Dividends are periodic payments made by corporations, mutual funds or 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.
In capitalist economies, dividends are a major form of non-labor income. To receive them, you must have a legal right to receive them. At present, most of those rights are held by a small minority. But there’s no reason why ownership of such rights can’t be expanded, and good reasons why it should be.
We must face the fact that jobs alone won’t sustain a large middle class in the future—there just aren’t, and won’t be, enough good-paying jobs to do that. This means we need broadly shared streams of non-labor income.
There are two possible ways to create income streams. One is through taxes and redistribution, the other is through income from wealth we own together.
Paying dividends from wealth we own together is a practical, market-based way to assure the survival of a large middle class. It can be implemented by electronically wiring such dividends to every legal resident, one person, one share. Such a reliable flow of income can sustain a large middle class for as long as we have a prosperous economy. What’s more, it can keep our economy prospering by continuously refreshing consumer demand.
The core of this idea isn’t new. Thomas Paine, the patriot who inspired our war of independence from Britain, 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 the sources of income.
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 old palliatives address the reality that for the foreseeable future, there won’t be enough good-paying jobs to maintain a large middle class.
A second reason 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.