by Karl Widerquist | Dec 3, 2012 | News, The Indepentarian
Alaska distributed its yearly Permanent Fund Dividend (PFD) on October 4, 2012. The amount was disappointing, only $878—down from last year’s dividend of $1,174 and the smallest dividend since 2005. The 2012 dividend was only the second dividend in the last 20 years to be below $900, and it is well below the all-time highest dividend of $2,069 in 2008 ($3269 including a one-time supplement the state added to the 2008 dividend).
The PFD is a sort of a yearly, variable basic income, given to all U.S. citizens (men, women, and children) who fill out a form showing that they meet the state’s residency requirement for eligibility. This year nearly 650,000 Alaskans received the dividend. It is financed by the Alaska Permanent Fund (APF), which is a sovereign wealth fund owned by the state and financed in turn by the accumulated savings from the state’s oil exports. The dividend varies considerably from year-to-year because the amount is calculated from a complex formula averaging the last five years of returns to the fund. The dividend is down this year because of the poor performance of international stock and bond markets over the last five years.
Even this year’s small dividend will come to $4,390 for a family of five, and the dividend makes a big difference in the lives on many Alaskans. The dividend is one reason Alaska is the most economically equal of all 50 states. According to Russ Slaten, “the oldest applicant was 107 years-old, and the youngest was born minutes before the qualification deadline on December 31 of last year.”
According to Jeff Richardson of the Fairbanks Daily News-Miner, Alaskan retailers have seen a smaller-than-usual bump in sales around dividend time this year because of both the smaller changes and in the higher cost of fuel oil. The smaller effect on retail sales might also be partly attributable to the increase in people donating all or part of their PFDs to charities through the state’s Pick-Click-Give program that allows people to direct some or all of their PFD to the charity of their choice in a few steps on the internet. This year, 23,000 Alaskans gave more than $2.2 million through the program, four times as much as they gave in the first year of the program (2009).
The PFD has largely escaped the demonization given to many programs that promote equality, probably because it provides tangible benefits all Alaskans, rich and poor alike. According to Jeanne Devon, “Even those who gripe about it in theory don’t want to actually give up their own Alaskan ‘entitlement.’ It is our oil, after all.”
The yearly fluctuations in the fund do not signal a long-term threat to the PFD. The fund has had a healthy grown trend since its inception, and it continues today. The bigger worry for the future of the Alaska Dividend is gradual decline in the state’s oil revenues. The amount of oil flowing through the Trans-Alaska Pipeline System is getting dangerously close to the minimum level needed to keep the pipeline system open. Most of the state’s operating budget comes from oil exports, and the state budget is not well prepared for the loss of oil revenue. Gradual decline (or a sudden drop) in oil exports would put enormous pressure on the state budget and might inspire the legislature to divert returns currently used to financed the PFD toward regular government spending.
For more recent stories on Alaska’s PFD, see the following stories:
“Alaskans to get $878 in yearly oil wealth payout”
By Rachel D’Oro Associated Press, September 18, 2012
https://bigstory.ap.org/article/amount-annual-alaska-dividend-be-announced
“Smaller Alaska dividend check likely to disappoint … for good reason”
Carey Restino, Bristol Bay Times, Sep 20, 2012
https://www.alaskadispatch.com/article/smaller-alaska-dividend-check-likely-disappoint-good-reason
“Dividend set: Alaskans shouldn’t forget fund’s purpose”
Fairbanks Daily News-Miner Editorial Sep 18, 2012
https://newsminer.com/view/full_story/20186798/article-Dividend-set–Alaskans-shouldn%E2%80%99t-forget-fund%E2%80%99s-purpose?instance=home_opinion_editorial
“2012 Permanent Fund Dividend is $878”
SIT News Ketchikan, Alaska, September 18, 2012
https://www.sitnews.us/0912News/091812/091812_pfd.html
“Permanent Fund Dividend Lowest Since 2005”
Russ Slaten, Your Alaska Link, Sep 19, 2012
https://www.youralaskalink.com/news/Permanent-Fund-Dividend-Lowest-Since-2005-170382336.html
“With Alaska’s higher costs, dividends won’t go far”
Mark Thiessen, Associated Press, Sep 18, 2012
https://www.businessweek.com/ap/2012-09-18/with-alaskas-higher-costs-dividends-wont-go-far
“PFDs still good for business, but not like the glory days”
Jeff Richardson, Fairbanks Daily News-Miner, Sep 19, 2012
https://newsminer.com/bookmark/20198521-PFDs-still-good-for-business-but-not-like-the-glory-days
“Happy Socialist Money Grab Day, Alaska!”
