“Alaskan socialists are trying to take your PFD” reads a sign at a local business in Wasilla. Whether or not this business owner is being sincere or delightfully subversive, I couldn’t tell you. I didn’t stop to ask. But the sign does point to a fundamental misunderstanding in the debate around the PFD, government spending, socialism and state services.
Socialists aren’t trying to take the PFD; they created the PFD.
The PFD program is a form of universal basic income, a policy proposal gaining some traction in the U.S. but viewed by many Americans as gross government overreach that threatens the individual rights and freedoms that form the bedrock of our democracy and capitalist economy.
“The problem with universal basic income,” explains American entrepreneur and investor Naval Ravikant, “is that it’s a slippery slide transfer straight into socialism. The moment people can start voting themselves money combined with a democracy, then it’s just a matter of time before the bottom 51% votes themselves everything in the top 49.”
This is an interesting critique to apply to Alaska’s permanent fund dividend program — a program often cited by UBI supporters. We seem to find ourselves on the same slippery slope Ravikant warns against — Alaskans have chosen to vote money directly into their own pockets over the long-term economic stability and viability of their state.
Voters created the permanent fund in 1976 to support state services. (See Alaska Constitution Article IX, Section 15: “All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law.”) Its creators recognized the dangers of building an entire state economy on a finite and volatile resource and created a fund to help guarantee the continuation of vital state services in perpetuity. The abolishment of a state income tax and creation of the dividend program in 1980 not only removed this safeguard but created a constituency dependent on a handout in the process. As a result, voters had no skin in the game. Elected officials were not held accountable, the state overspent and for decades Alaskans happily enjoyed both free money and free services.
“Alaska used to be the freest place in the world,” lamented a Fairbanks man advocating for a full PFD at public testimony before the House Finance Committee in mid-July. “Now it’s a socialistic society.” He was on to something but perhaps had it the wrong way around.
True fiscal conservatism would argue against taxing a corporation at all, let alone dishing out cash to every man, woman and child in the state. The PFD is money taken forcefully away from someone else by the government and given to you simply for living in Alaska. It is wealth redistribution — a cornerstone of socialism, not conservatism. This year’s budget debate has laid bare our ideological inconsistencies.
We could debate subsurface rights or the legality of using the PFD to fund state programs, but these weak arguments distract from the much bigger problem. The existence of the dividend itself — a state-run wealth redistribution program — has eroded Alaska’s democratic process and collapsed the state’s civic narrative to a single issue, an issue easily manipulated by politicians. The PFD has become a means of controlling the populous. The PFD makes us less free.
A slippery slide indeed.
Carolyn Kozak Loeffler is program coordinator for the Alaska Center for Energy and Power and an adjunct faculty member in the Arctic and Northern Studies Department at the University of Alaska Fairbanks.