Against Time Inequality: A Framework for Progress

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Most scarcities can be stretched. One could read this as the great promise of economics: to systematically stretch our scarcities into such thin films until we can hardly feel them. A scarcity stretched is a constraint loosened. A possibility opened. But this makes those inelastic scarcities that deny our attempts to manufacture their abundance all the more precious. And what presents a more immovable scarcity than time?

Where there is scarcity, there is inequality. Time inequality - a disparity of time ownership - is a deeply, existentially corrosive variety of inequality plaguing U.S. citizens - and more broadly, citizens of hyper-capitalist societies - today. And yet, we don’t have well-developed understandings of what ‘time inequality’, or ‘time ownership’ actually mean. Shrouded in ambiguity, they fester. Raising the resolution of these concepts, as if adjusting the blurred lens of American political economy, will help us see more clearly the most important inequality we’ve forgotten.

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Time ownership is a new phrase draped over an old idea. In Ancient Greece, they called it freedom. In the early days of industrial capitalism, leisure time. During the 100 years between 1830 and 1930, leisure time for all was seen as the highest dividend, the greatest promise of economic progress.

But as I detail below, we’ve ditched this view. The growing, shifting economy of the mid-20th century supplanted the intrinsic value of leisure with the extrinsic value of labor. Amidst the flurry of post-war consumption, our priorities flipped. This reversal of values did away with democratic distribution of leisure time as a guiding ideal for economics. The stage was set for time inequality, a lop-sided distribution of the capacity for leisure, to erupt.

Today, cascading crises are immobilizing and unraveling the America we so unenthusiastically knew, like that gruff uncle one avoids at family parties. Through the debris, the contours of an opportunity are emerging. An opportunity to ask ourselves, as the novelist Marilynne Robinson put it: what kind of country do we want? What is the economy for?

The severity of time inequality today makes a strong case for deep change. Time ownership can offer a guiding ideal for a revitalized political economy. It would empower individuals and communities at every socioeconomic stratum. It would enliven democracy, education, and mental health. It would ignite entrepreneurship and innovation. It would return a concrete meaning to the limp rhetoric of freedom and progress.

But new paradigms don’t take unless they’re anchored by new policies. New ideas need roots. Below, I do present a policy platform - more of a provocation than declaration - to anchor the idea of time ownership. But to begin, let’s clarify the impulse behind this rough sketch for a new economic paradigm: time inequality.

Time Ownership: Or, Freedom

To define time inequality, we begin by defining the substance of comparison: time ownership. In the same way that it wouldn’t make sense to talk about wealth inequality without a prior understanding of what wealth is, we can’t talk about time inequality until we understand what time ownership is.

A fitting, if ironic, metaphor for time ownership is a public corporation. Corporations are owned by multiple shareholders. The more shares one owns, the more voting power they hold over the corporation’s decision making. Time ownership is similar. The more time ownership we have, the greater the decision making power we wield over what we do with our time.

Also like a public corporation, ‘ownership’ doesn’t mean someone owns 100% of the shares, but a controlling interest. This requires only a majority, or 51%. Barring a triumph of fully automated luxury communism, total ownership of one’s time seems a fantasy.

For example, our bodies are inalienable shareholders of our time. They demand things of us - sleep, nutrition, hydration. There has always existed a distinction, perhaps blurred, between things necessity compels us to do and things we choose to do when necessity is satisfied and we regain a controlling interest over our time.

Settling into agricultural societies sharpened the distinction between freedom and necessity. The philosopher Hannah Arendt writes that ancient slavery did not exist to provide cheap labor that boosts profits. Rather, the exploitation of slaves was used to eliminate necessity-driven labor from the everyday lives of slave owners. Slavery was “the attempt to exclude labor from the conditions of man’s life.”

Labor is work done in service of necessity. Karl Marx called it “man’s metabolism with nature.” Time ownership is the “true freedom” he theorized lay beyond the realm of necessity.

Through the centuries, the flux of society functioned as a lens that transmutes our needs into historically-contingent forms of labor. The needs hardly change. But the form of labor employed to meet them does. The need for food evolved from the labor of hunting animals and tilling the fields to the labor of securing grocery money. Through all its forms, freedom often seemed to lie beyond the demands of labor.

Time ownership is thus a matter of degrees. It’s the balance between freedom and compulsion in everyday life. We might think of it as the ratio of extrinsic to intrinsically motivated time-use for any given person. The more of our time that’s intrinsically motivated, the less bound our possibilities are by necessity. The more time ownership we have.  

Time Inequality: Or, Compulsion

Now, we’re equipped to ask: what is time inequality? It’s the inequality of time ownership between citizens. Today, the majority of Americans suffer as the compulsion of extrinsic demands overdetermines the substance of their lives. Meanwhile, a wealthy minority is capturing an increasing share of the economy’s wealth, wealth being the key ingredient for time ownership.

The consequences of low time ownership, while living in a society that everywhere flaunts the lifestyles of those with large degrees of time ownership, are psychologically corrosive. Like pouring acid into your soul.

On the surface, we see time inequality in lifespans. Wealthy US citizens live an average 10 - 15 years longer than their lower-income counterparts. But lifespan is too blurred a lens to see the interior consequences of time inequality.

The withering away of intrinsic motivation is less legible to an outside eye than living an extra 10 years, but at least equally consequential. One’s life is hollowed out like a swarm of termites gnawing on the inside of an oak tree until nothing remains but a rickety shell of bark (and if you find this hyperbolic, consider the rise in working class suicides).

