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Poverty isn't a lack of character; it's a lack of cash

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    I'd like to start with a simple question:
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    Why do the poor make
    so many poor decisions?
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    I know it's a harsh question,
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    but take a look at the data.
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    The poor borrow more, save less,
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    smoke more, exercise less, drink more
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    and eat less healthfully.
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    Why?
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    Well, the standard explanation
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    was once summed up by the British
    Prime Minister, Margaret Thatcher.
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    And she called poverty
    "a personality defect."
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    (Laughter)
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    A lack of character, basically.
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    Now, I'm sure not many of you
    would be so blunt.
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    But the idea that there's something
    wrong with the poor themselves
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    is not restricted to Mrs. Thatcher.
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    Some of you may believe that the poor
    should be held responsible
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    for their own mistakes.
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    And others may argue that we should
    help them to make better decisions.
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    But the underlying assumption is the same:
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    there's something wrong with them.
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    If we could just change them,
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    if we could just teach them
    how to live their lives,
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    if they would only listen.
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    And to be honest,
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    this was what I thought for a long time.
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    It was only a few years ago
    that I discovered
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    that everything I thought I knew
    about poverty was wrong.
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    It all started when I accidentally
    stumbled upon a paper
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    by a few American psychologists.
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    They had traveled 8,000 miles,
    all the way to India,
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    for a fascinating study.
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    And it was an experiment
    with sugarcane farmers.
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    You should know that these farmers
    collect about 60 percent
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    of their annual income all at once,
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    right after the harvest.
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    This means that they're relatively
    poor one part of the year
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    and rich the other.
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    The researchers asked them to do
    an IQ test before and after the harvest.
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    What they subsequently discovered
    completely blew my mind.
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    The farmers scored much worse
    on the test before the harvest.
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    The effects of living
    in poverty, it turns out,
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    correspond to losing 14 points of IQ.
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    Now, to give you an idea,
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    that's comparable
    to losing a night's sleep
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    or the effects of alcoholism.
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    A few months later,
    I heard that Eldar Shafir,
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    a professor at Princeton University
    and one of the authors of this study,
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    was coming over to Holland, where I live.
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    So we met up in Amsterdam
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    to talk about his revolutionary
    new theory of poverty.
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    And I can sum it up in just two words:
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    scarcity mentality.
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    It turns out that people
    behave differently
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    when they perceive a thing to be scarce.
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    And what that thing is
    doesn't much matter --
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    whether it's not enough time,
    money or food.
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    You all know this feeling,
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    when you've got too much to do,
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    or when you've put off breaking for lunch
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    and your blood sugar takes a dive.
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    This narrows your focus
    to your immediate lack --
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    to the sandwich you've got to have now,
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    the meeting that's starting
    in five minutes
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    or the bills that have
    to be paid tomorrow.
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    So the long-term perspective
    goes out the window.
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    You could compare it to a new computer
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    that's running 10 heavy programs at once.
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    It gets slower and slower, making errors.
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    Eventually, it freezes --
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    not because it's a bad computer,
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    but because it has too much to do at once.
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    The poor have the same problem.
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    They're not making dumb decisions
    because they are dumb,
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    but because they're living in a context
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    in which anyone would make dumb decisions.
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    So suddenly I understood
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    why so many of our anti-poverty
    programs don't work.
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    Investments in education, for example,
    are often completely ineffective.
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    Poverty is not a lack of knowledge.
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    A recent analysis of 201 studies
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    on the effectiveness
    of money-management training
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    came to the conclusion
    that it has almost no effect at all.
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    Now, don't get me wrong --
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    this is not to say the poor
    don't learn anything --
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    they can come out wiser for sure.
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    But it's not enough.
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    Or as Professor Shafir told me,
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    "It's like teaching someone to swim
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    and then throwing them in a stormy sea."
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    I still remember sitting there,
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    perplexed.
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    And it struck me
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    that we could have figured
    this all out decades ago.
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    I mean, these psychologists didn't need
    any complicated brain scans;
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    they only had to measure the farmer's IQ,
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    and IQ tests were invented
    more that 100 years ago.
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    Actually, I realized I had read about
    the psychology of poverty before.
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    George Orwell, one of the greatest
    writers who ever lived,
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    experienced poverty
    firsthand in the 1920s.
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    "The essence of poverty,"
    he wrote back then,
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    is that it "annihilates the future."
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    And he marveled at, quote,
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    "How people take it for granted
    they have the right to preach at you
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    and pray over you
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    as soon as your income falls
