Is It Nuts to Give to the Poor Without Strings Attached?
nytimes.com
nytimes.com
This isn't charity. It is partnering with a talented group of village leaders that understand the needs of the community far better than we could. There is accountability but it's driven locally and it's sustainable. They'll be able to carry the momentum they created long after we're gone.
There are plenty of models that work, and I'm glad there are so many helping out. But I've seen first-hand that allowing a community to pull the help they need works better than a foreign push model.
Sooo, they pay you US rates for your consultancy?
But the best kind, the kind that may actually work long-term (as long as "raise money" means voluntary donations, and not some sort of taxation).
In contrast, I live in Brazil, here we have a governmental handout program which gives sure money every month. People use that money to short term spending, there is not much entrepreneurship or sustainable richness generation among the receivers.
It would APPEAR that one time downfall stimulates wise spending, since that has much more value than "blowing it on booze and cigarettes" or buying a plasma screen. One should, of course, have in mind that the article seems to only show us a few examples, constituting anecdotal evidence at best, prompting for further studies.
Another thing to consider is if this model is better than microcredit which stimulates entrepreneurship less diffusely and possibly more efficiently in respect to the relation between total program cost versus social betterment.
If on one side we have the fact that microcredit only costs the subsidy to the interest paid the debtor, things such as the metal roofs would not be feasible under such a model and although money would circulate and the entire society would benefit, this program would only be directly beneficial to people who have entrepreneur qualities, effectively creating very distant social classes (which is kind of ironic for a program which aims to distribute wealth). Could such a disparity dissipate over time, or would it evolve to a social abyss?
For every society the answer is probably different and the ideal path probably lies somewhere in the middle. One thing is certain: no matter what route is taken, this certainly shakes things up; and in a stale misery scenery, I can't seem to find a reason for this not to be positive.
My father once said that however bad a social program is, if it betters society it can only be the second worst thing to do, the worst being doing nothing.
Microcredit was a huge fad a few years ago, but then some studies found that its effectiveness may be suspect and requires more study. See http://en.wikipedia.org/wiki/Impact_of_microcredit
Those who become rich because of their work arguably have habits of working and investing in their ability to produce. Those not able to produce will have less reason to learn how if their income is somehow guaranteed.
I don't think that's the real issue stopping basic income. I think the real issue is that the money has to come from somewhere --- specifically, the money would necessarily come from the high earners in society. And they would have to agree to basic income since in our current form of democracy the high-earners have a disproportionate influence on the law.
However, the world's economy has been changing, such that it might actually behoove high earners to donate a portion of their earnings to basic income. Specifically, as automation decreases the need for human labor, then profits go up and employment goes down. This has actually been the trend since the 1970's. And if employment goes down too much, then there won't be enough spending money in the population's hands to fuel further earnings and economic growth.
There is an excellent, short book by a couple of MIT economists that analyzes the economics of modern automation and makes the case for guaranteed income. "Race Against The Machine," by Erik Brynjolfsson and Andrew McAfee.
Money doesn't come only from taxes, it can also come from printing. However, relying on printing money to cover government expenses has been a bad idea pretty much everywhere (there are a lot of examples of hyperinflation, like Zimbabwe, Argentina and Germany). Among many nasty effects, it destroys any savings people have.
A lot of the money comes from not running the bureaucracy required for a complex means tested benefits system.
If you took the existing UK budget for social protection, which does not include the existing health or social housing budget, and divided it equally among the population, it comes to about £58 per week, which is more money than you get right now on job seekers allowance if you are under 25 in the UK.
If the government printed money and gave it directly to the impoverished it would be equivalent to a tax on everyone else (and the wealthy would experience the largest absolute wealth loss).
Money is only useful in so much that it represents a fraction of the total money supply. It represents a kind of point system for the distribution of wealth. I might own one trillionth of the total money supply, whereas a more wealthy person might one one millionth of the money supply.
