Utopia for realists shows that we can construct a society with visionary ideas that are implementable. Every milestone of civilization was once considered a utopian fantasy, however, if we set our sights on new ideas such as a guaranteed basic income and fifteen-hour workweeks, we may just be able to achieve those ideals too.
Get the book here: Utopia for Realists: And How We Can Get There
Key Idea #1 – The scarcity mindset
To economists, everything revolves around the idea of scarcity. Our decisions and the way we act is determined by whether we can obtain things easily. People behave differently when they perceive something – either tangible like food or intangible like time – to be scarce. In the short-term, this scarcity mindset can provide benefits. It’s that survival mechanism which gets us moving to make ends meet. It provides that overworked CEO with the power to finally close that deal; the new junior employee to get the report finally finished or that struggling parent to find a way to put food on the table. Whilst being in this mindset can provide short-term benefits, people who experience living in this scarcity mindset come across significant issues when trying to escape the poverty trap they find themselves in.
Scarcity narrows our attention and vision to the short-term and moves our attention away from the longer term goals, the ones which don’t make much of a difference to our everyday lives but over multiple years can be life-changing.
Poor people as Bregman states have an analogous problem. They’re not making “dumb” decisions because they are dumb. They make them because they are living in a context where anyone would make the same mistakes. When someone is faced with the constant issue and threat of not being able to eat enough food or afford their rent it puts a significant strain on their mental bandwidth. The other important issues like trying to get a scholarship or learn a new skill go completely out the window. Furthermore, according to one of the studies quoted by Bregman, the mental bandwidth drain of being in this scarcity mindset is equivalent to losing 13 to 14 IQ points – similar to losing a nights sleep.
In general, the fight against poverty is one more complicated than not having enough money. It’s about giving everyone more mental bandwidth because overall, greater mental bandwidth equates to better child-rearing, better health and better outcomes for everyone.
Key Idea #2 – Universal basic income
One of the utopian ideas suggested by Bregman to help pull people out of poverty and into wealth is by providing citizens a universal basic income: A life-line source of cash guaranteed to each citizen to ensure they have enough money to survive without needing to work. As an idea it sounds pretty drastic and as a result of this it’s a hotly debated topic on both sides of the political spectrum. Whilst the key question of how it will be paid for isn’t entirely convincing, the suggested benefits a universal basic income will bring us is something any society would want to strive for.
Sometimes poverty isn’t always a result of stupidity states economist Joseph Hanlon. The main issue is a lack of cash. When people are already ‘down and out’ it’s very difficult for them to pull themselves up by the bootstraps and get back on their feet if they don’t have any boots to start with.
A study conducted by researchers in London show the power of giving people “free money”. This experiment examined thirteen homeless men who were defined as veterans of the street and looked at how their situation impacts society. Between police expenses, court costs, social services and other governmental assistance these individuals racked up bills estimated of £400,000 per year. As part of the experiment, Broadway – a London based aid organization decided that they would provide these homeless individuals £3,000 in spending money without any expectation in return. They didn’t need to provide any plans for what they would do with it, have a job lined up, it was in essence free money to do with whatever they wish.
Some might jump to conclusions with this and think they wasted it, spent it on drugs or burned through it, however, the results indicate otherwise. A year and a half after the injection of money, seven of these individuals had roofs over their heads, 2 more were moving into apartments and all of them had taken substantial steps towards improving their lives. The most interesting point? The total cost of this scheme was £50,000, meaning there was a net benefit of £350,000.
This isn’t the only study into the concept of a universal basic income. A study by the Massachusetts Institute of Technology (MIT) found that cash grants provided by a national charity called Give Directly found that it led to a lasting rise in incomes, home ownership and reduced the number of days children go hungry by 42%.
In addition to providing people with that safety net in the short-term it can also help individuals plan for the longer term too. Those who find themselves in the poverty trap not only from lack of money but mental bandwidth can remove themselves from jobs they’re working just to survive and instead learn new skills. People from impoverished backgrounds can gain an education they deserve and not worry about balancing many commitments. In the end, it expands the talent pool from those who have the luxury of being in it to everyone, more ideas, inventions, schemes, charities and perspectives.
Key Idea #3 – We need new metrics
If you watch any of the world news, how society is doing is generally dependent on whether the Gross Domestic Product (GDP) has increased or dropped a few percentages. This indicator is effectively is “the sum of all goods and services that a country produces, corrected for seasonal fluctuations, inflation and purchasing power”. In simple terms, it measures production and how many things are we producing.
In certain periods of history this metric has been a very useful tool at not only communicating how well we are doing but motivating us to push harder – notably World War 2 when our existence depended on how many tanks, bombs or planes we could produce. However, as the world has progressed, this metric is becoming less useful at expressing how prosperous as a society we are becoming.
The GDP is very good at measuring, alcohol sales, pharmaceutical sales, gambling sales – according to the GDP, a society doing well is one where everyone is an impulsive gambler who likes to drink and has been divorced multiple times. What’s more troublesome is the fact that the worst performing families according to the GDP are the ones which cook their own meals, take walks after dinner and spend time together away from the commercial world…
Whilst the GDP is great at seeing how much money is being generated as a whole, it doesn’t look at inequality and whether it’s going to those who need it the most. It also does a poor job of calculating advances in knowledge, ethics, happiness.
Overall, Bregman suggests that we need to use different metrics for success. If we want to get somewhere we need to know where we are going and if we judge ourselves by a criteria which aren’t aligned with what humans really need then we aren’t going to fulfil our potential and more importantly we wont be happy.
Get the book here: Utopia for Realists: And How We Can Get There