MK.pdf](https://economicprinciples.org/downloads/MMT_%20MP3_MK.pdf)

Universal Basic Income is just one of the configurations in which the next big
stimulus may be deployed. There's plenty of others, and it's informative to
understand the continuum.

------
thomasfl
Why does this and general basic income generate so much anger?

~~~
grok2
People don't get pissed when income from a shared resource (petroleum for
instance) is divided among people living on the land or in the country. People
get pissed when the taxes they pay (for improving infrastructure and
governance) is directed towards subsidizing the living of others (even though
in the long run, it might be in many ways beneficial as a society). In many
ways it is natural for them to be unhappy about this. I think, there needs to
be more education on the benefits (as a social net, they themselves may be the
beneficiaries) that alleviates people's fears on such UBI plans and shows the
overall societal benefits. Also more longer-term experiments to confirm if it
really helps.

If society makes progress and does move to a model where machines are doing
most of the work, and there is more free time for people and most people don't
need to do any work for their living or will not be able to find work for
their living, we will definitely need to look at this model or any other
alternate model that may come about as a result of natural experiences with
such progress.

~~~
Red_Leaves_Flyy
We're already at a point where machines do most of the work.

There are so many homeless Americans because our government has failed to
manage the resources of our country to provide even a basic poverty level
standard of living for everyone. There are countless reasons and studies about
how or why this occurred but I think the reality is rather simple. People in
power exploit those they control to get more wealth and power. Whether it's
the manager at mcdonalds or bezos himself, if they can abuse their power they
will. The reason there is so much anger against handouts to the destitute is
because this reduces the power these oligarchs hold. Unless you're topping
Forbes richest list then you're a peon in their game and they're not going to
capitulate to the life of a pleb without a fight that'd make Hitler look like
Rosa parks.

~~~
corporate_shi11
>"There are so many homeless Americans because our government has failed to
manage the resources of our country to provide even a basic poverty level
standard of living for everyone."

Americans enjoy a higher general standard of living than most others in the
developed world precisely because our government has a relatively hands off
approach to "managing resources".

Homelessness is the result of addiction and mental illness. The government
could pour huge sums of money (even more than it already does) into
initiatives focused on addressing these issues and the broken people that
comprise the homeless population will still not get better.

~~~
nicoburns
> Americans enjoy a higher general standard of living than most others in the
> developed world

I'd question that. Rich americans maybe. But the average american has to deal
with long working hours, poor access to high quality food, extortionate costs
for healthcare, cities where you can't walk anywhere, etc.

Homelessness is indeed a difficult issue. But what about the people working 2
or 3 minimum wage jobs. They'd benefit big time from mote government support.

~~~
indecisive_user
> But the average american has to deal with long working hours, poor access to
> high quality food, extortionate costs for healthcare, cities where you can't
> walk anywhere, etc.

I'd question that. Poor Americans maybe. But the average american has
relatively average work hours[1], shops at large grocery stores or
supercenters[2], and has among the highest median income in the world(adjusted
for PPP)[3]

1\.
[https://en.wikipedia.org/wiki/Working_time#OECD_ranking](https://en.wikipedia.org/wiki/Working_time#OECD_ranking)

2\. [https://www.ers.usda.gov/amber-waves/2015/august/most-us-
hou...](https://www.ers.usda.gov/amber-waves/2015/august/most-us-households-
do-their-main-grocery-shopping-at-supermarkets-and-supercenters-regardless-of-
income/)

3\.
[https://en.wikipedia.org/wiki/Median_income#Gross_median_hou...](https://en.wikipedia.org/wiki/Median_income#Gross_median_household_income_by_country)

~~~
Retric
Including part time workers distorts the average.

 _On average, a full-time employee in United Stats works 1,768 hours per year,
or 38.6 hours per week._ By comparison, _Europeans work up to 19 percent fewer
hours annually compared to those working in the US._. Even more extreme _On
average, a full-time employee in Germany works 1,363 hours per year, or 34.3
hours per week_ That’s the equivalent of 26 days more per year full time
Americans are working.