Thus, when you print money it reduces everyone's wealth (except for the new money holder). So let's say today there is $1 trillion in the money supply, and I (the government) print another trillion and give it directly to the impoverished. The value of every dollar has just been halved. So every millionaire has essentially become a half millionaire.
So yes, if you printed $1 trillion and gave it to the impoverished it would be equivalent to a tax on everyone else (and the wealthy would experience the largest absolute wealth loss).
However, in today's banking system newly created money disproportionately ends up in the hands of the wealthier. In this way, creating money (today) is a tax on the impoverished and the lower earners in society. See http://en.wikipedia.org/wiki/Money_creation
Because in the latter case, "them's fightin' words."
Here's why: let's say you compute an amount $X of income everyone gets. This means that everyone now has enough money for food, rent and other basic necessities. That means that the demand for these goods will increase (maybe not much in the US, but significantly in other parts of the world). That means that the prices for those goods will increase (unless production increases somehow, but why would it?). To adjust for this, the government would have to increase the income; then the prices would increase again and so on. Basically you'd have rampant inflation.
Now the counterargument is going to be that this wouldn't happen, because production would increase up to a point where everyone's needs are met, and prices stabilize. However, production still depends on labor. What incentives would people have to put in more work to produce more?
It is mostly a number game - you have to keep the basic income:
1. Fair - everybody gets the same sum no matter of employment status. 2. Really basic - it should be enough for food and utility bills but not rent.
Employment is complex topic. I go crazy if I stay without work for more than a few weeks. People like to work - case in point - almost every person has hobby that he is very passionate about. They don't like being forced into it.
Personally, I think that one of the best things you could do to increase production is to ensure that people are not living hand to mouth. The personal strategies of the desperate are not conducive to a working economy.
"What incentives would people have to put in more work to produce more?"
Boredom and curiousity. That's all you ever need. Hunger only inspires people to get fed. Satiation inspires them to design new houses.
To have more than other people. You don't need to threaten people with hunger and kicking them out on the streets. Just allow them to show off and they'll compete for bigger telly and nicer car/scooter/bicycle.
Whenever I hear of basic income, it always takes me back to communism. The main difference is that communism wouldn't let you have more than others (people found ways around that anyway).
A few other examples: http://en.wikipedia.org/wiki/Basic_income#Examples_of_implem...
http://cyprus-mail.com/2013/07/26/president-announces-guaran...
1. build infrastructure (water, electricity, roads, communication, education services, political infrastructure, financial etc.)
2. "lift people up" to a level at which they can make use of the infrastructure, through education and covering some of their basic needs.
No-string-attached donations are great for (2), but they are limited in impact and quite pointless if the people don't have the "infrastructure" to grab to once they are "lifted up a bit" - you'll only end up with poor uneducated people that will have more children so you'll end up with more poor uneducated people.
Otoh, if you build the infrastructure but you don't do something to directly lift people up from misery, poverty and depression or hopelessness you'll probably end up with an even bigger waste of resources and lots of angry people.
Philantropists and governments that want to lift their countries out of poverty should understand that you need both (1) and (2) simultaneously and that of course you need to have (2) with no-strings-attached (an ER doctor doesn't make a cardiac arrest patient sign a contract before resuscitating him!!!).
There's poverty where you grow up on one box of macaroni and cheese per day and your parents are never home but you have a roof over your head and at least free school lunches. You're not actually dying or being exploited into human impotence. You just lack avenues to grow into a full and complete person who can escape poverty.
And then there's poverty once that same child grows up and the welfare system has been dismantled and there's no more public housing, so he/she is working two or three jobs just to afford a roof over their head, real food of any kind is unheard-of, and you'd kill for a good night's sleep or just one Sabbath meal -- if you had the energy to kill.
The latter kind, you can solve just by giving people money. At the very least, it raises them up to the former kind, and from there, all you might need to really improve their life might be a decent library or a community center or a good source of stable jobs.
