In questo articolo, mostriamo come la nostra società possa utilizzare i cambiamenti nel governo societario per affrontare, se non per risolvere del tutto, una serie di problemi economici e sociali, oggi pressanti. Questi problemi includono: crescente disparità di reddito; disparità demografiche nella ricchezza e nella partecipazione azionaria; aumento della povertà e dell'insicurezza reddituale; necessità di maggiore innovazione e investimento nella soluzione di problemi quali malattie e cambiamenti climatici; l'"esternalizzazione" di molti costi dell'attività sociale presso terzi, quali clienti, lavoratori, creditori e la società in generale; la corrosiva influenza dellebusinesscorporationssulla politica; malcontento e perdita di fiducia nel sistema capitalista in una larga e crescente parte della popolazione.

Noi dimostriamo come, in misura molto significativa, questi problemi possano essere ricondotti al modo in cui le azioni delle società sono attualmente possedute, negoziate ed è esercitato il diritto di voto. Proponiamo anche un piano plausibile per cambiare la struttura del possesso azionario, del trading e del voto, al fine di creare un capitalismo più democratico e sostenibile, che permetta alle società di essere meglio al servizio dell'umanità. La nostra proposta, che immagina di sviluppare un nuovo tipo di investitore istituzionale, non si basa né sulle forze di mercato, né su interventi governativi. Piuttosto, si basa sulla cooperazione volontaria e sul private ordering di liberi individui che usano le moderne tecnologie dell'informazione. Essa opera per ridurre le diseguaglianze non solo in termini di ricchezza e di reddito, ma anche di influenza sulle società commerciali.

Sommario/Summary:

1. Introduction - 2. A Thumbnail Sketch of the Proposal - 3. Problems Addressed - 4. Challenges and Critiques - 5. Conclusion - NOTE

1. Introduction

Change begins with imagining something better. In this Article, we imagine a future where our society has ameliorated, if not resolved, a number of currently pressing social and economic problems. These problems include: rising socioeconomic inequality; racial and generational disparities in participation in equity markets; increasing poverty and income insecurity; inadequate innovation and investment in solving problems like disease and climate change; the "externalization" of many costs of corporate activity, such as carbon emissions, systemic risk, and the degradation of human health, onto third parties (customers, employees, creditors, the broader society); the corrosive influence of corporate money in politics; and the disengagement and alienation of large and growing segments of the population, leading to loss of trust in the capitalist system and the possibility of civic unrest. The insight underlying our approach is that governments are not the only institutions that can solve collective social and economic problems. Another type of powerful institution-the business corporation-can be brought to bear. Many of today's corporations rival nation-states in weight, influence, and reach. Collectively, they control tens of trillions of dollars in assets and affect hundreds of millions of customers, employees, and shareholders. Indeed, the corporate sector can be analogized to a kind of parallel state or shadow government that touches all our lives on a daily basis. The corporate sector can provide enormous benefits: investment returns, employment opportunities, innovative products, and tax revenues. It can also inflict great harms: environmental damage, consumer frauds, political corruption, and employee deaths and injuries. We all have a stake in how our business corporations are governed. Yet many laypersons think of corporations as an irresistible force that helps or harms, but remains outside average citizens' control.[1] As experts in corporate governance, we recognize this state of affairs need not be inevitable. Many of our current economic and social problems can be traced to the way shares in business corporations are currently owned, traded, and voted. In particular, the economic benefits of equity ownership are highly concentrated today among older, whiter, and wealthier investors.[2] Shareholder influence over corporations is even more concentrated. Recognizing that their individual votes are unlikely to matter, many individual [...]

2. A Thumbnail Sketch of the Proposal

Perhaps the best way to set the stage for exploring the strengths and weaknesses of our proposal is to first present its basic features. Space constraints necessarily prevent us from presenting a detailed discussion, which we are developing in other work.[7] Here, we offer a basic outline to provide the basis for exploring some of our plan's more important implications and challenges. We have dubbed our proposal the Blueprint for Citizen Capitalism (Blueprint). Blueprint has five basic elements. First, upon reaching the age of eighteen years, all U.S. citizens[8] would receive a share in a collective portfolio of securities-in effect, a share in a collective mutual fund, the Fund. As in a typical mutual fund, the Fund's shareholders would periodically receive a proportionate share of all dividends and interest payments paid to the Universal Fund Portfolio (Portfolio).[9] Ideally, under our Blueprint, the Portfolio would include equity securities from a wide variety of corporations, both public and private. With this structure in mind, we call the Fund's shareholders Universal Shareholders (Shareholders).[10] Second, at least initially,[11] the Fund would acquire the securities in its Portfolio primarily from shares donated by high-net worth individuals and companies, e.g., during public offerings.[12] We explore these and other funding options in greater detail later but note here such donations are quite likely.[13] Many corporations are interested in being perceived as "good citizens," as evidenced by corporate philanthropy and the growing interest in so-called benefit corporations.[14] Other corporations might view the Universal Fund as a desirable long-term shareholder.[15] Similarly, many high net worth individuals have a keen interest in philanthropy, as demonstrated by the Giving Pledge recently organized by Bill Gates and Warren Buffett. By 2016, the Giving Pledge had attracted 154 signatories from sixteen countries, each of whom had pledged to give away at least half of their wealth.[16] Third, the Administrators of the Universal Fund would not be entitled to any portion of the profits generated by the Fund-they would not be residual claimants. Rather, they would be passive functionaries compensated only by a fixed fee that (unlike fees in the typical mutual fund) would not be based on the Fund's performance or assets under management.[17] This administrative fee should be quite low because, unlike [...]

