0:00:01.575,0:00:04.682
I'd like to start with a simple question:

0:00:06.000,0:00:09.840
Why do the poor make[br]so many poor decisions?

0:00:11.852,0:00:13.403
I know it's a harsh question,

0:00:13.427,0:00:15.392
but take a look at the data.

0:00:15.416,0:00:17.259
The poor borrow more, save less,

0:00:17.283,0:00:19.942
smoke more, exercise less, drink more

0:00:19.966,0:00:21.486
and eat less healthfully.

0:00:22.372,0:00:23.533
Why?

0:00:24.451,0:00:25.978
Well, the standard explanation

0:00:26.002,0:00:29.382
was once summed up by the British[br]Prime Minister, Margaret Thatcher.

0:00:29.406,0:00:32.791
And she called poverty[br]"a personality defect."

0:00:32.815,0:00:34.655
(Laughter)

0:00:34.679,0:00:36.585
A lack of character, basically.

0:00:37.465,0:00:41.456
Now, I'm sure not many of you[br]would be so blunt.

0:00:42.497,0:00:46.347
But the idea that there's something[br]wrong with the poor themselves

0:00:46.371,0:00:48.354
is not restricted to Mrs. Thatcher.

0:00:49.285,0:00:52.488
Some of you may believe that the poor[br]should be held responsible

0:00:52.512,0:00:54.265
for their own mistakes.

0:00:54.289,0:00:58.186
And others may argue that we should[br]help them to make better decisions.

0:00:58.854,0:01:02.083
But the underlying assumption is the same:

0:01:02.650,0:01:05.224
there's something wrong with them.

0:01:06.057,0:01:07.915
If we could just change them,

0:01:07.939,0:01:10.431
if we could just teach them[br]how to live their lives,

0:01:10.455,0:01:11.988
if they would only listen.

0:01:13.233,0:01:14.930
And to be honest,

0:01:14.954,0:01:18.292
this was what I thought for a long time.

0:01:19.078,0:01:21.192
It was only a few years ago[br]that I discovered

0:01:21.216,0:01:24.713
that everything I thought I knew[br]about poverty was wrong.

0:01:26.286,0:01:28.937
It all started when I accidentally[br]stumbled upon a paper

0:01:28.961,0:01:30.569
by a few American psychologists.

0:01:30.593,0:01:33.146
They had traveled 8,000 miles,[br]all the way to India,

0:01:33.170,0:01:34.745
for a fascinating study.

0:01:35.245,0:01:38.013
And it was an experiment[br]with sugarcane farmers.

0:01:38.838,0:01:42.186
You should know that these farmers[br]collect about 60 percent

0:01:42.210,0:01:44.343
of their annual income all at once,

0:01:44.367,0:01:46.075
right after the harvest.

0:01:46.099,0:01:49.639
This means that they're relatively[br]poor one part of the year

0:01:49.663,0:01:51.257
and rich the other.

0:01:52.595,0:01:56.651
The researchers asked them to do[br]an IQ test before and after the harvest.

0:01:57.902,0:02:01.922
What they subsequently discovered[br]completely blew my mind.

0:02:03.159,0:02:07.608
The farmers scored much worse[br]on the test before the harvest.

0:02:08.457,0:02:10.757
The effects of living[br]in poverty, it turns out,

0:02:10.781,0:02:14.149
correspond to losing 14 points of IQ.

0:02:14.173,0:02:16.042
Now, to give you an idea,

0:02:16.066,0:02:18.507
that's comparable[br]to losing a night's sleep

0:02:18.531,0:02:20.704
or the effects of alcoholism.

0:02:22.685,0:02:24.944
A few months later,[br]I heard that Eldar Shafir,

0:02:24.968,0:02:28.515
a professor at Princeton University[br]and one of the authors of this study,

0:02:28.539,0:02:30.858
was coming over to Holland, where I live.

0:02:30.882,0:02:32.284
So we met up in Amsterdam

0:02:32.308,0:02:35.859
to talk about his revolutionary[br]new theory of poverty.

