Hillary missed out on a transformative idea. Now others can pick it up.
IN HER LATEST book What Happened, former presidential nominee Hillary Clinton reveals that she was “fascinated” by the idea of using our national patrimony to pay every American “a modest basic income,” much as Alaska pays every resident yearly dividends from its oil wealth. Clinton spent weeks working with her policy team to see if this idea was “viable enough” to include in her campaign. Ultimately she decided that the numbers didn’t work, so she left the idea on the shelf.
Too bad. Whether or not embracing the idea would have swung the election her way, it would surely have sparked a lively discussion of our national patrimony — what’s in it, how much it’s worth, and who benefits most from it. Such a discussion would have shed surprising light on solutions to middle class decline, climate change, financial instability and economic stagnation. And it would have established that the numbers can work.
The idea of using our collective inheritance to pay income to everyone isn’t new. In 1797 Thomas Paine proposed it in an essay titled Agrarian Justice. Under Paine’s plan, a national fund would pay approximately $17,500 in today’s dollars to every man and woman at age 21, and $12,000 a year after age 55. The fund would get its money from an inheritance tax on socially created land value. Paine even did the math to show how this could work. Social Security is partially modeled on his proposal, though it taxes labor rather than land.
While in Roman times “patrimony” meant property inherited individually from male ancestors, nowadays it means gifts passed down to everyone by previous generations. When Americans think about our national patrimony, we typically think of our national parks and highways, our laws, traditions and political institutions. But those are just the tip of a much larger trove.
IN 2014 I wrote a book called With Liberty and Dividends For All which laid out a broad list of co-inherited assets. (Clinton generously me credited me in her book.) The list includes some unexpected but hugely valuable assets such as the waste absorption capacity of our atmosphere, the airwaves used by satellites and cell phones, the Internet, our financial infrastructure and our intellectual property protection system. Some of these are gifts of nature, others are creations of our human ancestors. Many of them are given away for free or well below market value to private corporations. If we charged fairer prices for them, we could raise hundreds of billions of dollars every year.
Which leads to the question of who should benefit most from our patrimony. There are three potential candidates: private corporations, government, and all of us together as equal co-inheritors. Let’s see what happens if we choose the third option.
First, as Clinton noted, revenue from our patrimony could give every American an income boost. The amount would be far from enough for people to stop working, but it would supplement and stabilize many Americans’ stagnant or precarious wages. This is important because jobs alone can no longer sustain a large middle class, much less reduce the economic anxiety so many Americans now experience.
Second, if a portion of the revenue came from making polluters pay to use our atmosphere, we’d enjoy cleaner air and less dangerous climate change. In fact, there’d be a financial incentive to reduce pollution because higher pollution prices would lead directly to higher personal incomes.
Third, if another chunk of revenue came from charging speculators to use our regulated stock and commodity exchanges, we’d decrease financial volatility while simultaneously lifting incomes.
Fourth, boosting everyone’s incomes would increase consumer purchasing power without adding debt. This would serve as a bottom-up Keynesian stimulus, potentially lifting our economy out of the stagnation that has gripped it for several decades.
And fifth, as Clinton herself noted, paying dividends from our national patrimony would do more than put cash in people’s pockets. It would also make us “feel more connected to our country and to one another — part of something bigger than ourselves.”
So let’s thank Clinton for revealing her fascination with this transformative idea, even if she demurred from campaigning on it. And let’s encourage other politicians and citizens to take it up. That really could help make America great again.