    below a certain level."
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    Now, those words are every bit
    as resonant today.
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    The big question is, of course:
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    What can be done?
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    Modern economists have
    a few solutions up their sleeves.
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    We could help the poor
    with their paperwork
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    or send them a text message
    to remind them to pay their bills.
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    This type of solution is hugely popular
    with modern politicians,
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    mostly because,
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    well, they cost next to nothing.
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    These solutions are, I think,
    a symbol of this era
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    in which we so often treat the symptoms,
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    but ignore the underlying cause.
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    So I wonder:
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    Why don't we just change the context
    in which the poor live?
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    Or, going back to our computer analogy:
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    Why keep tinkering around
    with the software
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    when we can easily solve the problem
    by installing some extra memory instead?
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    At that point, Professor Shafir
    responded with a blank look.
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    And after a few seconds, he said,
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    "Oh, I get it.
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    You mean you want to just hand out
    more money to the poor
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    to eradicate poverty.
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    Uh, sure, that'd be great.
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    But I'm afraid that brand
    of left-wing politics
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    you've got in Amsterdam --
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    it doesn't exist in the States."
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    But is this really
    an old-fashioned, leftist idea?
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    I remembered reading about an old plan --
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    something that has been proposed
    by some of history's leading thinkers.
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    The philosopher Thomas More
    first hinted at it in his book, "Utopia,"
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    more than 500 years ago.
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    And its proponents have spanned
    the spectrum from the left to the right,
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    from the civil rights campaigner,
    Martin Luther King,
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    to the economist Milton Friedman.
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    And it's an incredibly simple idea:
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    basic income guarantee.
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    What it is?
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    Well, that's easy.
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    It's a monthly grant, enough to pay
    for your basic needs:
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    food, shelter, education.
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    It's completely unconditional,
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    so no one's going to tell you
    what you have to do for it,
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    and no one's going to tell you
    what you have to do with it.
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    The basic income
    is not a favor, but a right.
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    There's absolutely no stigma attached.
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    So as I learned about the true
    nature of poverty,
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    I couldn't stop wondering:
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    Is this the idea
    we've all been waiting for?
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    Could it really be that simple?
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    And in the three years that followed,
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    I read everything I could find
    about basic income.
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    I researched the dozens of experiments
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    that have been conducted
    all over the globe,
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    and it didn't take long before I stumbled
    upon a story of a town
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    that had done it --
    had actually eradicated poverty.
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    But then ...
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    nearly everyone forgot about it.
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    This story starts in Dauphin, Canada.
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    In 1974, everybody in this small town
    was guaranteed a basic income,
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    ensuring that no one fell
    below the poverty line.
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    At the start of the experiment,
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    an army of researchers
    descended on the town.
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    For four years, all went well.
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    But then a new government
    was voted into power,
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    and the new Canadian cabinet saw
    little point to the expensive experiment.
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    So when it became clear there was
    no money left to analyze the results,
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    the researchers decided to pack
    their files away in some 2,000 boxes.
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    Twenty-five years went by,
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    and then Evelyn Forget,
    a Canadian professor,
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    found the records.
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    For three years, she subjected the data
    to all manner of statistical analysis,
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    and no matter what she tried,
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    the results were the same every time:
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    the experiment had been
    a resounding success.
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    Evelyn Forget discovered
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    that the people in Dauphin
    had not only become richer
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    but also smarter and healthier.
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    The school performance of kids
    improved substantially.
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    The hospitalization rate decreased
    by as much as 8.5 percent.
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    Domestic violence incidents were down,
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    as were mental health complaints.
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    And people didn't quit their jobs.
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    The only ones who worked a little less
    were new mothers and students --
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    who stayed in school longer.
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    Similar results have since been found
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    in countless other experiments
    around the globe,
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    from the US to India.
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    So ...
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    here's what I've learned.
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    When it comes to poverty,
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    we, the rich, should stop
    pretending we know best.
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    We should stop sending shoes
    and teddy bears to the poor,
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    to people we have never met.
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    And we should get rid of the vast
    industry of paternalistic bureaucrats
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    when we could simply
    hand over their salaries
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    to the poor they're supposed to help.
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    (Applause)
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    Because, I mean, the great
    thing about money
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    is that people can use it
    to buy things they need
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    instead of things that self-appointed
    experts think they need.
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    Just imagine how many brilliant scientists
    and entrepreneurs and writers,
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    like George Orwell,
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    are now withering away in scarcity.
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    Imagine how much energy
    and talent we would unleash
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    if we got rid of poverty once and for all.
