Advertisement. For information about purchasing ads, please click here.

Pebble

Why a conservative Alaskan Governor promotes a Universal Basic Income

One of the most audacious ideas currently gaining favor among American progressives is the idea of a Universal Basic Income (UBI). UBI is a guarantee of money to every citizen in a population – no-strings attached.

The only UBI that exists in its purest form is in Alaska, where it is known as the Permanent Fund Dividend. In 1976, the State of Alaska began investing oil royalties into a rainy day fund. In 1980, the Alaska Legislature approved an annual dividend to all Alaskans from the earnings off of that fund, which continues to this day. There are no requirements, other than residency requirements, for receiving the dividend. Make six-figures? No problem, you get a dividend. Criminal record? Money for you too!

And who in Alaska defends this Universal Basic Income most vociferously? Moral and fiscal conservatives.

Advertisement. For information about purchasing ads, please click here.

Pebble
Facebook post showing support for a full PFD by Republicans in the Alaska House of Representatives.

In 2015, facing a budget shortfall of a more than three billion dollars, then Independent Governor Bill Walker prudently capped the dividend payout, leaving the remainder of the dividend in the permanent fund. Alaska is the only state in the union with no state sales tax, no state income tax, no local income tax, and no state property tax. For years, ninety percent of the State’s government revenue came from oil royalties. This over-reliance on oil revenues, and thus oil prices, lead to wild swings in the State’s finances, with surpluses in some years and stark deficits in others.

By restricting the dividend payout, Governor Walker essentially ended his political career. The unrestricted payout of the dividend was the sacred cow in Alaska politics, and while Governor Walker did not kill it, he just milked it a little, but that was enough to cause a backlash.

During the 2018 election cycle, facing impossible odds and a scandal that caused his Lieutenant Governor Byron Mallott to resign, Governor Walker pulled out of the race. Dunleavy, the far-right Christian conservative, ran on a platform of budget cuts and full dividends PLUS the missing money that had been capped from previous years. He won with a 7% margin over his Democratic rival, Mark Begich, former US Senator and Anchorage mayor. Dunleavy won with 51% of the vote, the same amount Trump won in Alaska back in 2016.

Independent expenditure Dunleavy for Alaska campaign signs

So how does a mostly conservative state like Alaska embrace one of the most progressive policies of the Democratic Party’s left wing?

In previous efforts, testing the benefits of the Universal Basic Income in countries like Finland and Canada, and parts of California, the money has always been treated as a gift. Intentionally, there was no notion that the UBI must be earned. One day, there is free money.

The major difference with these experiments and the Alaska Permanent Fund Dividend is that Alaskans believe that the Dividend is owed to them. Unlike previous UBI experiments, Alaskans, like owners of stock in a corporation, believe they own a piece of Alaska, and the Dividend is their annual shareholder payout. This belief is rooted in both Alaska society and Alaska law; the Alaska Constitution declares that resources on State land shall be developed “for the maximum benefit of its people.”

And how do Alaskans earn those benefits? Simply by living there!

Advertisement. For information about purchasing ads, please click here.

Pebble

Loss Aversion & Ownership

In cognitive psychology, people will work harder to avoid losses than to acquire equivalent gains. Loss aversion is an important concept encapsulated in the expression “losses loom larger than gains” (Kahneman & Tversky, 1979). It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining.

In previous Universal Basic Income experiments, the money distributed was viewed as a gain. But in Alaska, the Dividend is framed as something Alaskans OWN. Shifting payments towards government services was seen by some as not just a loss, but as theft, plain and simple.

Internally, Alaska is joked to be a redneck socialist state by many. The reason that Alaskan politicians can often run on a political contradiction is because of “loss aversion.”

Governor Dunleavy wants a full dividend payout of $3,000 for 2019 PLUS over $3,600, spread out over three years, to pay back the previous years reduced dividends. The proposed 2019 dividend payout creates around a $1.6 billion deficit for the next fiscal year.

Alaska is the only state in the union with no state sales tax, no state income tax, no local income tax, and no state property tax. For the first time in decades, there is now a chorus of calls for a state income tax. Mind you, Alaska still has a $60+ billion Permanent Fund, which theoretically could continue to fund a good portion of State government off of earnings alone for the foreseeable future. But instead of milking the sacred cow to pay for government services, more Alaskans would rather pay taxes.

To have a Universal Basic Income adopted across the political spectrum, every American needs to be told that they OWN a piece of the United States and that they deserve a percentage of profits earned by businesses on that land. Suddenly, Americans will not just be residents, but owners. If Alaska has illustrated anything, it has shown that if a UBI becomes institutionalized in terms of property, citizens across the political spectrum will argue as to why they are entitled to it – no holds barred.

If progressives are serious about a Universal Basic Income, it needs to be framed in terms of ownership just like it is in Alaska, otherwise, the policy will never gain wide acceptance.