0:02:36.390,0:02:38.493
And I can sum it up in just two words:

0:02:39.415,0:02:41.432
scarcity mentality.

0:02:42.647,0:02:44.801
It turns out that people[br]behave differently

0:02:44.825,0:02:47.311
when they perceive a thing to be scarce.

0:02:47.335,0:02:49.550
And what that thing is[br]doesn't much matter --

0:02:49.574,0:02:52.587
whether it's not enough time,[br]money or food.

0:02:53.080,0:02:54.738
You all know this feeling,

0:02:54.762,0:02:56.725
when you've got too much to do,

0:02:56.749,0:02:58.765
or when you've put off breaking for lunch

0:02:58.789,0:03:00.452
and your blood sugar takes a dive.

0:03:00.476,0:03:03.304
This narrows your focus[br]to your immediate lack --

0:03:03.328,0:03:05.338
to the sandwich you've got to have now,

0:03:05.362,0:03:07.624
the meeting that's starting[br]in five minutes

0:03:07.648,0:03:10.527
or the bills that have[br]to be paid tomorrow.

0:03:11.048,0:03:14.264
So the long-term perspective[br]goes out the window.

0:03:15.835,0:03:18.366
You could compare it to a new computer

0:03:18.390,0:03:20.577
that's running 10 heavy programs at once.

0:03:21.201,0:03:23.974
It gets slower and slower, making errors.

0:03:23.998,0:03:25.820
Eventually, it freezes --

0:03:25.844,0:03:27.950
not because it's a bad computer,

0:03:27.974,0:03:30.594
but because it has too much to do at once.

0:03:31.459,0:03:34.327
The poor have the same problem.

0:03:34.834,0:03:37.624
They're not making dumb decisions[br]because they are dumb,

0:03:37.648,0:03:39.570
but because they're living in a context

0:03:39.594,0:03:41.938
in which anyone would make dumb decisions.

0:03:42.542,0:03:45.490
So suddenly I understood

0:03:45.514,0:03:49.480
why so many of our anti-poverty[br]programs don't work.

0:03:50.647,0:03:55.171
Investments in education, for example,[br]are often completely ineffective.

0:03:55.195,0:03:58.007
Poverty is not a lack of knowledge.

0:03:58.760,0:04:01.315
A recent analysis of 201 studies

0:04:01.339,0:04:03.651
on the effectiveness[br]of money-management training

0:04:03.675,0:04:07.424
came to the conclusion[br]that it has almost no effect at all.

0:04:07.448,0:04:08.893
Now, don't get me wrong --

0:04:08.917,0:04:11.413
this is not to say the poor[br]don't learn anything --

0:04:11.437,0:04:13.342
they can come out wiser for sure.

0:04:14.012,0:04:15.650
But it's not enough.

0:04:15.674,0:04:18.676
Or as Professor Shafir told me,

0:04:18.700,0:04:20.684
"It's like teaching someone to swim

0:04:20.708,0:04:23.734
and then throwing them in a stormy sea."

0:04:24.688,0:04:26.283
I still remember sitting there,

0:04:27.203,0:04:28.458
perplexed.

0:04:29.291,0:04:30.448
And it struck me

0:04:30.472,0:04:32.985
that we could have figured[br]this all out decades ago.

0:04:33.009,0:04:36.260
I mean, these psychologists didn't need[br]any complicated brain scans;

0:04:36.284,0:04:38.293
they only had to measure the farmer's IQ,

0:04:38.317,0:04:40.825
and IQ tests were invented[br]more than 100 years ago.

0:04:41.219,0:04:44.928
Actually, I realized I had read about[br]the psychology of poverty before.

0:04:45.547,0:04:49.221
George Orwell, one of the greatest[br]writers who ever lived,

0:04:49.245,0:04:52.148
experienced poverty[br]firsthand in the 1920s.

0:04:52.856,0:04:55.034
"The essence of poverty,"[br]he wrote back then,

0:04:55.058,0:04:57.992
is that it "annihilates the future."

