0:00:01.607,0:00:05.189
I'd like to start with a simple question.

0:00:06.000,0:00:10.125
Why do the poor make[br]so many poor decisions?

0:00:11.852,0:00:13.551
I know it's a harsh question,

0:00:13.551,0:00:15.244
but take a look at the data.

0:00:15.416,0:00:17.374
The poor borrow more, save less,

0:00:17.374,0:00:20.153
smoke more, exercise less, drink more

0:00:20.153,0:00:21.982
and eat less healthfully.

0:00:22.483,0:00:23.644
Why?

0:00:24.651,0:00:26.202
Well, the standard explanation

0:00:26.202,0:00:29.440
was once summed up by the British[br]Prime Minister, Margaret Thatcher.

0:00:29.440,0:00:32.824
And she called poverty[br]"a personality defect."

0:00:33.196,0:00:34.198
(Laughter)

0:00:34.713,0:00:36.935
A lack of character, basically.

0:00:37.617,0:00:41.901
Now, I'm sure not many of you[br]would be so blunt.

0:00:42.647,0:00:46.521
But the idea that there's something[br]wrong with the poor themselves

0:00:46.521,0:00:49.038
is not restricted to Mrs. Thatcher.

0:00:49.435,0:00:52.662
Some of you may believe that the poor[br]should be held responsible

0:00:52.662,0:00:54.555
for their own mistakes.

0:00:54.555,0:00:58.641
And others may argue that we should[br]help them to make better decisions.

0:00:59.004,0:01:02.800
But the underlying assumption is the same:

0:01:02.800,0:01:05.680
there's something wrong with them.

0:01:06.100,0:01:08.089
If we could just change them,

0:01:08.089,0:01:10.521
if we could just teach them[br]how to live their lives,

0:01:10.521,0:01:12.406
if they would only listen.

0:01:13.258,0:01:14.979
And to be honest,

0:01:14.979,0:01:18.688
this was what I thought for a long time.

0:01:19.103,0:01:21.241
It was only a few years ago[br]that I discovered

0:01:21.241,0:01:25.251
that everything I thought I knew[br]about poverty was wrong.

0:01:26.415,0:01:29.061
It all started when I accidentally[br]stumbled upon a paper

0:01:29.061,0:01:30.793
by a few American psychologists.

0:01:30.793,0:01:32.233
They had traveled 8,000 miles,

0:01:32.233,0:01:33.370
all the way to India,

0:01:33.370,0:01:35.223
for a fascinating study.

0:01:35.223,0:01:38.452
And it was an experiment[br]with sugar cane farmers.

0:01:38.848,0:01:42.410
You should know that these farmers[br]collect about 60 percent

0:01:42.410,0:01:44.567
of their annual income all at once --

0:01:44.567,0:01:46.299
right after the harvest.

0:01:46.299,0:01:49.863
This means that they're relatively[br]poor one part of the year

0:01:49.863,0:01:51.844
and rich the other.

0:01:52.763,0:01:57.070
The researchers asked them to do[br]an IQ test before and after the harvest.

0:01:58.102,0:02:02.777
What they subsequently discovered[br]completely blew my mind.

0:02:03.359,0:02:07.967
The farmers scored much worse[br]on the test before the harvest.

0:02:08.455,0:02:10.024
The effects of living in poverty,

0:02:10.024,0:02:11.018
it turns out,

0:02:11.018,0:02:14.373
correspond to losing 40 points of IQ.

0:02:14.373,0:02:16.266
Now, to give you an idea,

0:02:16.266,0:02:18.791
that's comparable[br]to losing a night's sleep,

0:02:18.791,0:02:21.573
or the effects of alcoholism.

0:02:22.735,0:02:23.847
A few months later,

0:02:23.847,0:02:25.286
I heard that Eldar Shafir,

0:02:25.286,0:02:28.725
a professor at Princeton University[br]and one of the authors of this study,

0:02:28.725,0:02:30.066
was coming over to Holland,

0:02:30.066,0:02:31.220
where I live.

0:02:31.220,0:02:32.508
So we met up in Amersterdam

0:02:32.508,0:02:36.411
to talk about his revolutionary[br]new theory of poverty.

