We need new economics sufficient to make a significant difference. In provocation #129 I appended a short paragraph that proposed that we enter into a new stock plan for the nation (and as a model for others to follow).
The plan is simple and as I tried it out with people during the week I got a surprising amount of encouragement.
It starts with two facts:
1. Few people feel part of society. To live in a society where you don’t own a part is pathetic. The people should own their own society.
2. Capitalism is once again feeling the punch of serious criticism, since it has engendered oligopoly, climate change, and increasing inequality (Piketty 2018) .
Can we include the people and save capitalism?
The idea is simple: requisition ten percent of all the stock ownership in the US (that would be about $3 trillion in value) and put it in a federal holding agency paying dividends once a year to every citizen in the country. (Payout would be, given total stock of $30T, ten percent of that is 3 trillion and earning about 2% pay out to each person would be about $2,000. Family of four would be $8,000. (This idea is a modification of Peter Barnes, first in his Capitalism 3.0, which is based on the Alaska citizen’s fund, and further back, to Henry George, Progress and Property)
The holding agency would not have to do any management beyond being a holder. Normal corporate management would be left in place. But the managers and regular owners would feel the national pressure, now that ownership is spread to all the people to make decisions in the long-term interest of the country. Since we have to move the economy in a green direction, now there would be a large constituency coming to bear on the corporations to have sensible polices, including reasonable executive compensation plans.
This would eliminate some welfare needs and shift people from being welfare recipients to being owners. I am more willing to sacrifice (say in response to climate change) if I anticipate that I will benefit
Meanwhile the morale of the country would go up and everyone would be a capitalist, not welfare recipients, in that they actually are collectively owners of stock that pays out
An advantage of giving dividends rather than stock is that many people would, pressured by economic necessities sell the stock, as happened in Russia. Provisions would have to be made to keep them however for selling future anticipated payout for current cash. There are probably other pitfalls and corruptions to cope with. The banks obviously would try to turn that stream of income to themselves.
The one percent, the primary losers in this transaction, have to compare this loss to the loss of social upheaval and much stronger taxes and potential loss of everything through social system collapse. Ten percent seems politically feasible because it is reasonable.
This can be justified by returning to older values of equality, as Emma Rothschild writes
For Arthur Condorcet O’Connor, the Irish general who married Condorcet’s daughter Eliza, “the Turgots, the Condorcets, the Smiths” were the “fathers of the science” of political economy, whose principles, including “the eternal principle of equality,” had been overturned by the “new sect of so-called economists” of the post- Revolutionary reconstruction. (Economic Sentiments page 4)
Capital begins with the fruits of cattle breeding. The new head, cap, is new surplus and can be re-bred. The question since Mesopotamian times has been, how is the herd and it surplus to be managed? The “divided”, the divided, is part of the answer, but how distributed is the key, to social morale.The use of the word “stock” is inherited from that cattle culture.