Poverty, Meet Cash Transfers

In my guise as The Nonprofiteer, I suggest that the solution to poverty might be money.

dorothea lange depression era photographs 13

Alert the media.  No, really.

Author: Kelly Kleiman

Kelly Kleiman is a freelance writer on the arts, feminism, travel and social justice. Her reportage and essays have appeared in the New York Times, Wall Street Journal, Washington Post and Christian Science Monitor, among other dailies; in magazines, including In These Times and Dance; in the alternative press; on the BBC; and on Chicago Public Radio, where she’s one of the “Dueling Critics” and a contributor to the Onstage Backstage theater blog. She is also a consultant to charities and editor and publisher of The Nonprofiteer, a blog about charity, philanthropy and nonprofit management. She holds undergraduate and law degrees from the University of Chicago.

22 thoughts on “Poverty, Meet Cash Transfers”

  1. Where you on the idea of a universal basic income. Scrap every existing anti-poverty program, tally up all the money spent on them, divide by population (or maybe not – not exactly sure how we should calculate it for minors) and send out checks. Use the existing SSA – they have all the required info already.

    Maybe this is my glibertarian side, but every so often I come ’round to the idea that this would be better than having a hodge-podge of programs (food stamps, section 8 housing, medicaid, school lunch programs, you name it).

    1. Ah, I see. Shoulda read first, my bad. So you’d hand out the money to women. I get it, I really do: they really do seem to use it more responsibly. I do not, however, think it would be wise to go that route. Have you considered the reaction of men in a society that actually did it that way (systematically, rather than via charity)?

      1. Rob, I haven’t looked into this enough to be sure I’d prefer a guaranteed income with straight cash transfers to alleviate poverty in the United States; there may be some reason why they work better in the developing world than in the developed world. For instance, as the author of the original article says, we hope/expect poor people in our society to get a job, while in the developing world the “job” option is very limited and the only alternative is to provide people with capital to start their own businesses.

        Nor would I seriously recommend providing aid only to women in the US and not men–and even if I did recommend it, the 14th Amendment’s Equal Protection Clause would prohibit it! I’m not even sure there’s a principled reason for ignoring equal protection overseas: at the very least there are competing priorities (increasing the likelihood of healthy children vs. treating men and women equally). But in much of the developing world women are so disadvantaged (with respect to schooling and access to health care) that only a huge cash-transfer preference would be enough to right the balance.

  2. There´s a famous quotation attributed to Milton Friedman. When asked for his views on how to solve poverty, he is alleged to have replied: ¨Give them some money¨. This may well be apocryphal, but it is true to his thinking, especially his proposal for a negative income tax.
    Andy Sabl pointed here to a successful minimum-cash-income initiative by a German Lutheran church charity in Namibia.

    1. There’s also the Mincome experiment in Canada.

      All in all, some type of straight-up, universal guaranteed income seems like it would kill several birds with one stone. You get gains in efficiency, gains in liberty, gains in individual and family welfare, and gains in worker leverage. “Universal” is an important qualifier there, since it makes the program more likely to survive politically speaking.

      1. Perhaps you mean “bake several cakes in one oven.”

        It’s just a metaphor, but after all, why would anyone want to kill birds with a stone?

        And when has killing two birds with one stone ever happened, anyhow?

    2. Oh, God, you caught me: I am indeed a University of Chicago girl, compelled to read “There ain’t no such thing as a free lunch” as an innocent freshman, though thereafter I avoided economics like the plague. I’ve always been suspicious of Friedman’s simplicity, especially his blithe ignoring of externalities, which generally came at the cost of people not in a position to maximize value. We don’t, after all, live in a world where one person has all the eggs and another has all the beer and there is both perfect knowledge and perfect equality of bargaining power.

      However. So much tripe is preached in philanthropy, especially of the “we’re rich so we must know best” variety, that a suggestion that poor people are actually perfectly functional autonomous agents and we should let them behave as such comes as a great relief.

      It did occur to me, though, after posting this that I must work in a really intellectually bankrupt field if the notion that money is the solution to poverty strikes us all as revolutionary!

    1. Your assertion may be true or false or somewhere in between, but in any case it has nothing to do with the efficacy of direct cash transfers for reducing poverty.

    2. If by “communism” you mean “sharing the wealth,” that’s what any properly designed progressive income tax system does, and it works just fine in Western Europe. It would work here, too, but we’ve gutted progressivity, which accounts for the growth in inequality and the concomitant reduction in social peace and cohesion. A little “communism” wouldn’t come amiss right now.

  3. Cash is necessary but not sufficient. It costs more to be poor, so unless you do something about that, you can throw away a lot of money for not nearly so much effect.

  4. I suppose giving the poor money is a kind of solution to poverty. But isn’t it more of a “give a man a fish” solution, than a “teach a man to fish” solution? Don’t we care *why* the poor are poor?

    1. “Teach a man to fish, but neglect to leave him with a rod, line or hook, or any means for acquiring them.”

    2. Teach a man to fish, and he will spend his days drinking beer and telling lies.

      Seriously … if a man is starving, teaching him to fish may be a good long range plan, or maybe not (depends on whether he has access to fish-filled waters and the means to get to the fish), but in the short range you give him nutritious food to alleviate his malnutrition.

      1. Oh, I agree: Takes a long time to teach somebody how not to be poor, if you can even manage it. And they gotta eat in the meanwhile. I’ve put several people through vocational classes in the Philippines, and a fat lot of good it would have done them to pay the tuition, and not arrange for them to have anything to eat while taking the classes.

        I’m just pointing out that giving people money is a “cure” for poverty like insulin injections are a cure for diabetes: It doesn’t so much undo poverty, as enable people to survive it. It’s even got a rather dark side, politically: You create a class of people who are voting for a living, and what motive have the people the vote for to free them from that dependency? They might find other work…

    3. Everyone knows why the poor are poor. Liberals and conservatives just don’t, and never will, agree on the reasons. If this raises the poor out of poverty, ‘why’ doesn’t matter as much except as a preventative.

  5. We already give the poor money. We just tell them what they have to spend it on. I’d prefer it if we continued to give them money, perhaps even a bit more in some cases, and let them decide for themselves what to spend it on.

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