Or, to mutate the metaphor, consider a mosquito. It lands on your arm and plunges six stylets into your skin. Two of them are equipped with tiny teeth to saw through the surface. The mosquito is, literally, intent on sucking dry the interior content of your being.

In Ancient Greece, it was common knowledge that a life dominated by extrinsically determined labor has the same effect. Aristotle went so far as to argue that calling both slaves and free people “men” was like erasing the distinction between grapes and raisins. Lives dominated by labor eclipsed slaves’ capacity to become truly human.

Arendt reports that Ancient Greeks understood wealth as the best defense against the sawing teeth of necessity, the best way to safeguard and nurture our inmost human capacities:

“...the wealth of a person therefore was frequently counted in terms of the number of laborers, that is, slaves, he owned. To own property meant here to be master over one’s own necessities of life and therefore potentially to be a free person, free to transcend his own life and enter the world all have in common.”

The substance of wealth is the technology of freedom. Slavery was the technology of freedom in Ancient Greece. Today, it’s passive income from asset ownership. Large investment portfolios, or the ownership of real estate provide the same freedoms that slaves did in Ancient Greece. While we’ve broadened the category of wealth, we’ve mostly failed to democratize it.

To make this all more concrete, let’s consider a few examples.

Three Examples of the Time Ownership Spectrum

1.

First, there’s Jada. Her generously wealthy family establishes a $130k trust fund in her name at birth. Growing at the market average of 9% per year, by the time she turns 22 and gains access to the fund, it’s worth $865k.

After receiving advice from her father’s financially-savvy colleagues, she invests the money in an index fund. Her investment will yield $78k in the first year, more in subsequent years. She plans to keep the first $75k of each annual dividend, and reinvest the rest to grow the fund.

In short, for the rest of her life, barring economic depression, Jada will receive enough money to live comfortably without having to exchange any time in return. Marx’s ‘realm of necessity’ exerts no influence over what she chooses to do with her time. If she gets a job, it won’t be because she needs it. She’ll be free to quit at any time without endangering her basic livelihood.

2.

Second, consider Marcus. His father is a janitor. His mother works nights at the roadside diner. He works part-time to put himself through community college. He graduates with a degree in education and $20k in student loans (with a 6% interest rate licking its fat lips at his certain inability to pay them off quickly on a teacher’s salary).

Upon graduating, Marcus is only free to do that which earns enough to meet his living expenses, plus debt payments. Along with a bulk of American workers, he must exchange a significant quantity of his waking hours for a paycheck, doing work he wouldn’t otherwise do. Unlike Jada, the realm of necessity dictates his daily life.

These two crude examples are enough to show the major divide. Most Americans, despite working long hours at stupefying jobs, are unable to build the kind of wealth that liberates them from extrinsic domination. And since already having wealth is the best way to get more, the wealthy wind up with so much that they secure time ownership for generations to come.

But there are more ways to freedom than the size of one’s bank account. It’s an illusion perpetrated by the neoliberal economic paradigm shift of the 1970’s that the only road to freedom is amassing private wealth.

Absent from both of these examples is the public realm. The much maligned government. The past 50 years of economic thinking dismantled the idea that governments can, never mind should, play a role in stewarding portions of the national wealth for the benefit of all.

The reversal of this backwards thinking is already underway. A political economy for time ownership requires a partnership between public and private institutions. These can allocate wealth in ways more conducive to democracy, stability, and freedom than private individuals and deregulated markets can achieve on their own.

3.

So consider a third example. In an alternate universe, the U.S. responded to the 1970’s stagflation crisis by building institutions designed to create shared prosperity.

The first few years of universal healthcare were bumpy, as all large transitions are. But it quickly settled into a point of national pride. Federally recognized poverty was eliminated through a negative income tax - a variant of basic income that raises the economy’s income floor. Workers were given voting rights on their company boards through a codetermination mandate, reducing the rate of stock buybacks and executive pay, while improving stability, productive investment, and labor conditions.

Every citizen received a high-yield savings account via postal banking at birth. An annual wealth tax was used to provide each account with an initial $20,000 investment, accessible after the age of 18, growing all the while. This provided every American with an inheritance, a true ‘progress dividend’ that raised levels of entrepreneurship and innovation, while reducing debt burdens.

Reconsider Marcus’ life in this world. Through the basic income, he receives enough to cover most of his tuition and living expenses. He no longer needs to work his way through school, freeing him to focus on his studies and relationships. He leaves school without student debt, or can dip into his inheritance to pay off whatever little remains.

His first job in a New York City school doesn’t pay him enough, and he disagrees with their standardized educational curriculum. He quits, knowing losing his job doesn’t mean losing healthcare or access to enough money for groceries.

Maybe he’ll consider getting together with a few college friends and starting a research organization devoted to new educational pedagogies. They can pool money from their inheritance for startup capital.

Most importantly, Marcus experiences a significantly higher degree of time ownership than previously. Not because he earned more private wealth. But because he’s part of a society built to democratize wealth - giving everyone access to the baseline amounts of wealth that make a tangible difference on what kinds of lives we are free to lead. His freedoms were larger. His compulsions, looser.

Wealth Hyper-Inequality

Of course, we don’t live in that world. Following the crisis of the 70’s, we took a different direction. In both theory and practice, we bulldozed the public sector. The deregulated and newly globalized markets that emerged from the 1970’s began shoveling wealth to the top 1% (mostly the top 0.1%, actually).

