One State Already Has a Basic Income Plan

The forgotten politics of the Alaska Permanent Fund

I made a brief reference yesterday to the idea of a negative income tax or universal basic income: a single, unconditional cash payment aimed at keeping people out of poverty. There's been an increased interest in this idea recently -- a new book here, a piece in the Post there -- and a bunch of different variations on the concept have been put on the table. One way to sort those ideas is to separate the proposals in which the payments would supplant the existing welfare state from the ones that would just add one more program to the mix. (That's why Milton Friedman ended up opposing Richard Nixon's Family Assistance Plan, even though it had been inspired by Friedman's negative-income-tax proposal: Nixon's version would have been an add-on to the existing welfare state rather than a replacement for it.) Another notable distinction is between the people who would means-test the program and the ones who would just send a check to everyone. (That second division isn't a right/left split, by the way -- Friedman was a means-tester, while Charles Murray is in the checks-for-all camp.)

Some of these ideas would be an improvement over the current system and some would not. But I don't want to get into the weeds of weighing the competing proposals right now. I just want to note a fact that's oddly missing from a lot of these discussions: One state of the union has something similar to a basic income program already.

When Alaska started raking in money from the Prudhoe Bay oil boom of the '70s, officials there decided to invest the money rather than blow it all at once. In 1982, after a rather fierce debate, the resulting Alaska Permanent Fund started sending annual dividend checks to the state's residents. Meanwhile, Native Americans in Alaska are organized into regional and village corporations, and those companies pay out dividends as well. (The latter checks are usually smaller than the payments from the statewide fund.)

That seems relevant to the policy discussion about income grants, doesn't it? Yet while the full-time campaigners for a guaranteed income are well aware of Alaska's system, the people who write about the idea elsewhere tend to ignore it. The liberal site Remapping Debate, to give an especially egregious example, did a big story on the push for a basic income in the '60s and '70s that concluded that those old proposals faded because "market devotees drowned out those who continued to believe that government has a vital role to play….By Ronald Reagan's election in 1980, the country in which [a basic income] had seemed mainstream a decade earlier looked considerably different." All of which is hard to square with the fact that such a program was adopted during the Reagan years, in a state with a Republican governor, as part of a political moment that saw the same state eliminate its personal income tax, and with an important assist from the Libertarian Party, which was a substantial political force in Alaska at the time. (There were Libertarian legislators in Juneau in those days, and the party was capable of drawing 15 percent of the vote in a gubernatorial election. The party supported the dividends on the grounds that sending the money to individual citizens was preferable to letting elected officials spend it.)

Three decades later, several states have established sovereign wealth funds like Alaska's, and with the fracking boom their number may soon grow. As of yet, no state has followed Alaska in distributing dividends to its citizens. But you shouldn't be surprised if you see a strong push in some of those jurisdictions for a system like the one adopted in Juneau. And if that happens, you shouldn't be surprised if the conversation about income grants in Washington continues to treat the idea as an esoteric intellectual exercise or a policy debate from the past, not a live political fight in the states.

Bonus links: Versions of the idea have been around for a long time. Read a forgotten piece of relevant Canadian history here, and enjoy the Tuscaloosa News' take on a couple of socialists' basic-income proposal here. (In 1944 Alabama, apparently, a newspaper would explain H.G. Wells and George Bernard Shaw to its readers by comparing them to Huey Long.)