The Case for Giving Every American a Share of a Public Wealth Fund

Jim Pugh

A social wealth fund could help solve the inequality crisis in the United States. (YASIN AKGUL/AFP/Getty Images)

In late August, the People’s Pol­i­cy Project, a left-wing think tank run by econ­o­mist and writer Matt Bru­enig, released a pro­pos­al for the cre­ation of a social wealth fund in the Unit­ed States. Dubbed the Amer­i­can Sol­i­dar­i­ty Fund, the idea behind the pro­pos­al is to estab­lish a pool of shared, pub­lic wealth that would be invest­ed in the same way that pri­vate wealth is. Under this plan, every Amer­i­can adult would own a sin­gle share” of the fund, and while no sin­gle per­son would be able to with­draw their share, they would receive reg­u­lar uni­ver­sal div­i­dend pay­ments from returns on investments.

Bru­enig lays out plans for how a siz­able share of wealth in the Unit­ed States could grad­u­al­ly be moved into the fund, which would yield sub­stan­tial div­i­dends on the order of sev­er­al thou­sand dol­lars per per­son, per year. In this way, the fund would act as a mech­a­nism to democ­ra­tize eco­nom­ic growth: When the econ­o­my does well, it ben­e­fits every­one — not just the very wealthy.

As a sup­port­er of uni­ver­sal basic income, I’m a big fan of pro­vid­ing every­one with uncon­di­tion­al cash — we have ample evi­dence that peo­ple use cash to improve their lives, and alle­vi­at­ing extreme pover­ty leads to many pos­i­tive social out­comes, such as low­er rates of ill­ness and psy­cho­log­i­cal dis­tress. What’s unusu­al about Bruenig’s pro­pos­al is that, unlike most poli­cies aimed at address­ing eco­nom­ic inequal­i­ty, the social wealth fund doesn’t focus pri­mar­i­ly on income inequal­i­ty. Instead, it aims to take on wealth inequal­i­ty, shift­ing assets away from pri­vate con­trol and into the pub­lic sphere. By doing so, such a social wealth fund would also help to upend the inequal­i­ty of pow­er that exists in our soci­ety today.

Our eco­nom­ic and polit­i­cal sys­tems oper­ate in a way that pri­mar­i­ly ben­e­fits the wealthy. The fact that the rich­est 1% are steer­ing gov­ern­ment and finan­cial insti­tu­tions to fur­ther line their own pock­ets at the expense of every­one else has become ingrained in the pub­lic con­scious­ness, at least since the Occu­py Wall Street protests of 2011.

If we were to take a large chunk of the wealth of the 1% and give own­er­ship of it over to the pub­lic, we could dis­rupt that con­trol. The social wealth fund pro­vides a way to do exact­ly that. As part of their own­er­ship share, every Amer­i­can adult could be giv­en a voice in decid­ing fund invest­ment deci­sions. This could mean deter­min­ing what indus­tries the fund would and would not invest in (e.g., no invest­ment in fos­sil fuel or pri­vate prison com­pa­nies) as well as hand­ing gov­er­nance over cor­po­ra­tions in which the fund was invest­ed over to share­hold­ers (e.g., elec­tion of the Board of Direc­tors and set­ting of cor­po­rate goals).

Unlike share­hold­er vot­ing that exists today, where a select group of investors make all the deci­sions, share­hold­er vot­ing through the social wealth fund could be tru­ly demo­c­ra­t­ic. Because every­one would own a share, there wouldn’t be any us” vs. them” split that allows and encour­ages a small group to max­i­mize prof­its by exter­nal­iz­ing costs on oth­ers. And because no one could with­draw their share of the wealth fund, social wealth fund share­hold­ers would not be incen­tivized to vote for short-term gains at the expense of long-term prosperity.

The impact of such a tran­si­tion would extend beyond cor­po­rate pol­i­cy. Giv­en the pow­er that cor­po­ra­tions now wield in elec­tions and gov­ern­ment, with demo­c­ra­t­ic con­trol over wealth invest­ment deci­sions and cor­po­rate gov­er­nance, we might begin to see a sub­stan­tial shift in the Amer­i­can pol­i­cy agen­da towards pri­or­i­tiz­ing the needs of the many over the desires of the few.

By alle­vi­at­ing eco­nom­ic inse­cu­ri­ty and empow­er­ing the pub­lic, a social wealth fund could be a major step towards greater equi­ty in Amer­i­can soci­ety. It cer­tain­ly wouldn’t solve every prob­lem on its own — we still need to be pur­su­ing oth­er bold pro­gres­sive poli­cies like Medicare for All, end­ing mass incar­cer­a­tion, a Green New Deal and Eliz­a­beth Warren’s recent pro­pos­al for work­er code­ter­mi­na­tion of cor­po­rate board seats. But at a time when it feels like our econ­o­my is work­ing for few­er and few­er peo­ple, a social wealth fund could ensure that every Amer­i­can owns a slice of the col­lec­tive pie.

Jim Pugh is the co-direc­tor of the Uni­ver­sal Income Project.
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