0:04:59.147,0:05:01.334
And he marveled at, quote,

0:05:01.926,0:05:05.212
"How people take it for granted[br]they have the right to preach at you

0:05:05.236,0:05:06.387
and pray over you

0:05:06.411,0:05:08.883
as soon as your income falls[br]below a certain level."

0:05:08.907,0:05:12.812
Now, those words are every bit[br]as resonant today.

0:05:15.145,0:05:17.126
The big question is, of course:

0:05:17.150,0:05:18.490
What can be done?

0:05:18.514,0:05:21.309
Modern economists have[br]a few solutions up their sleeves.

0:05:21.333,0:05:23.392
We could help the poor[br]with their paperwork

0:05:23.416,0:05:26.398
or send them a text message[br]to remind them to pay their bills.

0:05:26.422,0:05:31.129
This type of solution is hugely popular[br]with modern politicians,

0:05:31.153,0:05:32.856
mostly because,

0:05:32.880,0:05:34.940
well, they cost next to nothing.

0:05:36.135,0:05:40.145
These solutions are, I think,[br]a symbol of this era

0:05:40.169,0:05:42.346
in which we so often treat the symptoms,

0:05:42.370,0:05:44.213
but ignore the underlying cause.

0:05:45.674,0:05:46.928
So I wonder:

0:05:47.786,0:05:51.133
Why don't we just change the context[br]in which the poor live?

0:05:51.725,0:05:53.850
Or, going back to our computer analogy:

0:05:53.874,0:05:56.011
Why keep tinkering around[br]with the software

0:05:56.035,0:06:00.100
when we can easily solve the problem[br]by installing some extra memory instead?

0:06:00.124,0:06:03.522
At that point, Professor Shafir[br]responded with a blank look.

0:06:04.292,0:06:05.929
And after a few seconds, he said,

0:06:06.922,0:06:09.047
"Oh, I get it.

0:06:09.660,0:06:13.391
You mean you want to just hand out[br]more money to the poor

0:06:14.144,0:06:15.995
to eradicate poverty.

0:06:16.019,0:06:18.820
Uh, sure, that'd be great.

0:06:19.914,0:06:22.215
But I'm afraid that brand[br]of left-wing politics

0:06:22.239,0:06:24.083
you've got in Amsterdam --

0:06:24.107,0:06:25.770
it doesn't exist in the States."

0:06:26.522,0:06:30.497
But is this really[br]an old-fashioned, leftist idea?

0:06:31.394,0:06:33.381
I remembered reading about an old plan --

0:06:33.405,0:06:36.889
something that has been proposed[br]by some of history's leading thinkers.

0:06:36.913,0:06:40.729
The philosopher Thomas More[br]first hinted at it in his book, "Utopia,"

0:06:40.753,0:06:42.652
more than 500 years ago.

0:06:43.205,0:06:46.755
And its proponents have spanned[br]the spectrum from the left to the right,

0:06:46.779,0:06:49.549
from the civil rights campaigner,[br]Martin Luther King,

0:06:49.573,0:06:52.324
to the economist Milton Friedman.

0:06:53.273,0:06:56.093
And it's an incredibly simple idea:

0:06:57.243,0:06:59.878
basic income guarantee.

0:07:01.465,0:07:02.623
What it is?

0:07:03.004,0:07:04.166
Well, that's easy.

0:07:04.727,0:07:07.458
It's a monthly grant, enough to pay[br]for your basic needs:

0:07:07.482,0:07:09.160
food, shelter, education.

0:07:09.683,0:07:11.504
It's completely unconditional,

0:07:11.528,0:07:14.288
so no one's going to tell you[br]what you have to do for it,

0:07:14.312,0:07:17.130
and no one's going to tell you[br]what you have to do with it.

0:07:17.154,0:07:19.444
The basic income[br]is not a favor, but a right.

0:07:19.468,0:07:21.601
There's absolutely no stigma attached.

0:07:22.372,0:07:25.002
So as I learned about the true[br]nature of poverty,

0:07:25.026,0:07:26.516
I couldn't stop wondering:

0:07:27.208,0:07:30.048
Is this the idea[br]we've all been waiting for?

