Less than six months before his assassination on April 4, 1968 Dr. Martin Luther King Jr. first endorsed the idea of “the guaranteed income” in his collection of essays entitled Where Do we Go From Here, Chaos or Community? King writes, hitherto now “we have proceeded from a premise that poverty is a consequence of multiple evils: lack of education restricting job opportunities; poor housing which stultified home life and suppressed initiative; fragile family relationships which distorted personality development. The logic of this approach suggested that each of these causes be attacked one by one…Each seeks to solve poverty by first solving something else. I am now convinced that the simplest approach will prove to be the most effective – the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” http://mlk-kpp01.stanford.edu/index.php/kingpapers/article/where_do_we_go_from_here/

Although proposals like King’s are often met with cynicism or chastisement, the truth is that at least one state in the Union has managed to establish a partial guaranteed income plan lauded by those with seemingly divergent— or so we’re told—political inclinations.

Have you ever wondered how Alaska has managed to boast yearly budgetary surpluses amidst economic crises http://sunshinereview.org/index.php/Alaska_state_budget while maintaining the third lowest poverty rate in the country (behind New Hampshire and Maryland) without collecting a single cent in individual state income taxes? http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html The Alaska Permanent Fund, in part, provides one such explanation and might, in fact, represent the best of both socialist and libertarian traditions.

Alaska’s Permanent Fund Dividend is the first U.S. example of a partial guaranteed income paid to all citizens based on commonly owned natural resources (oil from Alaska’s North Slope, in this instance). The Fund was architected over 30 years ago as a way to conserve oil revenue for the future, to reduce the state’s temptation to spend recklessly during boom cycles, and to maintain public oversight of diversified asset allocations.

In 1976 Alaskans approved a constitutional amendment (AS 37.13), proposed by Governor Jay Hammond (R) and legislators Hugh Malone (D) and Dick Randolph (Libertarian), which stated that “at least 25% of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue-sharing payments, and bonuses received by the State shall be placed in a permanent fund, the principal of which shall be used only for those income-producing investments specifically designated by law as eligible for permanent fund investments.”http://www.apfc.org/home/Content/aboutFund/fundFAQ.cfm

Later that year the state legislature created the Permanent Fund Dividend Program, retroactive to January 1, 1979, to allocate a portion of the income of the Permanent Fund each year to eligible Alaskans as a dividend payment. Since 1982 every eligible non-incarcerated resident of Alaska has received an average yearly dividend of $1,400. In 2010, according to the Alaska Permanent Fund Dividend Division, over $783 million was paid to 611,522 people, or nearly 88% of the state’s population. The fund ended FY2010 with a balance of $40.1 billion. (Alaskans received their largest dividend – $2,069 – in 2008). http://www.adn.com/2011/09/20/2078388/pfd-amount-1174-dollars.html

The form and function of the Alaska Permanent Fund ought to serve as a national model for the collection and distribution of natural resource rents to the public. The Permanent Fundcan help us to imagine a creative new conceptualization of the role of government –that of agent to distribute equitably resource rents to the citizenry through the collective management of common property resources.

Far from conceived as “handouts,” dividends represent the idea that Alaskans own their resources collectively and should therefore benefit from the 10% annualized rate of return on their investment. Further, in the form of an “unconditional cash payment,” the dividend respects the freedom and autonomy of each person to use it as s/he sees fit. And finally, because nearly everyone has a stake in the dividend, Alaskans have tended to invest prudently in lower risk asset classes that maximize the public good like government bonds and infrastructure.

A policy that conserves wealth for tomorrow, shares it fairly today, and negotiates the dictates of individual freedom and collective concern ought to be Alaska’s top export.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.