Free Money Is No Joke: Confessions of a (Former) Skeptic of Basic Income




Caption: Hand giving gift to a person (Image Credit: akindo via iStock)



Series: Effective Giving


Written by Dr. Gleb Tsipursky, Intentional Insights Co-Founder and President


First published in Salon

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Getting a tire replaced seems easy to me - I’d just go to the nearest tire place and get it fixed. Well, Jayleene was living from paycheck to paycheck, and didn’t have the $110 to spare. She couldn’t get to work, and her boss fired her. She couldn’t make her rent, and was soon out on the street, all because she needed $110 at the right time.

Jayleene told me her story during my shift volunteering at a soup kitchen. Her experience was the final straw that convinced me to support basic income, the notion of giving people an unconditional living wage, supported by conservatives and liberals alike. Basic income is becoming increasingly popular around the world, with Finland, the Netherlands, Switzerland, and Canada experimenting with it.


So is the United States. In fact, there is a planned study in California funded by the well-known Y Combinator. The President of Y Combinator Sam Altman described the study thus: “In our pilot, the income will be unconditional; we’re going to give it to participants for the duration of the study, no matter what. People will be able to volunteer, work, not work, move to another country—anything. We hope basic income promotes freedom, and we want to see how people experience that freedom.”


Does basic income make you skeptical? I know I was pretty skeptical when I first heard about basic income. Sure, I care about people and don’t want anyone to starve, to be homeless, or lack medical care. But there are nonprofits and government programs that are specifically created to take care of these needs. In fact, I myself volunteer at the soup kitchen and run fundraisers for food banks. So why give people money to do whatever they want to do with it?


I had two big concerns. One was that I simply didn’t trust poor people to manage their money well, and thought they would spend it on things like alcohol, drugs, and tobacco. Another concern was that people would stop working, and just do whatever they wished to do, as opposed to being productive members of society.


However, more and more evidence appeared that contradicted my beliefs. A number of studies showed that people given cash didn’t spend it on tobacco, alcohol, or similar “vice” products.Other studies demonstrated that those given a cash transfer did not do less work. Instead, the evidence indicated that people who received cash transfers improved both their income and assets, and had higher psychological and physical well-being.


Now, I could wait for more research, such as the Oakland study or another upcoming one by GiveDirectly. This nonprofit, highly rated by the best charity evaluator in the world, GiveWell, focuses on cash transfers to poor households in East Africa. GiveDirectly decided to run the largest study of basic income to date, using $30M to cover basic living costs of poor East Africans for a decade to settle questions about basic income’s long-term impact. However, I could reasonably predict the future, and conclude that these new experiments will show results similar to previous ones.


Hearing Jayleene’s story proved the clincher. I decided to bite the bullet, confess that my perspective was wrong, and update my beliefs based on evidence.


Freed of these limiting beliefs, I realized that basic income had other benefits. First, it’s simpler to provide basic income than to fund many overlapping welfare agencies, and we can save many billions of dollars by simply giving money to the poor. Second, basic income gives people more dignity and creates less hassle for them than our current an ad-hoc system. Thirdly, poor people like Jayleene are more aware than the government of what they actually need.


For all of these reasons, I am coming out publicly to renounce my skepticism and share how the evidence convinced me to change my mind. Now, there are plenty of unresolved questions about basic income, such as how to fund a transition to it and away from using a massive system of inefficient programs. Yet that’s a question of “how,” not “if.” I hope that sharing my story as a former skeptic of basic income will encourage a conversation about the next steps on the question of “how.”


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