DIVIDENDS are periodic payments made by corporations, mutual funds and trusts to their shareholders or beneficiaries. Such payments vary from time to time, depending on the earnings of the payers, but at any given time they’re the same for each share.
Dividends are a major form of non-labor income. At present, they mostly flow to a small minority that owns the lion’s share of private wealth. But dividends can also flow to the co-owners of common wealth — which is to say, to everyone.
The idea of dividends for all isn’t new. Thomas Paine, the patriot who inspired our war of independence, proposed something quite like it in 1797. And Alaska has been running a version of it since 1980. The main things that would be new are the scale and sources of income.
Paying dividends from co-owned wealth is a practical, market-based way to assure the survival of America’s middle class. It can be implemented by electronically wiring dividends to every legal resident, one person, one share.
THIS OLD/NEW IDEA is ready for prime time for two major reasons. One is the lack of alternatives. Our current fiscal and monetary tools can’t sustain a large middle class, nor can increased investment in education, infrastructure and innovation. None of these palliatives address the reality that, thanks to globalization and automation, there aren’t and won’t be enough good-paying jobs to support a large middle class.
A second reason this idea is timely is the current stalemate in American politics. Solutions to all major problems are trapped in a tug-of-war between advocates of smaller and larger government. Dividends from co-owned wealth bypass that bitter war. They require no new taxes or government programs; once set up, they’re purely market-based. And because they send legitimate property income to everyone, they can’t help but be popular among voters of all stripes.