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Comment by r00fus | Hacker News Reader

The opposite of austerity. I liked this part:

Direct cash payments cut out the many leaks and corrupt intermediaries. Delawa said: “The idea of unconditional income comes from the failure of conditional programmes. As soon as there are conditions, there is erosion. Conditionality means intermediaries, which means power, which means corruption.”

Corruption is the reason aid programs are so inefficient. By giving money directly to those impacted, the poor are empowered to save and concentrate their unconditional small wealth into larger pools and wield power of a sort.

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That was the reason even Milton Friedman, otherwise pretty much the opposite of a socialist, though that a basic income was a good option even in western countries. His view was that just giving people unrestricted cash would cut out much of the corruption, inefficiency, and market distortion that creeps in once you start giving intermediaries the power to put conditions and restrictions on support. For example, with food stamps, he was skeptical that the restrictions requiring people to buy "proper" food with them produced better results overall than just giving people the equivalent amount in cash and letting them decide. For one thing, if individual recipients are choosing their food, rather than picking it from a list of food-stamp-approved choices, it completely removes the whole business of lobbying to be on the approved list, plus the bureaucracy of administering the list.

The problem is that the economy is often seen as more than a mechanism for efficient allocation and transfer of resources: for many, it's also a source and enforcer of moral order.

"People who work hard and play by the rules should have a shot at success. People who don't work shouldn't be given handouts. Corporations who misbehave shouldn't be bailed out, because they're just incented to misbehave again. We should drug test welfare recipients even though it ultimately costs us more than it saves us, because drug addicts shouldn't get welfare." etc etc etc.

I'm not saying it's true, but in all of those cases it intuitively seems like a bad idea to encourage/not discourage those behaviors. Giving people handouts might give them an incentive not to work, giving corporations handouts lessens the incentive to not fail (and keeps the competitors which did better from gaining a larger market share), refusing drug addicts welfare might encourage them to get help, etc.

I'm not saying these things are necessarily true, but it certainly seems reasonable if you don't know otherwise. The point being that it's not because people necessarily see these things as moral issues, but just possible incentive problems.

I couldn't tell if you were implying this, but FYI in the US today food stamps can be used on any food item that isn't prepared (i.e. already cooked).

Yes, I agree. Get rid of the conditions and pay people directly through bank transfers.

The public should push for a basic income in developed countries also. A universal basic income would provide a safety net for entrepreneurs and make it easier for people to pursue education or high risk ventures. It would eliminate vast numbers of bureaucrats and lawyers from programs like US Disability. $1.5 billion was spent on disability lawyers in 2010 (http://online.wsj.com/article/SB1000142405297020351840457709...)

Governments could pay for a universal basic income with pollution taxes. The overall program would be revenue neutral. People would be discouraged from wasting energy (e.g. gasoline) to do low value work.

Basic income and government healthcare would be amazing for freelancers and entrepreneurs.

However all our politicians are owned by the corporatists. Effecting change like that seems asymptotic, unreachable.

Universal income should be popular as every voter would benefit. Alaska has a provident fund with payments to every resident. It might happen in Europe next as a backlash to the austerity programs in place now.

Even when corruption isn't an issue -- and it always is -- there is a lot of waste when some bureaucrat spends someone else's money. But this is their money, and they know exactly how much they would have to work to get it, so they spend on what they need.

And this money makes the whole economy flow in their previously cash-starved communities. The effect can be astounding.

Just look at Brazil's income distribution program: Bolsa Familia.

It has been shown to improve local economies and people's lives. Even though it is not completely unconditional and doesn't quite get to provide enough for basic needs.

Austerity is perpendicular to this. You could very easily have a basic income but insist on a strict balanced budget, which would be austerity. You could also very easily have a basic income and a government deficit, which would be anti-austerity.

thank you for mentioning this. "austrian economics", for all its flaws, has little to do w/ current austerity policies

Direct payments on this scale don't solve the problem of rentiers that are able to extort the poor. Someone still has the power to directly hand out the cash, and record who has and hasn't received it. Someone still has the ability to dupe villagers into believing the cash payments are contingent upon his goodwill. And somebody still wields enough economic or social power over the villagers to direct most of the returns into his own pocket.

The article itself pointed out the real problem with the villagers was that the local landlord owned their land and their debts - a local landlord with the ability to raise everyone's ground rent, increase the work requirements for debt service and appropriate most of the direct cash payment for himself.

A compulsory purchase order served on the landlord, and/or some kind of rent control might well be a more effective long term solution to these villagers' long term needs - even though such schemes have obvious potential for bureaucratic abuse.

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