13
Leave a Reply

7 Comment threads
6 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
11 Comment authors
  Subscribe  
newest oldest most voted
Notify of
Joe Geldhof

Analytically the PFD is not the same as the so-called UBI.
Alaska’s dividend is derived from the trust account the citizens established in which a portion of public mineral royalties were saved.
Alaskan citizens decided to save some our public oil revenues. From those savings, the PFD is paid based on interest earned in the savings.
That’s not a defined basic income guaranteed by the government. The dividend is a little slice of interest paid to the citizen owners of the trust fund.
Alaska is unique in setting up a trust fund that pays a little dividend.

An Observer

Similarly, tech companies have advanced their AI capabilities through collecting personal data of the American public, as well as by using public resources paid by taxpayers’ money. Andrew Yang’s Freedom Dividend would very much be a dividend in that sense and the money would be owed to citizens, just as much as the PFD is owed to Alaskans. That’s how I see it anyway.

Agreed, Joe! Alaskans are the owners of the Fund, the Alaska Permanent Fund Corp has said so. And Alaskans need to realize more of the responsibilities of ownership or we will lose the PFD and Fund. The People are the watchdogs against raiding politicians, such as we have witnessed and blocked for the last 3 years. And previous raids, like in 1999. The writer makes a good point that without connecting UBI to ownership it will not survive. The PFD is under massive attack, and this shows constitutional protection is the best and necessary way to secure the savings in… Read more »

Clark Duncan

THIS IS A COMPLETELY WRONG REPRESENTATION OF THE ALASKAN PFD. THE ALASKAN PFD IS NOT, NOT A UNIVERSAL BASIC INCOME (UBI). A UBI COMES FROM A REDISTRIBUTION OF WEALTH MOSTLY THROUGH TAXATION. THE ALASKAN PFD IS A DIRECT, DIRECT DISTRIBUTION OF INCOME. THE ALASKAN CITIZENS ARE OWNERS OF THE STATE RESOURCES, IN THIS CASE SPECIFICALLY, OIL RESOURCES. AS OWNERS OF THIS OIL RESOURCES, ALASKANS ARE ISSUED A DIVIDEND FROM THE INVESTMENTS OF THE MONEY EARNED BY EACH ALASKAN CITIZEN FROM THE SALE OF THIS OIL. THEREFORE, THE ALASKA STATE PFD CHECKS FOR ALL CITIZENS ARE PAYMENTS FROM THEIR OWN EARNINGS… Read more »

The Permanent Fund is indeed unique in the approach that the Libertarian led government of the time chose to manage the funds that they negotiated and the relationship that they crafted their contracts.. Other states have made efforts to similar approaches, only to be stymied by lobbyist from the vested interested parties who are managing those earnings.

Alaska needs a state income tax, to continue paying for state government, while maintaining the PFD for the future. Much like the country needs to eliminate the social security tax cap all together to maintain the social security benefits.

Stu

Does the state of Alaska own the oil companies? Or are the oilfields are owned by private companys and Alaska gets money to be distributed to the alaskan citizens from Washington?

Stu

Lol the USA invades countries over oil…you think the weakest state if Alaska owns thare own oil fields…bitch please

Stu

Oh you dummy you think Alaska has any influence on the oil company’s…Alaskas oil is private companies..that are in bed with Washington..that throws the state of Alaska ” dividends” to redistribute while actually pocketing the cash and ripping the citizens offf

David Burton

Been in Alaska since 1959. Bring back state income taxes. That is the only way to collect any money from the thousands of people working on the North Slope who reside in other states. They currently take money out of State without having to pay a dime into Alaska’s economy. The PFD is both a blessing and a curse. It fuels the economy with most every man woman and child spluging when checks come out. Also I believe it is the cause of the increased crime in Anchorage because it brings people from all over the world just to get… Read more »

Wesley Nason

The Alaska PFD bears no resemblance to UBI. Alaska passed a law recognizing that citizens own the resource revenue stream and established the Permanent Fund to invest and grow that revenue stream. Progressive proposals for UBI are simply wealth redistribution programs which would tax some citizens and transfer their wealth to other citizens.

Alaskan

If we Alaskans own the states resources, is it not within our rights, as Alaskans, to insist the oil corporations not be subsidized by state funds at the cost of public services to residents of Alaska? How is an administration continuing these corporate handouts working for the citizens of the state they are supposed to be working for? Gov works for us, not BP. Or does he?

You guys need to start reading the Futurist and get familiar with the ATOM. These guys get to UBI, though not in the way you would think. If they are right, think we are going to be seeing it. As a Friedmanite, this bothers me a lot. Basic problem is the societal damage in no longer having to earn your keep. Cheers –

https://atom.singularity2050.com/

Stu

Canada doesn’t have u b I ….there’s only 2 small towns in Canada temporarly testing it.. Get ur facts right..I’m canadian and it sounds like Alaskas government it crooked lol..ubI? How come buddy that was innapropriate andd had to resign got away without public information..so greasy and shady