TACOMA, Washington — An experiment in 2009 led Dutch historian Rutger Bregman to declare in his book, Utopia for Realists, that “free money works.” Precisely, free money functions to combat poverty and homelessness. The method: release ‘rough sleepers’ from the bondage of hyper-curated programs in regards to where they can spend aid money. Allow people the dignity to choose and incredible things might happen. The prominent case study Bregman used to support his claim was that of Broadway Charity. Broadway Charity is a London-based homelessness organization that experimented with this radical idea to fight poverty. In 2014, Broadway merged with St. Mungo’s and recommitted to ending homelessness and providing outreach that furnishes “a bed and support to more than 3,150 people.” The good work they do has sparked an innovative experiment that just might be a key solution to fighting poverty and homelessness around the world.
Described as a “personalized budget pilot project,” the experiment aimed to address a homelessness issue in London. There was a “23% increase in the number of people permanently living on the streets” in 2020. In 2009, the exercise focused on 15 long-term, hard-to-engage rough sleepers (those living on the streets between four and 45 years) and had a remarkably simple philosophy.
The philosophy was to provide the rough sleepers with a full-time coordinator that facilitated what they needed to help them off the streets, impart that they had a £3,000 personalized budget to achieve this and support them to develop an action plan. The results were exquisite and “far exceeded many people’s expectations of the project”.
Of the 15 participants, 11 moved into accommodation after one year, five set up welfare benefit claims and three registered for courses (IT, art and gardening). A number of people reported improvements in physical and mental health. One participant with a serious drug problem began engaging with a drug treatment service. One negative outcome highlighted the need for exercising caution and care when transitioning vulnerable rough sleepers to new and potentially isolating accommodation. Overall, the experiment highlighted a radical idea to fight poverty: free money and support.
This experiment has been played out many times in human history and the data is overwhelmingly supportive of the idea. “Research has correlated unconditional cash disbursements with reductions in crime, child mortality, malnutrition, teenage pregnancy and truancy, and with improved school performance, economic growth and gender equality.” Versions of the 2009 experiment in London had been run previously. In Kenya, Uganda, Namibia, Brazil, Mexico, India and South Africa. All of these experiments performed to objective success.
Perhaps what the ‘free money’ idea highlights most of all is that the argument against aid is patently false and politicized. Insolence, laziness and exorbitant birth rates, aside from being anecdotal and prejudiced, are uncorrelated. The 1974 Manitoba basic annual income experiment (Mincome) in Canada produced results that showed “total work hours only notched down 1% for men, 3% for married women and 5% for unmarried women.” In a test conducted in Liberia that distributed $200 to ‘alcoholics, addicts and petty criminals,’ the researchers noted that after three years the participants spent the money on food, clothing, medicine and small businesses.
Homelessness in the U.K.
The numbers in the U.K. have continued to grow since the 2009 experiment. The housing and homelessness charity Shelter estimated the homeless population in England rests at around 280,000 people in 2019. Another homelessness advocacy group, Research for Crisis, puts the cost of one person sleeping on the street at £20,128 per year. This number is astronomically high compared to successful intervention at £1,426. Broadway/St. Mungo’s number is closer to 3,000. The solution seems to be far cheaper than languishing in the political/sociological details.
Importance of Radically Fighting Poverty
This underscores the need for radical ideas to fight poverty. More than 315,000 people across England, Scotland and Wales filed for assistance in the last two years. This pathway can be more easily avoided with the progressive and proven idea of ‘free money’ to those that need it. Ultimately, the actions undertaken by St. Mungo’s will bolster the argument for a universal basic income as a means to lift people out of poverty.
What people can safely assume is that radical ideas to fight poverty like the one St. Mungo’s has undertaken in a former incarnation are becoming more mainstream. Evidence suggests both job creation and economic development will follow as the St. Mungo’s experiment demonstrated. With the aim of empowerment, inclusivity, commitment, creativity and accountability, this London charity is looking to a future in which poverty and homelessness are a phenomenon of the distant past.
– Spencer Daniels