Can Alaska's Permanent Fund Pave for More Social Welfare Funding?

We're back this week with a brand-new season, which means new blog posts to go with it! 

For our first episode of Season 14, we take a look at how we came to be in our current cultural, political, and economic situation.

To do this, we turn to Kurt Andersen. Kurt is a writer of great stature, the founder of Spy and Inside magazines, and host of the long-running public radio show Studio 360. His newest book, Evil Geniuses: The Unmaking of America: A Recent History, is a careful, thoughtful, hilarious, heartbreaking look at the last 50 years of American politics and how the rich have rigged our entire society to work for them and against everyone else. 

One of our problems, according to Andersen, is our intense and often pointless rhetoric of political polarization. In particular, we need to rethink our allegiance to the ideals of the "free market" and "socialism." 

"Among the freest of the free-market economies… Norway, Finland, Sweden, Denmark also have these huge social welfare states. So, you know, it's not one or the other. In their case, it's both," he averred. 

As it turns out, we actually have something very similar to what they have in Norway: the Alaska Permanent Fund. It was set up in 1980 and featured an enticingly simple premise: give free money to every Alaskan. No, seriously. 

Alaska is resource-rich but remains one of the least developed states in the nation. When resource extraction (mainly oil and natural gas drilling, although there is also a significant mining presence) got underway, Alaska found itself sitting on billions in newfound wealth. After an economist at the University of Alaska—who calls himself an anarchist and socialist—recommended that payments be equally distributed to every man, woman, and child living in Alaska, the Republican governor agreed. 

It isn't pocket change, either. The average payout since 1980 is between $1,000-2,000 a year. If you've been a resident of Alaska since 1982, you've pulled in more than $40,000. 

The Permanent Fund is not without its controversies. Recently allegations surfaced accusing the Alaska government of keeping payments from LGBTQ couples, despite court orders to the contrary. Since the collapse of the oil industry, payments have fallen. The current Republican governor is having problems keeping his campaign promise of back-payments to make up for the slimmer checks. 

On the whole, however, the Permanent Fund has been an incredible success. Alaska is home to a large, rural Indigenous population, and it lacks much of the urban infrastructure most states rely on for revenue. A 2016 study found that the Permanent Fund reduces poverty in Alaska by a staggering 20%. Alaska's universal basic income (UBI) makes a tangible difference in the lives of thousands of Alaskans each year. 

To Andersen, the Permanent Fund is a perfect blueprint for moving away from the politics of "socialism” versus the "free market." 

"It really goes to this question of this stupid, pointless quality of so much of this, quote-unquote debate: 'Well, that's socialism! We hate socialism!'" he told Mila during our interview. "My God, in Alaska, it really is [socialism]. And yet, do the Republicans and the good libertarian people of Alaska hate it, or are they rejecting it? Are they getting rid of it? No way!"

It's true. The Permanent Fund was signed into law by Republican Governor Jay Hammond. Later, Tea-Party darling and failed Vice-Presidential Candidate Sarah Palin raised the taxes oil companies had to pay, resulting in the largest Permanent Fund check ever: $3,269 per Alaska resident. The current Republican Governor, Mike Dunleavy, is facing a recall because he wasn't able to deliver on his promises of giving every Alaska resident more than $6,000 to make up for smaller previous checks. The Republican voters of Alaska and Republican lawmakers both love this “socialist” handout; political posturing be damned. 

If some form of UBI will be necessary for the coming decade as AI and robotics continue to siphon off jobs from the US workforce, Alaska's Permanent Fund offers us just the paradigm shift we need.  

WORKS CITED: 

“Division Info.” Summary of Dividend Applications & Payments, pfd.alaska.gov/Division-Info/Summary-of-Applications-and-Payments. 

Hanlon, Tegan. “Here's What the Governor Cut, and What Was Restored, in Alaska's State Operating Budget.” Anchorage Daily News, Anchorage Daily News, 20 Aug. 2019, www.adn.com/politics/alaska-legislature/2019/08/20/heres-whats-cut-and-whats-not-in-alaskas-state-operating-budget/. 

Judith Lewis Mernit May 27, 2013 From the print edition Like Tweet Email Print Subscribe Donate Now. “Alaska's Populist, Sarah Palin-Era Oil Tax Gets the Ax.” High Country News – Know the West, 27 May 2013, www.hcn.org/issues/45.9/alaska2019s-populist-sarah-palin-era-oil-tax-gets-the-ax. 

Rosen, Yereth. “Oil Windfall Leads to $3,269 Payout for Alaskans.” Reuters, Thomson Reuters, 6 Sept. 2008, www.reuters.com/article/oil-alaska-dividend/oil-windfall-leads-to-3269-payout-for-alaskans-idUKN0528908720080906. 

Savchuk, Katia. “How to Hand out Free Money.” Mother Jones, 26 Dec. 2018, www.motherjones.com/politics/2018/12/alaska-oil-permanent-fund-dividend-universal-basic-income/. 

“Sign the Recall Petition at Home.” Recall Dunleavy, 22 Feb. 2021, recalldunleavy.org/. 

Thiessen, Mark. “Alaska Denied Permanent Fund Dividend to Same-Sex Spouses for Years despite Court Rulings.” Anchorage Daily News, Anchorage Daily News, 16 Apr. 2021, www.adn.com/alaska-news/2021/04/15/alaska-denied-permanent-fund-dividend-to-same-sex-spouses-for-years-despite-court-rulings/. 

“Who We Are.” Alaska Permanent Fund Corporation, 22 Nov. 2017, apfc.org/who-we-are/.