Alaska Tourism: Politics

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The occupations of prospector, trapper, and homesteader -- rugged individualists relying only on themselves in a limitless land -- would dominate Alaska's economy if the state's image of itself were accurate. Alaskans talk a lot about the Alaskan spirit of independence, yearn for freedom from government, and declare that people from "Outside" just don't understand Alaskans when they insist on locking up Alaska's lands in parks and wilderness status. The bumper sticker says, simply, "We don't give a damn how they do it Outside." A state full of self-reliant frontiersmen can't be tied down and deterred from their manifest destiny by a bunch of Washington bureaucrats. At the extreme, there has even been a movement to declare independence as a separate nation so Alaskans can extend the frontier, extracting its natural resources unfettered by bunny-hugging Easterners.

But just because you wear a cowboy hat doesn't mean you know how to ride a horse. In Las Vegas you find a lot more hats than horsemen, and Alaska is full of self-reliant pioneers who spend rush hour in traffic jams and worry more about urban drug dealing and air pollution than where to catch their next meal or dig the mother lode. As for self-reliance and independence from government, Alaska has the highest per capita state spending of any state in the nation, with no state income or sales taxes and an annual payment that has ranged in the last decade from $900 to almost $2,000 a year to every man, woman, and child just for living here. The state government provides retirement homes; it owns various businesses, including a dairy, a railroad, and a subsidized mortgage lender; it has built schools in the smallest communities; it operates a state ferry system and a radio and television network; and it owns nearly a third of the landmass of Alaska. The state government relies on the oil industry; when oil prices are high, the state spends a lot, but when they go down budget cuts can go deep.

That conflict between perception and reality grows out of the story of a century of development of Alaska. The state is a great storehouse of minerals, oil, timber, and fish. A lot of wealth has been extracted, and many people have gotten rich. But it has always been because the federal government let them do it. Every acre of Alaska belonged to the U.S. government from the day Secretary of State William Seward bought Alaska from Russia in 1867. Since then, the frontier has never been broader than Uncle Sam made it.

Yet the whole concept of ownership didn't fit Alaska well from the first. Did the Russians really own what they sold? Alaska Natives didn't think so. They'd been living on this land for more than 100 centuries, and at the time of the purchase, most had never seen a white face. How could Russia hold title to land that no Russian had so much as explored? As Americans flooded into Alaska to search for gold at the turn of the 20th century, this conflict became obvious. Alaska Natives, never conquered by war or treaty, soon began their legal and political fight to recover their land -- a fight they would eventually win.

The concept of ownership has changed in other ways, too. For the first 100 years after the United States bought Alaska, it maintained the vast majority of the territory as "public domain," with federal land and its mineral resources free for the taking as in the Old West of frontier lore. Each piece of Alaska belonged to everyone until someone showed up to lay private claim. Today, amid deep conflict over whether to develop such areas as the Arctic National Wildlife Refuge (known as ANWR), federal control stands out far more clearly than it did during the gold rush, when the land's wealth was free to anyone with strength enough to take it. Alaskans who want to keep receiving the good things that a rich state government brings equate the frontier spirit of the past with their own financial well-being, whether that means working at a mining claim or at a desk in a glass office tower. But other Americans feel they own Alaska, too, and they don't necessarily believe in exploiting its resource treasure. They may want the frontier to stay alive in another sense -- unconquered and still wild.

White colonization of the territory came in boom-and-bust waves of migrants arriving with the goal of making a quick buck and then clearing out -- without worrying about the people who already lived there. Although the gold rush pioneers are celebrated today, the Klondike rush of 1898 that opened up and populated the territory was motivated by greed and was a mass importer of crime, inhumanity, and, for the Native people, terrible epidemics of new diseases that killed off whole villages. Like the Russians 150 years before, who had made slaves of the Natives, the new white population behaved as if the indigenous people were less than human. Until Franklin Roosevelt became president, federal policy was to suppress Alaska Native cultures. Protestant missionaries had the authority of law to forbid Native people from telling their old stories or even speaking their own languages. Segregation ended only after World War II. Meanwhile, the salmon that fed the people of the territory were overfished by a powerful, Outside-owned canning industry with friends in Washington, D.C. Their abuses destroyed salmon runs. Formerly rich Native villages faced famine when their primary food source was taken away.

