Facebook's cofounder just launched a $10 million initiative with other big names to figure out whether basic income works
Announced December 8, the Economic Security Project (ESP) is a two-year fund of $10 million that will go toward uncovering everything there is to know about universal basic income, a system of wealth distribution in which every citizen receives a monthly stipend to cover basic needs.
The coalition contains a range of future-minded folks, including Y Combinator President Sam Altman, GiveDirectly Co-Founder Michael Faye, and Robert Reich, the former Secretary of Labor and a current professor at University of California, Berkeley.
ESP is co-chaired by the Institute for the Future's Natalie Foster, Facebook Co-Founder Chris Hughes, and Roosevelt Institute Fellow Dorian Warren. The funds will support six organizations designed to investigate and advocate for cash transfer policies, including The Center for Popular Democracy and the charity GiveDirectly.
Basic income has seen a slew of promising studies in recent years.
Researchers in countries like Kenya, Tanzania, and Honduras have repeatedly found that direct cash transfers - giving people money for nothing - tend to improve people's lives without leading to unhealthy behaviors like drinking or drug abuse.
But with the exception of a few small cases, such as the Permanent Dividend Fund in Alaska and the Dauphin Experiment in Manitoba, North America has never experienced basic income in full-force. ESP might have the power to address that remaining curiosity: What happens in places where incomes aren't below the global poverty line?
"We have more questions than answers," Hughes said recently, according to Quartz. "But we do know we can unite around the fact that financial security should be a human right and cash is an underutilized tool."
According to the latest data, wealth inequality is the worst it's ever been.
Many basic income supporters see the strategy as an elegant solution to that dire problem. It's not only effective (at least on a small scales) but it's also appealing on both sides of the aisle. Liberals like it because it involves caring for the poor and downtrodden. Conservatives like it because it shrinks the role of the government and puts money in people's hands, which they can use how they see fit.
Until there's more data, however, basic income will remain a promising theory. To drag it into the real world of policy, a number of organizations have designed experiments of their own.
The largest is GiveDirectly's experiment in Kenya and Uganda, where 6,000 people will receive a basic income for 12 years. In the US, the most hopeful is Y Combinator's experiment in Oakland, California. Starting next year, roughly 100 families of all different income levels will receive $2,000 a month. Following the successful pilot, a larger experiment will last the next several years.
For Sam Altman, Y Combinator's president, the window for experimenting with basic income is closing at an unknown rate. As robotic automation displaces more American workers, the need grows for an alternative to labor-based wages.
Although, as Altman explains, he still needs more data to know whether basic income deserves his full support. Hopefully, ESP will help him and other like-minded people move toward clarity, he says.
"Intuitively, this idea of a floor and no ceiling really appeals to me," he tells Business Insider. With basic income, people could make as much as they want without worrying they'll slip into poverty - a key trait that distinguishes it from socialism.
"I'm just not sure if it's the right approach," Altman adds, "which is why I want to study it."