It's not widely known but the United States was the first developed country to promote a basic income, in the form of the Alaska Permanent Fund. Each year, every US citizen resident in Alaska receives a dividend payment from this fund. The amount varies based on market returns but it has hovered around $120/month ($1400/yr) over the last decade. Children are eligible, so a family of 4, for example, would receive $480/month.
Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.
It always struck me as ironic because Alaska is one of the most conservative states, and conservatives are not usually in favor of handouts. In this case, however, the inflows to the fund come not from personal income taxes but from taxes and lease-revenue on the state's natural resources, notably oil and gas. Because of this, people view it as a birthright, similar to an inheritance, rather than a handout, like welfare.
In 1976 Alaska's citizens just banded together and determined that (1) all of these natural resources are shared, and the benefits from them should be shared also; and (2) none of us trust the Government to spend this money for us, better than we could spend it ourselves. Today, it is the most popular Government program in the state with near absolute bi-partisan support.
So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. There are other countries, like Saudi Arabia or Norway, who will probably be the first to try this on a nation-wide scale before Switzerland.
> Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.
The problem with the states as laboratories of democracy is that, from a scientific perspective, they're pretty crappy experiments in terms of having any control groups. While an economist can travel to Alaska, it's hard to tell whether any given quality in the current state is due to the experiment or not. For instance, the price of food is quite high in Alaska; is this due to some basic commodity inflation, or is it because there are no road and rail links to most major population centers? Probably the latter, and you can look at Alaska both before and after the Permanent Fund was implemented, but even then, it's not a perfect control.
I think the idea of states as labs is generally a good thing, but people often misunderstand it. States as labs shouldn't be seen as pilot programs for the whole country, they should be seen as pilots for other states. The US is huge, and a state like Alaska has a very different economy than Rhode Island. However, somewhere like Montana may be able to use some of what worked in Alaska. The advantage of state power is that allows things that are unique to the state to have more influence on policy.
> The advantage of state power is that allows things that are unique to the state to have more influence on policy.
That is also the disadvantage of state power. At least, if you are a person whose life is being controlled by the coercive power of the state government in ways that might be harmful to you.
If you are powerful in the state, of course, it is very good for you to have fewer checks on your own power. It also helps things like arranging elections, like by excluding demographics less likely to vote for you.
As an ongoing exercise it's useful to study over time the number of times the notion of state's rights is invoked in defense of a good idea, a bad idea, or a genuinely disgusting idea. I'm not trying to impose any beliefs on you: feel free to use your own definitions for these things.
My position is that state's rights is invoked so often in defense of bad or disgusting policy in the United States - and frankly, used so infrequently to test genuinely interesting policy in a meaningful way - that it's not a hugely important thing. I feel this is an empirical observation that won't necessarily hold true in all times or places.
When people try to state these things about how government should work purely out of principle, it usually seems pretty unconvincing. We can judge methods of government based on their outcomes to a large extent.
This is a very good point, since Montana is the "Saudi Arabia of Coal."[1] It could work in North Dakota, too, where they're sitting atop the Bakken Oil Formation.[2] And as a Montanan, I would __love__ to see a Montana Permanent Fund.
I think perhaps an even better place to try this would be where I currently live: West Virginia. The oil/coal/natural gas industries account for a significant percentage of the state's economy, yet the people who benefit the most from it are mega-corporations from outside the state. On top of that, most of the people in West Virginia are dirt poor, so a basic income would probably have a huge impact.
"Alaska is one of the most conservative states" + "none of us trust the Government to spend this money for us, better than we could spend it ourselves" = not ironic at all.
It is usually admitted that there are huge overlaps between conservative and libertarian philosophies. Thus if one equates conservatives with libertarians, one can (falsely?) conclude that there is an incoherence with the idea of libertarians receiving handouts (see Atlas Shrugged, and Ayn Rand's 'propaganda' for more details)
I don't get a check for the usage of the natural resources of Illinois. If I did, it would be a handout, because I didn't put them there, and I don't own the land. One would assume that conservatives would be against people getting money just for living somewhere, without having to work for it.
The money is given to the government, and the government didn't put it there either. However, the job of the government is to serve you. So I disagree that it would be a handout.
The money exists and is given to the government, the difference is just whether the government should decide to give it to those who need it most, or whether it should be distributed equally.
The money is given to the government because the government levies taxes. The government could also choose to reduce the levies so that there's no surplus to distribute, and avoid choosing how to distribute the surplus.
There is a natural rights argument for Georgism, a political philosophy which would suggest that land (as a natural resource) being originally unowned, everyone has the right to an equal share of it.
if we multiply the population of alaska for that sum, we get 731,449 * $120 = $87,773,880/mo
then we get Alaska oil production of 2mi barrel per day (it is much lower now than a decade ago). Assuming a very conservative $100/barrel = 200,000,000/day = 2,400,000,000/mo
That's 3% if you tax on top of gross profit (no idea how oil is taxed. it is probably much less than my income tax if i know how the world works...)