Jeanne Devon, the Mudflats, September 19, 2012
https://www.themudflats.net/?p=33271
“By the numbers: Alaska Permanent Fund Dividend”
Eric Christopher Adams, The Alaska Dispatch, Sep 18, 2012
https://www.alaskadispatch.com/article/numbers-alaska-permanent-fund-dividend
“Alaskans donate $2.2 million from PFDs using Pick.Click.Give.”
Alaska Dispatch, Oct 06, 2012
https://www.alaskadispatch.com/article/alaskans-donate-22-million-pfds-using-pickclickgive
“Count the ways Alaskans spend their $878 Permanent Fund check”
Alaska Dispatch, Oct 05, 2012
https://www.alaskadispatch.com/article/count-ways-alaskans-spend-their-878-permanent-fund-check
“It’s time to cut state spending: The numbers show future has arrived”
Bradford Keithley, Fairbanks Daily News-Miner, Oct 07, 2012
https://newsminer.com/view/full_story/20385563/article-It-s-time-to-cut-state-spending–The-numbers-show-future-has-arrived?instance=home_opinion_community_perspectives
PFD program generates record amount for Alaska nonprofits
Anchorage Daily News, October 5, 2012
https://www.adn.com/2012/10/05/2652015/pfd-program-generates-record-amount.html
by Karl Widerquist | Nov 19, 2012 | Opinion, The Indepentarian
My new book, Independence, Propertylessness, and Basic Income: A Theory Of Freedom as the Power to Say No, now has a release date of February 28, 2013. Although I have edited or coauthored six other books, this is the first book I’ve written all by myself. It is also the first published book in which I begin to outline—however tentatively—my theory of justice. The basic income guarantee is intimately tied up with this theory of justice, and so I would like to take this opportunity to explain some of the background that led me to write it.
I don’t know exactly when I began thinking about the ideas that made their way into this book. The general philosophical outlook is something that has been bouncing around in my head for a long time. The outlook didn’t appear as a whole at any one point; it gradually developed. My interest in social justice began when I was a kid. My parents were politically interested, liberal Christians (a rarity these days). They, my brother, my sister, and I regularly discussed politics around the dinner table. Growing up in that context in the 1970s, I was optimistic about the progress the United States had made against racism, and I began to believe that the biggest problem remaining in most democratic countries is the horrible way we treat the poor.
The television series “Free to Choose,” by Milton Friedman, first introduced me to the idea of a guaranteed income, which is now more commonly known as the basic income guarantee. He presented it mostly as a way to simplify the welfare system, but having thought about it over the years, I began to see it as the centerpiece of a just society and a serious challenge to the Left: If we really care about other people in society, we should care about them unconditionally. The effort that has so far resulted in this book is a self-exploration of why I think this perspective is so important.
As I see it, from the hanging gardens of Babylon to the modern sweatshop, one social problem occurs over and over again in different ways: advantaged people force disadvantaged people to serve them. Can this be justified? I find the social contract answer extremely dissatisfying: it’s OK to force people to do things as long as you can imagine conditions under which they would have signed a contract subjecting themselves to force.
For some time I thought I was a libertarian, but I eventually came to see the Right-libertarians, who call themselves “libertarians” in the United States, in a similar light as social contract theorists. I find their answer even more dissatisfying: it’s OK for owners to force the propertyless to do things, because someone did something before we were all born to give owners special rights over the Earth and its resources, so that the propertyless have no right to refuse the duty to serve owners. Right-libertarians talk about freedom from force, but they invite everyone to ignore the tremendous amount of freedom-threatening force involved in the establishment and maintenance of property rights to the earth and all its products. Without rectifying this issue, “libertarianism” becomes the defense of privilege at the expense of liberty.
Although these issues were important to me, I didn’t do much direct work on social justice until the mid-1990s, when Michael Lewis, Pam Donovan, and I decided to have weekly breakfasts to talk about the progress we were making on our theses. These discussions usually turned to politics, and one day we found the one thing we could all agree on was an unconditional basic income guarantee. So, Michael Lewis and I wrote a paper on it that was eventually published (about ten years later and in heavily revised form) as “An Efficiency Argument for the Basic Income Guarantee,” in International Journal of Environment, Workplace and Employment.
One paper on the basic income guarantee led to another as well as to involvement with the Basic Income Earth Network and to writing the Newsletter for the U.S. Basic Income Guarantee Network. I read a lot of impressive literature on basic income, but none of it quite seemed to articulate the reasons I thought it was so important. So, I had to explore my ideas further.
