In a recent episode of “Money & Macro” (Youtube, Overcast) Joeri Schasfoort interviewed Dennis Egger about a massive basic income experiment that Give Directly did in Africa. Joeri asked:

“…people say ‘I don’t want to give a man fish. 
I want to teach him how to fish.’ But could you then say, no, you should give the man’s neighbors money so that there’s purchasing power for people to buy the fish from that man.”

Dennis agreed with this summary. To summarize, Give Directly gave one-time unconditional cash gifts to residents of a percentage of low income villages in Kenya. The researchers traced the impact of the cash on the recipients, their neighbors, and on inflation. They found a 2.5 multiplier of the cash on the local economy over the first two years after the gifts, with low or no inflation (inflation below 1%). Give Directly let the recipients decide whether to buy food (fish), spend money on education (learning to fish), or importing goods from outside the local economy (fishing rods).

Joeri and Dennis discussed how slack in the local economy could explained the results, and guessed how Keynes and Hayek would have responded to the experiment. The success of the experiment makes me wonder if something similar were implemented via redistribution (say taking money via a tax from the wealthiest 10%), the cash gifts would eventually end up (by normal market transactions) back in the hands of the top 10%, resulting in a gain for everyone.

I recommend the entire interview.