Utopian reasoning: the easy way to eradicate poverty | Rutger Bregman

Keeping people poor is a political option we can no longer afford, with so much human potential wasted. We need a universal basic income

Why do poor person build so many bad decisions? Its a harsh question, but look at the data: poor people borrow more, save less, smoke more, exert less, drink more and eat less healthily. Why?

Margaret Thatcher once called poverty a personality defect. Though not many would go quite so far, the view that theres something wrong with poor people is not exceptional. To be honest, it was how I thought for a long time. It was only a few years ago that I discovered that everything I supposed I knew about poverty was wrong.

It all started when I accidently stumbled on a paper by a few American psychologists. They had travelled 8,000 miles, to India, to carry out an experiment with sugar cane farmers. These farmers collect about 60% of their annual income all at once, right after the harvest. This means they are relatively poor one part of the year and rich the other. The researchers asked the farmers to do an IQ test before and after the harvest. What they discovered blew my intellect. The farmers scored much worse on the tests before the harvest. The effects of living in poverty, it turns out, correspond to losing 14 points of IQ. Thats comparable to losing a nights sleep, or the effects of alcoholism.

A few months later I discussed the theory with Eldar Shafir, a prof of behavioural science and public policy at Princeton University and one of the authors of this study. The reason, put simply: its the context, stupid. People behave differently when they perceive a thing to be scarce. What that thing is doesnt much matter; whether its time, fund or food, it all contributes to a dearth mentality. This constricts your focus to your immediate inadequacy. The long-term view runs out of the window. Poor people arent stimulating dumb decisions because they are dumb, but because theyre living in a context in which anyone would construct dumb decisions.

Indian
Indian sugar cane farmers scored much worse on IQ tests before the harvest than after. Photo: Ajay Verma/ REUTERS

Suddenly the reason so many of our anti-poverty programmes dont work becomes clear. Investments in education, for example, are often completely useless. A recent analysis of 201 analyzes on the effectiveness of money management training came to the conclusion that it makes almost no difference at all. Poor people might come out wiser, but its not sufficient. As Shafir said: Its like teaching someone to swim and then throwing them in a stormy sea.

So what can be done? Modern economists have a few answers. We could stimulate the paperwork easier, or send people a text message to remind them of their bills. These nudges are tremendously popular with modern legislators, because they cost next to nothing. They are a symbol of this era, in which we so often treat the symptoms but dismiss the causes.

I asked Shafir: Why keep tinkering around the edges rather than just handing out more resources? You mean only hand out more fund? Sure, that would be great, he said. But given the evident restrictions the brand of leftwing politics you have in Amsterdam doesnt even exist in the States.

But is this really an old-fashioned, leftist notion? I remembered reading about an old plan, something that has been proposed by some of historys leading intellectuals. Thomas More hinted at it in Utopia, more than 500 years ago. And its proponents have spanned the spectrum from the left to the right, from the civil right campaigner Martin Luther King to the economist Milton Friedman.

Its an unbelievably simple notion: universal basic income a monthly allowance of enough to pay for your basic needs: food, shelter, education. And its completely unconditional: not a favor, but a right.

But could it truly be that simple? In the three years that followed, I read all I could find about basic income. I researched dozens of experiments that have been conducted across the globe. And it didnt take long before I stumbled upon the histories of a town that had done it, had eradicated poverty after which nearly everyone forgot about it.

Dauphin,
Everybody in Dauphin was ensure a basic income ensuring that no one fell below the poverty line. Photograph: Barrett& MacKay/ Getty Images/ All Canada Photos

This story starts in Winnipeg, Canada. Imagine a warehouse attic where virtually 2,000 boxes lie meeting dust. They are filled with data graphs, tables, interviews about one of the most fascinating social experimentations ever conducted. Evelyn Forget, an economic prof at the University of Manitoba, first heard about the records in 2009. Stepping into the attic, she could hardly believe her eyes. It was a treasure trove of information on basic income.

The experiment had started in Dauphin, a town north-west of Winnipeg, in 1974. Everybody was insured a basic income ensuring that no one fell below the poverty line. And for four years, all went well. But then a conservative government was voted into power. The new Canadian cabinet watched little point in the expensive experiment. So when it became clear there was no money left for an analysis of the results, the researchers decided to pack their files away. In 2,000 boxes.

When Forget detected them, 30 year later , no one knew what, if anything, the experiment had demonstrated. For three years she subjected the data to all manner of statistical analysis. And no matter what she tried, the results were the same every time. The experiment the longest and best of its kind had been a echoing success.

Forget discovered that the people in Dauphin had not only become richer, but also smarter and healthier. The school performance of children improved substantially. The hospitalisation rate decreased by as much as 8.5%. Domestic violence was also down, as were mental health grievances. And people didnt quit their jobs the only ones who worked a little less were new mothers and students, who stayed in school longer.

So heres what Ive learned. When it comes to poverty, we should stop pretending to know better than poor person. The great thing about fund is that people can use it to buy things they need instead of things self-appointed experts think they need. Imagine how many brilliant would-be entrepreneurs, scientists and writers are now withering away in scarcity. Imagine how much energy and talent we would unleash if we got rid of poverty once and for all.

While it wont solve all the worlds ills and ideas such as a rent cap and more social housing are necessary in places where housing is scarce a basic income are now working like venture capital for the person or persons. We cant afford not to do it poverty is hugely expensive. The costs of child poverty in the US are estimated at $500 bn( 410 bn) each year, in terms of higher healthcare spending, less education and more crime. Its an incredible trash of possibilities. It would cost only $175 bn, a quarter of the countrys current military budget, to do what Dauphin did long ago: eradicate poverty.

That should be our goal. The hour for small thoughts and little nudges is past. The time has come for new, radical ideas. If this sounds utopian to you, then remember that every milestone of civilisation the end of slavery, republic, equal rights for men and women was once a utopian fiction too.

Weve got the research, weve got the evidence, and weve got the means. Now, 500 years after Thomas More first wrote about basic income, we need to update our worldview. Poverty is not a lack of character. Poverty is a lack of cash.


Translated from the original Dutch by Elizabeth Manton

Rutger Bregman is the author of Utopia for Realists: And how we can get there

Read more: www.theguardian.com

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