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    I believe that a basic income would work
    like venture capital for the people.
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    And we can't afford not to do it,
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    because poverty is hugely expensive.
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    Just look at the cost of child poverty
    in the US, for example.
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    It's estimated at 500 billion
    dollars each year,
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    in terms of higher health care
    spending, higher dropout rates,
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    and more crime.
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    Now, this is an incredible waste
    of human potential.
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    But let's talk about
    the elephant in the room.
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    How could we ever afford
    a basic income guarantee?
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    Well, it's actually a lot cheaper
    than you may think.
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    What they did in Dauphin is finance it
    with a negative income tax.
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    This means that your income is topped up
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    as soon as you fall
    below the poverty line.
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    And in that scenario,
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    according to our economists'
    best estimates,
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    for a net cost of 175 billion --
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    a quarter of US military spending,
    one percent of GDP --
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    you could lift all impoverished Americans
    above the poverty line.
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    You could actually eradicate poverty.
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    Now, that should be our goal.
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    (Applause)
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    The time for small thoughts
    and little nudges is past.
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    I really believe that the time has come
    for radical new ideas,
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    and basic income is so much more
    than just another policy.
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    It is also a complete rethink
    of what work actually is.
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    And in that sense,
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    it will not only free the poor,
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    but also the rest of us.
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    Nowadays, millions of people feel
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    that their jobs have little
    meaning or significance.
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    A recent poll among 230,000 employees
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    in 142 countries
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    found that only 30 percent of workers
    actually like their job.
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    And another poll found that as much
    as 37 percent of British workers
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    have a job that they think
    doesn't even need to exist.
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    It's like Brad Pitt says in "Fight Club,"
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    "Too often we're working jobs we hate
    so we can buy shit we don't need."
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    (Laughter)
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    Now, don't get me wrong --
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    I'm not talking about the teachers
    and the garbagemen
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    and the care workers here.
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    If they stopped working,
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    we'd be in trouble.
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    I'm talking about all those well-paid
    professionals with excellent résumés
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    who earn their money doing ...
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    strategic transactor peer-to-peer meetings
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    while brainstorming the value
    add-on of disruptive co-creation
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    in the network society.
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    (Laughter)
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    (Applause)
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    Or something like that.
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    Just imagine again how much
    talent we're wasting,
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    simply because we tell our kids
    they'll have to "earn a living."
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    Or think of what a math whiz working
    at Facebook lamented a few years ago:
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    "The best minds of my generation
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    are thinking about how
    to make people click ads."
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    I'm a historian.
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    And if history teaches us anything,
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    it is that things could be different.
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    There is nothing inevitable
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    about the way we structured our society
    and economy right now.
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    Ideas can and do change the world.
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    And I think that especially
    in the past few years,
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    it has become abundantly clear
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    that we cannot stick to the status quo --
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    that we need new ideas.
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    I know that many of you
    may feel pessimistic
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    about a future of rising inequality,
  • 13:34 - 13:35
    xenophobia
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    and climate change.
  • 13:37 - 13:39
    But it's not enough
    to know what we're against.
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    We also need to be for something.
  • 13:41 - 13:43
    Martin Luther King didn't say,
    "I have a nightmare."
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    (Laughter)
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    He had a dream.
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    (Applause)
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    So ...
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    here's my dream:
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    I believe in a future
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    where the value of your work
    is not determined
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    by the size of your paycheck,
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    but by the amount of happiness you spread
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    and the amount of meaning you give.
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    I believe in a future
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    where the point of education is not
    to prepare you for another useless job
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    but for a life well-lived.
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    I believe in a future
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    where an existence
    without poverty is not a privilege
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    but a right we all deserve.
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    So here we are.
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    Here we are.
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    We've got the research,
    we've got the evidence
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    and we've got the means.
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    Now, more than 500 years after Thomas More
    first wrote about a basic income,
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    and 100 years after George Orwell
    discovered the true nature of poverty,
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    we all need to change our worldview,
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    because poverty
    is not a lack of character.
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    Poverty is a lack of cash.
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    Thank you.
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    (Applause)
Title:
Poverty isn't a lack of character; it's a lack of cash
Speaker:
Rutger Bregman
Description:

"Ideas can and do change the world," says historian Rutger Bregman, sharing his case for a provocative one: guaranteed basic income. Learn more about the idea's 500-year history and a forgotten modern experiment where it actually worked -- and imagine how much energy and talent we would unleash if we got rid of poverty once and for all.

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Video Language:
English
Team:
closed TED
Project:
TEDTalks
Duration:
14:58
  • 4:38 Typo:
    more that 100 years ago
    ->
    more than 100 years ago

  • Question: At 12:01 I hear "30 percent" instead of "13 percent". Does anyone agree or did I mishear?

  • I heard 13.

  • P.S. How stupid of me, the number 13 is actually written down on the following slide ;-)

  • Oh, it was just a little bit of inattention, it can happen to all of us :)

English subtitles

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