Median income PPP is not that great of a means for comparing standards of
living. The US bottom 25th percentile earn less than 1/2 the 50th percentile.
I would argue for disposable income PPP after taxes, food, shelter, and
medical care at the bottom is more representative as a minimum standard of
living.

~~~
indecisive_user
The original comment I responded to compared the average American to the
average citizen in the "developed world". I'm using OECD countries as a proxy
since the term "developed" is ambiguous. But comparatively, US workers are
only slightly above the OECD average in number of hours worked per year (1,781
vs 1,763).

>The US bottom 25th percentile earn less than 1/2 the 50th percentile.

Again, only considering the average American here. I would agree that it's
worse to be poor in the US compared to a lot of other countries due to fewer
social safety nets.

~~~
Retric
OECD is a common list for developed countries. But did you ever really look at
it? It includes included Mexico and Turkey with a ~10k per capita GDP. Even
Latvia, Chile and Hungary @ 15k USD seem a bit underdeveloped. Czech Republic
and Slovenia at 20k per capital are borderline but probably fine. Granted
things change somewhat when you look at PPP, but large PPP differences
generally mean an underdeveloped economy.

[https://www.oecd.org/about/document/list-oecd-member-
countri...](https://www.oecd.org/about/document/list-oecd-member-
countries.htm)

------
gonational
“Unconditional” is a nice euphemism for “free”. There is no such thing as a
free handout (and, thusly, an unconditional handout), unless it’s coming in
the form of manna from heaven.

In these limited studies that don’t affect the inflation rate or the greater
macroeconomic picture, there appears to be no conditions, especially none
imposed on the recipients.

If you expand a study like this, in your mind, to include e.g., the entire
population of America, you don’t need to be a PhD economist to see that there
are certainly conditions involved.

~~~
dwaltrip
There are always at least some constraints on the givers, e.g. there is X
amount of money available to be distributed in a given time period. This
should not be conflated with conditions that the recipients must first meet.
The article is referring to this second type.

~~~
gonational
The reason there are no conditions for these recipients is because this is a
small, controlled experiment, with outside resources.

If you expand this experiment to include the entire population, then each
recipient has to meet the condition of welcoming expansion (inflation) of the
money supply, each time they receive a payment (unless each recipient is also
taxed 100% of what they receive each month). Inflation comes at the expense of
savings, and also discourages lending (since the money repaid will be worth
less - e.g., Weimar Republic, Zimbabwe, et al).

Given the aforementioned circumstances, if you are a saver (with money to
lend) OR a borrower (e.g., attempting to grow a business), then you have to
accept that these activities will be economically discouraged by the
inflationary effects of this income payment system. Only economic inactivity
is rewarded (e.g., folks who retire without savings, folks without a job,
etc.) without conditions.

This is all axiomatic and completely provable with syllogism alone, except for
in one scenario: new wealth is discovered (free energy, manna from heaven,
altruistic robots, etc.).

~~~
thawaway1837
Very little of what you’ve typed out is actually correct.

1 - Creating money out of thin air does not necessarily lead to inflation. How
do we know this? Because Europe and the US created a ton of money out of thin
air after the financial crisis but were unable to meet their already
historically low inflation targets. 2 - Inflation isn’t always hyper
inflation. You’ve mentioned the 2-3 countries that have experienced hyper
inflation in the past few decades. You’ve ignored the fact that nearly every
other country in the world, including the richest countries in the world, have
been experiencing inflation every year for several decades. A certain amount
of inflation is a good thing. In fact, the only major economy that has
experienced deflation for any sustained period of time over the last few
decades was Japan, and that was a massive concern.

3 - Inflation helps lending. In fact, deflation on the other hand discouraged
lending. Inflation means that in order to retain the value of the money you’ve
earned, you have to invest (I.e. lend). In deflationary scenarios, the value
of your money goes up simply by virtue of sticking it under the mattress.
Hyper inflation is a completely different situation, and the lack of lending
there probably has a lot more to do with the fact that there are no economic
opportunities in a country whose economy is so bad that it’s suffering from
hyper inflation.

4 - How in the world is inflation benefiting people who don’t have money
(retired folks without savings, or folks without jobs). Inflation means that
whatever money they do get (by begging?) only buys them less than it would
have without inflation.

You clearly know very little about economics, and your insistence that this
all axiomatic indicates you’ve likely not even done a cursory study of macro
economics, but are convinced whatever you’ve concluded from certain basic
principles is obviously correct, even if it diverges from what the entire
academic (and investment and government, for that matter) fields say about
those situations.

