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It's not widely known but the United States was the first developed country to promote a basic income, in the form of the Alaska Permanent Fund. Each year, eve

by nugget 13y ago

It's not widely known but the United States was the first developed country to promote a basic income, in the form of the Alaska Permanent Fund. Each year, every US citizen resident in Alaska receives a dividend payment from this fund. The amount varies based on market returns but it has hovered around $120/month ($1400/yr) over the last decade. Children are eligible, so a family of 4, for example, would receive $480/month. Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. It always struck me as ironic because Alaska is one of the most conservative states, and conservatives are not usually in favor of handouts. In this case, however, the inflows to the fund come not from personal income taxes but from taxes and lease-revenue on the state's natural resources, notably oil and gas. Because of this, people view it as a birthright, similar to an inheritance, rather than a handout, like welfare. In 1976 Alaska's citizens just banded together and determined that (1) all of these natural resources are shared, and the benefits from them should be shared also; and (2) none of us trust the Government to spend this money for us, better than we could spend it ourselves. Today, it is the most popular Government program in the state with near absolute bi-partisan support. So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. There are other countries, like Saudi Arabia or Norway, who will probably be the first to try this on a nation-wide scale before Switzerland.

rflrob 13y ago
> Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. The problem with the states as laboratories of democracy is that, from a scientific perspective, they're pretty crappy experiments in terms of having any control groups. While an economist can travel to Alaska, it's hard to tell whether any given quality in the current state is due to the experiment or not. For instance, the price of food is quite high in Alaska; is this due to some basic commodity inflation, or is it because there are no road and rail links to most major population centers? Probably the latter, and you can look at Alaska both before and after the Permanent Fund was implemented, but even then, it's not a perfect control.
- the_watcher 13y ago
  I think the idea of states as labs is generally a good thing, but people often misunderstand it. States as labs shouldn't be seen as pilot programs for the whole country, they should be seen as pilots for other states. The US is huge, and a state like Alaska has a very different economy than Rhode Island. However, somewhere like Montana may be able to use some of what worked in Alaska. The advantage of state power is that allows things that are unique to the state to have more influence on policy.
  - pekk 13y ago
    > The advantage of state power is that allows things that are unique to the state to have more influence on policy. That is also the disadvantage of state power. At least, if you are a person whose life is being controlled by the coercive power of the state government in ways that might be harmful to you. If you are powerful in the state, of course, it is very good for you to have fewer checks on your own power. It also helps things like arranging elections, like by excluding demographics less likely to vote for you.
    - the_watcher 13y ago
      That is an endemic danger to all forms of government. It's not a disadvantage of state power, but a disadvantage of power itself.
      - justin66 13y ago
        As an ongoing exercise it's useful to study over time the number of times the notion of state's rights is invoked in defense of a good idea, a bad idea, or a genuinely disgusting idea. I'm not trying to impose any beliefs on you: feel free to use your own definitions for these things. My position is that state's rights is invoked so often in defense of bad or disgusting policy in the United States - and frankly, used so infrequently to test genuinely interesting policy in a meaningful way - that it's not a hugely important thing. I feel this is an empirical observation that won't necessarily hold true in all times or places. When people try to state these things about how government should work purely out of principle, it usually seems pretty unconvincing. We can judge methods of government based on their outcomes to a large extent.
dkl 13y ago
Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. Can you say more about this? What is the perceived impact?
- pilom 13y ago
  The biggest impact that many people see is that over time, a minimum income gives people a disincentive to work. So if Switzerland starts giving every citizen $2800 a month, will tons of people stop working because they realize they can live off of 33k/year? In Alaska, it is probably rather difficult to live off of $1400/year but some people do it by living off the land and hard work at home. If the Alaska fund did not exist, would some of those people go back to work? That is the question economists would look for.
  - personlurking 13y ago
    There was a (Swiss) commenter on a previous HN article (last week, I believe) about the basic income idea and he/she said that $6000 is a median income there. Link https://news.ycombinator.com/item?id=6499954 https://news.ycombinator.com/item?id=6499954
  - Camillo 13y ago
