Dutch historian Rutger Bregman in his book Utopia for realists, which made it for the world bookshelves in 2016 and was translated into Croatian a year later, represents an experiment launched by a homelessness charity called Broadway in the City of London. It selected 13 homeless men and gave them £3,000 each.
Namely, the issue that Bregman poses is that of a big social state costing the taxpayers quite a lot of money. When we include police expenditures, court fees, and social services, the above mentioned thirteen homeless men collectively cost society about £400,000 a year or 3.5 million HRK a year. That is why the Broadway charity tried to give homeless people cash directly and see what would happen.
The experiment proved to be successful – homeless people bought the basic things they needed and found a job, and after one year and a half seven of the thirteen were in housing. Two more were about to move into their own apartments, and all thirteen have made decisive steps towards financial stability and personal progress. They entered schools; several had attended substance abuse rehabilitation or enrolled in cooking classes.
After several decades of unsuccessful state pampering, punishment and persecution, nine homeless men were removed from the street for only £ 50,000 a year, including social worker’s salary, which is eight times less than the tax money that had been spent before.
Bregman later introduces us with the GiveDirectly organization, which donates money to poor people, and their statistics speak for themselves. Namely, people who received financial assistance from GiveDirectly have consistently increased their income, 58% bought homes and cattle, and their children went without food on 42% fewer days.
The author in his book gives us a number of examples of scientific research where it is shown that people who do not have the money know best what they need in order to find a job or start their own business. People specifically want a cell phone or hearing aid, a gardening course and the like, and not necessarily food and shelter coupons.
Although there is a strong prejudice that the poor are in a position they are because they do not know about money, Bregman has shown us that this is not the case with the help of a series of studies.
Why do the poor make such poor decisions?
There is an interesting subtitle in Bregman’s book – “Why do the poor make such poor decisions”. Namely, in that chapter, with the assistance of psychologist Eldar Shafir, a professor at Princeton University, Bregman answers questions about why the poor are more likely to turn to crime, more obese, exercise less, and enjoy more alcohol and drugs, and the like.
Shafir tells us that poor people have an incredible ability – in short term – to make ends meet, the same way that overworked CEOs can power through to close a deal.
However, overcrowding with poverty narrows the focus on what is currently occurring. The lack of free time to think about things we do is destroying a long-term perspective. This also applies to, say, Wall Street brokers just like the poor. As brokers failed to foresee a fall in the market because they were concerned about tiny changes in the market so the poor cannot set up a long-term life plan because each day they are oppressed with a new existential problem.
There is a key distinction though between people with busy lives and those living in poverty: You can’t take a break from poverty.
Bregman continues with the research conducted south of the Great Smoky Mountains. Randall Akee, an economist at the University of Los Angeles, calculated that the casino cash distributed to Cherokee kids ultimately cut expenditures. According to his conservative estimates, eliminating poverty actually generated more money than the total of all casino payments through reductions in crime, use of care facilities, and repetition of school grades.
Bregman then mentions further studies establishing the increase of IQ of poorer citizens after enrichment, decrease of alcohol use, violence, mental illnesses and others. Researchers in Britain argue that poverty eradication policy would cover most of its costs by a large part. Because the amount of money being given to prisons, social assistance, police, and the like can directly help the poor.
When you give homeless people a lump sum, it gives them a chance to think long-term.
The problem of inequality
Bregman shows how up to a per capita GDP of roughly $5,000 a year, life expectancy increases more or less automatically. But once there is enough food on the table, a roof that does not leak, and clean running water to drink, economic growth is no longer a guarantor of welfare. From that point on, equality is a much more accurate predictor.
Whether you look at the incidence of depression, drug abuse, high dropout rates, obesity, unhappy childhoods and others, the evidence points to the same culprit every time: inequality.
Norway has a similar GDP per capita (with regard to purchasing power) as the USA, but far less social problems, while Japan, for example, has a much lower per capita GDP than the USA or Norway and less social problems even than Norway. This is because in the United States the inequality between rich and poor is very high, and in Japan and Norway it is low.