There's no excuse for not contributing.
My effective income tax rate is 50%, and then there is an additional 25% VAT on everything I buy. How much more of my income does the all-knowing Eli Gottlieb suggest I "contribute"? Perhaps I should give away the remaining 25% and go live on the streets as a declaration of solidarity?
You can only pay VAT on the 50% of your income that you keep (and that is presuming you spend all of it). So you have 50% * 75% = 37.5% of your income left to give to charity.
I also find it a bit interesting that you are OK (presumably) with giving away 63% of your income to the government, where you have hardly any say in how it is spent, but offended at the idea that you should give anything else away when you can choose where it goes.
Guess what? This story isn't about you.
Surprisingly, giving money to poor people makes them not-poor.
Now, for some reason, people tend to be averse to outright cash transfers, because they think that pre-tax income has a special significance in that it is somehow "natural". Matt Bruenig explains this better than I could, e.g. here: http://mattbruenig.com/2013/07/21/tm-scanlon-is-wrong-about-...
The essence is that pre-tax income is not in any way "natural", but also results from more or less conscious decisions made by society. So the reason that you think solving poverty is hard is that you assign a specific significance to the difference between pre-tax and post-tax income.
For a while at least. In many cases, they just spend that money and go back to being poor. It's not universal though.
Let's say you give a poor man enough money to start a business. Starting a successful business requires some basic business/economics knowledge and insights, a market and a lot of work to make it succeed. In addition, they might have to struggle with local corruption and bureaucracy. Because of all these difficulties, you have no guarantee they'll actually break out of poverty. Also, they might just take the money and spend it on leisure (buy a car, TV, clothes).
I think what helps people is education about economics and legal systems. If you have a free society in place with rule of law, people break out of poverty on their own.
> For a while at least. In many cases, they just spend that money and go back to being poor. It's not universal though.
You missed the point, though I have to admit that it is a subtle one and not well known. So let me continue playing devil's advocate.
The not-poor are only not-poor because they receive money through some already existing mechanism of distribution. If that mechanism ceases to operate, they will likely become poor by spending all their money.
So, yes, if you make the currently poor not-poor by changing the existing mechanisms of distributions, and then change those same mechanisms back to how they are today, then quite likely many of them will revert to being poor.
That is not an interesting point, yet somehow people think it is. Why?
Probably they think so because they have an unconscious and implicit belief that the currently existing mechanisms of distribution are somehow "natural". Frankly, that is a bizarre proposition.
Just consider how many laws affect the distribution of wealth in society, many of them largely arbitrary. This holds for laws of commerce, laws governing corporations, it holds for a lot of regulation, it certainly holds for things like patent law and copyright law.
> Probably they think so because they have an unconscious and implicit belief that the currently existing mechanisms of distribution are somehow "natural". Frankly, that is a bizarre proposition.
That strikes me as an un-natural way of looking at things. If a farmer grows potatoes and sells them for money, he's not "receiving" money, he's trading for it (he's receiving money as much as the other guy is "receiving" potatoes"). That seems very natural to me (you give something, you get something). Even in situations where this trade is illegal, it still happens; for example, drug dealers. They sell you heroin/cocaine/marijuana, you give them money. That transaction is highly illegal, yet it still happens because addicts want drugs and dealers want money (that they then use to buy other stuff with). On the other side of the spectrum, you have the completely legal and moral transactions, like the potato example I gave. Laws have some impact on the basic natural tendency of people to trade for what they need, but they can't make trade go away (look at alcohol prohibition for another example).
I think the main cause of poverty is that poor people don't have much to trade (skills, labor, resources, even ideas or art). In other situations, trade is simply made difficult (for example, if you live in a warzone, it's pretty hard to be a hairdresser or grow potatoes).
When giving money to the poor in a highly oppressed area of the world (like Kenya) I would think that this is a great idea assuming that most people are inherently good and that their poorness-situation is due to a lack of opportunity rather than a lack of will power.