It was only with World War II, and the Japanese invasion of the Aleutian Islands, that Alaska developed an industry that was not based on exploitation of natural resources: the military industry. The war brought the construction of the territory's first road to the outside world, the Alaska Highway. After the war, military activity dropped off, but only briefly. By the late 1940s, Alaska was on the front line of the Cold War. Huge Air Force and Army bases were built and remote radar stations were installed to detect and repel Soviet bombers and missiles. To this day, the federal government remains a key industry whose removal would deal the economy a grievous blow.

The fight for Alaska statehood also began after World War II. Alaskans argued that they needed local, independent control of natural resources, pointing to the example of overfishing in the federally managed salmon industry. Opponents said that Alaska would never be able to support itself, would always require large subsidies from the federal government, and therefore should not be a state. But the advocates pointed out that Alaska's lack of self-sufficiency came about because its citizens did not control the resources -- Alaska was a colony, with decisions and profits taken away by the mother country. If Alaskans could control their own land, they could use the resources to fund government. The discovery of oil on the Swanson River on the Kenai Peninsula in 1957 helped win that argument. Here was real money that could fund a state government. In 1959, Alaska finally became the 49th state. Along with the rights of entering the Union, Alaska received a dowry, an endowment of land to develop and pay for future government. The Statehood Act gave the new state the right to select 103 million acres from a total landmass of 365 million acres. Indeed, that land does pay for state government in Alaska, in the form of oil royalties and taxes -- but, to this day, the federal government still spends a lot more in Alaska than it receives.

Oil revenues supported the new state as it began to extend services to the vast, undeveloped expanse of Alaska. Anchorage boomed in the 1960s in a period of buoyant optimism. Leaders believed that the age-old problems of the wide-open frontier -- poverty, lack of basic services, impenetrable remoteness -- would succumb to the new government and new money, while the land would remain wide open. The pace of change redoubled in 1968 with the discovery of the largest oil field in North America at Prudhoe Bay on land that had been a wise state selection in the federal land-grant entitlement. The state government received as much money in a single oil lease sale auction as it had spent in total for the previous 6 years. This was going to be the boom of all booms.

The oil bonanza on the North Slope would change Alaska more than any other event since the gold rush. Once, opening the frontier meant letting a few prospectors scratch the dirt in search of a poke of gold. But getting this immense pool of oil to market from one of the most remote spots on the globe would require allowing the world's largest companies to build across Alaska a pipeline that, when completed, could credibly claim to be the largest privately financed construction project in world history. With the stakes suddenly so much higher, it came time to figure out exactly who owned which parts of Alaska. The land couldn't just be public domain any longer.

That division wouldn't be easy. Much of the state had never even been mapped, much less surveyed, and there were some large outstanding claims that had to be settled. Alaska Natives, who had lost land, culture, and health in 2 centuries of white invasion, finally saw their luck start to turn. It wouldn't be possible to resolve the land issues surrounding the pipeline until their claims to land and compensation were answered. Native leaders cannily used that leverage to assure that they got what they wanted.

In the early 1970s, America had a new awareness of the way its first people had been treated in the settlement of the West. When white frontiers expanded, Native traditional homelands were stolen. In Alaska, with the powerful lure of all that oil providing the impetus, Native people were able to insist on a fairer resolution. In 1971, with the support of white Alaskans, the oil companies, and Pres. Richard Nixon, Congress passed the Alaska Native Claims Settlement Act, called ANCSA. The act transferred 44 million acres of land and $962.5 million to corporations whose shareholders were all the Native people of Alaska. The new Native corporations would be able to exploit their own land for their shareholders' profit. In later legislation, Natives also won guaranteed subsistence hunting and fishing rights on federal land. Some Natives complained that they'd received only an eighth of the land they had owned before white contact, but it was still by far the richest settlement any of the world's indigenous people had received at that time. Today, the Native corporations are Alaska's largest and most powerful homegrown businesses.

