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 those living in poverty, 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 to a boy living in poverty, or tutoring at-risk youth in Washington, DC for several years after college.
Second, I was inspired by 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 and Capital in the Twenty-First Century by Thomas Piketty.
Third, I wanted to create an organization that was not political and whose mission would appeal to all Americans and my thinking has been inspired by the advocacy of two men, both of whom believed in giving people cash. The first is Milton Friedman. As a student of economics, I am familiar with Friedman’s advocacy for a Negative Income Tax. When it was proposed, Friedman's Negative Income Tax would have given a family of four $3,600 annually in 1978 dollars. Adjusted for inflation, Friedman's proposal would be equivalent to $14,860 in 2020 dollars. The second is Andrew Yang, whose proposed Freedom Dividend in 2020 would have given every US adult $12,000 annually.
Considering that Friedman’s Negative Income Tax was approved twice by the House of Representatives in the early 1970s as part of larger economic packages proposed by Richard Nixon, the failure of Yang’s similar proposal to catch on in 2020 convinced me that a give-people-cash package would never pass in our current political environment. This realization spurred me to consider a non-government solution.
Q: What is your goal for C4SI?
A: The goal is to put cash in the hands of those living in poverty by galvanizing those who have benefited from Capitalism to share a portion of their income / wealth.
I believe that Capitalism is a great economic system, but have come to believe that it doesn't control well enough for inequitable outcomes of wealth & income. As an economist, I believe that adequate economic returns are necessary to incent people to take risks and innovate and move economic society forward. Economic 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 an example, I would argue that Elon Musk would have taken every risk he has taken if his reward were $25 billion, so why is he worth $250 billion? As a result of this extreme amount of wealth controlled by a smaller number of people at the top, Capitalism risks falling out of favor with the general population. In fact, we are already seeing this. This is an existential risk, I believe.
As I thought more about Friedman & Yang and the fact that the US government has failed to adequately constrain Capitalism's extreme inequalities, I wondered why Capitalism could not simply self-regulate itself. I thought a capitalist funded endowment that used its yield and a portion of its capital gains to pay out cash stipends to those living in poverty 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: 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.
Q: Do you think C4SI can grow large enough to provide the working poor with a Universal Basic Income?
A: No, that's not our aim.
The only entity that would ever be able to provide something that is truly universal and basic is the government, and I don’t believe that will ever happen. There are many nonprofits now advocating for government to provide a universal cash supplement, but C4SI does not advocate for any specific government policies. Instead, C4SI’s goal is to build a private, non-government solution.
C4SI’s simple goal is help those living in poverty via a cash supplement. We view C4SI as being part of triage; someone has already demonstrated need by seeking aid from another charitable organization, and C4SI complements that organization's aid with a small cash supplement. 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. $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 someone living in poverty. 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 debit card distribution. 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.