by Chris Hughes
Instead, I became obsessed with how to turn the numbers in our financial statements from red to black. I had no interest in making a profit from The New Republic, but I did want to make it resilient and sustainable. I believed a break-even business would be a testament to the strength of the publication and an indicator of the value of our journalism. This became a personal challenge for me, a kind of Golden Fleece that I woke up each morning in pursuit of. Making the business work was about something much bigger than the numbers on the P&L: it was about attaining an idealistic, nearly impossible goal, just like we had at Facebook and in the Obama campaign. I wanted to be the one who “figured out” the model that took aging jewels of print journalism and set them on a surer path in a digital world.
I worked at a frenzied pace, learning the nitty-gritty of sales and business management. I traveled to Chicago, San Francisco, Washington, and other cities to sell junior ad buyers on our small-circulation scholarly political magazine. A year in, I found myself in a nondescript building on the outskirts of Detroit. Across from me, a 22-year-old ad buyer at a media agency chewed gum while she told us she had never heard of The New Yorker, let alone The New Republic. She flipped through our magazine rapidly, as if she were looking for the photographs of Jennifer Aniston that she’d find in US Weekly. The idea that I could ever convince her to buy a page in The New Republic was absurd, but my belief that I could do the impossible made me grit my teeth and push my way through. I didn’t leave that meeting feeling deflated—I left angry and more determined than ever to create a world where our star would rise so convincingly that even she would have to say yes the next time I called on her.
Two and a half years went by. The writing that filled our pages was beautiful and at times impactful. Our web traffic picked up lightly and even our print subscriptions rose by a bit. Our editorial staff told Frank and me that they felt happy and satisfied with our direction. Meanwhile, I was becoming more desperate. We had signed up a small set of new advertisers, but they paid much less than anyone had predicted. I had bet that The New Republic’s prestige and elite audience would command a higher premium, but after years of trying I learned that few advertisers were willing to pay to be in a small, somewhat partisan magazine, regardless of the quality of its iPad app, journalism, or design. We were losing just as much money as before because our business endeavors weren’t showing a trace of traction. I lost sleep over the design of our subscription page and the marginal effectiveness of a direct mail campaign to gain more subscribers. I spent hours in meetings trying to optimize our pages for Google search results, missing the forest for the trees.
We had tried our hand at events, apparel, and video, with some success, but it was clear none of these was going to right the ship. The fundamental math of the business just didn’t work. The market of subscribers and advertisers was too small to bridge the huge financial chasm that we had dug for ourselves with our early investments. I was writing checks for $500,000 every month to cover our losses, and each one felt like a private confession that I did not have the financial and management skills that I thought I had years earlier. I needed help.
The only option I hadn’t tried was bringing in executive leadership and investing that person with the authority to run the company day to day. The owner of The Atlantic, David Bradley, had lost tens of millions of dollars for years, until he brought in a seasoned media executive. Within a couple of years, the Atlantic’s new CEO brought the company close to break even, buoyed by a strong events program and a heavy emphasis on increasing digital traffic by writing pithy, timely updates for a broader audience to accompany The Atlantic’s long-form journalism. It seemed clear, at least to me, that our pristine and cultured website would have to begin courting mass appeal, while at the same time continuing the highbrow analysis The New Republic was synonymous with. In the late summer of 2014, I retained a recruiting firm to begin a search for a CEO.
I interviewed dozens of candidates, and Frank spent time with the final three. I chose Guy Vidra, a 40-something executive at Yahoo who had turned around businesses of our size. Guy’s vision was clear: a new, firmer emphasis on traffic metrics, a slimmer editorial staff, more talk of content partnerships, and more experimentation with video. The editorial team had little enthusiasm for his approach. They felt like it was a zero-sum game: an emphasis on digital traffic would come at the expense of quality long-form. I hoped that we’d be able to reconcile differences through a collective commitment to making a popular and sustainable New Republic, but unfortunately that was not to be the case.
Guy and Frank clashed continually over the fall, and Guy recommended that we bring in new editorial leadership. I backed his decision even though I had meaningful reservations. If I was going to hold Guy accountable for the success of the business, I had to empower him to work with a leadership team he trusted. Guy began quietly interviewing candidates for a new editor, and word got back to Frank. Frank resigned in an impromptu speech to the newsroom and then hosted a gathering for all the Washington staff at his home that evening. The following morning, a dozen senior staffers resigned en masse, and most of the freelance contributing editors asked to have their names removed from the masthead as well. We were left with nine editorial staffers, a fraction of the powerhouse roster that had showed up for work just the day before.