It was a political deal on a grand scale. It's unlikely that Natives would have gotten their land at all but for the desire of whites to get at the oil and their need for Native support. Nor could the pipeline have overcome environmental challenges without the Natives' dropping their objections. Even with Native support in place, legislation authorizing the pipeline passed the U.S. Senate by only one vote, cast by Vice Pres. Spiro Agnew.

But there were other side effects of the deal that white Alaskans didn't like so much. The state still hadn't received a large portion of its land entitlement, and now the Native corporations also had a right to select the land they wanted. There still remained the question of who would get what, and of the question of the wild lands that Congress, influenced by a strong new environmental movement, wanted to maintain as national parks and wilderness and not give away. That issue wasn't settled until 1980, when the Alaska National Interest Lands Conservation Act passed, setting aside an additional 106 million acres for conservation, an area larger than California. Alaska's frontier-minded population screamed bloody murder over "the lockup of Alaska," but the act was only the last, tangible step in a process started by the coming of big oil and the need its arrival created to draw lines on the map, tying up the frontier.

When construction of the $9 billion pipeline finally got underway in 1974, a huge influx of new people chasing the high-paying jobs put any previous gold rush to shame. The newcomers were from a different part of the country than previously, too. Alaska had been a predominantly Democratic state, but oil workers from Texas, Oklahoma, and other Bible Belt states helped shift the balance of Alaska's politics, and now it's solidly Republican. In its frontier days, Alaska had a strong Libertarian streak, but now it became more influenced by Christian conservatism. A hippie-infested legislature of the early 1970s legalized marijuana for home use. Conservatives at the time, who thought the government shouldn't butt into its citizens' private lives, went along with them. After the pipeline, times changed, and Alaska developed tough anti-drug laws.

Growth also brought urban problems. As the pipeline construction boom waned in 1977, the boomtown atmosphere of gambling and street prostitution disappeared with it, but other big-city problems remained. No longer could residents of Anchorage and Fairbanks go to bed without locking their doors. Both cities were declared "nonattainment" areas by the Environmental Protection Agency because of air pollution near the ground in cold winter weather, when people leave their cars running during the day to keep them from freezing.

But the pipeline seemed to provide limitless wealth to solve these problems. For fear that too much money would be wasted, the voters altered the state constitution to bank a large portion of the new riches. The new Permanent Fund would be off-limits to the politicians in Juneau, with half the annual earnings paid out to citizens as dividends. The fund now contains more than $30 billion in savings and has become one of the largest sectors of the economy simply by virtue of paying out as much as $1 billion a year in dividends to everyone who lives at least a year in the state. All major state taxes on individuals were canceled, and people got used to receiving everything free from the government.

Then, in 1985, oil prices dropped, deflating the overextended economy. Housing prices crashed and thousands of people simply walked away from their mortgages. All but a few of the banks in the state went broke. Condominiums that had sold for $100,000 went for $20,000 or less a year later. It was the bust that always goes with the boom, but it still came as a shock to many. The spending associated with the clean-up of the Exxon Valdez oil spill in 1989 restarted the economy and it continued on an even keel for a decade after, but the wealth of the earlier oil years never returned.

Meanwhile, the oil from Prudhoe Bay started running out. Oil revenues, an irreplaceable 85% of the state budget, started an inexorable downward trend in the early 1990s. The oil companies downsized. Without another boom on the horizon, the question became how to avoid, or at least soften, the next bust. At this writing, that question remains unanswered. Ironically, polls show that Alaskans would support a personal income tax, but so far they haven't been given the choice. Politically, it's more expedient to hope high oil prices hold until the next big project gets the good times rolling again, such as a natural gas pipeline from the North Slope to middle America or oil development in ANWR.

Culture moves slower than politics or economics, and Alaskans still see themselves as gold rush prospectors or wildcat oil drillers, adventuring in an open land and striking it rich by their own devices. Even as the economy blends ever more smoothly into the American corporate landscape, Alaskans' myth of themselves remains strong. Today, the state's future is as little in its own hands as it has ever been. Big petroleum projects will be decided in Congress and distant corporate boardrooms, not here. Ultimately, an economy based on exploiting natural resources is anything but independent.

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