The perennially popular board game Monopoly is a reasonable simulacrum of
capitalism. At the beginning of the game, players move around a commons and
try to privatize as much as they can. The player who privatizes the most
But Monopoly has two features currently lacking in American capitalism:
all players start with the same amount of capital, and all receive $200 each
time they circle the board. Absent these features, the game would lack fairness
and excitement, and few would choose to play it.
Imagine, for example, a twenty-player version of Monopoly in which one player
starts with half the property. The player with half the property would win
almost every time, and other players would fold almost immediately. Yet that,
in a nutshell, is U.S. capitalism today: the top 5 percent of the population
owns more property than the remaining 95 percent.
Now imagine, if you will, a set of rules for capitalism closer to the actual
rules of Monopoly. In this version, every player receives, not an equal amount
of start-up capital, but enough to choose among several decent careers. Every
player also receives dividends once a year, and simple, affordable health
insurance. This version of capitalism produces more happiness for more people
than our current version, without ruining the game in any way. Indeed, by
reducing lopsided starting conditions and relieving employers of health insurance
costs, it makes our economy more competitive and productive.
If you doubt the preceding proposition, consider the economic operating
systems of professional baseball, football, and basketball. Each league shifts
money from the richest teams to the poorest, and gives losing teams first
crack at new players. Even George Will, the conservative columnist, sees
the logic in this: “The aim is not to guarantee teams equal revenues,
but revenues sufficient to give each team periodic chances of winning if
each uses its revenues intelligently.” Absent such revenue sharing,
Will explains, teams in twenty of the thirty major-league cities would have
no chance of winning, fans would drift away, and even the wealthy teams would
suffer. Too much inequality, in other words, is bad for everyone. ...
Dividends from Common Assets
A cushion of reliable income is a wonderful thing. It can be saved for rainy
days or used to pursue happiness on sunny days. It can encourage people to
take risks, care for friends and relatives, or volunteer for community service.
For low-income families, it can pay for basic necessities.
Conversely, the absence of reliable income is a terrible thing. It heightens
anxiety and fear. It diminishes our ability to cope with crises and transitions.
It traps many families on the knife’s edge of poverty, and makes it
harder for the poor to rise.
So why don’t we, as Monopoly does, pay everyone some regular income — not
through redistribution of income, but through predistribution of common property?
One state — Alaska — already does this. As noted earlier, the
Alaska Permanent Fund uses revenue from state oil leases to invest in stocks,
bonds, and similar assets, and from those investments pays yearly dividends
to every resident. Alaska’s model can be extended to any state or nation,
whether or not they have oil. We could, for instance, have an American Permanent
Fund that pays equal dividends to long-term residents of all 50 states. The
reason is, we jointly own many valuable assets.
Recall our discussion about common property trusts. These trusts could crank
down pollution and earn money from selling ever-scarcer pollution permits.
The scarcer the permits get, the higher their prices would go. Less pollution
would equal more revenue. Over time, trillions of dollars could flow into
an American Permanent Fund.
What could we do with that common income? In Alaska the deal with oil revenue
is 75 percent to government and 25 percent to citizens. For an American Permanent
Fund, I’d favor a 50/50 split, because paying dividends to citizens
is so important. Also, when scarce ecosystems are priced above zero, the
cost of living will go up and people will need compensation; this wasn’t,
and isn’t, the case in Alaska. I’d also favor earmarking the
government’s dollars for specific public goods, rather than tossing
them into the general treasury. This not only ensures identifiable public
benefits; it also creates constituencies who’ll defend the revenue
Waste absorption isn’t the only common resource an American Permanent
Fund could tap. Consider also, the substantial contribution society makes
to stock market values. As noted earlier, private corporations can inflate
their value dramatically by selling shares on a regulated stock exchange.
The extra value derives from the enlarged market of investors who can now
buy the corporation’s shares. Given a total stock market valuation
of about $15 trillion, this socially created liquidity premium is worth roughly
At the moment, this $5 trillion gift flows mostly to the 5 percent of the
population that own more than half the private wealth. But if we wanted to,
we could spread it around. We could do that by charging corporations for
using the public trading system, just as investment bankers do. (For those
of you who haven’t been involved in a public stock offering, investment
bankers are like fancy doormen to a free palace. While the public charges
almost nothing to use the capital markets, investment bankers exact hefty
The public’s fee could be in cash or stock. Let’s say we required
publicly traded companies to deposit 1 percent of their shares each year
in the American Permanent Fund for ten years — reaching a total of
10 percent of their shares. This would be our price not just for using a
regulated stock exchange, but also for all the other privileges (limited
liability, perpetual life, copyrights and patents, and so on) that we currently
bestow on private corporations for free.
In due time, the American Permanent Fund would have a diversified
portfolio worth several trillion dollars. Like its Alaskan
would pay equal yearly dividends to everyone. As the stock
market rose and fell,
would everyone’s dividend checks. A rising tide
would lift all boats. America would truly be an “ownership
society.” ... read
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