In 2017, the three wealthiest U.S. citizens owned more wealth than the bottom 50% of the population combined. This inequality did not take off until the 80’s:

From the perspective of time ownership, this is exactly backwards. Wealth, more so than higher wages, affords time ownership. Ownership grants access to resources without requiring exchange. Wages, on the other hand, demand time in exchange for resources. Exchange, by definition, transfers ownership of your time to someone else. So a democratic commitment to time ownership would entail a wealth distribution that grows more egalitarian, rather than more lopsided.

Empowering the private sector and flattening the public sector left only one approach to more egalitarian distributions of time ownership: get more and more Americans privately wealthy. The past 50 years have achieved the opposite, concentrating wealth in fewer and fewer hands.

For most Americans during this period, increased reliance upon credit and heaps of private debt have actually decreased their degree of time ownership. Debt looms over our lives and further constrains them. It shrinks our spectrum of viable possibilities. But without the credit that creates debt, how could people afford their medical bills? College tuition? How could the slightly-below-average-income American afford to live?

The past 50 years of ‘progress’ have not delivered ordinary Americans more decision making power over their own lives. Instead, grocery aisles fill with fifteen different kinds of mayonnaise and sports drinks. We all carry new gadgets that have the potential to revolutionize the world, but are instead (mostly) pedaling the same tired consumerism.

1. In his absolutely brilliant, if slightly dense, book: Critique of Economic Reason.

The “shell of bondage”, French philosopher Andre Gorz writes1, “has become at the same time increasingly constraining and increasingly comfortable.” It’s as if we live in a shrinking room, but with every inch the walls close in, a new amenity appears to distract us from the fact that our lives are caving in.

How did we get here? 21st century time inequality - which hollows out the average American life by subjecting it to unrelenting extrinsic necessity - is a choice.

It’s a choice molded by the changing of the American mind during the 20th century. Devaluing leisure time opened the path for time inequality to grow like a hungry weed. The vision of all Americans coming into greater ownership of their time fluttered away like a dried leaf from a cold tree.

To revive a politics of time ownership in the 21st century, we should first revisit and understand why we abandoned it in the past.

The Decline of Leisure

The decline of leisure is a fascinating, perplexing story about how American culture changed its mind. The U.S. Dept. of the Interior sums up the saga in their 1974 report:

“Leisure, thought by many to be the epitome of paradise, may well become the most perplexing problem of the future.”

How did leisure evolve from the ‘epitome’ of paradise where we were free to more deeply realize our own humanity, to a ‘problem’ that threatened to plunge us into boredom, crime, and decay?

Life in the beginnings of industrial capitalism would strike us as unbearable today. People worked 70+ hours per week in conditions that would make Apple’s Chinese sweatshops, where in 2010, 15 workers decided suicide is preferable to their working lives and hurled themselves from windows, look comfortable.

By 1830, a growing labor movement successfully connected abstract ideas like “freedom” and “progress” to policies for steadily decreasing the working week. For the next 100 years, the reduction of the working week reigned as the concrete manifestation of progress under capitalism. The lifetime of American citizens - all citizens, not only those who ‘made it’ - would require less and less extrinsically motivated labor time. Leisure would define the everyday life of American citizens.

I call this the expanding leisure hypothesis. By the early 20th century, it was nearly taken for granted that innovations would continue improving productivity. Higher productivity would mean shorter and shorter workweeks would be required to sustain the economy.

Cultural luminaries like Benjamin Franklin, John Adams, Bertrand Russell, John Maynard Keynes, even the creators of the futuristic sitcom The Jetsons, believed economic progress would inevitably lead to shorter working weeks. Everyone would enjoy more time for leisure, play, and cultivating the ‘art of living’.

And so it went. From 1830 - 1930, this story played out. Average working weeks declined from 75 (1800), to 65 (1870), to 50 (1929), down to 37 (1938). The future imagined by The Jetsons felt within reach: by 2060, George Jetson’s 9-hour workweek would earn sufficient income to provide his entire family with a comfortable life. Keynes and Russell believed closer to 2030, 15-hour workweeks would be the norm.

Concerns that leisure would cause sociological decay, rather than facilitate the art of living, always existed. But they were dwarfed by widespread belief in the virtues of more leisure time for all.

FDR’s administration began tipping this balance in the 1930’s. The New Deal sought to enshrine a new vision: full-time, full employment at 40 hours/week. The labor movement’s call for shorter working weeks softened, replaced by a stronger cry for higher wages.

By the 1960’s, the expanding leisure hypothesis toppled. In 1964, the science fiction writer Isaac Asimov was asked to imagine the world of 2014. He concluded with a great fear: the disease of boredom. It would spread and intensify as automation progressed. “Enforced leisure” would wreak “serious mental, emotional, and sociological consequences.”

Now, the fear of leisure rose to prominence, no longer dwarfed by the virtues of leisure. The Pulitzer Prize-winning political scientist Sebastian de Grazia warned: “There is reason to fear…that free time, forced free time, will bring on the restless tick of boredom, idleness, immorality, and increased personal violence.”

By the 1980’s the inversion was complete. Like a marathon runner pivoting 180 degrees mid-race and bolting the exact opposite direction she’d traveled, average working hours began increasing. ‘Progress’ was no longer conceived as shifting the balance of our time from labor to leisure. Freedom from work became freedom through work.