0:02:36.590,0:02:39.624
And I can sum it up in just two words:

0:02:39.624,0:02:41.977
scarcity mentality.

0:02:42.644,0:02:45.025
It turns out that people[br]behave differently

0:02:45.025,0:02:47.217
when they perceive a thing to be scarce.

0:02:47.535,0:02:49.774
And what that thing is[br]doesn't much matter --

0:02:49.774,0:02:52.787
whether it's not enough time,[br]money or food.

0:02:53.280,0:02:55.041
You all know this feeling

0:02:55.041,0:02:57.079
when you've got too much to do,

0:02:57.079,0:03:00.648
or when you've put off breaking for lunch[br]and your blood sugar takes a dive.

0:03:00.648,0:03:03.528
This narrows your focus[br]to your immediate lack --

0:03:03.528,0:03:05.562
to the sandwich you've got to have now,

0:03:05.562,0:03:07.848
the meeting that's starting[br]in five minutes,

0:03:07.848,0:03:10.978
or the bills that have[br]to be paid tomorrow.

0:03:11.122,0:03:14.949
So the long-term perspective[br]goes out the window.

0:03:15.905,0:03:20.753
You could compare it to a new computer[br]that's running 10 heavy programs at once.

0:03:21.271,0:03:23.182
It gets slower and slower,

0:03:23.182,0:03:24.198
making errors.

0:03:24.198,0:03:26.044
Eventually it freezes

0:03:26.044,0:03:28.174
not because it's a bad computer,

0:03:28.174,0:03:31.073
but because it has too much to do at once.

0:03:31.522,0:03:35.035
The poor have the same problem.

0:03:35.035,0:03:37.848
They're not making dumb decisions[br]because they are dumb,

0:03:37.848,0:03:42.260
but because they're living in a context[br]in which anyone would make dumb decisions.

0:03:42.594,0:03:45.714
So suddenly I understood

0:03:45.714,0:03:49.805
why so many of our anti-poverty[br]programs don't work.

0:03:50.748,0:03:52.943
Investments in education for example

0:03:52.943,0:03:55.476
are often completely ineffective.

0:03:55.476,0:03:58.432
Poverty is not a lack of knowledge.

0:03:58.886,0:04:01.539
A recent analysis of 201 studies

0:04:01.539,0:04:03.875
on the effectiveness[br]of money management training

0:04:03.875,0:04:07.648
came to the conclusion that is has[br]almost know effect at all.

0:04:07.648,0:04:09.117
Don't get me wrong.

0:04:09.117,0:04:11.736
This is not to say that the poor[br]don't learn anything --

0:04:11.736,0:04:14.355
they can come out wiser for sure,

0:04:14.355,0:04:15.874
but it's not enough.

0:04:15.874,0:04:18.900
Or as Professor Shafir told me,

0:04:18.900,0:04:21.028
"It's like teaching someone to swim

0:04:21.028,0:04:24.315
and then throwing them in a stormy sea."

0:04:24.888,0:04:27.403
I still remember sitting there,

0:04:27.403,0:04:29.098
perplexed.

0:04:29.298,0:04:32.598
And it struck me that we could[br]have figured this all out decades ago.

0:04:32.598,0:04:36.058
I mean these psychologists[br]didn't need any complicated brain scans;

0:04:36.058,0:04:38.014
they only had to measure the farmers' IQ,

0:04:38.014,0:04:41.118
and IQ tests were invented[br]more that 100 years ago.

0:04:41.349,0:04:45.398
Actually, I realized I had read about[br]the psychology of poverty before.

0:04:45.658,0:04:47.239
George Orwell,

0:04:47.239,0:04:49.522
one of the greatest writers[br]who ever lived,

0:04:49.522,0:04:52.425
experienced poverty firsthand[br]in the 1920s.

0:04:52.922,0:04:54.293
"The essence of poverty,"

0:04:54.293,0:04:55.305
he wrote back then,

0:04:55.305,0:04:58.810
is that it "annihilates the future."