The public narrative quickly became a story of principled journalists standing up to the corrosive forces of Silicon Valley. The decision the editorial staff had made to walk out on the institution that they claimed to care so much about made little sense to me. In retrospect I can understand how my bringing in a digital media executive felt like a betrayal of what I had been consistently saying for years. I mistakenly presumed that they would know I harbored no secret desire to turn The New Republic into the next BuzzFeed. Instead, many of the editors accused me of harboring motivations that were insidious and malevolent. One former senior editor, Julia Ioffe, made a tour of media outlets to claim that I was “downright contemptuous and hostile” to the staff. I felt the editors unfairly painted me as a destructive force and a dumb princeling, King Joffrey in the flesh, even though they knew that was not who I was.
In hindsight, my decision to hold on to the dream of a break-even New Republic was a mistake. I should have accepted that the future model for institutions like The New Republic is likely to be the same as the one from its past: to rely on generous benefactors to cover moderate losses year to year. The New Republic had been bought and sold a dozen times in its 100-year history, but it was really a cause dressed up as a company. It was a nonprofit that always had, and always would, serve a small, cultivated audience. We might sweep a few million people into our net in any given month online, but the number of dedicated readers who cared would never be more than 100,000. The sustainable “business” solution I sought was achievable through largesse and through largesse alone.
Washington closed ranks, and the country club that I had effectively joined when I bought the magazine firmly and decisively expelled me. Dinner invitations were rescinded. Friends took to Twitter to publicly renounce their relationships with me. A year later, a person I had never met before greeted me politely at a holiday party at the home of the ambassador to the United Nations. He asked me how I was, and then raised his voice in a scream: “Shame! Shame on you for what you did to those people!” Half of the people in the room turned their heads to look. He and others like him saw me as the crusader from Silicon Valley intent on destroying the civic traditions of the Fourth Estate. I had fired a beloved magazine editor in a time of deep anxiety about the future of journalism, and in doing so, had touched a nerve that ran deeper than I could have ever imagined.
After the editorial staff left, I spent another year with a new team, trying to reinvigorate the company. Despite their valiant efforts, we saw little progress. Eventually I learned what everyone else had known the whole time: The New Republic would never break even. Unless I had a political agen
da to promote or an axe to grind, and a belief that absorbing millions in losses each year was the best way to do it, there was no future in my ownership. I decided to sell and a few months later, four years almost to the day that I bought it, I walked out of The New Republic’s office for the last time.
Looking back, there is no question I should have made space for a more measured idealism. The grand plans I came to the magazine with ironically caused me to go too far, too fast, undermining the institution I wanted to shore up and strengthen. Had I spent the $25 million I invested over those four years differently, it would have been enough to underwrite more modest ambitions for the institution for a decade or more.
In my work today I purposefully choose more modest means to accomplish otherwise idealistic and ambitious goals.
As with The New Republic and the Obama campaign, I was initially drawn to the idea of a guaranteed income because of the big-picture ideals. I loved the grandiosity of the idea—a world with no poverty, where everyone has a solid financial foundation to follow their dreams. I loved that it put the reins of responsibility in the hands of recipients, respecting their dignity to make their own decisions about where they wanted to live and what they wanted to spend their money on. Research showed that people with a guaranteed income would make better decisions as a result of living at least one step back from the threshold of financial catastrophe. The decentralized, market-driven nature of the benefit would create little new bureaucracy, making it one of the most efficient anti-poverty interventions out there.
Martin Luther King Jr.’s writing on the guaranteed income made a particularly deep impression on me, and over time I returned to his words again and again, almost as if they were scripture. I scoured collections of his sermons and speeches to trace the evolution of his thinking, and found some of the most inspiring words on the topic ever written. “The dignity of the individual,” he wrote in his final book, “will flourish when the decisions concerning his life are in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement.”
King put the emphasis on dignity. Other activists and thinkers on the left and right have made the case that without financial security, no one can be truly free. Belgian philosopher Philippe Van Parijs has been one of the most visible and ardent advocates for the idea that we cannot imagine a society with true freedom unless all its members have the ability to invest in themselves and make their own autonomous decisions. Friedrich Hayek and Milton Friedman made a similar case. Many of these twentieth-century thinkers followed in the tradition of writers like Thomas Paine and Thomas More. For centuries, philosophers have argued that only a guaranteed income can grant every individual the freedom that civilization is meant to provide.
I knew from my own extreme example that liberation from economic scarcity dramatically expands a person’s freedom and enables them to figure out what they want and who they want to be. That first $100,000 windfall bonus I made at age 22 from Facebook effectively gave me a guaranteed income of $5,000 a year for life, assuming a 5 percent annual rate of return that many investors plan on. That would never have been enough to cover all my expenses, but being able to count on that much income enabled me to feel like I had a little more security. The further you get from subsistence, the easier it is to ask fundamental questions like: What do I want, and how do I get it? What are my values, and what will I use this money to invest in? A guaranteed income would acknowledge and empower the agency that exists inside every human being—the ability to create his or her own future.