Derek Thompson describes this new religiosity of work as workism. Work, rather than leisure, became the means of “identity production”:

"The economists of the early 20th century did not foresee that work might evolve from a means of material production to a means of identity production."

Today, flying in the face of historical patterns, the most well off in society are working more hours than the least. “For the first time in human history, the rich work longer hours than the proletariat”, writes David Brooks. Ancient Greek aristocrats would slap their knees and laugh you away if you told them this would ever be the case.

2. I discussed this mystery at length with Ben during our podcast conversation together.

An historian by the name of Benjamin Hunnicutt devoted much of his professional life to studying what he calls “the great mystery of leisure”2. He came to a blunt conclusion: amnesia.

“I have come at last to the simple conclusion that one of the most important reasons for the end of shorter hours, the recent decline of leisure, and the substitution of the rhetoric of perpetual need for the traditional language of “abundance” is something like a nationwide amnesia.

We have forgotten what used to be the other, better half of the American dream. In our rushing about for more, we have lost sight of the better part of freedom - of what Walt Whitman, with so many others throughout American history, called Higher Progress.”

— BENJAMIN HUNICUTT

But as Hunnicutt’s work documents, this amnesia was orchestrated. It resulted from a web of cultural forces that sought to redefine the American Dream. Specifically, the redefined American Dream held a new, lesser estimation of its people’s capacities. Where previous generations believed that citizens were up to the task of using leisure time wisely, the new view was summarized in JFK’s comment that, following automation, “we’re going to find the work week reduced...we are going to find people wondering what to do.”

The assumption that people simply wouldn’t know what to do with more time ownership erased the prior view that leisure would widen citizens’ scope of freedom and empower them to develop their intrinsic motivations.

As the Dutch historian Rutger Bregman’s new history of human nature suggests, the assumptions baked into a system influence human development in line with those assumptions, regardless of their veracity. You get the kinds of humans you design for. This even has a name: The Pygmalion effect. If you assume humans are ill-equipped for leisure time, you will create systems that make it so. And, as the work of psychologist Peter Gray suggests, that’s exactly what happened.

From 1955 to the present day, the decline of unstructured play-time for children - itself largely the product of economic pressures - changed the course of human development. The decline of play caused, among other problems, a deterioration of our “intrinsic competencies.” Our capacities to self-govern and intrinsically motivate our own behaviors declined. We got what we assumed.

This means a political economy for time ownership is more than an economic commitment, but a framework for human development (as I’ve written elsewhere, the two can hardly be separated nowadays). Designing for time ownership, the rebirth of leisure, is to create systems that nurture the intrinsic capacities of human beings.

As Hunnicutt concludes his study, “Free people choosing more freedom is the best hope for the future.”

New Paradigms of Ownership

In many ways, a political economy for time ownership is a resuscitation of the connection between economic and higher progress. But the economy of the 21st century hardly resembles that of the 20th. Digitization, globalization, and financialization have all mutated the economic environment. To return to the old ideal of leisure, we require a new set of policies to get us there.

“But the point is this: if the onset of ownership had the power to birth a civilization, new models of ownership should have the power to fundamentally change it.”

20th century progressives believed that shorter working hours - achieved from above by reducing the overtime threshold, and below by individual firms choosing work-share programs to reduce shift lengths - higher wages, and better working conditions would pave the leisurely road to progress. Notice: the basic structure and distribution of ownership, the engine of wealth, remains unchanged.

This isn’t all that strange, considering wealth inequality wasn’t on economic radars at the time. But decades of cascading wealth inequality created pools of power that higher wages and lower overtime thresholds cannot touch.

Wealth, power, and decision making capacity are tightly interwoven. For time ownership to be more than hush-money, it needs to come along with heightened decision making power. One of the fears of universal basic income skeptics is that it will pacify the disenfranchised, thereby protecting existing power dynamics.

Wages and redistribution can only trace the surface of entrenched power. New models of ownership restructure at the ground floor, changing the generative dynamics of wealth in the first place. Many anthropologists and historians suggest that civilization as we know it was born with the onset of ownership. Rousseau famously believed that we might’ve saved our species - and others - a lot of trouble by ridiculing the idea that one might enclose a piece of land and call it their own.

But the point is this: if the onset of ownership had the power to birth a civilization, new models of ownership should have the power to fundamentally change it. Ownership is a lever plunged into the heart of our social structure. To pull the lever is to move civilization from its base. This is why a politics of time ownership must dig beneath wages. We don’t want more comfortable cages. We want to break them.

But what might new models of ownership look like in practice? Do they require wholesale communist revolution? Or just higher taxes on property? Ownership is a broad category open to a variety of new ideas. Before suggesting a policy platform designed around time ownership, I’ll survey two recent proposals that aim to rewrite the deep economic layers of our lives. They do not require violent revolution. They are imaginative, yet grounded in the eminently possible.

Familiarity with these proposals advances the idea that change is within reach. We gain a wide view of possible approaches to redesigned economic substrates of ownership. In turn, let’s examine Thomas Piketty’s vision for participatory socialism, and Nils Gilman & Yakov Feygin’s The Mutualist Economy: A New Deal for Ownership.

Piketty’s Participatory Socialism

Thomas Piketty’s 2014 book, Capital in the 21st Century, took the spotlight that movements like Occupy Wall Street placed on wealth inequality and gave it a voice in the highest level of economic analysis.

