Easy for Your Money to do Good.
I imagine walking my 6-year-old Teddy to our local bank to open his first account and being surprised at how easy it is to have his money held in a way that aligns with our family values.
I imagine when my daughter starts her first job and asks how to allocate her first retirement savings… it’s an easy answer because almost all the options are shared ownership and co-op funds.
I imagine a world where my angst and investing turmoil disappear because truly positive impact investing is made easy.
The vision is one where shared ownership enterprises are the dominant form of business. Firms where the non-capital providing stakeholders get the majority of the profits.
The idea is that 51% of profits from all companies, all banks, all funds are required to go to the employees, users/customers, or other stakeholders critical to the value the firm produces (i.e. a perpetual trust to expand and steward the environmental commons).
Because of the public good these employee-owned, customer-owned cooperatives offer, the government provides a backstop — a la “too important to fail”. Instead of backstopping the big banks, the government de-risks these shared ownership enterprises. As a result, these firms quickly emerge everywhere in every industry. When you invest your capital in these enterprises, they basically come with something similar to an FDIC guarantee. If they fail, they are backstopped by the Federal Reserve — the trusted entity that basically prints money in a way that refills the accounts of the smallest shareholder first. In other words in a crisis, there’s a massive re-distributive affect — as long as the firm was providing the intended social & environmental public goods.
Over a 5 to 10 year period, where this policy is rolled out massive capital is shifted to funds that invest in and help grow these care co-ops, health insurance co-ops, neighborhood housing and farm co-ops, local school co-ops. Companies of every sort become shared ownership enterprises. Current businesses convert to shared ownership and massive profits are distributed to stakeholders.
Household stability grows at an unprecedented rate.
While majority investor-owned enterprises still dominate for a while — and continue exploitative practices, creating harmful damage to people, communities, and nature — gradually shared ownership alternatives grow from marginal players in each industry to the dominant way things are structured. They grow stronger and more resilient because they figure out how to make inclusive, equitable, democratic management work. Their patience pays off. Over time, these entities revolutionize how we work, think, and organize every part of society and our economy.
How do we get there?
Here’s my letter:
Dear finance, tech, insurance, healthcare, utilities, real estate executives,
We all do better when we know what to expect. Growing uncertainty is making our lives increasingly difficult.
We also recognize the current rules of the game aren’t sustainable. We must make a shift to a new set of rules that builds inclusion, equity and a livable future into the fabric of our social compact.
The Proposal: 51% of all wealth (index funds, mutual funds, real estate, savings) must be held in Shared Ownership enterprises.
Shared Ownership enterprises have 51% of the profits (the long-term value from the business) accruing to non-capital participants. For example, the employees, customers, community, nature (air, water, land) , public commons.
In other words, these multi-stakeholder entities might often include a perpetual benefit trust where the majority of the value these enterprises creates goes to those who created the surplus value in the first place (i.e. the workers providing the labor or back to the forests in the case of a paper company).
The vision has massive opportunity for each of your leadership to reimagine a sustainable pathway to longevity for your sector, your business… and, most important… your legacy.
Your legacy is bound up in using this crisis to transform the US and Global economy.
We see where current trends are taking us. Destruction of the Amazon rainforest — the lungs of the world, a deterioration of democracy, the business climate of increasing uncertainty.
Pandemic-scale disruptions and death. Massive global uprisings. Polarization and lack of federal political leadership, super storms, raging fires, ravaging floods… all will continue to a world where even the elites are begging for a change.
Before trust in our government, our Federal Reserve, our market-making regulatory bodies, the rule of law as an institution get eroded — let’s make sweeping change that allows us all to learn the new rules of the game.
Our system has favored capital and put our focus too much on it, excluding land and labor.
Let’s remake our enterprises, all legal entities, as requiring that 51% of the profits must go to a non-capital input of production. Workers, intellectual property holders (nature, indigenous, plants), or customers, policy-holders, neighbors.
Everything becomes a shared ownership enterprise. Even your home mortgage must be 51% financed by a credit union, or other shared ownership fund or lender where the benefits all accrue to a divers set of stakeholders.
Let’s build household stability through shared ownership enterprises.
Let’s rebuild trust and confidence in our future by changing the rules so that all of humanity can flourish.