And I am not counting fish, gas, lumber, minerals, etc.
That sound like the citizens are doing a much worse job than the gov in setting the rent for the oil companies.
The biggest impact that many people see is that over time, a minimum income gives people a disincentive to work. So if Switzerland starts giving every citizen $2800 a month, will tons of people stop working because they realize they can live off of 33k/year? In Alaska, it is probably rather difficult to live off of $1400/year but some people do it by living off the land and hard work at home. If the Alaska fund did not exist, would some of those people go back to work? That is the question economists would look for.
But would it help anyone if those people go back to work? I'm pretty sure that in the future we need to refrain from the notion that everybody can find work. With increasing automation there just won't be enough jobs to fill.
Why speak on the future tense? This is occuring now (and has been occuring for more than 30 years now), with actual unemployment levels consistently above 10% and in some coutries even much more.
I'm unfamiliar with Alaska's situation, but some cities in Manitoba, Canada tried what they called "mincome" for a while as an experiment by the federal government.
The only people they found that were less represented in the work force were teenagers and new mothers (in my opinion, people that could do without being in the workforce for a while...). Hospital visits decreased (with socialized healthcare, this is a good thing financially). Crime went down. Kids did better at school... Really, the effect was a pretty clear net positive.
(It's important to note, however, that as you earned your own income the money was subtracted from your 'mincome' at half that rate. There was never a point where "working more" or "earning more" would equate to making the same or less money. Something missing in many current social programs.)
The program ended because of a shift from a more socialist party to a more conservative one, not because of any intrinsic issue.
> In Alaska, it is probably rather difficult to live off of $1400/year but some people do it by living off the land and hard work at home. If the Alaska fund did not exist, would some of those people go back to work?
They are working, as you note -- just working in a manner that they clearly prefer to wage labor.
There was a (Swiss) commenter on a previous HN article (last week, I believe) about the basic income idea and he/she said that $6000 is a median income there.
Sorry but you're talking out of your ass. People who are living off the land in Alaska are doing it because that's what they do, when they get their PFD check they spend it on extra things. Regardlesss, nobody's sole source of income is the PFD except for some of the homeless in Anchorage—but they'd be homeless with or without the PFD check.
>> "all of these natural resources are shared, and the benefits from them should be shared also"
Is it not unfair that they are only shared with people who live in Alaska? Shouldn't they be shared with all Americans? If I was an an American I would be in favour of one of two things:
1. The money from the resources is shared with all Americans either via a handout or government spending on something that benefits all Americans.
2. Use the money to subsidise current unemployment benefits (or some other nationally available benefit) in Alaska.
Norway's tax revenues from oil (which is taxed at a special, extra high rate) goes into a sovereign wealth fund. Proceeds are reinvested, but the government may choose to use from the fund to fund the budget. So far the general consensus has been to stick to spending no more than 4% of the value of the fund every year.
Currently the fund apparently holds about 1% of the total share capital of all listed companies worldwide (though it is by no means evenly distributed) - about 2% of the share capital of European listed companies - and a few months ago it was worth $670 billion, or more than $130,000 per Norwegian citizen.
>So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources.
Sure, if you have a virtually limitless supply of free money, you can give away free money. Alaskans like the fund so much because a) that money goes into their pockets rather than the pockets of politicians or the wealthy and well-connected, and b) it's not welfare. Unless you have a large resource/population ratio, basic income generally isn't feasible.
It's not welfare as welfare is commonly understood: a subsidy for the poor that everyone else pays for. To Alaskans, it's just free money, so the negative connotations that typically come with the welfare label don't apply.
Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.
The thing is that Alaska is not taxing Alaskan to share the wealth. Alaska is giving everyone a s share of what it gets from what they have underground. Arab countries have generous welfare systems but I doubt they'd have them if the richer ones were taxed to provide for everyone.
Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.
It always struck me as ironic because Alaska is one of the most conservative states, and conservatives are not usually in favor of handouts. In this case, however, the inflows to the fund come not from personal income taxes but from taxes and lease-revenue on the state's natural resources, notably oil and gas. Because of this, people view it as a birthright, similar to an inheritance, rather than a handout, like welfare.
In 1976 Alaska's citizens just banded together and determined that (1) all of these natural resources are shared, and the benefits from them should be shared also; and (2) none of us trust the Government to spend this money for us, better than we could spend it ourselves. Today, it is the most popular Government program in the state with near absolute bi-partisan support.
So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. There are other countries, like Saudi Arabia or Norway, who will probably be the first to try this on a nation-wide scale before Switzerland.