Together with his more recent work, Capital and Ideology, Piketty’s project is largely diagnostic. He traces the roots of our present inequalities into the deep annals of history, revealing the present as a deeply contingent expression of historical patterns.

This is powerful, since many have adopted Mark Fisher’s idea of capitalist realism to describe how the present now feels immovable, drained of the real possibility for change like an emptied bathtub. The present feels less like an always-changing expression of alterable patterns, more like a glacier frozen in place. Piketty’s historical analysis is meant to reveal the glacially unchanging present as, in fact, made of water.

Apply the right conditions, and the present is revealed as a soluble substance always poised to melt into fluidity.

Tucked beyond the 1,000th page of Capital and Ideology, Piketty sketches a vision of what these conditions might be. He gathers them under the name participatory socialism.

Participatory socialism, he writes, is “a new universalist egalitarian perspective based on social ownership, education, and shared knowledge and power.” In concrete terms, his vision rests on the twin pillars of steeply progressive taxation, and economic democracy:

1. Steeply progressive taxes on income and wealth to stimulate economy-wide circulation of capital, and replace “permanent private ownership” with “temporary private ownership”.
2. Sharing power, ownership, and decision making in firms by granting workers voting rights in company decisions, and capping how much voting influence money can buy, ensuring control cannot be captured by a single wealthy entity.

Piketty proposes an annual wealth tax (which he calls a “property tax”, not to be confused with the existing U.S. property tax) coupled with an inheritance tax. The rates climb all the way to 90% on those who own 10,000 times the national average wealth ($973 million in 2018).

His income tax includes all income, labor (wages) and capital (dividends, interest, corporate profits). Again, a top rate of 90% applies to incomes 10,000 times the average national income. Today, this translates to a marginal income tax rate of 90% on all incomes in excess of $755 million. In terms of purchasing power, this rate is softer than what the U.S. had in place for most of the mid 20th century, when top marginal tax rates reached 94% on incomes above $200,000 (just below $2 million in today’s dollars).

Alongside progressive taxes and temporary ownership, Piketty envisions the ‘social ownership of firms’ achieved through codetermination and legislating a ceiling on the voting power of large shareholders in major corporations.

Codetermination mandates that a certain percentage of the company board must be held by worker-elected representatives. This grants workers a direct voice in corporate decision making. In Germany, at least ⅓ of company boards with 500-2,000 employees must be made of worker-elected representatives. The percentage rises to just under 1/2 for companies beyond 2,000 employees.

As for the ceiling on shareholder power, Piketty suggests that for investments beyond 10% of a large firm’s capital, the correspondingly acquired voting power should proportionally decrease. A similar proposal for nonprofit media organizations proposed that investments beyond 10% of the organization’s capital would receive voting rights corresponding to only 1/3 of the amount invested.

Together, codetermination and shareholder ceilings widen the interests with power at the decision making table, and reduce the liability of corporate decision making to capture by singularly wealthy investors.

A Day in the Life of a Participatory Socialist

Relevant to the politics of time ownership are two elements of what Piketty suggests we do with the revenues from progressive taxation: basic income, and universal inheritance.

He envisions a basic income set at 60% of average after-tax income. So taking the average (median) U.S. income in 2018 of $62,000, the basic income would be set at $37,200. Someone with no other income would receive the full amount. As earnings increase, the basic income phases out. Technically speaking, this is a negative income tax.

The universal inheritance, funded by the wealth tax, would grant every citizen around $100,000 upon turning a given age (Piketty suggests 25).

These policies help establish the universal baseline of access to resources that raise the time ownership of all citizens. However, put crudely, Piketty’s plan amounts to “taxing capitalism out of existence”, as Paul Mason put it.

Top marginal taxes on income beyond 90% are well within historical norms, but the same rate applied to the highest echelons of wealth is unprecedented. The power dynamics required to pass such high degrees of taxation across the board - wages, capital gains, investments, corporate profits - are almost perfectly inverse to the actually existing landscape of power.

For a more accessible vision of an economy defined by inclusive institutions of public wealth, we turn to Nils Gilman and Yakov Feygin’s paper, The Mutualist Economy: A New Deal for Ownership.

The Mutualist Economy

The spirit of the New Deal for Ownership has a surprising predecessor: George W. Bush. The Bush administration popularized the idea of building an “ownership society”. The sentiment was straightforward: citizens should have maximal control over their lives.

But using the example of Marcus as a microcosm for both the low and lower-middle classes, the neoliberal regime of privatization, deregulation, and tax cuts produced a scale of inequality that actively reduces the control ordinary Americans have over their lives. Our lives are shaped, our possibilities slimmed by increasing piles of student, medical, and credit card debts. Just like Marcus, most of us are only free to do that which earns enough to keep bills, interest rates, and debt collectors at bay.

Bush’s idea was to incentivize home ownership and pensions as gateways for more Americans to benefit from capital gains. But pension funds provide a trickle of returns relative to the investments made by wealthier classes, and homeownership is a failing bridge between the wealth gap.

The New Deal for Ownership is an inverted approach to Bush’s ownership society: rather than privatized institutions of deregulated capital accumulation, build public and democratically owned institutions of wealth dispersion. Gilman & Feygin propose a series of policies that treat all citizens as partial owners of our national capital stock, viewing the economy as an interdependent system of collective value production, to which we are all entitled a share.

In the true spirit of ownership, each citizen should receive direct dividends from the national wealth. These dividends take the form of four policy proposals.

