Alaska’s Dividend vs. Andrew Yang’s UBI: Debunking the Misconceptions

Often misconceptions about the nature of Alaska's Alaska Permanent Fund Dividend (APFD) and Andrew Yang’s proposed Universal Basic Income (UBI) lead to misinterpretations and fears. Let’s clarify the key differences and dispel these misconceptions.

The Nature of Alaska’s Dividend

Alaska’s dividend is not a true universal basic income. It is a state-funded annual dividend paid to eligible Alaska residents and funded by the fees oil companies pay for the right to extract resources from state lands. This dividend is not guaranteed and varies based on annual profits from these resources. In recent years, most payments have not even exceeded 150 per month, making it insufficient as a basic income to sustain people alone.

Andrew Yang’s Yang Dividend: Fundamentally Different

Andrew Yang’s proposed UBI is quite different from Alaska’s dividend. It is a pure form of redistribution where the government takes from some and gives to others without the intention of generating value or economic benefits. Yang’s proposal aims to provide a monthly payment of 1000 dollars to every American, regardless of whether they pay taxes or not. This amount is much higher than Alaska’s and potentially impossible to fund through the same means as in Alaska.

Key Differences

Funding Mechanisms: Alaska's dividend is funded by oil companies' fees for extracting resources from state lands, which is not a viable national funding mechanism.

Income Level: While Alaska’s dividend is around 150-$200 per month, Yang’s UBI is set at a much higher $1000 per month, making it significantly more comprehensive and ambitious.

Myths and Misunderstandings

One common misconception is that Alaska’s example of basic income should serve as a model for national UBI policies. However, a few critical differences highlight why this is not the case:

1. Funding: Alaska’s dividends are funded by oil companies. National UBI would require significantly more stable and broad-based revenue sources.

2. Scale: The monthly amount in Alaska (150-$200) is far below the proposed $1000 by Yang, making it inadequate both in theory and in practice.

The Political and Economic Context

Supporters of Andrew Yang’s UBI argue that it can democratize wealth and allow people to make ends meet without relying on means-tested programs. However, critics argue that such a large-scale redistribution can be economically and politically challenging.

Despite these challenges, it is important to note that even some proponents of democratic socialism, like Andrew Yang, have stated that his proposal is not socialist in nature. According to the Democratic Socialists of America (DSA), any attempt at a universal basic income is more democratic and capitalist in approach than socialist. Yang's goal is to provide basic financial security to all Americans, ensuring a more equitable society.

Conclusion

Alaska’s dividend and Andrew Yang’s proposed UBI are fundamentally different concepts with distinct funding mechanisms and scales. The Alaska model, while interesting, does not provide a practical or sustainable example for implementing a national UBI. Instead, the debate around UBI should be based on practical and realistic proposals that address the economic realities and political feasibility of such policies.