0:07:30.698,0:07:32.879
Could it really be that simple?

0:07:34.348,0:07:36.148
And in the three years that followed,

0:07:36.172,0:07:38.710
I read everything I could find[br]about basic income.

0:07:38.734,0:07:40.671
I researched the dozens of experiments

0:07:40.695,0:07:42.816
that have been conducted[br]all over the globe,

0:07:42.840,0:07:45.908
and it didn't take long before I stumbled[br]upon a story of a town

0:07:45.932,0:07:48.404
that had done it --[br]had actually eradicated poverty.

0:07:48.428,0:07:49.698
But then ...

0:07:50.478,0:07:52.048
nearly everyone forgot about it.

0:07:53.586,0:07:56.115
This story starts in Dauphin, Canada.

0:07:57.051,0:08:02.631
In 1974, everybody in this small town[br]was guaranteed a basic income,

0:08:02.655,0:08:05.390
ensuring that no one fell[br]below the poverty line.

0:08:05.414,0:08:07.010
At the start of the experiment,

0:08:07.034,0:08:10.507
an army of researchers[br]descended on the town.

0:08:11.367,0:08:13.898
For four years, all went well.

0:08:14.511,0:08:17.943
But then a new government[br]was voted into power,

0:08:17.967,0:08:21.477
and the new Canadian cabinet saw[br]little point to the expensive experiment.

0:08:21.501,0:08:25.754
So when it became clear there was[br]no money left to analyze the results,

0:08:25.778,0:08:30.580
the researchers decided to pack[br]their files away in some 2,000 boxes.

0:08:32.175,0:08:34.965
Twenty-five years went by,

0:08:34.989,0:08:37.677
and then Evelyn Forget,[br]a Canadian professor,

0:08:37.701,0:08:38.917
found the records.

0:08:38.941,0:08:42.908
For three years, she subjected the data[br]to all manner of statistical analysis,

0:08:42.932,0:08:44.518
and no matter what she tried,

0:08:44.542,0:08:47.278
the results were the same every time:

0:08:47.968,0:08:51.786
the experiment had been[br]a resounding success.

0:08:53.311,0:08:54.471
Evelyn Forget discovered

0:08:54.495,0:08:57.079
that the people in Dauphin[br]had not only become richer

0:08:57.103,0:08:58.634
but also smarter and healthier.

0:08:58.658,0:09:02.164
The school performance of kids[br]improved substantially.

0:09:03.156,0:09:07.384
The hospitalization rate decreased[br]by as much as 8.5 percent.

0:09:08.122,0:09:09.932
Domestic violence incidents were down,

0:09:09.956,0:09:11.747
as were mental health complaints.

0:09:12.153,0:09:14.209
And people didn't quit their jobs.

0:09:14.509,0:09:18.243
The only ones who worked a little less[br]were new mothers and students --

0:09:18.267,0:09:19.712
who stayed in school longer.

0:09:20.888,0:09:22.763
Similar results have since been found

0:09:22.787,0:09:25.183
in countless other experiments[br]around the globe,

0:09:25.207,0:09:27.454
from the US to India.

0:09:29.613,0:09:30.833
So ...

0:09:31.680,0:09:33.014
here's what I've learned.

0:09:33.995,0:09:36.151
When it comes to poverty,

0:09:36.175,0:09:41.291
we, the rich, should stop[br]pretending we know best.

0:09:42.211,0:09:44.965
We should stop sending shoes[br]and teddy bears to the poor,

0:09:44.989,0:09:46.510
to people we have never met.

0:09:46.534,0:09:50.067
And we should get rid of the vast[br]industry of paternalistic bureaucrats

0:09:50.091,0:09:52.272
when we could simply[br]hand over their salaries

0:09:52.296,0:09:54.102
to the poor they're supposed to help.

0:09:54.126,0:09:56.422
(Applause)

0:09:56.446,0:09:59.319
Because, I mean, the great[br]thing about money

0:09:59.343,0:10:01.694
is that people can use it[br]to buy things they need

0:10:01.718,0:10:04.871
instead of things that self-appointed[br]experts think they need.

