The simple fact that someone came after those people to check what they did with their money, for the purpose of the research, probably influenced the result (at least if they knew or suspected that beforehand). If they said they would use the money for business, but then instead spend it alcohol and gambling, that would be very embarrassing.
If on the other hand, a program like exists this for a long time and everyone knows nobody will check what you do with the money, abuse would become very likely, imo.
Absolutely. The problem with these kind of studies is how difficult it is to generalise from them. One of the cited examples concludes making people accountable for the money was less efficient even though accountable people spent the money better because it cost "up to $1800" per $150 loan for followup studies. That hires a well-educated person for a year in a developing country, which strongly suggests that you'd reach a wholly different conclusion if the programme was designed and administered 100% locally. Of course, there's also the issue that if a particular group doesn't have any followup studies associated with the research, then observations of how they spent the money are inevitably less accurate.
Then there's the simple observation that repayable grants can be passed on to others (less admin costs) and are sustainable on a larger scale in an economy. Teach a man to fish and his interest repayments can teach his neighbours to fish, provided those neighbours also reasonably expect to get a positive return on the rod they invest in. That latter bit is important in assuming the net effect doesn't involve very expensive fishing rods and depleted fish stocks...
Whilst loan based aid is not unproblematic (there's some hideously expensive administration and profiteering in some microfinance problems, and poor people many people do use them as expensive consumer loans) the same technology that earns Kenyan grants such rave reviews for their effectiveness can also be applied to strings-attached microfinance: M-PESA can potentially cut the cost of receiving microloan repayments even more effectively than it cuts corruption in doling out the aid. Just because the desperately poor don't spend all their grant money on prostitutes and alcohol (which isn't that surprising if you've ever visited a developing country) doesn't necessarily mean they can't be efficiency helped in other ways
I think you've just hit the nail on the head. Gifts in this program have the same function as loans would traditionally have : they are supposed to be invested in improving one's life. They were obviously not free, the money was traded for promises that carry a social cost if one doesn't deliver.
A basic income would have no such effect. If it's enough to live on, why would everyone invest it in becoming a better and more capable individual ? (note the question is not "anyone", but "everyone". The aggregate effect of free money is what will determine the outcome. Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters)
Ah yes, the undeserving poor. Alfred P. Doolittle gave a pretty good accounting of what they might do with it in Shaw's Pygmalion:
I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: "You're undeserving; so you can't have it." But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything... Don't you be afraid that I'll save it and spare it and live idle on it. There won't be a penny of it left by Monday: I'll have to go to work same as if I'd never had it. It won't pauperize me, you bet. Just one good spree for myself and the missus, giving pleasure to ourselves and employment to others, and satisfaction to you to think it's not been throwed away. You couldn't spend it better.
> The aggregate effect of free money is what will determine the outcome.
And this:
> Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters)
Contradict each other? The "aggregate effect" = "lazy drunkards" + the effect of "exceptional individuals" + the effect of everyone else. So it really isn't the lazy drunkards that matter; it's the overall effect that does. If, on average, it improves society then isn't that a win?
Very often, when talking about basic incomes and similar programs, people seem to say things like "twice as many people will take advantage of the system and be lazy." To me, that's not a sufficient criticism: it all depends on the percentages. If a program increases the percentage of bottom feeders from 1% to 2%, say, but also doubles the quality of life of everyone else, that would be a huge win to me. Obviously, the numbers I chose in my example are probably unrealistic, which just further illustrates how important it is to actually determine what the numbers are/will be.
You're right. That was wrong. I obviously meant it's the effect of A plus B.
It would depend on the amount of "bottom feeders". That's a bad way to define it though, "non-productives" might be better, since it would include pensioners, children, students (including people who go back to studying if this program is introduced, but are older than 0-24 years), really ill people, ... mostly not people I'd define as bottom feeders.
I would say that it's a lot larger than 1-2%. Let's assume that a lower bound on the non-productive people would be 30% of the total (which would mean tax levels need to be, at bare minimum . I would say that various factors are going to make that close to 50% over a period of time that's not very long.
Suppose you'd have the same tax level for these things as you currently have for social programs + medical programs (~50% of total taxes), then here's how much it could be (ignoring administration costs, which would take another bite):
Non-active population => basic income possible using 50% of govt. budget
30% => 11,249
40% => 9,642
50% => 8,035
60% => 6,428
70% => 4,821
(the current labor force participation rate is 65%. Since that is likely to drop, prudence would suggest you take the 50% or 60% figure as realistic. Increases in the govt. budget dedicated to this cannot make these numbers rise by a significant amount. So I would think the 30% figure is the maximum attainable even if the military were to be defunded)
Since even the largest of these numbers is only barely sufficient to live + insurance + ... is this really worth it ? This amount is not of the level that it's going to do what this program needs to do to improve our economic situation : give the poor disposable income.
The basic problem we have is of a different nature. We do not have any economic reason for 70% of the world population to be alive, and that number is growing fast. In the US that number is currently amazingly low, but it's bound to rise as well.
> It would depend on the amount of "bottom feeders". That's a bad way to define it though, "non-productives" might be better, since it would include pensioners, children, students (including people who go back to studying if this program is introduced, but are older than 0-24 years), really ill people, ... mostly not people I'd define as bottom feeders.
You're absolutely right, thanks for the correction.
The simple fact that someone came after those people to check what they did with their money, for the purpose of the research, probably influenced the result (at least if they knew or suspected that beforehand). If they said they would use the money for business, but then instead spend it alcohol and gambling, that would be very embarrassing.
If on the other hand, a program like exists this for a long time and everyone knows nobody will check what you do with the money, abuse would become very likely, imo.