Chapter 10

Why Not?

THOUGH PRACTICAL CHALLENGES EXIST and specific design questions remain to be ironed out, none present an insurmountable barrier to Citizen Capitalism. For example, questions related to the criteria for selecting Fund administrators, or the application process for becoming a citizen-shareholder, or the size that the Fund would need to be in order to get started, would all require further analysis by the pioneer founders. All of these can be eased if there is a collective will to create change.

We will, however, note that the plan that we have offered might present some psychological hurdles because it is new, different, and has not been done before. For starters, we recognize that our solution, because it relies on private ordering, may strike some readers as odd since it might be presumed that all policy problems must be solved either through government intervention or by the market. The battle lines between government action and laissez-faire market solutions have long been drawn. One can reflect on the fervor on both sides created by President Franklin Roosevelt’s New Deal and the equal fervor created by free-market economist ideals—think Milton Friedman. As we have discussed, Citizen Capitalism avoids these battle lines by providing a third path grounded in private ordering—an alternative that has proven itself superior to government and market solutions for addressing certain social and economic problems. Models of such successful private ordering abound and include organizations like private universities, the Red Cross, and the Sierra Club—all private organizations created by the voluntary association of individuals, which serve a particular purpose and have amassed significant assets and influence. Ironically, business corporations themselves are also in large part creatures of private ordering. Citizen Capitalism is simply borrowing a page from a well-developed playbook. We are deploying the concept of private ordering and using it as a policy solution to drive change in the corporate system.

Another psychological hurdle to implementing the Universal Fund is a common but empirically erroneous assumption that people are purely selfish actors concerned only with acquiring financial wealth. Thankfully, this assumption has proven not to be the case by several research studies in anthropology, behavioral economics, biology, cognitive psychology, developmental psychology, evolutionary science, neuroscience, and social psychology. In Cultivating Conscience, author Lynn Stout systematically analyzes how contemporary law and public policy often assumes that human beings are “selfish,” yet, in fact, humans tend to be “prosocial” and “altruistic.”¹ The assumption that humans are selfish also flies in the face of millennia of human altruism, not to mention modern-day individual giving and corporate philanthropy. The prosocial nature of most human beings makes likely that the Universal Fund will be funded in part by individual altruism.

In addition, there is perhaps a natural human tendency to assume that any policy solution we have not seen at work before must suffer from some fundamental flaw and therefore cannot work in the future. In a witty little handbook titled The Rhetoric of Reaction, Albert Hirschman maps the reactionary rhetoric that people tend to deploy when faced with new ideas and policy solutions.² In particular, Hirschman looked at responses to liberal ideas such as the French Revolution and Declaration of the Rights of Man, universal suffrage, and democracy. In each case, Hirschman noted that reactionary responses often employed three principal arguments. First is the “perversity thesis”—this is where any action to improve some feature of the economic, social, or political landscape was critiqued for resulting in exactly the opposite of what was intended. Second is the “futility thesis,” which as the name would suggest captured reactions that predicted that the proposed advancement would produce no effects whatsoever. Last is the “jeopardy thesis,” in which the argument is that the cost of the proposed reform is unacceptable and puts the entire system in jeopardy.

We point these out because we can already predict and, in some cases, have already heard reactionary rhetoric that fits neatly into one or more of Hirschman’s three camps. Our plan for the Universal Fund is no more futile than capitalism may have been perceived as futile when it was first conceptualized, nor will it result in the opposite of what we intend (which is creating an investing vehicle that increases economic participation and diversity of voice in the corporate ecosystem). We can confidently make these assertions because our six-point plan anticipates and provides a framework for designing the Universal Fund in a manner that should avoid capture or perversion of its intended goals and ensure its continued sustainability and future existence.

Finally, our plan for the Universal Fund does not jeopardize capitalism, nor does it dilute it or convert it into a socialist agenda. Rather, 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.