A while ago I read an article that proved to me, once and for all, that economic growth will not solve poverty. Based on data from the last two decades showing how the benefits of growth are distributed, analysts had assessed how much would be needed to lift everyone above a $5 a day poverty line. To achieve this, they found that the world economy would need to grow to 173 times its current size, and the average gross income per person would need to be over $1.3 million.
An average income of over a million dollars each, just so that the unluckiest people can earn $5 a day?
GDP growth lands with the wealthy
The problem is that hardly any of GDP growth goes to the poor. The article notes that between 1998 and 2008, the richest 40% of humanity raked in 95% of the extra income from economic growth. The majority of the world’s people are left fine-slicing the remaining 5%.
This really hammered home to me what I had long suspected – poverty won’t end until we tackle distribution. We have to find ways to redistribute income and wealth, so that people at the sharp end aren’t trapped mathematically with incomes they can barely survive on.
World basic income redistributes wealth
There are lots of ways to redistribute wealth, as discussed on this page. But the ongoing extent of poverty in the world implies that they are not adequate on their own.
World basic income seemed to me like the obvious answer. It is the simplest way to scrape money off the top of the wealth pyramid, and pump it back in from the bottom. It is, quite literally, the redistribution scheme that keeps on giving. It could reach every single person, every month, forever.
Getting the ball rolling
The more I thought about it, the more I felt that the world really needs this. Of course, it is not by a long shot the only change the world needs – world basic income won’t end wars, or reverse climate change, or solve the myriad other major issues that the world’s people face.
But it could help to support every single person in the world, so that we all have the security to fight these problems ourselves. It could end the worst extremes of poverty. It could bring us together, when so many other forces threaten to drive us apart.
That is why we set up this organisation. Although it won’t be easy, we felt that this prize was just too big to ignore. World Basic Income aims to get the ball rolling. We wonder how far we will manage to push it.
Director - World Basic Income