Alaska

Everybody talks a lot about economic inequality, but there don’t seem to be many credible proposals out there, let alone ones that have political legs.  French economist Thomas Piketty documented the deep structural nature of inequality in Capital in the 21st Century, but the best solution he could come up with was a global wealth tax.  Good luck with that!

What a pleasure, then, to read Peter Barnes’ new book and discover some sensible, practical ideas.  Barnes is a writer, entrepreneur and long-time friend; we worked together a decade ago with the late Jonathan Rowe in exploring the great potential commons in re-imagining politics, policy, economics and culture. The author of pioneering policy ideas in Who Owns the Sky? and Capitalism 3.0, Barnes has just published With Liberty and Dividends for All:  How to Save Our Middle Class When Jobs Don’t Pay Enough (Berrett-Koehler Publishers). 

The book aims to reduce inequality not through the tax system or education and training, but by inventing new commons-based institutions that can generate nonlabor income for everyone.  The secret of the wealthy, of course, is that they don’t depend on salaries or wages, but on investment income from their equity assets. 

So how might commoners pull off this trick?  By generating income from common assets.  The money won’t come from government spending or redistribution, or from new taxes on business.  It will come from commoners seizing control of the shared equity assets they already own – the atmosphere, airwaves, the sovereign right to create money (now enjoyed by banks), and the public institutions that make stock markets and copyrights possible.

These equity assets belong to all of us. Unfortunately, most of the benefits from these assets have been privatized by banks, oil companies, telecom companies, the culture industries, depriving us of income to which we, as common property holders, are entitled.

Barnes proposes renting out various common assets to businesses that wish to use them.  This is a well-accepted principle – to pay for something owned by someone else.  Why should companies get a free ride on public assets?  Barnes proposes charging corporations for the use of the airwaves, the pollution sink of the atmosphere, and the right to monopoly protections such as copyrights, trademarks and patents.  Revenues from our common assets could be channeled into independent, non-governmental trust funds that would then regularly generate dividends for everyone.

It happens all around the world, every day – corporate enclosures of shared, sustainably managed renewable resources.  Brutal abuses of the land, colossal disruptions of communities.  And yet investors and corporate management always cast themselves as the champions of progress, civilization, jobs and the public good – and respectable opinion somehow accepts the ecological insanity of the plans as necessary.  We know the rest of the story. 

These thoughts were provoked by a recent commentary about a massive proposed open-pit mine near Bristol Bay, Alaska.  The project is being pushed by a British-Canadian corporate alliance, the Pebble Partnership, which audaciously claims that its mining could power “green energy initiatives.”  The Pebble Partnership's website helpfully notes that “the difference between being a stone age culture and a post-stone age culture is metal,” implying that the Pebble Mine is just another step forward for civilization and away from the Stone Age. 

The truth is that under a best-case scenario, the mining of copper, gold and molybdenum near Bristol Bay will destroy up to 90 miles of streams and 4,800 acres of wetlands.  The mining operations will supposedly confine billions of tons of mine tailings within 700-foot tall dams.  But in a place where earthquakes are common and the land is wet and the wilderness pristine….well, we all know that “accidents will happen.”  If the mine is built, you can be sure that a BP-style disaster will eventually ruin the biggest spawning grounds for sockeye salmon in the world.

The political right in the U.S. is dominated by libertarian-minded champions of the “free market” and highly limited government – not the most natural ally of progressives who like the commons.  Yet that doesn’t mean that there aren’t some interesting possibilities to explore.  Consider this remarkable video clip of Bill O’Reilly talking with Lou Dobbs on Fox News about rising oil prices.  (A tip of the hat to Peter Barnes for bringing this to my attention.)

O’Reilly starts off the segment by noting that oil companies are exporting U.S. oil to foreign countries, which in turn has caused U.S. gas prices to rise.  “It is my contention,” O’Reilly says, “that we the people own the gas and oil discovered in America.  It’s our land and the government administers it our name...Land and water are the domain of we the people.  That’s why oil companies have to get permits.  They can’t just go around drilling anywhere! That’s why there are environmental laws – to protect the domain of we the people.”  (Wow -- O'Reilly defends environmental laws!)

Bill then asks Lou Dobbs, a former CNN business news anchor, Tea Party supporter, and now a Fox commentator, what he thinks.  Dobbs says that he agrees with O’Reilly -- we the people own the oil, coal and other energy resources in the U.S.  Then he adds, “In Alaska, there is a perfect model for what we should do as a nation.”  He then proposes that the federal government create an American Trust Fund modeled on the Alaska Permanent Fund, a state-charted trust fund that collects a percentage of revenues from all oil drilled on state land.  The trust then invests the money and distributes annual dividend checks to every citizen in the state.  In 2010, every Alaskan resident received $1,281 kicked from a trust fund worth more than $40 billion.  None of the trust fund money goes to the government.