How might a common wealth dividend system work at the national level?

Excerpted from Peter Barnes:

“How might a common wealth dividend system work at the national level? The easy part is distributing the dividends. As in Alaska, enrollment could be done online and payments could wired electronically at a cost of pennies per transaction. The Social Security Administration could set that up in a jiffy.

The harder part is collecting the revenue. In my latest book, With Liberty and Dividends For All, I show how, over time, we could generate enough revenue to pay dividends of up to $5,000 per person per year. Initially, a sizable chunk would come from selling a declining number of permits to dump carbon into our air. Later, more revenue could flow from our monetary infrastructure, our patent and copyright systems, and our electromagnetic airwaves.

Consider what $5,000 per person per year would mean. If a child’s dividends were saved and invested starting from birth, they’d yield enough to pay for a debt-free college education at a public university. In midlife, $5,000 per person would add 25 percent to the income of a family of four earning $80,000 a year. In late life, it would boost the average retiree’s Social Security benefit by about 30 percent. Thus, dividends from common wealth would provide a badly-needed boost for poor and middle class families during what promises to be a lasting shortage of good-paying jobs.

Surprisingly, the core idea behind Alaska’s dividends is over two centuries old. In his 1796 essay “Agrarian Justice,” American patriot Thomas Paine distinguished between two kinds of property: “natural property, or that which comes to us from the Creator of the universe—such as the earth, air, water … [and] artificial or acquired property, the invention of men.” The second kind of property, Paine argued, must necessarily be distributed unequally, but the first kind belongs to everyone equally. It is the “legitimate birthright” of every man and woman, “not charity but a right.”

And Paine went further. He proposed a practical way to implement that right: create a “National Fund” to pay every man and woman a lump sum (roughly $17,000 in today’s money) at age 21, and a stipend of about $1,000 a month after age 55. Revenue would come from what Paine called “ground rent” paid by landowners. He even showed mathematically how this could work. Presciently, Paine recognized that land, air, and water could be monetized not just for the benefit of a few but for the good of all. Further, he saw that this could be done at a national level. This was a remarkable feat of analysis and imagination, and it’s time to apply it broadly.

Today, Paine’s core idea—that everyone has a right to equal income from common wealth—can be applied not just to natural resources but also to the creations of society. Consider, for example, the immense value created by our legal, intellectual, and financial infrastructures, the Internet, and our economy as a whole. This value isn’t created by single individuals or corporations; it’s created collectively and hence belongs equally to all. In a fairer economy some of it would actually be distributed to all. The ideal mechanism for doing this would be common wealth dividends—simple, transparent, direct (not trickle down), built on co-ownership rather than redistribution, and politically appealing.

And here’s the best part. If Paine’s idea and Alaska’s model were applied at sufficient scale, the implications would be vast. The current tendencies of capitalism to widen inequality and devour nature would be self-corrected. Instead of plutocracy and climate change, our market economy would generate widely-shared, earth-friendly prosperity. And it would achieve these goals automatically, without much need for government intervention.

Is this wild-eyed dreaming? Possibly, but no more so than universal suffrage or Social Security once were. Common wealth dividends could be the next step in America’s long march toward equal rights—and the game-changer that leads to a new version of capitalism.”

1 Comment How might a common wealth dividend system work at the national level?

  1. Kevin CarsonKevin Carson

    It needn’t be funded by revenue at all (or at least not all of it), if you operate on Social Credit principles and simply spend into existence a dividend equal to the shortfall in aggregate demand at any given time. If this amount is insufficient for the social purposes of a basic income, it could be combined with additional sources of actual revenue like carbon taxes, land value taxation and pigouvian taxes on negative externalities.

    As for patents and copyrights, I think it would be far better to abolish them altogether and cut out the middleman rather than resort to a Rube Goldberg expedient like enforcing them and then taxing the rents.

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