“The present state of America is truly alarming to every man who is capable of reflection.”
—Thomas Paine, from Common Sense, 1776
After Thomas Paine wrote the pamphlet that sparked the American Revolution, Common Sense, he went on to think about how the inequalities caused by capitalism undermine the egalitarian values of democracy. To address this problem, in his later work he proposed that governments should subsidize poor people, provide perinatal healthcare and old-age pensions, and give a stakeholder grant to young adults who did not inherit land as land was a critical asset in that era. Paine's ideas were thus key precedents for modern social safety net programs such as welfare, food stamps, Medicare, Medicaid, and Social Security. However, despite the vast wealth of the United States today, we are still struggling with rising financial inequality in general, and with persistent racial wealth gaps in particular. Nowhere is this tension between capitalism and democracy more visible than in our failure to address who owns the world's most reliable source of wealth, which is the U.S. stock market.
Fortunately, the invention of index funds offers a new tool that Paine almost certainly would have seen as a commonsense solution to wealth inequality. What if we were to use this innovation to give every new American child individual ownership of the U.S. stock market? Such "baby stocks" would make more financial sense than baby bonds, they would support the values of both capitalism and democracy, and they would also address the connection between wealth and health inequties. A full discussion of the ideas reviewed in this website is available here for an access fee,3 and an unedited pre-print version is available on SSRN for free.
—Michael Miovic, M.D.