Social Wealth Fund

A social wealth fund (SWF) is a collectively owned investment portfolio. Every citizen owns an equal share, so that all citizens receive dividends as the investment grows. An example is Alaska’s Permanent Fund (APF). The state of Alaska taxes all oil sales 25%, investing the tax revenue in a publicly managed portfolio of which each citizen owns an equal share. Since its inception in 1982, citizens have received between $1,000 - $2,000 per year.

SWF revenues can be distributed to people directly, like the APF, or used to fund government investment in public services, as in the cases of Norway and Singapore. Norway’s SWF - The Norwegian Oil Fund - funds the country’s universal pension. Singapore’s SWF (they have two, actually) covers nearly 30% of the country's government expenditures.

Joint Ownership of Government Funded Patents

Government investment often plays a key role in the early stages of risky R&D. The iPhone, Google’s search algorithm, even the internet were all seeded by taxpayer investments. But once these innovations are enshrined in patents, what began as fruitful public-private collaborations transfer ownership over to the private sector.

The proposal for joint ownership of government funded patents suggests that taxpayers should receive a cut of the returns on their investments. By owning shares of patents that arise from public-private collaboration, the government can either distribute IP dividends on a per capita basis, or use the revenue to fund public services.

Baby Bonds

Similar to Piketty’s universal capital endowment - though far more politically viable - is the idea of baby bonds. Every citizen would receive a high-yield savings account at birth. The account would be managed publicly, by the Treasury, or the Post Office. Bonds would be added to the account at birth, accruing value until a specified age when the funds are made available to the citizen, serving as a minor inheritance.

Guaranteed Retirement Accounts

401(k) pensions perform meagerly relative to the more complex financial instruments available to the wealthy. Using 401(k)’s as a way to tie the middle class into the stock market is like giving a child a tennis ball to keep busy while you return to the real game of tennis.

Instead, a GRA would be a universal pension fund managed by the Treasury or Federal Reserve. Since it would be administered as a large pool, it could make more meaningful investments that fetch greater returns than individual 401(k)’s do. This would bring pension returns closer to the higher returns enjoyed by wealthier investors.

Mutualist Political Economy

All these elements combined - a sovereign wealth fund, government owning shares of publicly funded patents, high-yield savings accounts with capital endowments, and guaranteed retirement accounts - are designed to bring about a “new social contract”. A new paradigm of shared ownership of the returns on capital that are usually enjoyed only by the wealthy.

The Political Economy of Time Ownership

Each preceding proposal reconsiders the construct of ownership, but neither is explicitly designed with time ownership in mind. Drawing on elements from both Participatory Socialism and The Mutualist Economy, here I propose a rough sketch of a policy platform that could belong to a political economy built explicitly around time ownership.

Recall today’s wealth distribution:

Since the strategy of bulldozing public institutions and regulations so that every American can become privately wealthy isn’t working, we need a different approach. A political economy of time ownership can employ public-private cooperation to provide every citizen with access to a sufficient baseline of unconditional (owned, not exchanged) resources to keep their lives from extrinsic domination.

This means using redistribution to jumpstart pre-distribution. Increasing equality of opportunity through redistribution can kickstart more egalitarian pre-distributions of wealth. Doing so requires taking some tools to wealth inequality and creating public institutions that create a baseline of wealth for all:

In turn, this more egalitarian baseline will spread opportunities for wealth creation to more people who’re otherwise shut out, such as the difference made in Marcus’ life between the second and third examples.

The policy platform to create this baseline could include: progressive income and wealth taxation, basic income, universal healthcare, baby bonds, a social dividend system that allows for per capita distribution on profits from collectively owned assets, and codetermination.

Wealth Taxes

The current wealth distribution is like a giant, top-heavy anchor holding pre-existing power structures in place. It’s unhealthy for the economy, unhealthy for human development, and is stained by the injustice of racism, imperialism, and exploitation.

Using wealth taxation to empower the marginalized is to reckon with the mixed bag that is the history of capitalism. It is also, as the economists Gabriel Zucman and Emmanuel Saez show, highly feasible in the American context. Zucman proposes a wealth tax rate of 2% beginning on fortunes in excess of $50 million. The rate rises to 3% above $1 billion.  

The wealthy tend to invest a majority of their wealth in the stock market, historically yielding 8 - 10% returns. A wealth tax rate of 2-3% will not reduce their overall accumulation of wealth, but simply reduce the rate at which their wealth continues increasing.

Wealth taxes alone are grossly insufficient to bring our tax system into the 21st century, let alone to fund a revitalized political economy of time ownership for all. A broader tax discourse should reconsider taxing multinational corporations, progressive taxes on all income and capital gains, and broad-base taxes like a value-added tax or a national income tax to fund robust and inclusive social programs.

Basic Income and Universal Healthcare

One of the biggest thorns in America’s pained relationship with taxation is legibility. How clearly visible are the benefits our taxes go towards? Say I purchase a $20k car. It’s directly apparent to me what my $20k gets me. I drive the car every day. But if I pay $20k in taxes, it’s less clear what I’m getting for my money.

The legibility issue is one reason why welfare states that rely more on universal (everyone receives benefits) than targeted programs (only a certain group receives benefits) have higher rates of overall redistribution and broader support for taxation.

Universal programs are expensive. But they’re also highly legible. Two universal programs in particular can play a crucial role in affording more time ownership to all: universal healthcare, and basic income*.