    > living off the land and hard work at home > go back to work It sounds to me like they're working pretty hard already.
  - thetrb 13y ago
    But would it help anyone if those people go back to work? I'm pretty sure that in the future we need to refrain from the notion that everybody can find work. With increasing automation there just won't be enough jobs to fill.
    - informatimago 13y ago
      Why speak on the future tense? This is occuring now (and has been occuring for more than 30 years now), with actual unemployment levels consistently above 10% and in some coutries even much more.
JackFr 13y ago
"Alaska is one of the most conservative states" + "none of us trust the Government to spend this money for us, better than we could spend it ourselves" = not ironic at all.
- pessimizer 13y ago
  I don't get a check for the usage of the natural resources of Illinois. If I did, it would be a handout, because I didn't put them there, and I don't own the land. One would assume that conservatives would be against people getting money just for living somewhere, without having to work for it.
  - smackfu 13y ago
    The money exists and is given to the government, the difference is just whether the government should decide to give it to those who need it most, or whether it should be distributed equally.
    - pessimizer 13y ago
      It isn't given to the government by me, though. It's given by the people who extract the resources out of the land.
    - toast0 13y ago
      The money is given to the government because the government levies taxes. The government could also choose to reduce the levies so that there's no surplus to distribute, and avoid choosing how to distribute the surplus.
  - Kluny 13y ago
    The money is given to the government, and the government didn't put it there either. However, the job of the government is to serve you. So I disagree that it would be a handout.
  - randallsquared 13y ago
    There is a natural rights argument for Georgism, a political philosophy which would suggest that land (as a natural resource) being originally unowned, everyone has the right to an equal share of it.
gcb0 13y ago
if we multiply the population of alaska for that sum, we get 731,449 * $120 = $87,773,880/mo then we get Alaska oil production of 2mi barrel per day (it is much lower now than a decade ago). Assuming a very conservative $100/barrel = 200,000,000/day = 2,400,000,000/mo That's 3% if you tax on top of gross profit (no idea how oil is taxed. it is probably much less than my income tax if i know how the world works...) And I am not counting fish, gas, lumber, minerals, etc. That sound like the citizens are doing a much worse job than the gov in setting the rent for the oil companies.
jotm 13y ago
I think Norway does the same with their oil resources...
- anbu32 13y ago
  No, we don't :(
- vidarh 13y ago
  Norway's tax revenues from oil (which is taxed at a special, extra high rate) goes into a sovereign wealth fund. Proceeds are reinvested, but the government may choose to use from the fund to fund the budget. So far the general consensus has been to stick to spending no more than 4% of the value of the fund every year. Currently the fund apparently holds about 1% of the total share capital of all listed companies worldwide (though it is by no means evenly distributed) - about 2% of the share capital of European listed companies - and a few months ago it was worth $670 billion, or more than $130,000 per Norwegian citizen.
k-mcgrady 13y ago
>> "all of these natural resources are shared, and the benefits from them should be shared also" Is it not unfair that they are only shared with people who live in Alaska? Shouldn't they be shared with all Americans? If I was an an American I would be in favour of one of two things: 1. The money from the resources is shared with all Americans either via a handout or government spending on something that benefits all Americans. 2. Use the money to subsidise current unemployment benefits (or some other nationally available benefit) in Alaska.
- umanwizard 13y ago
  Why all Americans as opposed to all people in the world?
bsullivan01 13y ago
Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. The thing is that Alaska is not taxing Alaskan to share the wealth. Alaska is giving everyone a s share of what it gets from what they have underground. Arab countries have generous welfare systems but I doubt they'd have them if the richer ones were taxed to provide for everyone.
- adaml_623 13y ago
  Are they taxing companies. Or charging a fee for extracting resources?
notdrunkatall 13y ago
>So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. Sure, if you have a virtually limitless supply of free money, you can give away free money. Alaskans like the fund so much because a) that money goes into their pockets rather than the pockets of politicians or the wealthy and well-connected, and b) it's not welfare. Unless you have a large resource/population ratio, basic income generally isn't feasible.
- mjcohen 13y ago
  Of course it's welfare. That doesn't mean it's bad, it just means that they are not doing any work to get it.
- kooshball 13y ago
  How is it not welfare? It's free money from the government.
  - notdrunkatall 13y ago
    It's not welfare as welfare is commonly understood: a subsidy for the poor that everyone else pays for. To Alaskans, it's just free money, so the negative connotations that typically come with the welfare label don't apply.