0:04:59.347,0:05:02.126
And he marveled at quote,

0:05:02.126,0:05:03.610
"How people take it for granted

0:05:03.610,0:05:05.329
they have the right to preach at you

0:05:05.329,0:05:06.328
and pray over you

0:05:06.328,0:05:08.831
as soon as your income falls[br]below a certain level."

0:05:08.831,0:05:13.151
Now, those words are every bit[br]as resonant today.

0:05:15.225,0:05:17.251
The big question is of course,

0:05:17.251,0:05:18.714
what can be done?

0:05:18.714,0:05:21.533
Modern economists have a few[br]solutions up their sleeves.

0:05:21.533,0:05:23.616
We could help the poor[br]with their paperwork,

0:05:23.616,0:05:26.549
or send them a text message[br]to remind them to pay their bills.

0:05:26.549,0:05:30.711
This type of solution is hugely[br]popular with modern politicians.

0:05:31.353,0:05:33.080
Mostly because,

0:05:33.080,0:05:34.078
well,

0:05:34.078,0:05:35.790
they cost next to nothing.

0:05:36.264,0:05:37.716
These solutions are,

0:05:37.716,0:05:38.746
I think,

0:05:38.746,0:05:40.439
a symbol of this era

0:05:40.439,0:05:42.639
in which we so often treat the symptoms,

0:05:42.639,0:05:44.931
but ignore the underlying cause.

0:05:45.651,0:05:48.082
So I wonder,

0:05:48.082,0:05:51.847
why don't we just change the context[br]in which the poor live?

0:05:51.847,0:05:54.162
Or, going back to our computer analogy,

0:05:54.162,0:05:56.288
why keep tinkering around[br]with the software

0:05:56.288,0:06:00.116
when we can easily solve the problem[br]by installing some extra memory instead?

0:06:00.376,0:06:01.381
At that point,

0:06:01.381,0:06:04.110
Professor Shafir responded[br]with a blank look.

0:06:04.409,0:06:05.596
And after a few seconds,

0:06:05.596,0:06:07.122
he said,

0:06:07.122,0:06:09.969
"Oh, I get it,

0:06:09.969,0:06:14.400
you mean you want to just[br]hand out more money to the poor

0:06:14.400,0:06:16.274
to eradicate poverty.

0:06:16.274,0:06:19.992
Uh, sure, that'd be great ...

0:06:19.992,0:06:22.406
but I'm afraid that brand[br]of left-wing politics

0:06:22.406,0:06:24.307
you've got in Amsterdam ...

0:06:24.307,0:06:26.454
it doesn't exist in the States."

0:06:26.707,0:06:31.074
But is this really[br]an old-fashioned, leftist idea?

0:06:31.406,0:06:33.223
I remembered reading about old plan --

0:06:33.223,0:06:36.749
something that has been proposed[br]by some of history's leading thinkers.

0:06:37.113,0:06:40.953
The philosopher Thomas More[br]first hinted at it in his book, "Utopia,"

0:06:40.953,0:06:43.033
more than 500 years ago.

0:06:43.405,0:06:46.979
And its proponents have spanned[br]the spectrum from the left to the right,

0:06:46.979,0:06:49.773
from the civil rights campaigner[br]Martin Luther King,

0:06:49.773,0:06:52.750
to the economist Milton Friedman.

0:06:53.473,0:06:56.462
And it's an incredibly simple idea.

0:06:57.229,0:07:00.564
Basic income guarantee.

0:07:01.427,0:07:02.863
What it is?

0:07:03.102,0:07:04.527
Well, that's easy.

0:07:04.839,0:07:05.870
It's a monthly grant,

0:07:05.870,0:07:07.547
enough to pay for your basic needs:

0:07:07.547,0:07:09.429
food, shelter, education.

0:07:09.781,0:07:11.728
It's completely unconditional,

0:07:11.728,0:07:14.403
so no one's going to tell you[br]what you have to do for it,

0:07:14.403,0:07:17.166
and no one's going to tell you[br]what you have to do with it.

0:07:17.166,0:07:18.770
The basic income is not a favor,

0:07:18.770,0:07:19.799
but a right.

0:07:19.799,0:07:21.932
There's absolutely no stigma attached.

0:07:22.437,0:07:25.226
So as I learned about the true[br]nature of poverty,

0:07:25.226,0:07:27.306
I couldn't stop wondering ...