In 2001, I held a half-year fellowship at the Chaire Hoover at the Catholic University of Lovain in Belgium. By this time I had realized that my interest in economics was secondary to my interest in social justice, and I decided that the best way to work full-time on social justice was to go back to graduate school and get a doctorate in political theory. Getting a second doctorate still feels like a crazy idea, but in hindsight, it was the right thing for me. I started at Oxford in October 2002, and by April 2006 I completed a doctoral thesis entitled “Property and the Power to Say No: A Freedom-Based Argument for Basic Income,” which is my initial statement of the theory of justice as the pursuit of accord. Many of the ideas in this book appeared first in that thesis—often in a slightly different form.
I have discussed these ideas with so many friends, colleagues, students, and mentors that I can’t possibly name everyone who has influenced this book. If I’ve discussed politics or philosophy with you in my lifetime, you might have influenced this book in some way. So, thanks.
Since leaving Oxford, I have continued to rework and extend the ideas from my thesis on and off while working on other projects. Not long after Laurie Harting of Palgrave Macmillan approached me about becoming series editor for their new book series Exploring the Basic Income Guarantee, I thought about turning my thesis into a book. In the spring of 2012, I set out to do that, but as I revised it, I found that the chapters in the first half were growing and splitting into more chapters.
I finally realized that the book would be an extension of the first half of my thesis—concentrating on an exploration of the theory of freedom I call “effective control self-ownership” or “personal independence” and leaving the development of most of the rest of justice as the pursuit of accord for later works. Effective Control Self-Ownership is a theory of freedom that makes the freedom from directly or indirectly forced service central to an individual’s standing as a free person. The book defines, derives, and defends this theory of freedom in the context of the contemporary literature on freedom and justice. It examines the implications of the theory and argues that a basic income guarantee is an important tool to maintain personal independence in a modern society.
Now that the book is almost ready to be released, I still feel that it is tentative in many ways. I could spend years revising it, but it is best to get it out. Although tentative, it is a sincere expression of my beliefs on the issues discussed at this point. I hope to explore these ideas much more in the future.
-Karl Widerquist, Mojo’s Coffee House, New Orleans, Louisiana, August 2012; revised onboard a flight from Dallas to London, November 2012
by Karl Widerquist | Sep 16, 2012 | News, The Indepentarian
Alaska’s Permanent Fund Dividend (PFD) is volatile and uncertain reflecting the Alaskan economy, which—typical of resource-exporting regions—is subject to volatile commodity prices, fear that resource exports will soon run out, and hope that a new export boom could be about to begin. The dividend is likely to decline this year as more difficult news about the state’s finances comes out, but new drilling could bring the first increase in oil exports in years.
The PFD is the only existing basic income in the developed world. Each year it pays an equal amount in cash to all citizens who meet the residency requirement, but the amount varies each year. The PFD is funded by the returns to the Alaska Permanent Fund (APF), a pool of investments created out of savings from the state’s oil revenue. The APF accumulates investments each year as new savings are deposited into it, but its value fluctuates with the world economy. The Alaska Permanent Fund Corporation (APFC), the state-owned corporation that manages the fund, uses a complex formula to make the yearly dividend less volatile than the yearly returns to the fund, but the dividend still is rather volatile.
After reaching a high of $2,069 in 2008 ($3269 if the one-time energy rebate is added), returns over the past three years have been $1,305 in 2009, $1,281 in 2010, and $1,174 in 2011. According to a recent press release by the APFC, the dividend level is likely to decline a little more this year. APFC will designate $605 million for distribution as dividends this fall—nearly $200 million less than the $801 million it designated for dividend payments in 2011. Therefore the dividend might slip under $1000 for the first time since 2005. The exact amount of the dividend will be announced in a few weeks and dividends will be distributed in October.
The main reason for the decline is the poor performance of world stocks. Although the APF has recently moved some of its funds into real estate investments, which have been doing well, they have not done well enough to make up for poor stock performance. The APF finished its fiscal year on June 30th with a yearly return of 0.02%.
Some recent news has been troubling for the future of the dividend. As discussed in this column recently, Alaskan oil exports have been declining for 20 years, but oil revenue has so far been buoyed by rising oil prices. However, according to the Fairbanks News-Miner, the recent decline in oil prices has threatened the state’s budget. “To cover the state budget for the coming fiscal year, which begins July 1, oil prices must average at least $104 per barrel.” But oil prices have recently been as low as $100, a price that would put the state budget into deficit if it were to continue.
