Q: What inspired you to found Capitalists for Shared Income?
A: I've had several inspirations. First, like many others, I have witnessed first-hand some of the challenges faced by the working poor, whether it was helping to feed those in need at my church on the Upper West Side of New York in my youth, being a Big Brother for 3 years in college, or tutoring in Washington, DC for several years after college. Second, I got inspiration from some of the books I've read, whether it was Nickel and Dimed by Barbara Ehernreich or more recently Give People Money by Annie Lowrey. Third, I was inspired by Andrew Yang, especially seeing him speak in Ames, IA in January 2020 and hearing him compare his Freedom Dividend to Milton Friedman's Negative Income Tax. As an economist I knew about Friedman's proposal but I had not realized that the House of Representatives voted on and passed Friedman's Negative Income Tax twice in the early 1970's but it never passed the Senate. As I sat listening to Yang speak, I thought to myself "if the Senate couldn't pass it back in the 1970s, it will never pass it now!" That spurred me to consider a non-government solution.
Q: What is your goal for C4SI?
A: The goal is to galvanize those who have benefited from Capitalism to give back to those who are suffering. I believe that Capitalism is a great economic system, but it doesn't control well enough for inequitable outcomes of wealth & income. Economic returns are necessary to incent people to take risks and innovate and move economic society forward, but returns that exceed what is economically necessary to reward capitalists for taking risk are called “economic rents.” Economic textbooks consider economic rents to be unearned, and thus both economically and socially unnecessary. I would argue economic rents have gotten too extreme. As a result, Capitalism risks falling out of favor with the general population. This is an existential risk, I believe. As I thought more about Yang & Friedman and the fact that the US government had failed to adequately constrain Capitalism's inequities, I wondered why Capitalism could not self-regulate itself. I thought a capitalist funded endowment that used its proceeds to pay out cash stipends to the working poor was an idea worth pursuing. It would be similar to Norway's Government Pension Fund or Alaska's Permanent Fund, except instead of building an endowment from natural resource wealth, it would build an endowment from the wealth spawned by the ingenuity, productivity & entrepreneurial spirit nurtured by the capitalist system. From that, C4SI was born.
Q: Do you think C4SI can grow large enough to provide the working poor with a Universal Basic Income?
A: No. The only entity that can provide something that is truly universal and basic is government. C4SI can help on the margin. We are trying to provide someone in need, someone who has already demonstrated need by seeking aid from another charitable organization, with a small cash subsidy. Some relief on the margin. Some freedom and self-determination. I came up with the idea to put $58 on the debit cards because that is a day's pay for someone working on the federal minimum wage. I liked the idea of telling someone, "Here's a day's pay. Help your family." $58 is not going to change someone's situation, but it can provide temporary utility & relief. That's worth it to me.
Q: What is your goal for the endowment?
A: I have a dream of being really, really big. Whether that means our endowment grows to 25 million, 500 million, 1 billion, 10 billion, 100 billion I don't know. But, I’m going to go for 100 billion! I mean why not? There’s so much money in so few hands you just have to start by convincing a couple key people to support C4SI. US billionaires have over $4 trillion in wealth. Not all of that is liquid, obviously. But what if we could capture only 2.5% of that? That would be a $100 billion endowment. Let's do it.
Q: Are you only targeting the mega-wealthy for donations?
A: No. The initial idea was to raise money from the mega-wealthy and build an endowment. But it has evolved. I believe there are millions of people who feel blessed with their situation and want to give back. We want C4SI to be an organization with a mission strong enough that it will generate support from a wide distribution of people. Someone can donate $58 and know that 100% of that is going to go out immediately and fund a cash debit card for the working poor. Or, someone can donate $1,000 and allocate $580 of it to immediately fund ten $58 cash debit cards and allocate $420 of it to our endowment which will go to support our annual operations. Or, hopefully, someone will donate $10 million to our endowment knowing it will support both our annual operations and generate money for cash debit cards in perpetuity.
Q: What do you say to people who think Capitalism is the problem and should be dismantled?
A: I don't agree with that, and would challenge them to define an alternative economic system that would work better. I do agree that there are injustices in our society, and would agree that because of how it functions Capitalism may exacerbate these injustices. But, I don't believe these injustices are an inherent feature of Capitalism. I think Capitalism can have a fault (inequality) but use one of its attributes (private wealth creation) to self-correct and develop a solution. C4SI was founded to be part of the solution.