0:07:27.306,0:07:30.430
is this the idea[br]we've all been waiting for?

0:07:30.779,0:07:33.458
Could it really be that simple?

0:07:34.350,0:07:36.125
And in the three years that followed,

0:07:36.125,0:07:38.788
I read everything I could find[br]about basic income.

0:07:38.788,0:07:40.664
I researched the dozens of experiments

0:07:40.664,0:07:42.735
that have been conducted[br]all over the globe,

0:07:42.735,0:07:43.855
and it didn't take long

0:07:43.855,0:07:46.685
before I stumbled upon a story[br]of a town that had done it --

0:07:46.685,0:07:48.336
had actually eradicated poverty --

0:07:48.336,0:07:50.702
but then ...

0:07:50.702,0:07:52.693
nearly everyone forgot about it.

0:07:53.667,0:07:56.684
This story starts in Dauphin, Canada.

0:07:57.065,0:08:02.691
In 1974, everybody in this small town[br]was guaranteed a basic income,

0:08:02.691,0:08:05.589
ensuring that no one fell[br]below the poverty line.

0:08:05.589,0:08:07.123
And at the start of the experiment,

0:08:07.123,0:08:10.937
an army of researchers[br]descended on the town.

0:08:11.345,0:08:13.876
For four years all went well.

0:08:14.564,0:08:18.167
But then a new government[br]was voted into power,

0:08:18.167,0:08:21.701
and the new Canadian cabinet saw[br]little point to the expensive experiment.

0:08:21.701,0:08:25.978
So when it became clear there was[br]no money left to analyze the results,

0:08:25.978,0:08:31.145
the researchers decided to pack[br]their files away in some 2,000 boxes.

0:08:32.181,0:08:35.189
25 years went by,

0:08:35.189,0:08:36.646
and then Evelyn Forget,

0:08:36.646,0:08:37.901
a Canadian professor,

0:08:37.901,0:08:39.141
found the records.

0:08:39.141,0:08:43.132
And for three years she subjected the data[br]to all manner of statistical analysis,

0:08:43.132,0:08:44.742
and no matter what she tried,

0:08:44.742,0:08:47.478
the results were the same every time.

0:08:48.009,0:08:52.398
The experiment had been[br]a resounding success.

0:08:53.350,0:08:54.522
Evelyn Forget discovered

0:08:54.522,0:08:57.079
that the people in Dauphin[br]had not only become richer,

0:08:57.079,0:08:58.643
but also smarter and healthier.

0:08:58.643,0:09:02.496
The school performance of kids[br]improved substantially.

0:09:03.166,0:09:07.584
The hospitalization rate decreased[br]by as much as 8.5 percent.

0:09:08.326,0:09:10.156
Domestic violence incidents were down,

0:09:10.156,0:09:11.947
as were mental health complaints.

0:09:12.353,0:09:14.409
And people didn't quit their jobs.

0:09:14.709,0:09:18.467
The only ones who worked a little less[br]were new mothers and students --

0:09:18.467,0:09:20.391
who stayed in school longer.

0:09:21.088,0:09:22.902
Similar results have since been found

0:09:22.902,0:09:25.407
in countless other experiments[br]around the globe,

0:09:25.407,0:09:28.382
from the US to India.

0:09:29.451,0:09:31.698
So ...

0:09:31.698,0:09:33.543
here's what I've learned.

0:09:34.195,0:09:36.375
When it comes to poverty,

0:09:36.375,0:09:41.639
we the rich should stop[br]pretending we know best.

0:09:42.287,0:09:45.005
We should stop sending[br]shoes and teddy bears to the poor,

0:09:45.005,0:09:46.734
to people we have never met.

0:09:46.734,0:09:50.211
And we should get rid of the vast[br]industry of paternalistic bureaucrats

0:09:50.211,0:09:52.311
when we could simply[br]hand over their salaries

0:09:52.311,0:09:54.086
to the poor they're supposed to help.

0:09:54.086,0:09:56.345
(Applause)

0:09:56.345,0:09:59.520
Because, I mean, the great[br]thing about money

0:09:59.520,0:10:01.871
is that people can use it[br]to buy things they need

0:10:01.871,0:10:05.231
instead of things that self-appointed[br]experts think they need.

