by Karl Widerquist | Sep 1, 2015 | News, The Indepentarian
A recent poll asking Alaskans how to deal with the state’s increasingly severe budget deficit found that trimming the Permanent Fund Dividend or PFD (also know as “the Alaska Dividend”) was the most popular solution. The poll also found that a second strategy for trimming the dividend was third in popularity.
-Alaska Dispatch News
The Alaska dividend is the closest program to a basic income in the world today. Each year it pays out a dividend, usually between $1000 and $2000 per year, financed out of the returns from the Alaska Permanent Fund or APF—a savings portfolio of more than $50 billion accumulated from past state oil revenue. Its enormous popularity earned it the nickname of “the third rail of Alaskan politics,” meaning that any politician who touched it died.
This poll might be an indication that the dividend is losing that status in the face of Alaska’s financial situation, which is deteriorating because of the state’s dependence on oil revenues. The state has no sales or income tax. The vast majority of its revenue comes from taxes, fees, and royalties on the state’s oil exports. Not only have oil prices declined by more than 50 percent since 2014, but the amount of oil exported from Alaska has been declining significantly for years. The state is quickly running through the savings it built up in good years, and it is faced with the situation in which it must either make deep cuts in spending or seek new revenue.
Asking Alaskans to respond to several strategies of dealing with this issue, the Rasmuson Foundation found the following:
- 66% of Alaskans agreed with “Using a portion of excess earning from the Permanent Fund to fund public services and programs while protecting the dividend program.” 27% opposed.
- 57% agreed with “Introducing a statewide sales tax.” 41% opposed.
- 55% agreed with “Putting a cap on the yearly amount of Permanent Fund dividends.” 41% opposed.
- 54% agreed with “Reducing oil development tax credits offered by the state.” 32% opposed.
- 41% agreed with “Introducing a state personal income tax.” 55% opposed.
- 16% agreed with “Making deep funding cuts to essential public services like schools, police, health care, and roads.” 16% opposed.
The first option might not sound like a cut in the dividend, but it is. There are no “excess earnings” in the PDF. Every dollar the PDF receives in returns either goes to spending or to generating more returns and higher dividends in all the years to come. Any strategy that defines some returns as “excess” and diverts those to other spending, necessarily means lower dividends in the future. This opinion protects the existence of the dividend, but it does not protect its future growth or even its current level. If any significant amount is taken in “excess earnings,” it will slow the growth of the dividend in the future, and it might even create negative future growth in the dividend.
The poll did not ask people whether they would support eliminating the dividend entirely, but over time either of the two strategies suggested would lead to significantly smaller dividends than what would otherwise occur.
The poll also did not ask about spending the principal of the PFD, which is constitutionally protected. The legislature would need a constitutional amendment to spend down the $52 billion fund, but with a simple majority vote, it could cancel the dividend and use that money to finance state spending. Before the recent fiscal crisis, such a strategy was politically untenable, but the poll shows that movement in that direction might have become politically tenable.
The poll results suggest that Alaskans might view the dividend as a luxury to be distributed as long as the state is booming. If so, it is very different than how most basic income supporters view it: as an essential tool to promote social justice and an important way to show solidarity with economically disadvantaged individuals. Whether this or any other view of the dividend is strong enough to project it during Alaska’s fiscal crisis remains to be seen.
For more information see:
Alex DeMarban, “Poll: Alaskans prefer new revenue over deep cuts, including tapping Permanent Fund.” Alaska Dispatch News, August 13, 2015.
The Rasmuson Foundation, “Alaska Attitude Survey On The State Fiscal Climate.” The Rasmuson Foundation, Conducted July 13 – 21, 2015
Representative Wes Keller, “My Turn: Don’t be snookered, ther’es no ‘free ride.’” The Juneau Empire. August 20, 2015
Rep Les Gara, “My Turn: Open discussion needed on oil taxation.” The Juneau Empire. August 19, 2015.
NOTE: The paragraph beginning, “The first option might not sound like a cut…” was added after this article was first posted in response to questions from readers.
by Guest Contributor | Aug 10, 2015 | Opinion
Busiso Moyo
[The Southern African Development Community (SADC) member states are characterized by high levels of poverty and some of the highest levels of inequality globally, albeit endowed with high levels of mineral resources. – ed.]
By Busiso Moyo
Despite being endowed with many natural resources, Sub-Sahara Africa (SSA), wherein 13 of the 14 SADC countries are located, ranks amongst the worst regions globally in terms of poverty and socio-economic inequalities. Evidently, for the region, the capitalist ‘trickle down’ effect of wealth to all citizens in the context of a neoliberal global political economy has proven to be a fallacy. As such, now more than ever, it has become imperative for African governments to prioritize social protection namely through the provision of a Basic Income Grant (BIG) for all residents furnished through universal Social Cash Transfers (SCTs).
