Facebook CEO Mark Zuckerberg visited Alaska this weekend where he fished, kayaked and saw his pet political issue in action. Zuckerberg has made universal basic income—providing citizens with regular, no-strings-attached cash payments—one of his key political priorities and sprung at the opportunity to write about the Alaska Permanent Fund dividend.
Zuckerberg posted pictures of eagles and otters to his Facebook page, but his post about the PFD made headlines. Here’s an excerpt:
This is a novel approach to basic income in a few ways. First, it’s funded by natural resources rather than raising taxes. Second, it comes from conservative principles of smaller government, rather than progressive principles of a larger safety net. This shows basic income is a bipartisan idea.
Seeing how Alaska put this dividend in place reminded me of a lesson I learned early at Facebook: organizations think profoundly differently when they’re profitable than when they’re in debt. When you’re losing money, your mentality is largely about survival. But when you’re profitable, you’re confident about your future and you look for opportunities to invest and grow further. Alaska’s economy has historically created this winning mentality, which has led to this basic income. That may be a lesson for the rest of the country as well.
Universal basic income is an economic concept with emerging popularity as an alternative to social safety nets, particularly among Silicon Valley types like Zuckerberg. It’s particularly caught on as the tech sector ponders the fate of the many thousands of people it will put out of work thanks to developments in automation.
Alaska has more than 30 years of history of paying eligible residents a dividend so it’s become an ideal data point for supporters of universal basic income, but there’s plenty that doesn’t make it a great case study.
The problems with Zuckerberg’s analogy
Sure the permanent fund dividend is a form of universal income in the most technical sense, but not in the sense that folks like Zuckerberg and others think of it. The core ideas of universal basic income is that it’s guaranteed, enough or close enough to live on and that it reduces the need to some degree for social safety net programs. Despite lawsuits arguing otherwise, none of those are really true with the dividend.
The income isn’t consistent and, as recent history has shown, isn’t guaranteed. Both of those are core to universal basic income. Alaskans can’t accurately budget the dividend any given year as it’s the product of the market with a rolling average that has varied pretty wildly (it doubled from 2013 to 2014). The size of the dividend has also recently become a political issue.
There’s little evidence that the PFD significantly changes a person’s behavior. This is in large part because the impacts of the dividend aren’t understood all that well and actual research on it is pretty scant over the course of the dividend’s history. Though, there is a recent study that found the current dividend would only cause about 1 percent of people to work less. An interesting finding, however, is the dividend could encourage people to take more financial risks. Of those employed about 11 percent said they would considering taking a financial risk at $2,000 a year.
Most universal basic income plans come hand in hand with cuts to social safety net programs. The idea is if you are supplying cash, then most people don’t need those safety nets. There was no corresponding cut to services and you don’t hear even the most conservative of legislators calling for safety net cuts because there’s a dividend (they call for those cuts anyways).
Keep the dividend, raise taxes
One thing Zuckerberg did get right is the broad popularity of the dividend across political lines. Both Republicans and Democrats are falling over each other to protect the dividend, particularly with plenty of big elections in 2018. It is, after all, an entitlement program that even the most conservative of legislators hold dear.
The study mentioned above found Alaskans preferred to keep the dividend even if it meant raising taxes. The study notes that this is a reversal from early attitudes about the dividend, which found people would have rather gotten rid of it instead of paying taxes.