0:10:06.037,0:10:10.302
Just imagine how many brilliant scientists[br]and entrepreneurs and writers,

0:10:10.302,0:10:11.314
like George Orwell,

0:10:11.314,0:10:14.032
are now withering away in scarcity.

0:10:14.295,0:10:16.673
Imagine how much energy[br]and talent we would unleash

0:10:16.673,0:10:19.573
if we got rid of poverty once and for all.

0:10:19.573,0:10:24.094
I believe that a basic income would[br]work like venture capital for the people.

0:10:25.082,0:10:27.361
And we can't afford not to do it,

0:10:27.361,0:10:30.206
because poverty is hugely expensive.

0:10:30.644,0:10:34.030
Just look at the cost of child poverty[br]in the US for example.

0:10:34.030,0:10:38.290
It's estimated at 500[br]billion dollars each year,

0:10:38.290,0:10:40.212
in terms of higher health care spending,

0:10:40.212,0:10:41.243
higher dropout rates,

0:10:41.243,0:10:42.541
and more crime.

0:10:42.797,0:10:46.902
Now this is an incredible waste[br]of human potential.

0:10:48.391,0:10:51.008
But let's talk about[br]the elephant in the room.

0:10:51.526,0:10:54.790
How could we ever afford[br]a basic income guarantee?

0:10:55.129,0:10:58.231
Well, it's actually a lot cheaper[br]than you may think.

0:10:58.375,0:11:01.850
What they did in Dauphin is they[br]financed it with a negative income tax.

0:11:01.850,0:11:03.858
This means that your income[br]is [stacked up]

0:11:03.858,0:11:06.229
as soon as you fall[br]below the poverty line.

0:11:06.229,0:11:07.817
And in that scenario,

0:11:07.817,0:11:10.355
according to our economists'[br]best estimates,

0:11:10.355,0:11:13.404
for a net cost of 175 billion --

0:11:13.404,0:11:15.918
a quarter of US military spending,

0:11:15.918,0:11:18.394
one percent of GDP --

0:11:18.394,0:11:22.420
you could lift all impoverished Americans[br]above the poverty line.

0:11:22.656,0:11:25.797
You could actually eradicate poverty.

0:11:26.342,0:11:28.514
Now that should be our goal.

0:11:28.981,0:11:32.560
The time for small thoughts[br]and little nudges is past.

0:11:32.980,0:11:36.312
I really believe that the time has come[br]for radical new ideas,

0:11:36.312,0:11:39.391
and basic income is so much more[br]than just another policy.

0:11:39.391,0:11:43.886
It is also a complete rethink[br]of what work actually is.

0:11:44.048,0:11:45.806
And in that sense,

0:11:45.806,0:11:48.732
it will not only free the poor ...

0:11:48.732,0:11:50.489
but also the rest of us.

0:11:51.293,0:11:53.562
Nowadays, millions of people feel

0:11:53.562,0:11:56.013
that their jobs have little[br]meaning or significance.

0:11:56.013,0:11:59.102
A recent poll among 230,000 employees,

0:11:59.102,0:12:01.032
in 142 countries,

0:12:01.032,0:12:05.967
found that only 30 percent of workers[br]actually like their job.

0:12:06.671,0:12:10.491
And another poll found that as much[br]as 37 percent of British workers

0:12:10.491,0:12:13.656
have a job that they think[br]doesn't even need to exist.

0:12:14.386,0:12:16.905
It's like Brad Pitt says in "Fight Club,"

0:12:16.905,0:12:20.585
"Too often we're working jobs we hate[br]so we can buy shit we don't need."

0:12:20.585,0:12:21.584
(Laughter)

0:12:21.884,0:12:23.425
Now don't get me wrong --

0:12:23.425,0:12:25.915
I'm not talking about the teachers[br]and the garbagemen

0:12:25.915,0:12:27.592
and the care workers here.

0:12:27.592,0:12:29.198
If they stopped working,

0:12:29.198,0:12:30.849
we'd be in trouble.

