Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All
New book by business law experts provides a powerful and simple plan for unlocking the positive power of corporations and engaging every U.S. citizenUniversal Fund would be a "private solution to a civic problem," a capitalist alternative to universal basic income ideas
NEW YORK, Jan. 30, 2019 /PRNewswire/ -- Against a background of declining civic engagement, unity, and financial security for many Americans, a new book proposes a bold but simple antidote that Adam Smith himself would love – a privately administered fund in which every adult U.S. citizen gets a share. Each share of this "Universal Fund" would offer income generated by the fund and shareholder voting rights. And unlike various trendy universal basic income proposals, the Universal Fund would require no government funding – relying entirely on private money that is already there.
In Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All (Berrett-Koehler Publishers; January 29, 2019; Paperback; 9781523095650; $19.95), authors Lynn Stout, Tamara Belinfanti and Sergio Gramitto lay out a point-by-point plan that would result in every U.S. citizen being able to participate meaningfully in our country's capitalist and shareholder systems, by receiving a share of the Universal Fund, which would be similar to a mutual fund. Once the Fund is set up, corporations would have incentive to contribute to the Fund. Corporations, who have faced criticism for share buyback programs, will instead be able to strengthen the corporation with a Universal Fund donation, the authors explain. As the book shows, additional incentives exist for wealthy individuals to donate.
The idea that corporations may help save the country from some of its worst ills and actually increase civic engagement may seem like a quaint notion today, but historically this is part of what corporations were designed to do – not just make short-term money for a few private shareholders, said co-author Tamara Belinfanti, a New York Law School professor who has been named an Aspen Ideas Scholar for her work on the roles and rights of corporations in the broader societal sphere.
"Unlike Universal Basic Income proposals, Universal Fund fits in with capitalist ideals – it does not rely on government funding, and also does not rely on government-directed redistributions of wealth," Prof. Belinfanti said. "We're giving citizens a financial incentive to participate in our shareholder system and through that, to address issues that impact every citizen. For corporations, the incentives and money are already there – only the structure is not."
The book presents an alternative take on why corporations that otherwise touch every area of our lives and have a keen understanding of what makes people tick, seem so disconnected from citizens. The Universal Fund would change that, while providing a small but increasingly meaningful amount of income to every adult U.S. citizen.
"The Universal Fund does not jeopardize capitalism, nor does it dilute it or convert it into a socialist agenda. Instead, it reinvigorates it," the authors write. "The framework that we have presented paves the way for a path forward in a manner that honors the brilliance of capitalism and harnesses its power as a tool for building a more inclusive and better future. It is a private solution to a civic problem."
The book points out that S&P 500 companies are spending between $400 billion and $600 billion on share repurchases annually, which are just sitting on their books. Those shares could easily be donated to the Universal Fund, the net result being that the corporation would gain a long-term shareholder while at the same time signaling a commitment to building a sustainable future – which can bring its own value to the corporation. Ultra-high net-worth individuals would have similar incentives to contribute to the Fund.
"There's every reason to believe that the Fund can make corporations more sensitive to the interests of average citizens while actually creating long-term shareholder value," Prof. Belinfanti said.
Citizen Capitalism is available in paperback and eBook wherever books are sold. To request copies and/or an interview with the authors, please contact Keith Emmer, [email protected].
About the Authors
Lynn Stout, who passed away in April 2018, was an internationally recognized corporate law scholar who produced pioneering work on derivatives and corporate purpose. Her most recent book, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations and the Public, was named 2012 Governance Book of the Year by Directors & Boards magazine. She served on numerous high level boards and committees in the private sector, government and academia, including the Financial Research Advisory Committee to the U.S. Treasury. She taught at numerous law schools, including most recently Cornell, where she held the title of Distinguished Professor of Corporate and Business Law. She received her B.A. and Masters in Public Affairs from Princeton University and her J.D. from the Yale School of Law.
Tamara Belinfanti is a professor at New York Law School. She was named an Aspen Ideas Scholar for her work on the roles and rights of corporations in the broader societal sphere, and her work has been cited multiple times by industry experts, other academics, think tanks and the media. She serves on various nonprofit boards and has served on various professional committees such as the New York City Bar Securities Regulation Committee. In 2015, she co-founded (with Lynn Stout) The Ethical Shareholder Initiative, a nonprofit focused on building more sustainable capital markets. She received her Juris Doctor, cum laude, from Harvard Law School in 2000.
Sergio Gramitto, Visiting Assistant Professor of Law and Assistant Director, Clarke Program on Corporations & Society, at Cornell Law School, has conducted global legal research at Bocconi University, Cornell Law School, Sydney Law School, and UCLA School of Law, and has lectured at Bocconi University on comparative corporate law and Italian company law topics. He graduated magna cum laude from the University of Milan and holds a PhD in Law of Business and Commerce from Bocconi University.
"Citizen Capitalism offers fresh thinking at a critical point in our understanding of the effects of shareholder capitalism—from scholars who effectively bridge theory and the practical world of investment, markets, and citizen communities. This book offers an audacious plan on how to use the rules of capitalism to address inequality. I strongly recommend it."—Judy Samuelson, Executive Director, Business & Society Program, The Aspen Institute
Learn more about Citizen Capitalism at citizencapitalism.org.
Contacts: Keith Emmer · (212) 920-9205 · [email protected]
SOURCE CitizenCapitalism.org
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