* A brief technical note: by “basic income”, I mean any policy that establishes an unconditional income floor in the economy. Two leading proposals are a universal basic income (UBI) given to all, or a negative income tax (NIT) that phases out benefits as individual income rises. A UBI advocate might argue that NIT isn’t unconditional/universal, but in truth, neither are most UBI proposals. The taxes necessary to fund UBI create the same phaseout effect as NIT. Elon Musk would not really receive UBI. He would pay more in increased taxes than he receives, so it’s slightly misleading to call the program universal. The difference between UBI and NIT is not universality, but legibility. There are benefits a UBI offers over an NIT, but they come with significantly larger gross costs, which in turn require significantly more tax revenue. The choice between them is largely a political and psychological question.

Basic income and universal healthcare would immediately provide a (short) ladder out of the deep, psychologically corrosive well of extrinsic domination for all those at the lowest end of the wealth distribution. They grant direct entitlement to vital resources that we would otherwise need to labor (exchange time) for.

By lessening citizens’ dependency on employers for base levels of income and access to healthcare, every citizen is further empowered to choose whether to enter into a relationship of exchange, or remain in autonomous ownership of their time (of course, one doesn’t yet have a real choice in the matter, if receiving only $13,000 from a basic income and healthcare. Most will still need to work).

But these policies alone are insufficient. They’re necessary to swiftly lift those with least ownership of their time. But they don’t reach deep enough into the economy’s underlying architecture that produces such wealth inequalities in the first place.

Baby Bonds

Rather than adopting Piketty’s 90% tax rates on vast fortunes to provide a universal inheritance to every citizen, the mutualist proposal for baby bonds can achieve similar outcomes with far lower tax rates. By allowing the account to benefit from capital gains, every American receives a direct share in the growing economy.

The high-yield savings (or perhaps risk-averse investment) account given to every American upon birth could be funded by the previously mentioned 2-3% wealth tax. The tax is estimated to raise between $118 - $376 billion per year. Let’s assume a middling scenario of $250 billion. ~3.7 million American babies were born in 2018. Dividing the tax revenue equally, that’s enough to endow the account of every newborn American with $67,000.

On their 21st birthday, assuming an annual growth rate of 6% (less than the stock market’s 20-year average, and well below the 12% rates savers enjoyed in the 1980’s), a baby endowed with $67k would find themselves with access to $227,770. This is worth repeating: every American from the implementation of this policy forward would have access to a bank account in excess of $200k on their 21st (or whenever) birthday.

The economist Darrick Hamilton offers a more conservative - and therefore politically feasible - proposal. He suggests making the initial investment adaptive to wealth. The less wealthy the newborn’s family, the higher the initial investment in the baby bond account. Instituting a spectrum that would run from $500 for the wealthiest up to $60,000 for the least wealthy would cost approximately $100 billion. The account would grow at a rate sufficient to counterbalance inflation.

Beyond facilitating time ownership and new life possibilities for all, the explosion of innovation would likely pay back the cost of the program, in either formulation.

Social Dividends

“Social dividends” refer to a broad range of possibilities, each following a similar logic: recognizing that some assets should be collectively owned by all American citizens, entitling them to direct dividend payments from the profits those assets generate.

For example, the thinking behind Alaska’s Permanent Fund was that Alaskan oil should be treated as a natural resource endowed to all Alaskan’s, rather than to whatever oil company digs it up first. Establishing collective ownership of the oil means that all Alaskan’s are entitled to a percentage of the profits generated by oil sales. Accordingly, the state invests all oil tax revenues into a SWF that pays a dividend to all Alaskans.

Another example is the proposal for a carbon fee-and-dividend, a strategy already in place in British Columbia and Switzerland. The idea is to levy a carbon tax, collect all the revenue, and distribute it back out equally to all citizens.

A third example is the burgeoning idea of ‘data dividends’. Presently, digital platforms freely capture our data. They either sell that data, or feed it into profitable machine learning algorithms. Levying a tax on the sale and resale of consumer data, or taxing “data dependent” companies in proportion to their dependency, asserts that we own our data, and must be compensated for its use. If our data is being used to generate profits, citizens deserve a small share of the profits.

All of these social dividends - payouts from social wealth funds, carbon dividends, or data dividends - can be rolled into a single ’social dividend’ given to citizens on a monthly or yearly basis. Just like tax returns, citizens can see how much each subsidiary dividend contributed to the single lump-payment.

Elsewhere, I’ve suggested a ’split-tier’ system between basic income and social dividends. Social dividends can layer atop people’s basic income benefits, forming a two-tier payout structure. The stable layer of basic income guarantees no one’s income will fall below a certain level, while the social dividends can freely fluctuate as their asset values change. Recipients thus receive a direct incentive to contribute to national wealth, as a growing economy means higher social dividends, even if one is above the basic income threshold.

These dividends are entitlements, not exchanges. As such, the more assets that feed into them, the more unconditional resources every citizen receives, furthering their time ownership.

Codetermination

Basic income and universal healthcare are largely redistributive measures that would raise the bottom end of the wealth distribution. Social dividends and baby bonds would democratize ownership and raise the economy-wide baseline of time ownership by granting every American a partial slice of ownership in our national wealth. But untying the knots of power that create and perpetuate wealth inequality in the first place requires deeper reform.