3. Problems Addressed

To understand the potential power of Blueprint, it is useful to begin by recognizing the wide range of social and economic problems it can help address. These problems include-but importantly, are not limited to-the inequality and income insecurity that typical wealth redistribution and basic income proposals focus on. Thus, we briefly describe below seven economic and social phenomena that are widely recognized today in the United States as problems in need of a remedy. They are: rising inequality, a persistent racial divide in wealth and equity ownership, increasing poverty and income insecurity, a need for more innovation and investment in the future, the externalization of many costs of corporate activity, the corrupting influence of corporate money in politics, and rising civic discontent and related "soft" social ills. A. Rising Inequality There is considerable debate today over wealth and income inequality, which appears to be increasing in the United States. For example, the share of wealth held by the top 0.1% of wealth holders increased from seven percent in 1978 to twenty-two percent by 2012.[27] Many informed observers believe inequality is likely to worsen in the future. Thomas Piketty has famously argued in his best-selling book, Capital in the Twenty-First Century,that returns to capital now exceed economic growth rates and further suggested reasons why asset holders' incomes may exceed wage earners' even more in the future.[28] He has estimated that the top ten percent of income earners saw their share of national income increase from thirty to thirty-five percent to forty-five to fifty percent between the 1970s and the 2000s, and if this trend continues, the top decile will capture sixty percent by 2030.[29]Commentators have identified other trends likely to worsen inequality, including: the elimination of many jobs through automation,[30] the increasing concentration of stock ownership in public companies,[31] the recent pattern of public companies disappearing to be replaced by private companies,[32] and the creation of massive fortunes that allow the ultra-wealthy to acquire still more wealth through corruption and political rent-seeking.[33] Blueprint works to temper inequality by redistributing ownership of equity more equally; thus, providing additional ongoing income that contributes relatively more to the incomes of lower earners.[34] Although considerable inequality would persist (as is true under [...]

4. Challenges and Critiques

Space constraints preclude our addressing every possible objection or obstacle to implementing Blueprint here. Instead, we discuss the most obvious issues: adequacy and sources of funding; agency costs imposed by Fund Administrators; reduced informational efficiency in stock pricing; practical obstacles to Shareholder voting; and the risk of irrational or antisocial Shareholder preferences. A. Adequacy and Sources of Funding As an initial matter, the size of the Portfolio determines the degree to which Blueprint promotes democratic capitalism but does not change the direction of its effects. The only question is whether the Blueprint would have more, or less, impact. For the past five years, U.S. corporate profits have averaged about $1.6 trillion annually.[74] There are an estimated 227 million U.S. citizens over the age of eighteen.[75] This means corporate profits per adult citizen average over $7,000 annually. The impact of Blueprint, in terms of the significance of the income to and influence exercised by Shareholders, depends on how large a percentage of outstanding corporate securities are held by the Fund. For example, if the Fund held ten percent of all equities, each Shareholder's representative interest in corporate profits would amount to about $700 annually. The larger the share of equities held by the Fund, the greater Blueprint's impact. There are several ways the Fund could amass a significant Portfolio relatively quickly. First, ultra-high-net worth individuals are a significant potential source of portfolio donations. The upper decile of wealth-holders own more than eighty percent of all stocks,[76] and eventually their fortunes must change hands; it has been estimated that $60 trillion will be transferred from U.S. estates between 2007 and 2061.[77] This cohort already frequently participates in philanthropy. For example, David Callahan reports that charitable giving from people making over $500,000 annually increased fifty-seven percent from 2003 to 2013; Callahan argues that for the ultra-wealthy with "vast fortunes . . . philanthropy is the only real place the money can go."[78] If the top decile of equity holders contribute half their holdings to the Portfolio, while living or upon death, the Fund would within a few decades come to hold forty percent of all corporate equities. This proportion would continue to grow as long as the ultra-wealthy choose to contribute. Second, corporations also have reason [...]

5. Conclusion

In this Article, we have provided a thumbnail sketch of a proposal to address many currently pressing social and economic problems and, in the process, restore public faith in the idea of a democratic capitalism that serves the vast majority of people. We have shown how implementing Blueprint would provide a number of significant benefits and is unlikely to present any dangers. Practical challenges exist, but they can be overcome. The only real question is the degree to which Blueprint is implemented and its potential benefits become a reality. Our proposal, however, faces another obstacle: certain widely held, often unconscious, and fundamentally erroneous beliefs about how the world works. We mention some of these psychological hurdles below in the hope that drawing attention to them and to their inaccuracy can temper their effect. The first erroneous belief is the often-automatic assumption that all policy problems must be solved either through market forces or by government intervention. This assumption overlooks the demonstrated reality that private ordering often provides a third way, superior to either free markets or regulation, for addressing certain economic and social problems. History has shown that private organizations are capable of amassing enormous assets and exercising great influence.[88] Consider, for example, the Red Cross, the Sierra Club, private universities, and the Catholic Church. Modern business corporations-some of which rival nation-states in their power and influence-are yet another example of the power of private ordering. Corporations emerged as private ordering solutions to the problem of aggregating resources to pursue long-term, large-scale, and uncertain projects requiring specific investments.[89] By proposing Blueprint, we simply take the concept of private ordering as a policy solution to the next level. A second psychological hurdle to implementing Blueprint is the common, but empirically incorrect, assumption that human beings are purely selfish actors concerned only with amassing financial wealth. This often-unconscious assumption, which is a staple of more-superficial economic analysis, has been definitively proven false by innumerable research studies in cognitive psychology, behavioral economics, developmental psychology, anthropology, neuroscience, evolutionary science, social psychology, and biology.[90] It also flies in the face of centuries of human altruism and devotion to nonprofit [...]

NOTE