Reduced oil revenue does not immediately threaten dividends, but it will reduce new deposits into APF, which will have a negative effect on dividends over time. If the state finds itself in permanent deficit, it is constitutionally prohibited from spending the APF principal, but it has the authority to reduce or cancel the PFD and use APF returns for other purposes. Whether the state would have the political will to do so is uncertain. It would probably depend on whether popular opinion was more strongly against elimination of PFD or the reintroduction of state sales or income taxes.
Typical of a resource-exporting region, Alaskans live with the constant fear of lost resource revenue and with the constant hope that new sources of resource revenue will be found. Not long ago there was a great deal of talk about a new natural gas pipeline that might replace oil revenue when North Slope oil runs low. The recent decline in the price of natural gas has made such a pipeline less attractive in the near future.
The latest new hope in Alaska is for offshore oil drilling. According to Alex DeMarban of the Alaska Dispatch, Shell Oil is about to start exploratory drilling off the Alaska coast. Federal law makes offshore oil the property of the federal government rather than the various state governments. However, several states along the Gulf of Mexico have recently made an agreement with the federal government to share more than one-third of the royalties for oil drilled off their coasts. This agreement might be precedent setting. If Alaska can get a similar deal, offshore oil will prove lucrative for the state and for the PFD, but not as lucrative as on-shore oil has been.
For more on these issues see the following links:
Alex DeMarban “Will offshore oil development in Alaska’s Arctic make the state rich? Don’t count on it.” The Alaska Dispatch, July1, 2012:
https://www.alaskadispatch.com/article/will-offshore-oil-development-alaskas-arctic-make-state-rich-dont-count-it
The APFC’s press release on its performance for the 2012 fiscal year (Permanent Fund flat for Fiscal Year 2012) is online at:
https://www.apfc.org/home/Content/pressroom/pressStory2009.cfm?story=Permanent%20Fund%20flat%20for%20Fiscal%20Year%202012&s=1
“Volatile stock market hinders return for Permanent Fund”
KTOO News Department, August 2, 2012. Online at:
https://www.ktoonews.org/2012/08/02/volatile-stock-market-hinders-return-for-permanent-fund/
“Alaska Permanent Fund’s 2012 investments flat, PFD payout smaller”
Alaska Dispatch, Aug 2, 2012
https://www.alaskadispatch.com/article/alaska-permanent-funds-2012-investments-flat-pfd-payout-smaller
Becky Bohrer, “Alaska Permanent Fund dividend likely to shrink this fall”
The Associated Press, Aug 02, 2012
https://newsminer.com/view/full_story/19671261/article-Transfer-into-Alaska-Permanent-Fund-dividend-account-smaller-than-2011?instance=home_news_window_left_bullets
by Karl Widerquist | Sep 10, 2012 | Opinion, The Indepentarian
You reach a milestone the first time you or your organization is named the mastermind behind a vast government conspiracy that goes all the way up to the President of the United States. This happened to the U.S. Basic Income Guarantee (USBIG) on July 23, 2012, when an opinion piece by J. D. Longstreet on The Right Side News website declared that the ultimate aim of the Obama administration’s “Socialist/Marxist” conspiracy is to establish exactly the kind of policy described on the USBIG website. The article actually used several long—properly cited—quotes from the USBIG website to describe Obama’s unspoken goal.
As the author of many of the quotes that website took from USBIG, it was a lot of fun to read my words used to describe the hidden agenda of the President of the United States. My sympathies are closer to the Green Party than the Democrats. But if Obama has secretly engineered his entire political career to put my words into actions, well, gee wiz, the least I could do is vote for him. The website states, “Our goal is to provide accurate news and information about threats to our country and Western civilization, and to provide you with the opportunity to counter these threats.” Even with this assurance, unfortunately, I don’t think the Obama administration is a vast conspiracy to do USBIG’s bidding. Obama never calls.
Although this is the first time (I know of) that the USBIG website has caught the attention of conspiracy theorists, it is not the first time that BIG has caught their attention. Longstreet’s conspiracy theory is based on a theory Glenn Beck proposed on Fox news a few years ago. Beck reached way back to a 1966 article, in which Frances Fox Piven and Richard Cloward discussed the large number of people who were eligible for public assistance but had not applied for it. They argued for (and later became part of) a movement to get eligible people to sign up for welfare benefits, partly in hope that the financial pressure of new applicants would lead to a streamlined federal welfare system hopefully employing a basic income guarantee. Nearly 35 years later Glenn Beck decided that this published paper was the secret objective of an on-going conspiracy to bankrupt the federal government and bring about some kind of socialist revolution.
Longstreet writes, “If I am correct, then we are actually seeing the ‘Cloward-Piven Strategy’ at work. We are observing the foundation, the groundwork — if you will — for establishing a guaranteed annual (minimum) income for American citizens. It is very, very, worrisome. But — it is only the latest move by our socialist leaders to break America so they can re-mold her in the image of their choosing, which is, unarguably a socialist/Marxist state.”