~~~
gonational
1\. e.g., quantitative easing is literally described as “an unconventional
form of monetary policy, it is usually used when inflation is very low or
negative” - just because we are not able to meet a specific inflation target
does not mean that creating money does not the create inflation… this is some
of the most basic monetary economics stuff

2\. At what point did I state that inflation is always hyper-inflation? It is
perfectly appropriate to bring up hyper-inflation in a conversation about
money creation where the money would be created at a rate of no less than $335
billion per month (e.g., UBI of $1,000/mo), which would be the greatest
expansion of money supply, in PPP terms(and 25% expansion of M2 per year), in
planetary history.

3\. Pray tell... if the inflation is due to an increase of the money supply at
the inter-banking level, then of course loans are easier to be had. If you
already have loans, then of course you are in a great spot when inflation
ramps up. If you’re trying to get a loan and the money supply is increasing at
25% per annum, you will likely need to be lent money at a rate higher than
what usury laws allow...

4\. Never said that either. What I said is that those people are the only ones
that will benefit without condition, because inflation does not affect them
(other than price stickiness in their assets, if they choose to sell them -
they can also thank money expansion for this, one of the known failings of New
Keynsianism)

Pertaining your last point about the divergence of my thinking from the
boundless wisdom of academics... Don’t fall for the college tribe common look
no further than Paul Krugman for an example of how Neo Keynesian economics
will lead you down a path of endless failure (search for his predictions - as
we know, predictions are the best way to test a theory). New Keynesianism
economics will go down in history as the single failure that collapsed the
Occident into an inescapable swamp of debt. You sound like you’re in junior
high or early high school, so you still have time; trust me, do not waste your
time studying economics in college. And if you do, at least seek out some
place that teaches Austrian School economics at least from a historical
perspective (like Booth).

Hey there :) no need to reply if you don’t want to; I already know you read it
all

------
newnewpdro
After living in a very poor region of the US for a few years, coming from
quite affluent areas like Silicon Valley/SF, I've grown to substantially
disapprove of handouts.

At the local grocery store, 90+% of the people I follow through the cashier
lanes are paying for their groceries with EBT. What I see these folks buying
is carts full of overpriced packaged foods with out of control kids often
carrying tubs of Ben and Jerries ice cream one per child. They are absolutely
not spending responsibly and living frugally, their lives of excess are being
subsidized and as they say easy come, easy go.

When I socialize with the locals, they're all on food stamps and promote it as
a way of life if they learn I'm not currently taking handouts. I'm literally
peer pressured to get on the EBT program, many have argued they want as many
people on it as possible because the more people supported by it the less
likely it is to be taken away. These are perfectly capable people who choose
to spend their lives horsing around and smoking pot all day. Not that there's
anything inherently wrong with that, but I do take issue with deliberately
abusing social programs to fund it.

One annoying effect is because of these programs, I'm surrounded by people
whose lives are precariously built upon a system that can vanish rather
suddenly from political events like the current president getting elected.
There's been murmurings of EBT qualifications changing to cut down spending on
these programs, and many expect it to happen should this president be re-
elected. If that occurs, the crime in my community (and many like it) is going
to absolutely _explode_ because the programs have been supporting lives for
too long and these people have grown far too comfortable on unstable ground.

When I see a headline "Unconditional handouts benefit recipients and their
neighbors" I immediately think to myself "It's not unconditional when the
program is conditional on the current government's decision to continue it".
When you have large-scale populations becoming entirely dependent on such
programs for their livelihoods, and yes, in poor, low-cost areas you can and
people will 100% survive off as little as $1000/mo, you have a weaponized
community where the trigger for releasing rampant crime and instability
concentrated in low-income neighborhoods is the single decision to cut
handouts.

Now I don't think having these programs is a good idea at all, it seems to
create more problems than it solves. I would rather us find ways to wean
people off EBT to the point of all but eliminating it, and forget this UBI-
like crap unless it's more permanent, like in the form of an amendment to the
constitution.

~~~
Chinjut
"Their lives of excess"? No one on EBT is living a life of excess, and they
are just as deserving to enjoy ice cream or other pleasures of life as you
are. There's nothing irresponsible about buying ice cream or anything else in
a grocery store. You're being ridiculous and cruel.