by nugget 13y ago

rflrob 13y ago

> Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. The problem with the states as laboratories of democracy is that, from a scientific perspective, they're pretty crappy experiments in terms of having any control groups. While an economist can travel to Alaska, it's hard to tell whether any given quality in the current state is due to the experiment or not. For instance, the price of food is quite high in Alaska; is this due to some basic commodity inflation, or is it because there are no road and rail links to most major population centers? Probably the latter, and you can look at Alaska both before and after the Permanent Fund was implemented, but even then, it's not a perfect control.

the_watcher 13y ago
I think the idea of states as labs is generally a good thing, but people often misunderstand it. States as labs shouldn't be seen as pilot programs for the whole country, they should be seen as pilots for other states. The US is huge, and a state like Alaska has a very different economy than Rhode Island. However, somewhere like Montana may be able to use some of what worked in Alaska. The advantage of state power is that allows things that are unique to the state to have more influence on policy.
- pekk 13y ago
  > The advantage of state power is that allows things that are unique to the state to have more influence on policy. That is also the disadvantage of state power. At least, if you are a person whose life is being controlled by the coercive power of the state government in ways that might be harmful to you. If you are powerful in the state, of course, it is very good for you to have fewer checks on your own power. It also helps things like arranging elections, like by excluding demographics less likely to vote for you.
  - the_watcher 13y ago
    That is an endemic danger to all forms of government. It's not a disadvantage of state power, but a disadvantage of power itself.
    - justin66 13y ago
      As an ongoing exercise it's useful to study over time the number of times the notion of state's rights is invoked in defense of a good idea, a bad idea, or a genuinely disgusting idea. I'm not trying to impose any beliefs on you: feel free to use your own definitions for these things. My position is that state's rights is invoked so often in defense of bad or disgusting policy in the United States - and frankly, used so infrequently to test genuinely interesting policy in a meaningful way - that it's not a hugely important thing. I feel this is an empirical observation that won't necessarily hold true in all times or places. When people try to state these things about how government should work purely out of principle, it usually seems pretty unconvincing. We can judge methods of government based on their outcomes to a large extent.

dkl 13y ago

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. Can you say more about this? What is the perceived impact?

pilom 13y ago
The biggest impact that many people see is that over time, a minimum income gives people a disincentive to work. So if Switzerland starts giving every citizen $2800 a month, will tons of people stop working because they realize they can live off of 33k/year? In Alaska, it is probably rather difficult to live off of $1400/year but some people do it by living off the land and hard work at home. If the Alaska fund did not exist, would some of those people go back to work? That is the question economists would look for.
- personlurking 13y ago
  There was a (Swiss) commenter on a previous HN article (last week, I believe) about the basic income idea and he/she said that $6000 is a median income there. Link https://news.ycombinator.com/item?id=6499954 https://news.ycombinator.com/item?id=6499954
- Camillo 13y ago
  > living off the land and hard work at home > go back to work It sounds to me like they're working pretty hard already.
- thetrb 13y ago
  But would it help anyone if those people go back to work? I'm pretty sure that in the future we need to refrain from the notion that everybody can find work. With increasing automation there just won't be enough jobs to fill.
  - informatimago 13y ago
    Why speak on the future tense? This is occuring now (and has been occuring for more than 30 years now), with actual unemployment levels consistently above 10% and in some coutries even much more.