A cursory look at SADC countries’ socio-economic circumstances clearly reveals the need for upping efforts towards social protection to ensure that the most vulnerable are safe from destitution. South Africa, the economic mecca of Africa, despite being a middle-income country, is the one of the most unequal countries in the world. People with access to wealth experience the country as a developed modern economy, while the poorest still struggle to access even the most basic services. On the other hand, since the late 90s, Zimbabwe’s economy slowed down and grounded to a halt by 2008 due to socio-political challenges that still bedevil the country to this day. Unemployment is estimated at 80% to date thus leaving the majority of people in abject poverty. Furthermore, 5.3 million people or 50% of the Zambian population falls under the poverty line coupled with the fact that 70% of Mozambicans are classified as ‘poor’. Consequently, poverty and socio-economic inequalities have left the majority of people within the SADC-region food-insecure and with many of the region’s children’s educational aspirations frazzled.
Amidst the above, South Africa has borne the brunt of regional poverty and inequalities as the net receiver of socio-political economic refugees from around Africa especially the SADC region, resulting in refugee management headaches for authorities and ills like recurrent xenophobic attacks on non-South Africans. Therefore, a SADC-wide BIG would not only serve as a buffer against poverty but would be utilized as a stabilizing force to stimulate local and regional growth in-turn curbing one-directional mass movement of people to countries like South Africa.
A universal SADC-wide unconditional social cash transfer to all citizens of no less than US$15 per month, would go a long way in curbing destitution. SCTs, as opposed to in-kind gifts, give beneficiaries the freedom to acquire what they need exactly. This freedom to choose in itself constitutes human security.
The fact that poverty is dire in SSA should not simply be left to the sphere of development practitioners with an interest in poverty-alleviation, but as an obstacle to the enjoyment of many human rights ought to be a concern of all change agents within society. For States and capital-interests within the region in particular, the role of SCTs as the best intervention strategy in the fight against poverty cannot be ignored any longer. Granted, some scholars have alluded to the fact that the notion of social cash transfers brings about dependency amongst beneficiaries and removes the impetus for seeking meaningful employment. So what? People deserve to benefit from the region’s natural resources in a non-prejudicial manner, especially in the pervasive absence of formal jobs. Nonetheless, for the half-convinced, its high-time we acknowledge that the poor are in fact good managers who already know how to do best for their families with the little they have. Many sustain the survivalist economy at the bottom of the pyramid with such wise daily financial decisions. For scholars such as Joseph Hanlon, the questioning of the frugality of the poor is tantamount to blaming the poor for their circumstances. Moreover, such feeble arguments show a lack of appreciation for the political history of SSA and its structural make up. Worse still this mindset portrays a blind endorsement of the neoliberal agenda. Remarkably, a study of European history shows that social protection came first, then economic growth. Indeed saving and/or the entrepreneurship-spirit cannot happen when the majority of people have to endure hunger-pains.
Empirical evidence of successes of SCT schemes globally abound. Brazil’s 2003 initiated Bolsa Familia SCT scheme, supporting about 12 million families, has to date decreased inequality by 17% and the poverty rate has fallen from 42.7% to 28.8%. For the South African experience, social safety nets such as the child grant have already shown that SCT schemes are capable of producing positive outcomes. Gharagozloo-Pakkala observes the following, ‘In South Africa, the child grant reduced the poverty gap by 47%; in Kenya unconditional cash transfers saw a 19% increase in primary school enrolment among ‘hard-to-reach’ children; in rural Ghana, for every one Cedi transferred, 1.50 Cedi of income can be generated in the economy”. Malawi’s Mchinji district’s SCT scheme also testifies to a positive turn of SCTs. SCTs are recorded to have “…influence[d] household productive capacity [and]…ownership of agricultural assets increased 16 per cent…”
Having shown the need for a BIG and it’s transformative power, it is necessary to conclude this piece by observing that in a region blessed with natural resources the issue of a BIG roll out to all – SADC residents, refugees, economic migrants, asylum seekers funded by proceeds from extractive industries and other actors, is not ‘alms’ giving or a charitable gesture, but is an act of economic and social justice, and most importantly an investment in the poor’s human capital!
SADC wide BIG
“Make the Change Happen!” – Support the call for a SADC BIG. Visit www.spii.org.za
Busiso Moyo is an Advocacy and Campaigns Officer with the Studies in Poverty and Inequality Institute (SPII).
by Toru Yamamori | Aug 8, 2015 | News
Jeremy Corbyn, front running candidate to be the next Labour Party leader, has recruited Richard Murphy, an advocate of basic income, to draft his economic policy.
Corbyn, a 66-years-old MP, not especially prominent in Westminster politics, has recently gotten tremendous media attention on account of his unexpected initial success in getting support for his candidacy for Labour Party leader, coupled with mainstream Labour politicians’ panic reaction against precisely this (Tony Blair, for one, has advised Corbyn supporters to get a heart transplant).
Although Corbyn himself hasn’t spoken on basic income yet, there have been some speculations as to whether he could possibly support the idea — namely: ‘Why Anti-Austerity Needs The Basic Income: SNP, Jeremy Corbyn?’ and ‘Universal Basic Income: How the Labour Party could stand up for workers, help the poor and be pro-business’.