When giving money to the poor methamphetamine-addict who is incessantly harassing every passer-by for some bus money (found in the downtown areas of many prosperous and free cities throughout North America) then no I would say that is a horrible waste of capital. Due to their having a lack of will power to "succeed" rather than a lack of opportunity.
What you refer to as 'will power' is socially constructed to a much greater degree than you seem to realize, and is deeply intertwined with privilege and opportunity.
You raise some points that I've heard before, and I would like to address them all, and explain why I think it is rational for me to give money the way I do.
(1) "I would say that is a horrible waste of capital" to give money to meth addicts.
I give a dollar to whoever asks me for money. I can't tell who is a meth addict and who is not. I am sure much of my charity goes to alcohol, tobacco, marijuana, meth, and other drugs. I just consider that a cost of doing business. For every dollar I give out, some subset of that money goes to __non-drug use__. I think that is a good use of my capital.
(2) "Due to their lack of will power to 'succeed' rather than lack of opportunity."
There's a couple of things to say to this sentiment.
First, I often hear the notion that impoverished people have the opportunity to bring themselves out of poverty. That's not true. The world's economic system results in non-zero unemployment. Meaning there are more people who want jobs than there are available jobs. Thus there are inevitably many people who want to work but can't get it. The only way they can survive is through charity --- from either friends, family, strangers, the government, charities, etc.
The last point I'll make might be the most controversial, but it is also at the core of why I give money directly to impoverished people.
I am skeptical that "will power" exists in the literal sense. As in, I am skeptical that free will exists as much as people tend to intuitively believe. It seems to me that humans are just moist robot automatons whose actions are the result of their current physiological state and response to the stimuli on their senses. Some interesting scientific research has shown that humans can perceive more free will than they actually have. There is also some interesting philosophical arguments that suggest free will could be a complete illusion. See http://en.wikipedia.org/wiki/Neuroscience_of_free_will
So I think it's possible that people who "lack of will power to "succeed"' are simply __unlucky__. And I happen to be lucky. I am smart, tenacious, hard-working, have relevant job skills and I happen to live in a society where those variables are rewarded with wealth.
It therefore makes sense to me to give people small amounts of money when they ask for it. It just might be the case that I am lucky and they are not.
I do not expect this money to solve any of their problems. But maybe the person I help will buy a tasty snack and their happiness will go up in those moments. Or maybe that person will buy a cheap ukulele and teach himself to play --- which happened the other day with someone I regularly give money to.
Look I appreciate your desire to help. It's a fantastic thing, and something we should all do. However, giving money to people on the street is not helping. It's enabling.
Basically every city has some sort of program to help the homeless work themselves back into society in general. These programs are generally built around strict oversight and supervision during those early days.
These programs are effective and important. However, they do require the people participating in them to be fully "bought in". When you give a dollar to someone "down on their luck", you are really giving them just enough of a life-rope to keep from entering these programs (which require sobriety as a matter of course).
You're not helping them. You're ensuring that they spend another night on the street, and ultimately that may prove fatal. They need to bottom out and seek help of their own free will. That's how the road to ending their homelessness truly begins.
* source: Working with several homeless organizations.
I live in New York, and I frequently travel in NYC. I've spoken to a number of homeless people. How do you counter the often heard response that homeless shelters pose a risk to people entering them?
I have heard stories (I don't know if they're true, but I wasn't told on the pretense of giving money) that homeless shelters frequently house other members who will steal from their fellows or abuse them (sometimes sexually).
Like I said, I like your argument. But you worked with several homeless shelters, I want to know your take on this.
People spending significant time in shelters (again, in my city) are refusing to enter into these programs.
I've a few questions (from legitimate curiosity - I have no point to prove here,) if you'll indulge me:
* What percentage of the homeless you've encountered in your work are mentally ill?
* What percentage are addicts?