In the early days of my work on the issue I found the purity of the ideals behind a guaranteed income intoxicating and wildly exciting. Later on I would learn more about the large body of evidence that undergirds the practical case for the effectiveness of cash transfers, but at the start, the boldness and idealism of an income floor for all was what drove me. But I also knew to be wary of untethered idealism. As I began exploring the feasibility of a guaranteed income, I kept thinking about what I learned from The New Republic: just because an idea is bold does not mean that the means to achieve it need to be. A prosaic and incremental approach can be a more effective way to put poetic ideals into practice.
I found a collaborator with a similar disposition in Natalie Foster, an organizer and activist with a deep understanding of the changing nature of work. We had met socially years before, and she and I had both worked on President Obama’s digital team at different times. We reconnected in January of 2016. I immediately loved her style. Direct, honest, and optimistic, she carried copies of a book on the basic income by Peter Barnes (With Liberty and Dividends for All) in her backpack and handed them out to anyone curious about the idea. Natalie was already beginning work to explore whether it might be feasible to start a guaranteed income at a city level, like in San Francisco.
Later that spring, I also met Dorian Warren, an academic and activist interested in exploring how a guaranteed income could contribute to the movement for racial justice. That year, in the midst of exploring the idea in policy papers, he wrote a call for a guaranteed income into the platform of the Movement for Black Lives. In May, Natalie, Dorian, and I traveled to Switzerland to better understand the dynamics at play in its nationwide referendum on the idea of a basic income. (The initiative failed, but the vote sparked a Europe-wide debate on the idea that continues today.)
The three of us shared a passion for building a world in which everyone has basic financial security. We also shared a fundamental caution: we wanted to better understand the issues and stakeholders involved before making any sweeping statements or big investments. We chose not to start a big campaign or even a new nonprofit, but instead organized a network of leaders into an initiative called the Economic Security Project to foster a deeper conversation around how a basic income might work. Over the past two years, we have convened leading thinkers across the country to talk about the guaranteed income in a range of settings, from big conferences to small dinners. Our team has joined community meetings and convened conversations in homeless shelters. We’ve raised money from a broad group of donors and invested millions of dollars in researchers, organizers, and artists to explore the idea of how a guaranteed income might work in practice, with the hope of inspiring more people to get involved in the work.
Importantly for all three of us, we did not start with a big proclamation for a UBI. Many people in our network found the initial language on our website tepid and too nuanced: “We believe people need financial security, and cash might be the most effective and efficient way to provide it” was in big, bold letters up top. The words “universal basic income” were buried further down the page, not because of a lack of passion for the ideals behind it, but because we purposefully wanted to go slow and create as much common ground as possible rather than setting unreasonably thin, ambitious goals too early.
We also knew from personal experience that the idea of a guaranteed income was not that clear. Despite its simplicity, most of the people I talked to who were not economists or philosophers would knit their eyebrows in confusion when I attempted to explain it. Each time I told someone—an old acquaintance, a taxi driver, the person next to me on a flight—what I was working on, confusion reigned. “Who gets money for nothing?” “It’s not in exchange for something?” “How much money will people get, and how often?” “And who is paying for this?!” (That one often had the immediate follow-up, “Hopefully not me!”) Most people would walk away curious at best, suspicious at worst.
In search of a more practical, less highfalutin way of talking about the idea, we turned our attention to the one place in America that already has a guaranteed income, albeit a small one: the state of Alaska. Each year every Alaskan gets about $1,400, or $120 a month, paid out of the Alaska Permanent Fund. The father of the fund was a man who governed in prose, not poetry. Jay Hammond, the Republican governor of Alaska from 1974 to 1982,
had in his lifetime been a World War II fighter pilot, backcountry guide, and commercial fisherman. In the mid-1970s, during the heady days of the oil rush, Hammond found himself at the helm of a state flush with cash. He decided to propose a novel idea he had come up with years before when he was mayor of Bristol Bay Borough, a region of fishing villages in southwest Alaska with a tiny population. Hammond had noticed that the out-of-state companies that extracted millions of dollars of profit from commercial fishing were investing little to no money in the poor villages that their workers lived in. He proposed levying a 3 percent tax on fish and distributing the proceeds as a dividend to local residents. That plan was defeated, but just a few years later, he was significantly more successful in applying the same principle to a much more valuable natural resource: oil.
The Alaska Permanent Fund, conceived by Hammond and approved by a 2–1 margin in a 1976 referendum, deposits a quarter of the annual royalties from the production of oil and gas into a government-run savings account. Over the past 40 years, the fund has grown significantly: it is now worth $60 billion. Each year, 2.5 percent of the fund is divided up evenly among all of the residents, adults and children, of the state. Each person gets between $1,000 and $3,000 depending on the fund’s earnings in the past few years, but the average amount is about $1,400. This means that in most years a family of four receives a check for a little less than $6,000 in October. A 2016 report from the University of Alaska’s Institute of Social and Economic Research estimates that the dividend lifts 15,000 to 25,000 people above the poverty line, reducing the state’s poverty rate by 25 percent while providing additional economic security to middle-class families.