Top Cornell law professor Lynn Stout and her coauthors Tamara Belinfanti and Sergio Gramitto offer a visionary but practical proposal to provide a guaranteed minimum incomeit not only avoids creating a new government program or increasing taxes, but also gives the entire citizenry more influence in the economy.
Corporations have a huge influence on the life of every citizenthis book offers a visionary but practical plan to give every citizen a say in how corporations are run while also gaining some supplemental income. It lays out a clear approach that uses the mechanisms of the private market to hold corporations accountable to the public.
This would happen through the creation of what the authors call the Universal Fund, a kind of national, democratic, mega mutual fund. Every American over eighteen would be entitled to a share and would participate in directing its share voting choices. Corporations and wealthy individuals would donate stocks, bonds, cash, or other assets to the fund just like they do to other philanthropic ventures now. The fund would pay out dividends to its citizen-shareholders that would grow as the fund grows.
The Universal Fund is undoubtedly a big idea, but it is also eminently practical: it uses the tools of capitalism, not government, to give all citizens a direct influence on corporate actions. It would be a major institutional investor beholden not to a small elite group of stockholders pushing for short-term gain but to everyone. The fund would reward corporations that made sure their actions didn't harm people, communities, and the environment, and it would enable them to invest in innovations that would take more than a few months to pay off. Which is another reason corporations would donate to the fundthey could be freed from the constant pressure to maximize their quarterly share price and would essentially be subsidized for doing good.
The authors demonstrate that our current economic rules force corporations to be shortsighted and even destructive because for most large investors, nothing matters but share price. The Universal Fund is designed to be a powerful positive balancing force, making the world a better place and the United States a better nation.
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About the Author
Lynn Stout was the Distinguished Professor of Corporate and Business Law at the Jack G. Clarke Business Law Institute at Cornell Law School. She was the author of Cultivating Conscience: How Good Laws Make Good People and the award-winning book, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. Sergio Gramitto is a Visiting Assistant Professor at Cornell Law School, where he also serves as the Assistant Director of the Clarke Program on Corporations and Society. Tamara Belinfanti is a Professor of Law at New York Law School. Along with Lynn Stout, she co-founded the Ethical Shareholder Initiative, a nonprofit that seeks to revolutionize share voting to create a more sustainable corporate system.
Table of Contents
Introduction: What If? 1
Chapter 1 Lost Opportunity 13
Chapter 2 Short-Termism and Corporate Governance 27
Chapter 3 Introducing the Universal Fund 49
Chapter 4 The Private Money Is There 61
Chapter 5 How Citizen Capitalism Unleashes Corporations' Positive Power 75
Chapter 6 How Citizen Capitalism Embraces Capitalist Principles 85
Chapter 7 How Citizen Capitalism Mirrors American Values 97
Chapter 8 How Citizen Capitalism Promotes Equality 107
Chapter 9 How Citizen Capitalism Compares to Other Proposals 119
Chapter 10 Why Not? 127
Conclusion: What Next? 131
About the Authors 165