An ambitious book offers a radical proposal to save capitalism by exponentially increasing the number of capitalists.
According to the two debut authors and various politicians, the American middle class is ailing; while wealth is increasingly concentrated in the hands of a plutocratic elite, inequality skyrockets. Chivukula, a New Jersey assemblyman and Democrat, and Musum, a Republican businessman, argue that the crux of the problem is that labor has gradually become severed from capital, and so the vast majority of productivity in the economy is supplied by a disenfranchised class hobbled by an appalling lack of appropriate payment for its efforts. The authors contend that the solution to this problem is to make the economy more inclusive by expanding the private ownership of both small businesses and corporations. This would be largely accomplished by a systematic overhaul of the tax system, which would simultaneously decrease taxes and dismantle various tax barriers to the proliferation of Employee Stock Ownership Plans. Those stock plans permit workers to enjoy the advantages of ownership while avoiding the principal disadvantages: they don’t have to buy this stock with their own wages or front their own property as collateral. The authors repeatedly make clear that this enlargement of the owner class, or the creation of more capitalists, drives their proposal. “Here’s the bottom line: Dramatically accelerate broad based property/capital ownership. Do that by requiring every corporate tax incentive conditioned on having some form of a broad based ownership share plan for their workers. Period.” The authors believe that this approach navigates between the alternatives of ferocious capitalism and ideological socialism. They call this the third way, which is an expression of “economic democracy.” This is not a facile exercise in political idealism: Chivukula and Musum furnish considerable empirical evidence that their strategy will not only work, but also be politically appealing to a broad spectrum of citizens, irrespective of party allegiances. They overstate the manner in which they provide a new alternative to both capitalism and socialism—this is really an intensification of capitalism. They likely also exaggerate the bipartisan allure of their ideas, since many will reject the central role given to the continued health and reliability of the corporate sector. But this remains an impressively ambitious effort to find pragmatic and innovative solutions to problems created and sustained by blinkered partisan commitments.
A serious, rigorous contribution to the debate over how to rescue a drowning middle class.