Richard Murphy, Tax Research UK
It is good news for basic income supporters that Richard Murphy is involved in drafting Corbyn’s economic policy.
Murphy, an economist at Tax Research UK, is also an advocate of basic income and co-author (with Howard Reed) of ‘Financing the Social State’ (pdf), which recommends the implementation of basic income in the U.K. This policy paper was published in 2013 by the Centre for Labour and Social Studies.
Corbyn hasn’t published his detailed economic plan other than providing a brief outline. Despite this, The Daily Mail, The Times, to cite a few, have already termed it the derisory ‘Corbynomics’.
Will basic income be included in ‘Corbynomics’ (which I am using the term without ridiculing tone)? Will Corbyn win the Labour Party leader contest? We will know by the autumn. The party’s internal vote will begin Friday 14 August and close on Thursday 10 September, with the results being announced on Saturday 12 September.
Credit Picture: CC Chris Beckett
*Minor editing for a link and for responding one of comments below on 10th August
by Citizens' Income Trust | Aug 2, 2015 | Opinion
Peter Barnes, With Liberty and Dividends for All: How to save our middle class when jobs don’t pay enough, Berret-Koehler Publishers, 2014, 1 62656 214 1, pbk, xii + 174 pp, £13.99
There are not enough well-paid jobs to sustain a large middle class, and Peter Barnes offers as a solution to this problem the idea that co-owned wealth could pay dividends to everyone. The Alaska Permanent Fund is the model, and the inspiration is Thomas Paine’s Agrarian Justice, in which Paine proposes an equal distribution of the income generated by the property which belongs to all of us. This is the ‘co-owned property’ that is at the heart of Barnes’ proposal; and he extends the meaning of the economist’s term ‘rent’ to include payments made to all of us in recognition of the uses that are made of our co-owned wealth.
Drivers of the changed outlook for the United States’ middle class – and the middle classes of all developed nations – are globalization, automation, and deunionization. The effect of all three of these is to reduce the proportion of the proceeds of production going to labour, and to increase the proportion going to the owners of capital ( – the main point made by Thomas Piketty in his book Capital). Economic stimulus, education, and job creation, might ameliorate the situation slightly in the short term, but automation, globalization and deunionization will defeat them in the end, as will the fact that the economic system quickly magnifies small differences in wealth into sizeable inequalities. As Barnes suggests, the system needs to be fixed, not the symptoms. One particular change that is required is that means-tested benefits need to be replaced by universal ones, but the most important change is that the rent that owners extract from assets that belong to all of us (‘extracted rent’) should be distributed to everyone (‘recycled rent’) as a Citizen’s Income
Barnes suggests several types of co-owned wealth that could be made to generate the income to pay for a Citizen’s Income: the money infrastructure, the electromagnetic spectrum, sovereign wealth funds generated by extraction royalties (as in Alaska and Norway), and the atmosphere ( – rather than ‘cap and trade’, Barnes recommends ‘cap and dividend’, in which anyone who pollutes the atmosphere has to pay, and in which what they pay is redistributed as Citizen’s Incomes).
This is a very American book, and the context in view is always the USA. For Barnes, it is the middle class that needs to be cared for, and, by implication, not the rest. The situation looks very different in the UK. Here we have a generally more egalitarian society ( – compare the universal NHS with the United States’ differentiated health systems), and the ways in which a Citizen’s Income would benefit everyone will be higher up the UK’s agenda than would be the protection of the middle class. But having said that, this is an engaging introduction to a Citizen’s Income and to how we might pay for it. Something similar for the UK and for other European countries would be welcome.
by Liam Upton | Jul 13, 2015 | News
Ireland’s Fianna Fáil party will include a commitment to a Basic Income of €230 a week in its manifesto for next year’s general election.
The news was revealed by Fianna Fáil spokesperson for social protection and social equality, Willie O’Dea in an interview with the Sunday Times newspaper. O’Dea said that he will outline the plan in the party’s social protection policy document, which is due to be published in a few week’s time.
This commitment makes Fianna Fáil the most significant party in Ireland to support Basic Income, they are currently the largest opposition party and are usually the third largest party in opinion polls, not far behind those in front. The €230 Fianna Fáil proposal is also higher than that suggested by Social Justice Ireland, who presented a Basic Income affordability study at a BIEN conference in 2012. The Green Party also supports Basic Income but has never campaigned on it nor laid out a concrete proposal.
In terms of costing, the document says that refunding tax credits would be the first step to a Basic Income and that “Any income earned above [the Basic Income] would be taxed at a new single rate.”
The policy document will also outline some of the justification for Basic Income, making a number of criticisms of Ireland’s current taxation and social welfare system, noting that social work such as caring and volunteering go financially unrewarded. It will further mention that “It would promote gender equality, as all forms of ‘work’ are rewarded, not just paid employment.” and that “It would remove poverty traps and unemployment traps, as seeking paid employment or increased income would still be worthwhile.”
The inclusion in Fianna Fáil’s manifesto reflects the increasing political support Basic Income has been receiving worldwide in the last year.