0:10:05.882,0:10:10.286
Just imagine how many brilliant scientists[br]and entrepreneurs and writers,

0:10:10.310,0:10:11.461
like George Orwell,

0:10:11.485,0:10:14.275
are now withering away in scarcity.

0:10:14.299,0:10:16.755
Imagine how much energy[br]and talent we would unleash

0:10:16.779,0:10:19.518
if we got rid of poverty once and for all.

0:10:19.542,0:10:23.894
I believe that a basic income would work[br]like venture capital for the people.

0:10:25.093,0:10:27.137
And we can't afford not to do it,

0:10:27.161,0:10:30.006
because poverty is hugely expensive.

0:10:30.546,0:10:33.938
Just look at the cost of child poverty[br]in the US, for example.

0:10:33.962,0:10:38.194
It's estimated at 500 billion[br]dollars each year,

0:10:38.218,0:10:41.166
in terms of higher health care[br]spending, higher dropout rates,

0:10:41.190,0:10:42.573
and more crime.

0:10:42.597,0:10:46.477
Now, this is an incredible waste[br]of human potential.

0:10:48.365,0:10:50.566
But let's talk about[br]the elephant in the room.

0:10:51.326,0:10:54.338
How could we ever afford[br]a basic income guarantee?

0:10:55.052,0:10:58.151
Well, it's actually a lot cheaper[br]than you may think.

0:10:58.175,0:11:01.739
What they did in Dauphin is finance it[br]with a negative income tax.

0:11:01.763,0:11:03.771
This means that your income is topped up

0:11:03.795,0:11:06.207
as soon as you fall[br]below the poverty line.

0:11:06.231,0:11:07.593
And in that scenario,

0:11:07.617,0:11:10.131
according to our economists'[br]best estimates,

0:11:10.155,0:11:13.180
for a net cost of 175 billion --

0:11:13.204,0:11:18.111
a quarter of US military spending,[br]one percent of GDP --

0:11:18.135,0:11:21.689
you could lift all impoverished Americans[br]above the poverty line.

0:11:22.566,0:11:25.707
You could actually eradicate poverty.

0:11:26.142,0:11:27.944
Now, that should be our goal.

0:11:28.716,0:11:29.800
(Applause)

0:11:29.824,0:11:32.756
The time for small thoughts[br]and little nudges is past.

0:11:32.780,0:11:36.088
I really believe that the time has come[br]for radical new ideas,

0:11:36.112,0:11:39.312
and basic income is so much more[br]than just another policy.

0:11:39.336,0:11:43.974
It is also a complete rethink[br]of what work actually is.

0:11:43.998,0:11:45.668
And in that sense,

0:11:45.692,0:11:47.484
it will not only free the poor,

0:11:48.532,0:11:50.000
but also the rest of us.

0:11:51.261,0:11:53.507
Nowadays, millions of people feel

0:11:53.531,0:11:56.037
that their jobs have little[br]meaning or significance.

0:11:56.061,0:11:58.878
A recent poll among 230,000 employees

0:11:58.902,0:12:00.808
in 142 countries

0:12:00.832,0:12:05.497
found that only 13 percent of workers[br]actually like their job.

0:12:06.600,0:12:10.267
And another poll found that as much[br]as 37 percent of British workers

0:12:10.291,0:12:13.221
have a job that they think[br]doesn't even need to exist.

0:12:14.387,0:12:16.681
It's like Brad Pitt says in "Fight Club,"

0:12:16.705,0:12:20.361
"Too often we're working jobs we hate[br]so we can buy shit we don't need."

0:12:20.385,0:12:21.863
(Laughter)

0:12:21.887,0:12:23.284
Now, don't get me wrong --

0:12:23.308,0:12:25.862
I'm not talking about the teachers[br]and the garbagemen

0:12:25.886,0:12:27.368
and the care workers here.

0:12:27.392,0:12:29.006
If they stopped working,

0:12:29.030,0:12:30.347
we'd be in trouble.