JackFr 13y ago

"Alaska is one of the most conservative states" + "none of us trust the Government to spend this money for us, better than we could spend it ourselves" = not ironic at all.

pessimizer 13y ago
I don't get a check for the usage of the natural resources of Illinois. If I did, it would be a handout, because I didn't put them there, and I don't own the land. One would assume that conservatives would be against people getting money just for living somewhere, without having to work for it.
- smackfu 13y ago
  The money exists and is given to the government, the difference is just whether the government should decide to give it to those who need it most, or whether it should be distributed equally.
  - pessimizer 13y ago
    It isn't given to the government by me, though. It's given by the people who extract the resources out of the land.
  - toast0 13y ago
    The money is given to the government because the government levies taxes. The government could also choose to reduce the levies so that there's no surplus to distribute, and avoid choosing how to distribute the surplus.
- Kluny 13y ago
  The money is given to the government, and the government didn't put it there either. However, the job of the government is to serve you. So I disagree that it would be a handout.
- randallsquared 13y ago
  There is a natural rights argument for Georgism, a political philosophy which would suggest that land (as a natural resource) being originally unowned, everyone has the right to an equal share of it.

gcb0 13y ago

if we multiply the population of alaska for that sum, we get 731,449 * $120 = $87,773,880/mo then we get Alaska oil production of 2mi barrel per day (it is much lower now than a decade ago). Assuming a very conservative $100/barrel = 200,000,000/day = 2,400,000,000/mo That's 3% if you tax on top of gross profit (no idea how oil is taxed. it is probably much less than my income tax if i know how the world works...) And I am not counting fish, gas, lumber, minerals, etc. That sound like the citizens are doing a much worse job than the gov in setting the rent for the oil companies.

jotm 13y ago

I think Norway does the same with their oil resources...

anbu32 13y ago
No, we don't :(
vidarh 13y ago
Norway's tax revenues from oil (which is taxed at a special, extra high rate) goes into a sovereign wealth fund. Proceeds are reinvested, but the government may choose to use from the fund to fund the budget. So far the general consensus has been to stick to spending no more than 4% of the value of the fund every year. Currently the fund apparently holds about 1% of the total share capital of all listed companies worldwide (though it is by no means evenly distributed) - about 2% of the share capital of European listed companies - and a few months ago it was worth $670 billion, or more than $130,000 per Norwegian citizen.

k-mcgrady 13y ago

>> "all of these natural resources are shared, and the benefits from them should be shared also" Is it not unfair that they are only shared with people who live in Alaska? Shouldn't they be shared with all Americans? If I was an an American I would be in favour of one of two things: 1. The money from the resources is shared with all Americans either via a handout or government spending on something that benefits all Americans. 2. Use the money to subsidise current unemployment benefits (or some other nationally available benefit) in Alaska.

umanwizard 13y ago
Why all Americans as opposed to all people in the world?

bsullivan01 13y ago

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves. The thing is that Alaska is not taxing Alaskan to share the wealth. Alaska is giving everyone a s share of what it gets from what they have underground. Arab countries have generous welfare systems but I doubt they'd have them if the richer ones were taxed to provide for everyone.

adaml_623 13y ago
Are they taxing companies. Or charging a fee for extracting resources?

notdrunkatall 13y ago

>So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. Sure, if you have a virtually limitless supply of free money, you can give away free money. Alaskans like the fund so much because a) that money goes into their pockets rather than the pockets of politicians or the wealthy and well-connected, and b) it's not welfare. Unless you have a large resource/population ratio, basic income generally isn't feasible.

mjcohen 13y ago
Of course it's welfare. That doesn't mean it's bad, it just means that they are not doing any work to get it.
kooshball 13y ago
How is it not welfare? It's free money from the government.
- notdrunkatall 13y ago
  It's not welfare as welfare is commonly understood: a subsidy for the poor that everyone else pays for. To Alaskans, it's just free money, so the negative connotations that typically come with the welfare label don't apply.