* Of those addicts, how many became homeless because they were addicts, and how many became addicts after they became homeless?
Your post maintains that people should hit rock-bottom; then they will be integrated into government programs to "work themselves back into society in general" with "strict oversight and supervision". And, "They need to bottom out and seek help of their own free will." This notion of "free will" is actually "desperation". It is not a free choice between alternatives.
Consider this: have you spoken with a parent who complained about some random rude person who criticized some minor aspect of their childcare? (Usually a mother, since even rather negligent fathers are heroes.) That can ruin people's days, make them angry and humiliated. Consider being in an institution which is all about this "strict oversight and supervision". And what's the prospect? Many uninterrupted hours a day of even more dignity destruction washing dishes for some strict boss. (Who often stiffs them on their paycheck to boot.)
(I'm not saying people have to individually give money to their fellow humans down on their luck. If people prefer some small sustainable amount of activism to fight the societal structures which make people poor, good on them. That's collective action, not atomized individual action; certainly in the business world, people organize into strange sorts of collectives. And activism is generally in their own interests; the prospect of being poor scares people into accepting worse conditions for being cogs in the machine. http://www.nytimes.com/1997/02/27/business/job-insecurity-of...)
Recall, my goal isn't to solve their problems by giving them small amounts of money. I think to solve their problems we need to make society-wide changes. Under our current form of society, there will __always__ be people on the bottom.
My hope is that they can use my donation to temporarily boost their happiness. Similar to how when I spend $2 on a cupcake it temporarily boosts my happiness.
> "It's enabling."
My thesis is that I am not enabling their poverty. If we stopped giving them money, they (in aggregate) could not work themselves out of poverty --- because there isn't room for everyone to make money in our society. Recall, unemployment is non-zero.
> "Basically every city has some sort of program to help the homeless work themselves back into society in general."
I think these programs are important. But I don't think they should be the only mechanisms by which we contribute charity to impoverished people.
> "However, they do require the people participating in them to be fully "bought in". When you give a dollar to someone "down on their luck", you are really giving them just enough of a life-rope to keep from entering these programs (which require sobriety as a matter of course)."
It sounds like you are essentially saying that the homeless should be helped __exclusively__ through these programs. I disagree. Not everyone will benefit from those programs; not everyone is even elligile for admission. For instance, you point out non-sober people won't benefit. I don't think people are universally capable of curing themselves of addiction. Some people are unlucky and do not have the "will power" to overcome addiction. This comes back to my point about the possibility that free will might be an illusion: http://en.wikipedia.org/wiki/Neuroscience_of_free_will
> "You're not helping them."
I am helping them. They smile when I give them money, and then they use it in whatever way they think will improve their life.
> "They need to bottom out and seek help of their own free will. That's how the road to ending their homelessness truly begins."
I am glad you made that point because I think it illustrates the core of our disagreement. It seems you strongly believe in the existence of free will. You believe that people have a "choice." Whereas I am skeptical that free will exists.
I think it is plausible that impoverished people could literally have zero ability to "make choices" that could bring them out of poverty. I am lucky; they are not. I get to eat complimentary delicious food at work, whenever I want. I want to share my wealth directly with the unlucky.
Sure, I could give someone a dollar and that person could use it to buy a small portion of their last hit of heroin which finally ends up killing that person.
This message is saying that I am responsible (at least partially) for that person's death.
The bigger causes of that person's death is that this person is a heroin addict, and something caused this person to be a heroin addict, and that someone is selling heroin, and that someone is making heroin, and so on and so on....
When you account for all the causal factors that led to that person's death, this one dollar is just the straw that broke the camel's back. The real cause of the death is all the other factors that brought that person to become addicted to heroin to the point of overdose.
http://www.thisamericanlife.org/radio-archives/episode/503/i...
http://web.ntpu.edu.tw/~ckliu/course/research/lifeboat.pdf
Whether you agree or not, there is something in the argument to consider.
http://www.ribbonfarm.com/2013/07/31/the-quality-of-life/
> When you actually meet people living in tough conditions, you realize that they don’t exactly make up dreams for their lives in some UN-approved sequence; water first, food next, healthcare third, money fourth, philosophy when I am rich, alcohol and marijuana never.