0:12:30.990,0:12:34.615
I'm talking about all those well-paid[br]professionals with excellent résumés

0:12:34.639,0:12:36.444
who earn their money doing ...

0:12:36.468,0:12:38.504
strategic transactor peer-to-peer meetings

0:12:38.528,0:12:41.560
while brainstorming the value[br]add-on of disruptive co-creation

0:12:41.584,0:12:42.757
in the network society.

0:12:42.781,0:12:43.804
(Laughter)

0:12:43.828,0:12:44.846
(Applause)

0:12:44.870,0:12:46.072
Or something like that.

0:12:46.096,0:12:49.020
Just imagine again how much[br]talent we're wasting,

0:12:49.044,0:12:52.884
simply because we tell our kids[br]they'll have to "earn a living."

0:12:53.638,0:12:57.380
Or think of what a math whiz working[br]at Facebook lamented a few years ago:

0:12:57.404,0:12:59.266
"The best minds of my generation

0:12:59.290,0:13:02.403
are thinking about how[br]to make people click ads."

0:13:04.699,0:13:05.944
I'm a historian.

0:13:06.992,0:13:09.061
And if history teaches us anything,

0:13:09.085,0:13:11.877
it is that things could be different.

0:13:11.901,0:13:13.292
There is nothing inevitable

0:13:13.316,0:13:16.273
about the way we structured our society[br]and economy right now.

0:13:16.297,0:13:18.653
Ideas can and do change the world.

0:13:18.677,0:13:21.188
And I think that especially[br]in the past few years,

0:13:21.212,0:13:22.641
it has become abundantly clear

0:13:22.665,0:13:24.618
that we cannot stick to the status quo --

0:13:24.642,0:13:26.217
that we need new ideas.

0:13:28.499,0:13:31.712
I know that many of you[br]may feel pessimistic

0:13:31.736,0:13:33.799
about a future of rising inequality,

0:13:33.823,0:13:35.100
xenophobia

0:13:35.124,0:13:36.320
and climate change.

0:13:36.986,0:13:39.204
But it's not enough[br]to know what we're against.

0:13:39.228,0:13:40.840
We also need to be for something.

0:13:40.864,0:13:43.398
Martin Luther King didn't say,[br]"I have a nightmare."

0:13:43.422,0:13:45.295
(Laughter)

0:13:45.319,0:13:46.478
He had a dream.

0:13:46.502,0:13:47.581
(Applause)

0:13:47.605,0:13:48.757
So ...

0:13:49.835,0:13:51.060
here's my dream:

0:13:52.303,0:13:53.941
I believe in a future

0:13:53.965,0:13:56.318
where the value of your work[br]is not determined

0:13:56.342,0:13:57.819
by the size of your paycheck,

0:13:57.843,0:13:59.875
but by the amount of happiness you spread

0:13:59.899,0:14:01.876
and the amount of meaning you give.

0:14:01.900,0:14:03.132
I believe in a future

0:14:03.156,0:14:06.816
where the point of education is not[br]to prepare you for another useless job

0:14:06.840,0:14:08.450
but for a life well-lived.

0:14:09.204,0:14:10.483
I believe in a future

0:14:10.507,0:14:13.601
where an existence[br]without poverty is not a privilege

0:14:13.625,0:14:15.638
but a right we all deserve.

0:14:15.662,0:14:17.127
So here we are.

0:14:17.151,0:14:18.302
Here we are.

0:14:18.326,0:14:20.516
We've got the research,[br]we've got the evidence

0:14:20.540,0:14:21.703
and we've got the means.

0:14:21.727,0:14:25.636
Now, more than 500 years after Thomas More[br]first wrote about a basic income,

0:14:25.660,0:14:29.715
and 100 years after George Orwell[br]discovered the true nature of poverty,

0:14:29.739,0:14:32.180
we all need to change our worldview,

0:14:32.204,0:14:35.193
because poverty[br]is not a lack of character.

0:14:35.832,0:14:38.400
Poverty is a lack of cash.

0:14:39.321,0:14:40.505
Thank you.

0:14:40.529,0:14:44.952
(Applause)