Alaska’s System of Dividends For All
THE IDEA that everyone has a right to some regular income has long been advanced by Americans of many persuasions. It’s embedded in the iconic board game Monopoly, the very epitome of capitalism, in which all players receive $200 when they pass Go. Yet with one exception, Americans have been unable to agree on any plan that pays regular income to competitors in our real economy. The reasons lie mostly in the stories that surround such income. Is it welfare? Is it redistribution? Will people stop working if they get it? Does it require higher taxes and bigger government? Americans think dimly of all these things. But then, there’s the exception.
Jay Hammond, the Republican governor of Alaska from 1974 to 1982, conceived of — and then persuaded Alaska’s legislators and voters to adopt — the world’s first system for paying equal dividends to everyone. In that system, the revenue comes not from taxes but from a commonly owned asset: oil. By investing proceeds from North Slope wells, the Alaska Permanent Fund has paid equal dividends to every Alaskan, including children, of about $1,000 to $3,000 a year, for more than thirty-five years. While this isn’t enough to live on, it nicely supplements Alaskans’ other earnings. It has also boosted the state’s economy, reduced poverty, and made Alaska one of the least unequal states in America.
Alaska’s invention brilliantly avoids all the hot buttons usually associated with universal income. As Alaskans view them, their dividends are neither welfare nor redistribution; according to surveys, most Alaskans consider them to be their rightful share of their state’s public wealth. There’s thus no stigma attached to them, no recipient is demonized, and a broad constituency protects the dividends from political attack.
Alaska, of course, has an unusually high ratio of oil to population; in that sense it is more like Norway or Dubai than the United States as a whole. So the question Americans in the lower 48 should ask is: can we replicate Alaska’s dividend system nationally without relying on oil? The answer, fortunately, is yes.
HOW MIGHT an Alaska-style dividend system work at the national level? As in Alaska, enrollment could be done online and payments could be wired electronically at a cost of pennies per transaction. The Social Security Administration could set that up in a jiffy. The challenge is to monetize some valuable national assets that belong to everybody, but are currently used by private companies at no charge.
There are several potential assets we could utilize — for example, our atmosphere, our financial infrastructure and our intellectual property protection system. If the industries that most profit from these national assets — fossil fuel producers, banks and speculators, and pharmaceutical companies — were made to pay for value received, there’d be enough revenue to wire every American several hundred dollars a month, or several thousand dollars a year. Such income would be neither welfare nor a tax on Peter to pay Paul. As in Alaska, it would be everyone getting a rightful share of jointly inherited wealth. How could President Trump argue against that?