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Discussions around a basic income usually presuppose that government will necessarily have to provide this benefit.

I am aware of charities such as GiveDirectly who run trials conducting unconditional cash transfers in e.g. Uganda and Kenya, but I am not aware of larger initiatives organised by civil society with longer term views to provide regular benefits to entire nations.

Are there any worthwhile ideas being considered for NGO's to step in to provide basic income? And what may prevent NGO's from ever accomplishing such a system without government assistance or intervention?

  • Are you referring to minimum wage or social welfare/security? – LateralFractal Nov 21 '14 at 9:04
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    Nevermind, I see the tags. Might want to put that in the body though. I initially thought minimum wage when I read 'basic income'. – LateralFractal Nov 21 '14 at 9:06
  • @Philipp Actually basic-income is a cryptic term (what is 'basic' exactly? for what type of 'income' work/non-work?) so creating a tag for it is problematic unless the tag itself has a uniform wiki description. For instance, I could ask "What is the basic income of the 2014 XYZ Enterprise Bargaining Aggreement?" or "What changes to the basic income of Social Security is suggested by Senator ABC?" or "What is the basic income of Prince Salman bin Abdulaziz". Different meanings for each; so not a concise term. – LateralFractal Nov 21 '14 at 21:21
  • @LateralFractal I have done so, but my contributions need to be reviewed. I think in the political sense the idea of basic income is fairly well-known to mean something specific, but I agree clarification won't hurt. Do you mind having a look at my suggested edit to the tag wiki? (This is a response to this request - I can't comment on that post.) – Aaa Nov 21 '14 at 22:25
  • Thanks Adriaan. Only some members have the permission to review/approve tag edits; so it'll have to wait until someone checks their tag review queue. – LateralFractal Nov 21 '14 at 23:50
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The idea of basic income is that everyone receives enough money to fulfill their most basic needs. That money must come from somewhere.

An NGO which is financed through voluntary donations from the same population they are supposed to provide basic income to can simply not achieve that.

When you want to pay everyone $500* a month, you need to collect an average of $500* per person and month. Collecting that money equally from everyone would obviously be pointless, as it would make no difference for anyone. In order to have basic income as a tool for wealth redistribution you need some people who pay a lot more than others.

)* or whatever sum you consider appropriate

This is easy for a government which can use taxes and subsidiaries as a tool to take and give money from or to certain demographics. But an NGO which can not force anyone to give them money and can only rely on the goodwill of donors simply doesn't have the necessary leverage. The average amount of their income a citizen in a developed country is willing to pay to charity is between 2% and 5%.

In 2012, the total sum of all charitable donations by all US citizens and corporations was $316 billion. That's about $1000 per citizen, which would be enough to pay every US citizen a monthly basic income of about $83 (minus administrative overhead) - far far below even the most conservative models of basic income.

Another goal of basic income is to also reduce administrative overhead by making other kinds of government subsidiaries like social welfare obsolete. This obviously only applies when the state is involved in the basic income initiative.

  • Thank you for the considered response. I would have given you an upvote, but I don't have enough reputation to do so. I am going to keep the question open for a while to get more responses. I suppose funding a hypothetical NGO to provide a basic income is the most obvious issue - but let us suppose (for argument's sake) a group of philanthoripists leave enough money so that this is no longer an issue. What other things need to be considered if an NGO were to provide a basic income? Is there anything else that would make such a system fail if funding were not an issue? – Aaa Nov 21 '14 at 11:52
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    @AdriaanJoubert With infinite money, almost any problem becomes solvable. One problem I could see is obtaining a complete list of all citizens and their bank details. Such personal information is hard to obtain in a legal way. However, they could just ask people through lots of advertisement to register themselves. Few people would say no to receiving free money with no strings attached. One minor problem would be that the basic income would likely not be tax-exempt, but that's another problem which can be dealt with by throwing more money at it. – Philipp Nov 21 '14 at 11:55
  • @AdriaanJoubert ...or maybe it would be just more cost-effective for the group of ultra-rich philanthropists when they would just invest those trillions of dollar into political lobbying to get the government to do it for them. – Philipp Nov 21 '14 at 12:06
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    With infinite money, money becomes worthless. And that $316B voluntary charity was on top of $4.9T involuntary "charity" to the state. – Tyler Nov 21 '14 at 16:41
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    Tyler, I think with basic income it is usually understood that money is transferred from one point to another. As Philipp mentioned, the conventional idea is for government to provide this benefit through tax revenue. So there is no "infinite money" at play. I am fairly certain that printing money for basic income is a recipe for disaster, and that it is not something being considered by any serious participant in the basic income debate. – Aaa Nov 21 '14 at 17:17
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Very few unemployed people would be incapable of doing work with at least some value for a prospective employer. In order for someone to be worth hiring, however, it is necessary that the value of their work to the employer be sufficient that the employer can in turn pay the worker an amount sufficient to justify the worker's efforts. Having people who could be doing work with some value refrain from doing so is harmful in many ways. Any policy makers who are genuinely benevolent should endeavor to minimize such unemployment, and should be careful to ensure that none of their policies instead promote it. Conversely, policy makers who are interested in political power may benefit by implementing policies which raise the minimum level of labor value necessary to make someone employable, and then promoting policies which "support" the unemployed but in fact make them even less employable.