It's better than this, go and read it.
also if you sort of prioritize some social connection to supplying money, or you try to think about it with a strategy
. . . is that giving
Disclaimer; I'm a blue eyed guy born and raised in norway. So excuse me for having a naive view on this topic.
Being that this is the NY Times one always has to be guarded about potential ideological bend on articles. This is no different than watching Fox News vs. CNN. The bend here might be to somehow use some of these success stories to create support for our entitlement programs.
The problem: Culture and History.
A continuous stream of free money devolves a person into a state of mind from which it is hard to self-extract. By this I mean that free money forever and without any conditions creates, well, to put it simply, lazy people without any motivation. In that sense this kind of "help" is actually damaging to society, creating a whole layer of people with a perennial need for support.
And, in this kind of an environment criminal twists and turns also develop. There are plenty of videos on Youtube from people explaining how to abuse the system by, for example, having lots of kids in order to increase your monthly take. The damage to society from such behavior probably can't be measured. You have single mothers with a bunch of kids from probably different fathers --none of whom really care about the kids. The kids are seen as sources for money and goods. They live a crappy life outside any semblance of even a quasi-normal nurturing family. The rest is history: Whole layers of society stuck in a perennial muck of poverty, ignorance, crime and social mayhem.
We have tens of millions of people who have been on one or many layers of government handouts of generations. Generations. What we have accomplished with that is far from helping the poor. We have destroyed generations of people who would otherwise have certainly become very useful members of society.
Giving money indiscriminately, with no limits or conditions for years, for generations, is horribly damaging. It only exacerbates the problem and creates a perennial load on society at large and a massive cultural and, yes, financial cost.
And that's the culture and history. A lot of our poor have been living through various layers of handouts forever. And rather than helped them we have destroyed them as people.
To be sure, it is the responsibility of any modern society to look after those, who through whatever circumstance in life, fall on hard times. I believe, with passion, that it is absolutely important to have a way to help individuals and families. Long term help that isn't careful about devolving those being helped to the point of, effectively, transforming them into less-than-useful members of society, isn't good.
We have this problem.
The poor being highlighted in this article come from a very different frame of reference. They are struggling as few of us can possibly imagine. And in their struggle they work hard --very, very hard-- to provide themselves and their families with a meager existence. They are poor beyond most Americans comprehension, yet they maintain family units and live within the nurturing context families provide. They do not --for the most part-- resort to crime and will do almost anything and take almost any job to earn some money for their families. They are not out there buying iPhones, cars, fancy TV's, eating expensive and bad junk food. I could go on, but I want to be somewhat kind to the American poor, the vast majority of whom are nice people on hard times. Regrettably we have millions who are not.
When you take someone with the culture and history of this representative example of a Kenyan poor and, out of nowhere, provide him or her with a lifeline the results are bound to be very different. Of course they are not going to go out and burn that money on booze, TV's or other luxuries. That is not in their culture. They see this as an opportunity to make a real effort to intelligently better themselves. To improve their station in life and make an attempt to raise their family up a few notches from where they were.
This culture is very similar to that of the masses of immigrants who made-up the US as well as those who continue coming here. The story is familiar: They come here with nothing. Often even without command of the language. And, after a few years of struggling, you find them doing very well. A lot of them end-up owning small local businesses and some create huge enterprises. Their children are well-balanced, respectful and dedicated to academic excellence.
These poor and often uneducated immigrants almost always surpass our native poor in almost anything you might care to measure. Again, it is down to culture and history. Our poor don't have the drive. They lost it. And they lost it because we have been throwing money at them for generations. Immigrants come to our shores without any expectation of handouts. They land here already knowing that they are going to have to work hard and be relentless if they want to create a better life for their families. That they do.