When we set a graph regarding inequality in the distribution of wealth, we notice the regularity:
Why is it so? The psychosocial consequences are such that people living in unequal societies spend mora time worrying about how other see them. Countries with big disparities in wealth also have more bullying behaviour and this undercuts the quality of relationships (manifested in a distrust of strangers and status anxiety). The resulting stress, in turn, is a major determinant of illness and chronic health problems, says Bregman.
When we put the Roma as a minority within this context we realise that bigger economic equality enables interaction between cultures, tolerance and lack of intolerance, which is the interest of all minorities, Roma included.
When inequality goes up, social mobility goes down. There is almost no country on Earth where the American Dream is less likely to come true than in the USA. Anybody eager to work their way up from rags to riches is better off trying their luck in Sweden.
The mastermind behind the production line, Henry Ford had discovered that a shorter workweek actually increased productivity among his employees. Leisure time, he observed, was a “cold business fact.” A well-rested worker was a more effective worker. And besides, an employee toiling at a factory from dawn till dusk, with no free time for road trips or joy rides, would never buy one of his cars. Later, the country passed the 40-hour workweek into law.
Others took his experiments a step farther. In 1930, as the Great Depression was raging, the cornflake magnate W.K. Kellogg decided to introduce a six-hour workday at one of his factories. It was an unmitigated success: Kellogg was able to hire an additional 300 employees (increasing the overall purchasing power at the market) and slashed the accident rate by 41%. Moreover, his employees became noticeably more productive.
Bregman then continues with data showing all the problems which would be solved with the greater amount of free time:
- Less Stress. The largest share of minutes would go toward intimate relationships, socializing, relaxing, all together decreasing stress. It also means less medicine consumption and collective saving on psychiatric treatments, less power for pharmaceutical industry and so on.
- Climate change. A worldwide shift to a shorter workweek could cut the CO2 emitted this century by half.
- Long workdays lead to more errors: Tired surgeons are more prone to slip-ups. From Chernobyl to the Space Shuttle Challenger, overworked managers often prove to have played a fatal role in disasters.
- Emancipation of women. Countries with short workweeks consistently top gender equality rankings. Not until men do their fair share of cooking, cleaning, and other domestic labour will women be free to fully participate in the broader economy.
- Inequality. The countries with the biggest disparities in wealth are precisely those with the longest workweeks. While the poor are working longer and longer hours just to get by, the rich are finding it ever more “expensive” to take time off as their hourly rates rise.
After all, leisure time is not necessarily inaction. It turns out that many people are learning to play instruments during free time, composing, conducting research, drawing patents, writing books, and the like. In other words, they deal with what they are most interested in, and the sincere enthusiasm for something is an excellent prerequisite for achieving something socially useful.
Bregman concludes with information about regular collapse of once respectable jobs due to technology. At the start of the 20th century, machines were already rendering a time-honoured occupation obsolete and today innovations in Silicon Valley trigger mass layoffs elsewhere. Production has been globalized. Take the iPhone. It is a miracle of technology, certainly inconceivable without the chip and the box. It is a phone constructed out of parts made in the USA, Italy, Taiwan, and Japan that are screwed into place in China and then sent the world over. We may be living in the age of individualism, but our societies have never been more dependent on one another. The big question is: Who’s profiting?
Until now machines were rendering a time-honoured occupation obsolete but also offered numerous new jobs. It does not happen anymore – human labour has become too expensive and inefficient.
In times when machines replace human labour, the gap between rich and poor is already wider than it was, job uncertainty is growing, and they are made redundant and badly paid, while less and less people do what they like, Rutger Bregman proposes the idea of a universal basic income.
As Bregman proved, poverty creates unstable, unhealthy people who cannot think long-term and are therefore unable to get out of their misfortune. Countries that do not have a strong redistribution of wealth are always more prone to social problems, while leisure creates more productive, more satisfied, healthier, freer and more equal people.
According to him, part of the tax money should be given directly to all people in an amount that is sufficient for a safe and dignified life while a lack of stress and free time would stimulate people to educate themselves and deal with what they sincerely aspire to. Famous people like businessman Elon Musk and scientist Stephen Hawking, have also advocated and / or advocate for such a proposal, and by many, universal basic income is the only solution to save the unstable economy of today.
This Bregman’s book encourages us to think, breaking prejudice of the poor and people with more leisure time as being lazy. It abounds with scientific facts and at the same time it is extremely interesting to read.