Ebay Founder Invests $500,000 in a Project Giving Free Money to Kenyans
Pierre Omidyar, the eBay founder, has invested $500,000 in a project that aims to give free money to Kenyans. Well, a section of Kenyans to be precise.
Omidyar has pledged to donate the money which will be used to test the concept of universal basic income.
The money is expected to come from Omidyar Network, a philanthropic foundation started by the tech mogul.
The money will be distributed to a section of Kenyans through the GiveDirectly program.
The experiment aims to test the practicality and advance insights around basic income to more practical approaches.
The 12-year pilot program will see 6,000 Kenyans receive regular stipends for the entire duration of the experiment.
In addition, about 20,000 people will be given some money to supplement their income.
Universal basic income is the notion that every citizen should receive some money from the government yearly regardless of their occupation.
The reasoning is that such a program would reduce economic stress especially following the dwindling demand for labor as a result of automation.
This and other similar theories have existed for centuries, but governments have not been sold to the idea. Not one bit.
Currently, GiveDirectly is operating on a small scale in a few villages in Kenya and Uganda.
Nevertheless, its fortunes are about to change since the universal basic income research will be its biggest income research to date.
The charity program gives money to people living in poverty and it depends on public donations.
The participants will be selected based on basic income levels.
Basically, all people who will participate in this research fall under the basic income category.
The money is expected to cover their basic expenses such as rent, food, and clothing.
Past Studies on Basic Income
Past studies on basic income have revealed that there are positive implications that come with helping poor people meet their needs.
Some studies have revealed that drug use reduces when people’s financial needs are met since they have fewer reasons to be stressed.
Also, it has been reported that people are more likely to control their finances accurately since they are stress-free.
Examples of similar studies are the one launched by Y Combinator (YC) in Oakland, California and a five-year experiment ran in Manitoba, Canada in the 70’s.
The later was dubbed Mincome but it was shut before the five-year period. This experiment has also been conducted in Namibia, India, and Scotland.
Omidyar is confident about the project as he believes that once complete, it will provide valuable insights.
The Omidyar Network also operates under the belief that when people are empowered, they better themselves and the society in general.
Perceptions on Basic Income
Advocates of universal basic income believe that this is an economic security that can get people out of poverty.
On the other hand, skeptics believe that free money will not be spent well.
The latter argue that recipients are likely to waste money or become complacent.
This issue is contentious as both sides of the debate table persuasive evidence-based arguments.
The topic of universal basic income generates a lot of heated debates.
We can only hope that the 12-year pilot program will provide valuable insights that will advise on the best way forward.
In the meantime, we can only wait for the program to be rolled out.