It’s easy to dismiss the Right Side News as the lunatic fringe of the extreme right, which it probably is. But their rhetoric is not that different from what one can hear on Fox News and many other mainstream media outlets on a regular basis. It is symptomatic of how far divorced America’s political discourse is from the political reality. Over the last 30 years or more, the U.S. welfare system has been slowly but consistently dismantled. The minimum wage has not kept pace with inflation. Individuals’ rights to organize unions have been reduced. Taxes on the wealthy have fallen while government favors for the wealthy have increased. Wages have stagnated for 30 years despite healthy economic growth over the period, the benefits of which have been captured almost entirely by the richest few percent of Americans. Yet, somehow a large part of the American populace lives under the belief that we have been moving toward socialism.
It’s fine to label the Obama administration’s policies “socialist” (or to throw any other label on them you want), and it’s fine to believe the Obama administration’s policies are wrong. But if the mild piecemeal policies of the Obama administration are socialist, the United States has been socialist since the Theodore Roosevelt administration and it has been drifting away from socialism since the early 1980s at the latest.
Wild conspiracy theories, like the one by Beck and Longstreet, are part of a brand of fact-denying conservatism that has recently made its way into mainstream U.S. politics. One can now expect to be taken seriously while claiming global warming isn’t happening, the Earth is only 6,000 years old, Obama is a secret Muslim, and so on. Someone paying only casual attention to the mainstream media in the United States could easily think all of these are live, debatable issues. We can hope that such obvious fact-deniers will eventually hang themselves. But we should also be aware that repeating the ridiculous can make it respectable. We have to continually call-out the fact-deniers. The only way to fight falsehoods is with facts.
-Karl Widerquist, begun in New York, NY, completed in South Bend, IN, August 2012
If you’re interested in seeing Longstreet’s editorial on the Right Side News, go to:
https://www.rightsidenews.com/2012072316711/editorial/us-opinion-and-editorial/a-guaranteed-minimum-income-in-the-us.html
by Karl Widerquist | Jul 13, 2012 | News, The Indepentarian
On June 16, 2012, Khayelitsha, South Africa, has faced protests in favor of basic income, according to Sisi Lwandle. Khayelitsha Progressive Youth Movement and New Women’s Movement demanded basic income grant of about 2000 Rand (roughly US$240) per year, increase in child support grant, and end to labor brokers. Many civil society organizations in South Africa call for basic income grant, but government has not adopted any official position on it. The country provides many welfare grants, but able bodied adults without income cannot benefit from any of them. This adds to the fact that there is a high unemployment. Employment conditions are so costly that employers prefer not to employ inexperienced or bad workers. Many pensioners support the members of their family that have no income. If basic income were granted to the citizens, this would take the burden out of pensioners. Government intent of providing a basic income to its citizens in South Africa is a big social challenge and a hole in government policy.
For more on the above proposals, see the following:
BIG Financing Reference Group (March 2004) “Breaking the Poverty Trap:” Financing a Basic Income Grant in South Africa.” BIG Financing Reference Group.
https://www.blacksash.org.za/docs/financingbig.pdf
Hassen, Ebrahim-Khalil (4 February 2011) “South Africa: The Balance between Growth and Redistribution – Revisiting the Call for a Basic Income Grant.” The South African Civil Society Information Service.
https://allafrica.com/stories/201102040709.html
Kenny, Andrew (14 November 2011) “A Basic Income Grant for Paupers and Vagabonds.” Politics Web.
https://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page71639?oid=266588&sn=Detail&pid=71639
Lwandle, Sisi (June 17 2012) “Protesters demand Basic Income Grant.” IOL News.
https://www.iol.co.za/news/politics/protesters-demand-basic-income-grant-1.1320583#.T_1YWWhpu0c
by Karl Widerquist | Jul 5, 2012 | Research, The Indepentarian
In this op-ed, Jason Hickel, argues that Sudan should create a sovereign wealth fund paying regular dividends. South Sudan, is a very poor country with substantial oil resources, most of which are yet to be fully tapped. Hickel bases his argument on Alaska’s experience with its Permanent Fund and Dividend, which pay a yearly basic income to all Alaskans. Hickel is an LSE Fellow at the London School of Economics and Political Science. He is a contributing author to the book, Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World.
The article is online at:
https://www.theafricareport.com/index.php/20120629501814512/news-analysis/can-south-sudan-learn-from-the-alaska-model-501814512.html