If we truly want to help our poor out of the caves (Platonic reference, not literal) we actually have to cut back on aid in a reasonably staged manner to force them into an alternative life path. I am not proposing this is easy. Not at all. The sad reality is that this would be political suicide for anyone to approach, even superficially. And because of this we have millions of poor that, generation after generation, stay in the muck and are unlikely to get out. We need to cut off the flow of free money and put into place a system that slowly reintegrates those of able body and mind (again, able body and mind) into the productive layers of society.
Those with mental or physical ailments that prevent them from fully participating in society do deserve our help for as long as required. If a family exists then they would be expected to provide for them. Those without any kind of a support group would absolutely need public help for as long as required. We must keep in mind that we see incredible examples of what the disabled can do with great frequency. For example, there are disabled athletes that can do things most full-bodied couch potatoes in the US couldn't even dream of doing. We have to be very careful not to cause damage with handouts. I am not the one to decide where the lines are other than to say: Do not underestimate the power of a motivated individual to struggle and climb incredible hurdles to better themselves.
At some level I am speaking as someone who has been there. I had a massive business failure early in my life. I am quite literally talking about something that left me with almost nothing but the clothes on my back. The job market was horrible at the time, with hundreds of engineers lining up for every single available job. My response was to start a small business from my garage. Within two years I had moved out of the garage and was employing several people. I did not take any government handouts. I raised a few thousand dollars from family and friends and worked 18 hour days seven days a week for two years. I can't describe the sense of pride and accomplishment this sort of thing brings.
And, yes, while I am an engineer and far from being uneducated a struggle is a struggle. I know plenty of people with excellent educations who cave in when faced with trouble. I also have a very good friend from Israel who came to this country with no money and without even having finished high-school. He literally slept in his $250 junk car for six months as he launched into delivering small packages for businesses. He would sleep in the parking lot behind his customers businesses waiting for packages being ready for delivery at all hours of the night. He saved as much as he could and eventually got himself a newer car. Today he employs nearly fifty people, has a nice business a beautiful family and owns several properties. No education + No money + No handouts. Huge drive to succeed. Success.
We have destroyed our poor through mindless handouts.
Culture and History. Very important.
Also, pretty much every lottery winner ever.
...which is not to say that giving money to the poor is always a bad idea, but dropping huge lump sums (and in rural Kenya, $500 is huge) to random people with zero accountability does seem... inefficient at best.
But more importantly there's a stark difference between somebody who lives homeless in a developed nation vs a bunch of villagers living in poverty. I'm not sure how well I could articulate them but I imagine it comes from the perspective of what is considered "well-off" for the homeless man vs the villagers.
Givedirectly [0] are a charity that do this, and they do randomised trials and conduct follow up interviews.
Maybe it's a difference in money. Give someone just enough money to make their life slightly less awful for a bit (e.g. enough for a drink, not enough to get somewhere to live) and it's probably not going to help much. Give someone enough to actually make a difference and they probably will. GiveDirectly finds that people get things like tin roofs, invest in their businesses, pay for education and medicine.
A couple of quotes from their page
> Cash transfers benefit children. Many studies find positive effects on the health of children - for example, large increases in height-for-age and weight-for-height in South Africa, large reductions in HIV infection rates and psychological distress in Malawi, and large reductions in the incidence of low birth weight in Uruguay (2,15,16,17,18,19,20,25,26,27,29). Several studies also find that unconditional cash transfers substantially increase schooling and decrease child labor. (21,22,23)
and
> Cash transfers have long-term impacts. Recipients often save or invest a large proportions of the transfers they receive, generating increases in future income. (1,2,3,4,5,6) One study found that men's annual income five years after receiving transfers had increased by 64%-96% of the grant amount. (24)
The references are on the linked page.