A few years before Jay Hammond, a Republican, was elected to serve as Alaska’s governor in 1974, he worked as mayor of the small borough of Bristol Bay. There, he watched as nearly all of his town’s rich salmon resources were extracted from the region, with virtually none of the profits or job opportunities going to locals. He fashioned the idea of a 3 percent tax on fish catch, and using the money raised for an investment fund that would pay Bristol Bay residents an annual dividend from its returns.

Voters rejected Hammond’s idea, but he’d have several more opportunities to promote it in the following years. As governor, in 1976, he pushed for a constitutional amendment that would direct 25 percent of all lease sale payments and oil royalties to a fund that could only be used for income-generating investments. Hammond originally kept quiet about his desire to direct those returns back to citizens, and it was understood primarily as a proposal to prevent the waste of oil revenue. But after the amendment passed by a 2-to-1 margin, Hammond made it his central mission to push for the citizens’ dividend idea. His persistence paid off and in 1982, Alaskans received their first check from the so-called Permanent Fund, a dividend that has flowed annually ever since.

At the end of 2017, over 600,000 Alaskan citizens received dividends of $1,100. In prior years, checks have been as high as $2,000 per person. The fund is massively popular — recent polling showed that Republicans, Democrats, and independents all would rather pay higher income taxes to reduce the deficit than see their annual dividend cut. In no small part due to the Permanent Fund, Alaska is the most economically equal state in the country.

“It’s certainly the most popular political program in Alaska,” Bill Wielechowski, a Democratic state senator, told The Intercept. “It’s a really significant amount of money and has a huge impact. There have been studies that show the majority of people put it towards savings and paying ordinary bills.”

The Alaska Permanent Fund is what’s known as a “social wealth fund” — also sometimes called a “sovereign wealth fund” or a “citizens’ wealth fund.” There are more than 70 such funds across the world, in countries like Australia, Japan, New Zealand, Qatar, and Norway. The number of social wealth funds has risen considerably since 2000, and a new report produced by Matt Bruenig, founder of the crowd-funded socialist think tank the People’s Policy Project, advocates for expanding Alaska’s model to create a national social wealth fund in the United States. Doing so, Bruenig argues, may be the best shot Americans have to stop a decades-long trend of accelerating inequality.

Bruenig dubs his idea the “American Solidarity Fund.” The government would gradually accumulate assets such as stocks, bonds, and real estate, and as the value of the publicly managed assets increases, the value of the shares would also rise. Citizens would receive a “universal basic dividend” every year from the income earned from the fund’s investments.

While Alaska’s Permanent Fund was built around a rich natural resource, Bruenig points to Sweden’s short-lived experiment with a social wealth fund in the 1980s, where Swedes used taxes on corporate profits to fill it up. (Conservative legislators ended Sweden’s fund in 1991.)

Bruenig explores five different ways to bring in assets to a national U.S. fund, ranging from voluntary contributions from the superrich to a host of new taxes and fees. While he acknowledges many different types of levies could work, he focuses on wealth taxes, like market capitalization taxes, financial transaction taxes, and steeper inheritance taxes.

Unlike Alaska’s model, which does not grant dividend recipients any formal ownership, Bruenig proposes giving every qualifying citizen one nontransferable share of the fund. The idea is to give citizens some power they could then collectively exert over corporate board decision-making. Individuals could also track their share online, similar to the way individuals can track their growing capital investments on Vanguard. “This is partially a communications gimmick,” he acknowledges. “But no more so than many of the hyper-abstracted ownership gimmicks that already exist in the country’s capital markets.”

Also unlike Alaska’s model, which distributes dividends to all citizens, Bruenig proposes issuing dividends to every citizen above age 17. (He advocates monthly child allowances for families with children, not administered through a social wealth fund.)

The national social wealth fund idea has gotten some high-profile attention, including in Hillary Clinton’s recent memoir, “Hard Choices.” Clinton said she first learned about the idea after reading a 2014 book published by Peter Barnes, an entrepreneur who also proposed a national fund like the model in Alaska. “Besides cash in people’s pockets, it would also be a way of making every American feel more connected to our country and to one another—part of something bigger than ourselves,” she wrote. “I was fascinated by this idea, as was my husband, and we spent weeks working with our policy team to see if it could be viable enough to include in my campaign.” Clinton said they shelved the “Alaska for America” idea when they “couldn’t make the numbers work.”



Still, the political appeal of a policy like this might be hard to shelve permanently. Whether or not robots are really coming for our jobs remains hotly disputed, but what’s not up for debate is that voters increasingly fear it is happening and want political solutions to it. In 2015, Pew Research Center found that 65 percent of Americans anticipate that robots and computers will “definitely” or “probably” do the work currently under human control within the next 50 years. Politicians will be on the lookout for ideas to ease public insecurity.

Bruenig also points to the problem of growing wealth inequality, one that has shown no sign of reversing course. Analyzing the Survey of Consumer Finances, he found that between 2007 and 2016, the average wealth of the top 1 percent increased by $4.9 million as the wealth of the median family declined by $42,000. The top 1 percent of families, he adds, owns more wealth than the bottom 95 percent combined.

By putting more wealth under government control, Bruenig reasons, the U.S. can then redistribute it back to the people.

Peter Barnes, author of “With Liberty and Dividends for All” — the 2014 book Clinton cited in her memoir — told The Intercept that any version of a social wealth fund should be expected to start very small, but grow over time. “Getting it started would be a breakthrough,” he said. “Social Security started in 1935 at a 1 percent payroll tax and the benefits for the elderly were trivial at the beginning.”

Still, not all who’ve explored the idea see it as the right move for the United States to address its growing inequality and insecurity. Mike Konczal, a fellow at the left-leaning Roosevelt Institute, is skeptical about establishing a U.S. social wealth fund, and says it’s not only a particularly difficult way to achieve the desired redistributive goals, but could also easily have negative effects.

“If you’re thinking that the government should spend more on ‘Medicare for All,’ or for a basic income, then we can both tax wealthy people and capital income more,” he said. “If a sovereign wealth fund reinforces the deficit mentality that we have to save money to spend money, or we can’t spend money if we don’t have a special fund, that would be counterproductive.”

Another problem Konczal highlights is that social wealth funds are more difficult tools to capture privately held wealth. “This is a hard way to get at a lot of income. Koch Industries, for example, would not interact with a fund like this.” Rather than a market capitalization tax on public companies, Konczal says, why not just tax all companies through a higher corporate income tax?

And lastly, with regard to tying citizenship to capital income, he worries this could reinforce, rather than weaken, the view that the economy should only work for shareholders. Would making capitalists out of everybody drive up support for deregulating Wall Street or repealing environmental protections?