Collectivizing ownership over a portion of national wealth does redistribute a certain degree of power. By giving citizens an unconditional basis of resources, they’re more capable to demand better labor contracts, or avoid them all together by becoming entrepreneurs. But within organizations, the unaddressed question of power is: who gets to make decisions? What interests are represented in the votes that determine what companies do with their profits?

Unchecked concentration of decision making power that excludes labor, environmental, and broader societal interests led to a meteoric rise in stock buybacks and executive pay in the past 40 years. Too often, these same company executives and major stockholders that stuff their pockets when profits boom are those that rely on taxpayer dollars to bail them out when recession strikes. Codetermination is a national mandate that would give worker-elected representatives direct voting power in company decisions.

Germany’s ongoing 50-year experience with codetermination provides encouraging results. Stable growth and innovation, no decline in productivity, a tighter ratio of worker to executive pay, lower macroeconomic inequality, far fewer stock buybacks, and improved working conditions. While Germany’s board structure differs from that in the U.S., adapted proposals already exist.

All Together

This list is by no means exhaustive. I don’t mean to declare the policy agenda for a political economy of time ownership, but to provoke a wider democratic deliberation on its behalf. What’s missing?

A Society For Time Ownership

The German politician Peter Glotz used the phrase “a new politics of time” to draw a connection between reducing the working week and a political commitment to emancipation:

"A new politics of time...would be the most important objective in the programme of a political movement which would not be ashamed to claim emancipation as its goaI.”

“Emancipation” is a darling word of the left, but its pragmatic meaning is often unclear. Emancipation from what? And how, exactly? The foregoing policies for collective and unconditional wealth ownership are anchored in a concrete interpretation: emancipation from extrinsically dominated lives, achieved by leveraging our national wealth to reduce the amount of time citizens are forced to exchange in order to meet their needs.

Decreasing extrinsic imperatives raises intrinsic optionality. Citizen’s gain the capacity to let intrinsic motivation guide more of their time. But time ownership isn’t a political philosophy that hopes to extricate individuals from society. We are social, cooperative, and exploratory by nature. Rather, higher intrinsic optionality could reweave the web of society from increasingly voluntary relations. Time ownership enables citizens to explore lives of their own choosing, rather than those laid out for us by circumstance.

It’s in this spirit that André Gorz envisions reducing the extrinsic demands set upon citizens would enliven and improve our capacities to self-organize. A more “generative society and democracy” would ensue:

“...a policy of a staged reduction in working hours, accompanied by a guaranteed income, cannot fail to enliven thinking, debate, experimentation, initiative and the self-organization of the workers on all the different levels of the economy and therefore to be more generative of society and democracy than any social-statist formula. This is the essential point: that control over the economy should be exercised by a revitalized society...The progressive diminution of work for economic ends will have made it possible for autonomous activities to become preponderant in that society.”

The political economy of time ownership sketched in this essay offers a 21st century road to that same ideal: an enlivened society of self-organizing workers, where “work” becomes an increasingly intrinsic and autonomous affair. Progress would be understood as conferring ordinary citizens with growing shares of ownership over their time.

What Glotz wrote in 1987 is all the more true today: "The historic opportunity we have before us has never before existed in human history.” Time ownership, defined as the advance of intrinsic motivation over the composition of daily life, has never been achievable at scale. Where it existed in history, it was by virtue of slavery and violence. Aristocracies enjoyed luxurious lives made possible by slaves and peasant labor.

Hannah Arendt writes of how Ancient Greek philosophers took for granted that violence and enslaving others were the best ways to escape the realm of necessity. To transcend necessity:

“...force and violence are justified…because they are the only means to master necessity - for instance, by ruling over slaves - and to become free. Because all human beings are subject to necessity, they are entitled to violence toward others; violence is the prepolitical act of liberating oneself from the necessity of life for the freedom of the world. This freedom is the essential condition of what the Geeks called felicity, eudaimonia, which was an objective status depending first of all upon wealth and health."

In 2019, U.S. household wealth reached $106 trillion. The objective criteria for freedom no longer require violence and slavery. We can politicize the act of liberation and lift every citizen towards time ownership.

Amidst the United States’ 21st century wealth, the psychologically corrosive, politically bankrupt unfreedom of extrinsically dominated lives is a design problem we’re capable of solving.

The immovable scarcity of time is a constraint that we may never transcend. We can manufacture abundance in all but what matters most. But in a world exploding with change, the familiarity of unchanging constraints can be grounding, like deep anchors in a dark and thrashing storm. Indeed, what matters most to humankind has hardly changed throughout history. Only our capacities evolve.

The nature of how we spend our time may always remain a fundamentally economic question. But this bestows political economy with an abiding purpose for our growing capacities: time ownership for all.

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You Might Also Like

Universal Basic Income & the Capitalist Production of Consciousness // my essay about economic systems, consciousness, and human development.

A Negative Income Tax for the 21st Century // my full policy proposal for a basic income.

Ben Hunnicutt: Leisure, the (Forgotten) Basis of American Progress // my podcast conversation with the historian Ben Hunnicutt, whose work inspired the Decline of Leisure Section

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If you’ve read this far, you might have some thoughts. This essay is exploratory - the ideas are loosely held waypoints along an open-ended, ongoing inquiry. Don’t hesitate to reach out with responses, collaborations, (constructive) criticisms, suggestions, etc.

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In addition to essays, I explore these themes through a few different projects:

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• I write Mind Matters, a newsletter exploring the connective tissue between economics, culture, & consciousness:

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