Depending upon where the money comes from, a "basic guaranteed income" may increase the minimum level of labor value necessary to make an employer/employee relationship worthwhile for both parties. Such policies, however, could be a good thing if they can replace other social welfare policies which are much worse. Many social welfare policies are constructed so that people on welfare who accept low-income jobs have their welfare benefits reduced substantially, leaving them little reward for their labor. Thus, unless a sense of pride from reducing one's welfare dependency can serve as a reward in and of itself, such policies serve to greatly increase the minimum labor value that would make it worthwhile for someone to work. Replacing such policies with a "basic guaranteed income" would greatly reduce those effects, and encourage such people to work. Employment of the presently-unemployable could be enhanced further if the "basic guaranteed income" made it possible to eliminate the minimum wage (since the minimum "livable wage" would be $0).

With regard to a "Basic Income" which doesn't replace worse aspects of a country's social welfare system but is instead takes the form of resources injected from outside a country, the effects may be harder to predict. An externally-supplied "income" which is too large relative to the value of a person's labor could discourage people from working. Further, there's no way to avoid having an outside injection of resources affect the prices of things. An injection of useful resources won't cause massive inflation the same way an injection of paper money would, but the effects on market prices may nonetheless be harmful. For example, if the primary use of labor in a region would be to harvest grain, then an outside injection of some quantity of grain per person might ensure that nobody starves, but could on the flip side greatly reduce the value of farm workers' labor. Freeing up the labor of people who would otherwise work on farms would mean that other industries or prospective industries would have a new source of labor available; that could be a good thing if capital exists to create industries to utilize such labor, but would not be a good thing if no new industry is formed and people are left without any useful job to do. Harm from poorly- or malevolently-designed social programs need not result only from the fact that any resources they distribute need to come from somewhere. Even if a program only injects resources which were not taken from anyone with whom the recipients might interact directly or indirectly, it's possible that such injection may undermine the society receiving it.

  • Very thorough and well reasoned answer. +1 – Tyler Nov 21 '14 at 23:36
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Required scale is huge

The funds required for a BI scheme dwarf the funds available from philanthropy, both on a local level (total of country X philanthropy isn't enough for BI in country X) and on a foreign level (the portion of country X philanthropy that they're willing to divert away specifically to country Y isn't enough for BI in country Y).

BI experiments in low-income countries also is harder than it seems - you can state that a small $X/month is sufficient for BI in some very poor country, but that's only true while it remains very poor - if the BI was funded by a huge outside monetary influx from much wealthier countries, the economy see severe inflation and very quickly the same $X would not cover basic necessities. Furthermore, this situation would create a dangerous unsustainable economic dependency, where the new system is at a risk of total collapse when/if the philantrophy stops, as the new physical economy would be heavily reliant on imported goods bought by the "imported" money, and would lose the capability to produce them locally.

BI is a replacement for many current government policies

BI is (somewhat) plausible only if it is implemented as a replacement for many current government social expenses, not as an addition to them. In most countries, government provided social security benefits form a huge part of the budget - and BI would replace them, furthermore reducing the administrative apparatus that currently wastes a lot of effort in determining who qualifies for a vast number of different niche social security programs. I.e., you replace all the apparatus and legislation handling all the processing and verification for unemployment/disability benefit/maternity/child assistance/student living expense loans/retirement/etc with a single system that is much, much simpler and requires less people to handle. If BI was implemented on top of all that expenditure and in addition to all that bureaucracy instead of replacing it, then the math simply doesn't work out anywhere.

  • You may want to simplify the point #1 by indicating that influx of foreign money would cause inflation commeasurate with ratio of influx to GDP; and thus induce a spiral of making the donations more and more (worthless/costly - pick one). – user4012 Nov 21 '14 at 19:12
  • @DVK: An injection of foreign tangible resources would not cause "inflation" as conventionally defined (since that would imply that the money supply was expanding relative to the total worth of goods, but if tangible resources are being injected the total worth of goods would be increased). It could still have other nasty economic effects, but it wouldn't be "inflation" in the normal sense. – supercat Nov 23 '14 at 20:19
  • @supercat - Basic income is money. M1, I'm guessing. NOT "tabgible resources". – user4012 Nov 26 '14 at 21:08
  • @DVK: There are a variety of proposals I've read which might be described as "basic income"; some would be inflationary, but others not. – supercat Nov 27 '14 at 19:09
  • @supercat - are the "not" ones relying on foreign money influx? Because that's the context being discussed – user4012 Nov 27 '14 at 22:23

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