Alaska Permanent Fund

Description

Tom Bowerman:

"The Alaska Permanent Fund is a direct dividend returned to all citizens of the State of Alaska derived from a rent against oil extraction. Although it generally fits the definition of a guaranteed basic income, in reality it falls short due to sizable annual fluctuations, low of $331 in 1984 to high of $3269 in 2008, $1305 in 2009. The fluctuation is caused by variations in investment returns from the $34 billion fund, which vary dramatically annually; the dividend would be $1300 / year if the find yielded a steady 6% annual return or about 3% of the average annual state income. Economist Scott Goldsmith gives a reasonable overview in: The Alaska Permanent Fund Dividend: A case study of implementation of a basic income guarantee (2010) (www.iser.uaa.alaska.edu/Publications/bien_xiii_ak_pfd_lessons.pdf). This study suggests two weaknesses for climate stability policy. First is that the oil revenue dividend is expended mainly as conventional consumption, and, second, it creates a citizen demand for more income and hence extraction of fossil fuel to keep the revenue dividend coming. There is no evidence of contribution to climate stability." (email August 2015)

Discussion

Robert Cook:

"We can find one small but extremely important example of Dividend Economics in the U.S. by examining the Alaska Permanent Fund, which paid every resident of Alaska a dividend of $3,269 in 2008 out of state resource revenues. The APF was set up in 1976 when Alaska voters passed a constitutional amendment calling for a direct payment to individuals rather than turning the money over to the state bureaucracy for “social services.”

Today the Alaska Permanent Fund is a shining—and rare—example of economic democracy at work. At first the APF made dividends incremental based on a person’s years of residency, but the U.S. Supreme Court declared this provision unconstitutional. The Alaska legislature responded by providing equal dividends to all residents of six-months or more. The first dividend, amounting to $1,000, was paid on June 14, 1982.

The APF dividend is not a welfare payment. It is a resident’s fair share of the bounty of the earth. There are no means tests, no lines to wait in, and no bureaucrats snooping around to find out what someone used the money for. The APF has not ruined the character of those who get it. A millionaire receives the same payment as a person living in poverty. Spent into circulation, the money becomes part of the lifeblood of the community without having to be repaid and with no interest being charged. Deposited into banks, the money capitalizes consumer borrowing and economic growth." (http://dandelionsalad.wordpress.com/2009/02/03/bailout-for-the-people-the-cook-plan-by-richard-c-cook-2/)