Dividends for the people

Feb 17, 2012   //   by boyce   //   Articles, Media Library  //  1 Comment

Peter Barnes, author of Capitalism 3.0, writes for onthecommons.org:

Why don’t we pay everyone some non-labor income — you know, the kind of money that flows disproportionally to the rich? I’m not talking about redistribution here, I’m talking about paying dividends to equity owners in good old capitalist fashion. Except that the equity owners in question aren’t owners of private wealth, they’re owners of common wealth. Which is to say, all of us.

One state—Alaska—already does this. The Alaska Permanent Fund uses revenue from state oil leases to invest in stocks, bonds and similar assets, and from those investments pays equal dividends to every resident. Since 1980, these dividends have ranged from $1,000 to $2,000 per year per person, including children (meaning that they’ve reached up to $8,000 per year for households of four). It’s therefore no accident that, compared to other states, Alaska has the third highest median income and the second highest income equality.

Alaska’s model can be extended to any state or nation, whether or not they have oil. Imagine an American Permanent Fund that pays dividends to all Americans, one person, one share. A major source of revenue could be clean air, nature’s gift to us all. Polluters have been freely dumping ever-increasing amounts of gunk into our air, contributing to ill-health, acid rain and climate change. But what if we required polluters to bid for and pay for permits to pollute our air, and decreased the number of permits every year? Pollution would decrease, and as it did, pollution prices would rise. Less pollution would yield more revenue. Over time, trillions of dollars would be available for dividends.

Read his piece here.

1 Comment

  • Hi Jeremy, takhns for your comment.You’re right, it’s more a guide than a hard and fast rule. Though you have to admit it has a pretty good success rate. The US may not have slipped into recession in early 2007, but it did experience the great financial crisis a mere 9 months later. Ahmed, the US has its own rule when it comes to classifying whether it has experienced a recession or not. From In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession’s onset and end. In the periods that you refer to, the NBER classified that the US was in recession. Revisions to the GDP data show that the US did not actually register a fall in growth, though when the GDP print first came out the year on year rate of growth was actually negative. It highlights the difficulties of trying to measure the national accounts.On the rule you are referring to, wikipedia notes In a 1975 New York Times article, economic statistician Julius Shiskin suggested several rules of thumb for defining a recession, one of which was two down quarters of GDP . In time, the other rules of thumb were forgotten. Some economists prefer a definition of a 1.5% rise in unemployment within 12 months.