Contribution to GTI Roundtable "Common Wealth Trusts"
From my perspective, this discussion of Peter Barnes’s excellent work on common wealth trusts couldn’t be more timely. As Gar Alperovitz and I recently wrote in the New York Times, there are already many examples of large-scale public funds (also known as sovereign wealth funds) in existence in a number of American states—including the Alaska Permanent Fund that Barnes references.
While Alaska is the only state to use its public fund to directly provide a level of universal basic income, other states do use the revenues they generate to fund a variety of social services (primarily public education). In Texas, for instance, revenues from the Texas Permanent School Fund—which acts similar to a common wealth trust in that it directly owns and manages millions of acres of land in perpetuity—support public schools in every county and city both through direct transfers and bond guarantees. Revenues can also be used for other interesting public purposes. In Alabama, for instance, roughly 10 percent of the annual income from the Alabama Trust Fund is invested in the Forever Wild Land Trust Fund, a fund established by voters in 1992 to purchase, maintain, and protect natural areas of the state—similar, at least in its environmental orientation, to a common wealth trust, albeit governed by the state rather than an independent non-profit.
In my opinion, this raises the question as to whether it would be more effective or even more equitable to distribute revenues from a public fund or common wealth trust as universal basic income (as suggested by Barnes and is done in Alaska) or in other social or environmental ways. On the one hand, there is no indication that a basic income alone will provide the means or incentive for citizens to move to more environmentally sustainable practices. (It has not done so in Alaska). Moreover, for individuals at higher wealth and income distributions, a universal basic income could possibly serve to further increase patterns of consumption that undermine ecological sustainability. Accordingly, using revenues from common wealth trusts for other public and environmental purposes may prove to be more effective at increasing environmental sustainability and reducing social inequality, at least in the short term.
On the other hand, a universal basic income could have the not insignificant benefit of uniting people across classes behind the common wealth trust idea, making it more attractive and resilient politically. This can be seen in the popularity and profile of the Alaska Permanent Fund, by far the most well-known of the American public funds in existence. This could be particularly important if the common wealth trust concept expands beyond resource (and particularly fossil fuel) extraction to other areas, as Barnes suggests.
A related question concerns the critical concept of local community economic stability. Many cap-and-dividend (or fee-and-dividend) proposals envision some sort of conscious, planned effort—for both political and economic reasons—to reinvest proceeds from the program in local economies that are currently reliant on carbon-intensive industries. The same would likely have to apply to the common wealth trusts, especially an atmosphere trust (auctioning off the rights to dump carbon in the air) or mineral trust (charging to extract fossil fuels and other minerals from the ground). This suggests a broader conceptualization of common wealth trusts beyond simply non-profit actors independent of the state that distribute proceeds equally to all. Rather, they likely would have to interact in some way with a democratically responsive and participatory economic planning system based on the goals of local economic stability, ecological sustainability, and social equity. Moreover, with issues as complex as climate change and ecological sustainability—to say nothing of local economic stability in a massive continental system such as the United States—such a system would likely have to be dynamic and evolve over time. This, in turn, raises fundamental questions regarding the structure, ownership, and governance of common wealth trusts and their relationship to democratic politics.
These issues only become more acute when we consider that, as many environmentalists and others have pointed out, truly addressing climate change in any sort of equitable way will require a redistribution of resources from (and/or greater sacrifices by) richer countries that developed on the back of carbon emissions to poorer developing countries that have traditionally been low-emitters. Instead of providing all US residents with dividends of up to $5,000 (as Barnes suggests), one alternative might be that common wealth trusts would, for a time, be used to invest in renewable energy infrastructure in communities destabilized by a decline in fossil fuel extraction and/or sent overseas to help developing countries grow their economies in a less carbon-intensive direction.