~~~
allovernow
>There's nothing irresponsible about buying ice cream or anything else in a
grocery store

That's a debatable point when you consider the context that these people, many
of whom are perfectly capable of working, are living exclusively off of the
labor of others, perhaps not entirely with the laborer's consent. Is it just
to force someone to work without benefit for someone else else's survival?
What about for someone else else's comfort?

Some reservations over such handouts are entirely justified. You have no right
to force others to toil for your pleasure, that's a form of oppression.

~~~
tehwebguy
> You have no right to force others to toil for your pleasure

No one is being forced to work! They can simply live a life of “excess” off
government assistance right?

All they have to do is trade in their current friends, their standard for home
ownership, their dreams of financial stability, any ability to pay for their
kids’ emergencies / college / wedding ...

This society has determined that the people who cannot fully take care of
themselves should still be taken care of and given a microscopic slice of a
tiny sliver of dignity, and that it’s worth the cost of some percentage of bad
actors milking the system.

It’s not perfect but I am okay with that trade off.

~~~
allovernow
This is not black and white. The point is that there is some cutoff between
full welfare for all of life's luxuries and literal table scraps. Some of us
think spending a month worth of food stamps at Walmart on junk (where there
are cheap healthy alternatives) is past the line of the minimum that people
deserve for free. And it may be anecdata but anyone who's been to Walmart on
EBT day has seen plenty of people making this choice.

~~~
tehwebguy
I am so sorry but it is exactly black and white:

Society sets up rules, most people follow most of them. One of the policies
society has agreed on is that if your life is totally fucked financially you
can get some table scraps from the government so that you don’t die as a
direct result.

Some people are bad actors, which society will tolerate up to a certain level,
so long as it means that the worst off people in the country can eat if they
jump through some hoops.

That said if you see someone you suspect is scamming EBT etc please report
them. Same goes for when your friend gives you a stock tip that’s a little too
hot or your folks tell you they didn’t report some income.

~~~
allovernow
>can get some table scraps from the government so that you don’t die as a
direct result.

I think you've missed my point. By black and white I mean we are debating over
where the appropriate line is between table scraps and government subsidized
golden toilets.

------
kristianp
[https://outline.com/NeLHSV](https://outline.com/NeLHSV)

------
nwah1
Benefit recipients and their landlords. Fixed that for you.

------
blackflame
Unconditional handouts are only good for the person handing things out.

~~~
RHSeeger
Can you explain your comment? I'm having a hard time understanding how giving
someone something without conditinos benefits the giver more than the receiver
(or, as you say, _only_ the giver)

~~~
ravenstine
People aren't going to vote against the hand that feeds them. Money is a proxy
for the top of the hierarchy of needs, and if people are going to be voting
merely to satisfy their hierarchy of needs then other policy comes second.

Say you've got one party running for office that promises to continue
handouts, or perhaps expand them, but also is highly authoritarian, but
there's another party that wants to protect fundamental freedoms but wants to
reduce handouts. Who do you think has the upper hand in that scenario? It'd be
one thing if the populace was well educated and had an interest in their own
freedoms, but we're not exactly known for that these days.

This is one of the reasons that California is in the state that it's in. It
dwarfs all other states in welfare spending, has the most homelessness, has an
exponential feces and public urination problem in its big cities, and the
return of medieval illnesses. The problem is unlikely to resolve any time soon
because enough voters are dependent and detached from society that those in
power can sit back.

That's why there are people who are wary of handouts. It's not that they don't
want to help other people; it's that handouts are an easy way to influence the
populace, and once you give out handouts, it's extremely difficult to take
them away, lest you are willing to lose elections.

~~~
enraged_camel
>>People aren't going to vote against the hand that feeds them.

This is demonstrably false. Here in the US, conservative states are net
recipients for federal aid, yet they continue voting for the party that is
determined to shrink the federal government and abolish many of the aid
programs they are benefiting from.

~~~
ravenstine
How often do conservatives successfully run on the platform that they're going
to end handouts? (Besides Trump)

~~~
MisterBastahrd
Have you ever spent any time south of the Mason-Dixon line?Conservative
"austerity" is the bastard stepchild of Jim Crow and it's pretty much been the
central party plank for decades.

