How to end poverty - Justice, not charity
The existence of poverty in the world is a choice. It is absurd to suggest that a world which can sequence the genome and construct supercomputers cannot also invent a social system in which no person must live in degrading conditions. Many of the solutions to poverty are already well-known. Strong labour movements, access to land and resources, fair trade rules, decent infrastructure spending, comprehensive public services, and free civil society - all are essential and effective tools we have used to combat poverty and secure decent lives for ourselves. All these are still very much needed, and World Basic Income will gladly work in partnership with organisations that seek to secure them. But we can continue to innovate and design new features for our social system that go even further. We can choose to combat income poverty directly, by simply distributing money directly to everyone, guaranteeing a fairer share of world income for those who otherwise miss out.
The impact of basic income on poverty - Evidence from pilots
A world basic income is likely to be introduced at a fairly low level (although the aim would be to increase it over time as income streams open up). Therefore the greatest impacts on poverty will be for the billions of people who are currently struggling by on very low incomes.
Basic income pilot projects have shown that providing a regular cash income to people - even a very small income of less than £10 per month - has been a highly effective way to combat poverty. Some commentators have been sceptical as to whether poor people would spend money wisely in ways that truly improve their quality of life, suggesting that basic income could increase spending on alcohol, drugs, jewellery or luxury clothing. The evidence from real-world experiments shows the opposite - people have tended to spend their basic income on goods and services that significantly improve their well-being and that of their families.
Basic income pilot projects have shown that providing a regular cash income to people - even a very small income of less than £10 per month - has been a highly effective way to combat poverty. Some commentators have been sceptical as to whether poor people would spend money wisely in ways that truly improve their quality of life, suggesting that basic income could increase spending on alcohol, drugs, jewellery or luxury clothing. The evidence from real-world experiments shows the opposite - people have tended to spend their basic income on goods and services that significantly improve their well-being and that of their families.
Impacts of the Basic Income Grant in Otjivero-Omitara, Namibia
In a basic income pilot in Otjivero-Omitara, Namibia, people were found to have spent their money (around £4.60 per month) on:
Just a year after the beginning of the experiment, many positive impacts of the basic income, and little or no negative ones, were apparent:
- Food (previously, 80% of households reported sometimes or often having not enough food)
- Starting small businesses, in brick-making, baking bread, and dress-making.
- Healthcare - basic income enabled people to pay the N$4 (18p) clinic fee.
- Paying children's school fees of £2.30 per year.
Just a year after the beginning of the experiment, many positive impacts of the basic income, and little or no negative ones, were apparent:
- The poverty rate fell from 76% of households to 36%, and fell to just 16% of households not affected by inward migration (the improved circumstances of people in Otjivero-Omitara led family members living elsewhere to move in with them, spreading the basic income more thinly within the household).
- The proportion of people involved in income-generating activity rose from 44% to 55%.
- Child malnutrition rates fell from 42% to 10%.
- There was a 36.5% drop in crime, and alcohol consumption did not increase.
Tackling poverty in Madhya Pradesh, India
In a basic income pilot in Madhya Pradesh, India, people spent their money (around £2 or £3 per adult, and £1 per child, per month) on:
Once again, the impacts were strongly positive, with clear improvements in many areas of people's lives:
- More and better food, including more vegetables, pulses, eggs and fish.
- Medicines (women especially felt able to spend on medicines, rather than relying on 'home remedies').
- Seeds, fertilisers and livestock for their own farms, increasing their productivity.
- Building toilets and wells.
- Avoiding debt - by the end, 78% said their indebtedness had reduced.
Once again, the impacts were strongly positive, with clear improvements in many areas of people's lives:
- The proportion of households reporting that they could afford enough food went from 52% to 78%.
- The majority of households said they had noticed an improvement in their health, from being able to buy medicines when needed, from eating better, and from reduced anxiety. Fewer families had to get into debt to pay for health expenses.
- 66% of girls in the basic income villages were in secondary school by the end of the pilot, compared to just 36% in the control villages.
- Families were also able to increase their earned income, with 21% reporting an increase in work activity.
- Women gained more control within the household in basic income villages. By the end of the experiment, 54% of women said income was shared equally in their household, compared to 39% in the control villages.
Economic growth will not end poverty - its time to tackle distribution
The UK's Department for International Development write, "Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries." Growth in world production certainly can bring benefits for the poor, but there is strong evidence that because the poorest people benefit the least from economic growth, this alone will not be able to end poverty. We will also need to adjust the way that income gains are distributed if we want to ensure no one lives in extreme poverty.
An analysis by UNCTAD's Senior Adviser for Africa, Least Developed Countries and Special Programmes looked at how much the world economy would have to grow in order to raise everyone in the world to the still-very-low income of at least $5 per day. It found that world production would need to increase to 173 times the current level, and world GDP would need to reach $1.36 million per person.
These figures are staggering. The quantity of natural resources that we would need to produce 173 times as much goods and services as we do today, every year and continuing forever, is clearly not going to be available on our finite planet, and the carbon emissions generated by producing even a fraction of the energy required would cause enormous climate change. It also seems unlikely that the average person could even manage to consume $1.36 million worth of goods every year, which they would need to do if this imagined economy is to come about.
These figures show that simply growing the world economy, while allowing the poorest people only the same proportion of income growth as they have receive in the last couple of decades, is not a workable strategy for tackling poverty. We need to tackle the distribution of wealth and income, to make sure that our very high and growing levels of world production actually translate into a better standard of living for those who need it most. The evidence shows that this does not happen on its own - we need deliberate interventions to shift income distribution away from the already well-off, and towards the poor. World basic income is one such intervention, which could redistribute world income in the right direction.
An analysis by UNCTAD's Senior Adviser for Africa, Least Developed Countries and Special Programmes looked at how much the world economy would have to grow in order to raise everyone in the world to the still-very-low income of at least $5 per day. It found that world production would need to increase to 173 times the current level, and world GDP would need to reach $1.36 million per person.
These figures are staggering. The quantity of natural resources that we would need to produce 173 times as much goods and services as we do today, every year and continuing forever, is clearly not going to be available on our finite planet, and the carbon emissions generated by producing even a fraction of the energy required would cause enormous climate change. It also seems unlikely that the average person could even manage to consume $1.36 million worth of goods every year, which they would need to do if this imagined economy is to come about.
These figures show that simply growing the world economy, while allowing the poorest people only the same proportion of income growth as they have receive in the last couple of decades, is not a workable strategy for tackling poverty. We need to tackle the distribution of wealth and income, to make sure that our very high and growing levels of world production actually translate into a better standard of living for those who need it most. The evidence shows that this does not happen on its own - we need deliberate interventions to shift income distribution away from the already well-off, and towards the poor. World basic income is one such intervention, which could redistribute world income in the right direction.