And I have to mention, their presence was far from cheap — think of health care costs, legal costs, policing costs — they were costing the British taxpayers hundreds of thousands of pounds every year. So, everything had been tried at that point and it was time for something new.
In the spring of 2009, a local charity decided: Well, why not try free money instead? So, each of the homeless men received £3,000. Cash. No strings attached. They were completely free to decide whatever they wanted to do with the money. The only question they had to answer for themselves was: What do you think is good for you? Counseling services were completely optional. Now, of course, most of the aid workers, they didn’t have high expectations: they thought that, well, the men are probably going to spend the money on alcohol or drugs or gambling or something like that.
But then, something amazing happened. What happened in the first place was that the men turned out to be extremely frugal with the money they received. At the end of the first year only £800 had been spent on average. And what did they spend it on? A phone or a passport or a dictionary, each had his own idea of what would be best for him.
Moreover, a year after the experiment had started, the impossible had happened; 7 out of 13 of the men had a roof above their head. Two more had applied for housing. Some of the men took gardening classes; another learned how to cook, for example. They visited their children, again. And all of the men made plans for their future. It sort of seemed as if the cash had empowered them.
Now, I don’t know if there’s a politician in the room, but a politician would probably ask at this point: Well, this is a very interesting story, but what did it cost? What did the experiment cost? Well, the answer is £50,000, including the wages of the aid workers. So, in addition to giving at least seven individuals another shot at life, the project had saved money by a factor of at least seven. And this is a very conservative estimate.
Even the liberal, free market magazine, The Economist, concluded at that point: The most efficient way to spend money on the homeless might be just to give it to them. Experiments such as these, and they’ve been done all around the world, show us that we need to rethink what poverty actually is. Poverty is not a lack of character; poverty is a lack of money. Nothing more, nothing less. So, it turns out that it’s a great idea just to give money to the poor if you want to resolve that problem.
Ladies and gentlemen, we are living through a time and age in which our societies and economies are changing faster than ever. It’s an age of automation; the robots are coming for our jobs. Now, this will bring, obviously, great prosperity, but it also means that we will have to adjust. If we do not adjust, if we keep applying the solutions of the 20th century to the challenges of the 21st century, then the middle class will crumble, and inequality will soar. And truly this is a dystopian future.
Nowadays, governments are obsessed with pushing people into jobs, even when there are no jobs. It’s like the great inventor Richard Buckminster Fuller once said: So we have inspectors of inspectors, and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were doing before somebody came along and told them they had to earn a living.
I believe that the basic income is a better alternative to our current welfare mess. But I have to admit, throughout history, there have always been three arguments against it, three formidable objections.
Now the first goes something like this: Oh, it’s an interesting idea, but — I’ve done some calculations and it’s too expensive. Sorry, can’t pay for it. It’s not going to work. Now, this might have been true in the times of Thomas Paine, 200 years ago, when almost everyone, almost everywhere, was sick, poor, hungry and ugly. But it’s not true anymore.
As a society, we are richer than ever. I’d like to see the basic income as a dividend of progress. Because our forefathers worked so hard to achieve our current level of prosperity, we can now afford to give everyone a share of their accomplishments. And remember, eradicating poverty is actually an investment.
As one economist calculated that it would cost about $175 billion to eradicate poverty in the United States. That’s quite a lot of money, right? $175 billion each year — But it’s only a quarter of the country’s military budget. So this is entirely possible, it’s entirely doable. And after ten, or maybe twenty years, it will turn out that the investment has paid for itself. Because the government will save billions in lower health care costs, there will be less crime, and there will be lots more productive citizens who will be able to fulfill their dreams.
So, let’s move onto the second objection, maybe that one’s better. The second objection goes like this: Ah, this is an interesting idea, we might be able to pay for it, but um — when you give people free money, they will stop working. You know, it’s human nature, people are lazy, nothing can be done about that.
The interesting thing here is that if I would ask each and one of you in this room: Would you stop working when I’ll give you about €1000 each month? About 99% of you would say: Of course not. I’ve got dreams, I’ve got ambitions, I’m not going to sit on the couch, no.