0:12:31.217,0:12:34.691
I'm talking about all those well-paid[br]professionals with excellent resumes

0:12:34.691,0:12:36.668
who earn their money doing ...

0:12:36.668,0:12:38.664
strategic transactor peer-to-peer meetings

0:12:38.664,0:12:41.635
while brainstorming the value add[br]on all disruptive co-creation

0:12:41.635,0:12:42.732
in the network society.

0:12:42.732,0:12:43.731
(Laughter)

0:12:43.731,0:12:44.733
(Applause)

0:12:44.733,0:12:46.296
Or something like that.

0:12:46.296,0:12:49.172
Just imagine again how much[br]talent we're wasting

0:12:49.172,0:12:53.481
simply because we tell our kids[br]they'll have to "earn a living."

0:12:53.722,0:12:56.400
Or think of what a math whiz[br]working at Facebook lamented

0:12:56.400,0:12:57.580
a few years ago:

0:12:57.580,0:12:59.546
"The best minds of my generation

0:12:59.546,0:13:03.124
are thinking about how[br]to make people click ads."

0:13:04.566,0:13:06.548
I'm an historian.

0:13:07.073,0:13:09.285
And if history teaches us anything,

0:13:09.285,0:13:11.879
it is that things could be different.

0:13:12.101,0:13:13.406
There is nothing inevitable

0:13:13.406,0:13:16.346
about the way we structured our society[br]and economy right now.

0:13:16.346,0:13:18.623
Ideas can and do change the world.

0:13:18.877,0:13:21.412
And I think that especially[br]in the past few years,

0:13:21.412,0:13:22.853
it has become abundantly clear

0:13:22.853,0:13:24.825
that we cannot stick to the status quo --

0:13:24.825,0:13:27.003
that we need new ideas.

0:13:28.604,0:13:31.935
I know that many of you[br]may feel pessimistic

0:13:31.936,0:13:34.023
about a future of rising inequality,

0:13:34.023,0:13:35.308
xenophobia

0:13:35.308,0:13:36.692
and climate change.

0:13:37.087,0:13:39.309
But it's not enough[br]to know what we're against.

0:13:39.309,0:13:40.813
We also need be for something.

0:13:40.813,0:13:43.626
Martin Luther King didn't say,[br]"I have a nightmare."

0:13:43.626,0:13:44.873
(Laughter)

0:13:45.336,0:13:46.638
He had a dream.

0:13:46.638,0:13:47.740
(Applause)

0:13:47.740,0:13:50.140
So ...

0:13:50.140,0:13:51.670
here's my dream.

0:13:52.300,0:13:54.165
I believe in a future

0:13:54.165,0:13:58.061
where the value of your work is not[br]determined by the size of your paycheck,

0:13:58.061,0:14:00.046
but by the amount of happiness you spread

0:14:00.046,0:14:02.111
and the amount of meaning you give.

0:14:02.111,0:14:03.358
I believe in a future

0:14:03.358,0:14:04.690
where the point of education

0:14:04.690,0:14:06.869
is not to prepare you[br]for another useless job,

0:14:06.869,0:14:09.039
but for a life well-lived.

0:14:09.208,0:14:10.707
I believe in a future

0:14:10.707,0:14:13.910
where an existence[br]without poverty is not a privilege

0:14:13.910,0:14:15.718
but a right we all deserve.

0:14:15.862,0:14:17.086
So here we are.

0:14:17.296,0:14:18.296
Here we are.

0:14:18.296,0:14:19.391
We've got the research,

0:14:19.391,0:14:20.465
we've got the evidence

0:14:20.465,0:14:21.714
and we've got the means.

0:14:21.714,0:14:25.646
Now, more than 500 years after Thomas[br]More first wrote about basic income,

0:14:25.646,0:14:29.806
and 100 years after George Orwell[br]discovered the true nature of poverty,

0:14:29.806,0:14:32.389
we all need to change our worldview,

0:14:32.389,0:14:35.484
because poverty[br]is not a lack of character.

0:14:35.867,0:14:38.844
Poverty is a lack of cash.

0:14:39.247,0:14:40.602
Thank you.

0:14:40.756,0:14:43.112
(Applause)