By the time you’re finished reading this blog post, the net worth of Jeff Bezos, currently the richest person on this planet, will have increased by several thousand dollars. Assuming a rather conservative 3 % return per year, his current net worth of 177 billion $ (as of August 2021) translates to an increase of his fortune of roughly 10,000 $ every minute. While those are numbers that are difficult to process for the vast majority of the world, they show the basic principle of the accumulation of wealth. Money creates more money and should you be one of the lucky persons to own a very large sum, there is in fact little you need to do in order to keep and increase your wealth. There is an increasing number of rich and ultra rich individuals throughout the world who can enjoy a life without financial worries as their passive income flow from rents, interest and dividends spares them from the burden of having to seek wage labor.
Although there is no question that most wealthy people have worked hard for their money and some of them have brought significant technological innovations to the world (electric car, anyone?), it is easy to forget that they owe their success not only to talent and hard work, but for the most part to sheer luck. There are many pivotal events in everyone’s life, but the single most important factor that determines personal economic success is the place and country in which one was born. The mere fact of being born in North America, Europe or any other prosperous region of the world is a great privilege of which most of its inhabitants are not even aware of. Without a society based on the rule of law, a good education system and a family that supports you along the way, a self-determined life is hardly possible. The results of this ‘ovarian lottery’ can also be seen in the famous Forbes list of the world’s richest people, as the vast majority of billionaires come from just three countries/regions: The United States, the European Union and China.
Development aid vs. remittances
Even without looking a the steadily growing number of billionaires it is fairly obvious that the wealth on planet is very unevenly distributed, not only from country to country but also within societies. While there have been significant advances in many countries in the past decades, there are still way too many people stuck in poverty although with today’s technology and resources it is theoretically possible for everyone to live a decent life. Development cooperation can be an important contribution to building more just and wealthy societies but there is a limit of the impact ‘traditional’ government or donation funded aid can potentially have.
Private remittances from migrants working in North America, Europe or the Middle East on the other hand have been (and still are) an important source of income for millions of families in many countries. Although it is impossible to determine precise numbers it is safe to assume that these migrant remittances exceed the amount of government funded development cooperation by several multiples. Unlike development aid these cash transfers enable the recipients to use the money without bureaucracy or constraints as they deem fit and enabled many people to pay for school, afford proper housing or even start a small business.
Unfortunately only a minority of families in developing countries is lucky enough to benefit from a breadwinner abroad. It is often again a kind of lottery whether one of your family members will be able to obtain a working visa or having to choose the dangerous way via deserts and/or oceans to work on Europe’s or America’s farms or construction sites under mostly less than desirable working conditions. Many people in developed countries have no idea what being stuck in extreme poverty actually means and why therefore so many people choose to leave their loved ones behind and risk their lives for a slim chance to a better life.
Where does all the money go?
A huge part of the natural resources and the goods produced by the workforce in and from Southern countries flows into the profits of large corporations in Europe, the United States or China. Unfortunately, this flow of wealth is mostly directed one way and further strengthening the head start in terms of wealth and infrastructure of the Northern hemisphere that would take decades to make up even under optimistic growth assumptions. This huge wealth gap is not only highly unfair but also setting us back as a global society.
Let me give you an example: The people living in the Western African country of Burkina Faso in Western Africa have a median income per person of roughly 150 US$ per month and the national government has a yearly budget of roughly 3 billion US$ to pay for infrastructure, health care and education for their population of approx. 21 million. This translates to roughly 12 US$ of public spending per person and month and is about half the amount the Coca-Cola company alone pays its shareholders as a quarterly dividend. Just imagine how much the life of the people living there could be improved by diverting only a tiny fraction of the sums constantly being shifted around on the global financial markets.
Just imagine the advances mankind could make as a whole if everyone on this world would have an equal chance to proper education and follow his or her ambitions. Maybe there is a baby born today somewhere in this world who has the potential to find a cure for a deadly disease, invent a cheap and sustainable form of energy or becoming an artist enriching our culture for decades to come. If this baby is being born within the borders of our example Burkina Faso or in any of its neighboring countries, it is unlikely we will ever hear from her or him. This needs to change and in order to do so, the huge inequalities within our world must be addressed.
Time for change
In order to combat these inequalities many scientists, activists and politicians are calling for changes in tax policies, trade agreements or laws regulating intellectual property such as patents, for example. Those are all sensible demands but let’s face it: The system of wealth distribution (aka capitalism) as it is in place today is unlikely to substantially change anytime soon. That is why we should try out something new and take control of the wealth generated by the working people of this world by simply buying it. This would allow us to not only distribute earnings more evenly but also to strengthen the voice of the majority of the world’s population not lucky enough to make it onto the Forbes’ list.
Sustainable development can only come from societies within and many studies have shown that cash transfers can play a major role towards supporting individuals and families alike and at the same time contribute to a more equal world. They allow people to take matters into their own hands and get the fair chance of succeeding in life we all deserve. It is therefore time to complement the ‘ovarian lottery’ with a lottery of our own and therefore I’ve started this website to see if more people agree that this could be an idea worth pursuing. If you’d like to read more about the UBI Fund concept, I invite you to read the whitepaper or the FAQ. I hope that at the very least the readers of this website will be more open to the idea of cash transfers and consider it as one option to help underprivileged people to escape poverty. Maybe, however, this will be the beginning of something meaningful and I hope that you will be a part of it.