Tuesday, 8 October 2013

Social Dividend

A social dividend is a proposal for distributing the economic profits (or surplus value) generated by publicly owned enterprises in a socialist economic system.[1] A social dividend would provide every citizen with a share of the profit generated by publicly owned enterprises,[2] potentially eliminating the need for the social welfare programs and income redistribution programs that exist under capitalism, as well as eliminating the costs associated with the administration of such programs.
Oskar Lange is credited with the first use of the phrase "social dividend". In Lange's theory of market socialism, a central planning board would allocate the profit and rent accumulated by public enterprises to achieve economic growth targets and ensure a reasonable amount of social equality through the provision of a basic income to consumers and workers.[3]
The economist James Meade was another proponent who advocated a social dividend as a form of basic income to be funded out of the return on publicly owned productive assets.
Léon Walras, one of the founders of the neoclassical school of economics, believed that nationalized land and natural resources would provide a source of income to the state that would eliminate the need for income taxes.
The social dividend is a key feature of many models for market socialism, and has been proposed by Oskar Lange, Abba Lerner, James Meade and more recently by the economists James Yunker and John Roemer. This model of market socialism contrasts with cooperative forms of market socialism, where the economic profits generated by firms would only be distributed amongst the member-workers of the cooperative firm.
Under a social dividend system, an employee would be entitled to a share in the dividend in addition to his or her normal wage or salary. An unemployed individual would also be entitled to a share of the social dividend as a form of basic income, though the exact institutional arrangement can vary - whether or not constraints on the receipt of the dividend would be imposed on the unemployed, or whether it would be an unconditional payment.
Social dividends have an alternate definition from Natural Finance[4] where they are described as the citizen's egalitarian share of surplus tax revenue. This form of social dividend exists within the framework of capitalism since productive assets would be privately owned, operated for private profits and would not directly finance the social dividend.
Similar systems have been implemented to some degree on the basis of public ownership of natural resources, most notably in Alaska (Alaska Permanent Fund) and in Norway (The Government Pension Fund of Norway).

See also[edit]


  1. ^ Social Dividend versus Basic Income Guarantee in Market Socialism, by Marangos, John. 2004. International Journal of Political Economy, vol. 34, no. 3, Fall 2004.
  2. ^ The Social Dividend Under Market Socialism, by Yunker, James A. 1977 in Annals of Public and Cooperative Economics journal.
  3. ^ On the Economic Theory of Socialism, by Lange, Oskar. 1936. The Review of Economic Studies, Vol. 4, No. 1: "It seems, therefore, convenient to regard the income of consumers as being composed of two parts: one part being the receipts for the labour services performed and the other part being a social dividend constituting the individual's share in the income derived from the capital and the natural resources owned by society."
  4. ^ [1] Natural Finance - The imperative need for social dividends.

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