Karl Widerquist and Michael Howard, Alaska’s Permanent Fund Dividend: Examining its suitability as a model

by Citizens' Income Trust | Jun 21, 2013 | Opinion

Karl Widerquist and Michael Howard, Alaska’s Permanent Fund Dividend: Examining its suitability as a model, Palgrave Macmillan, 2012, xvii + 267 pp, hbk, 0 230 11207 0, £62.50

In 1967 oil was found in the relatively new state of Alaska; in 1976 a constitutional amendment established the Alaska Permanent Fund (APF) to receive 25% of oil royalties; and in 1982 the fund paid out the first Permanent Fund Dividend (PFD) to every Alaskan citizen: the same amount to every individual. The world had its first Citizen’s Income.

This important edited collection tells the political and legislative story of the APF and PFD, explains their operation, and discusses the dividend’s economic impacts ( – from being the US state with the most unequal net incomes in 1980, Alaska is now the state with the least net income inequality: p.53). Chapter 5 shows how distributing a dividend from a permanent fund generates political protection for resource revenues; chapter 6 explores the trade-off between higher average dividends and lower volatility facing any permanent fund administrators; and chapters 7 and 8 ask what will happen when the oil stops flowing: Will the Alaskan economy be in sufficiently good shape for the Permanent Fund to remain a political possibility?

In the second part of the book a number of authors debate the ethics of the Alaskan model. They find that Left-Libertarianism requires the collection and distribution of the natural resource components of all privately owned wealth; that the PFD constitutes a kind of Citizen’s Income (though the fact that it fluctuates compromises its ability to behave like one); that if the dividend were to be transformed into a capital sum for every citizen at the age of majority, then citizens would become genuine stakeholders in the economy (with the temptations that that would bring); that the dividend only ambiguously coheres with a republican ‘freedom-as-nondomination’ perspective; that registering for the PFD makes the individual citizen complicit in the oil industry’s contribution to climate change (though if Alaskan citizens were at the same time to prevent the same amount of climate change as Alaska’s oil industry causes then they would escape this charge); and that a Citizen’s Income can be consistent with a variety of moral theories. Finally, Widerquist and Howard draw a number of lessons: that resource dividends work, that they are popular, that they can be established anywhere politicians are willing to look for opportunities (as Governor Jay Hammond did); that governments need to assert community ownership of resources; and that coalitions need to be built if resource dividends are to be established and then defended.

We have waited a long time for a thorough book-length treatment of the APF and PFD, and Widerquist and Howard have served us well by pulling together such a relevant and coherent collection of essays. The one weakness is not of their making: As Scott Goldsmith suggests in chapter 4, there has been too little research on the economic and social impacts of the APF and the PFD. The research needs to be done and a second edition of the book then published so that we can all benefit from the results.