Asset-based egalitarianism is a form of egalitarianism which theorizes that equality is possible by a redistribution of resources, usually in the form of a capital grant provided at the age of majority. Names for the implementation of this theory in policy include universal basic capital and stakeholding, and are generally synonymous within the equal opportunity egalitarian framework. [1]
The idea has been around since Thomas Paine (January 29, 1737 – June 8, 1809) in his work Agrarian Justice from 1795, and complemented his other thesis of basic income. [2]
Two independent schools of thought were developed on the subject, involving individuals from the American labor movement and scholars of the Belgian School. [1] However, the same reasoning (given by both schools) behind the basic capital proposal is the redistribution of wealth usually funded by an inheritance tax in order to provide a universal and unconditional sum of money (or capital assets) at the age of majority. From most authors, the intention was to create a nominal grant for everyone based on a deserved natural inheritance of the earth.
In the policy format, asset-based egalitarianism is usually seen as the opposite policy proposal of Philippe Van Parijs and his thesis of basic income, [3] but asset-based egalitarian proposals have received less academic attention. However, more recently the wave of third way politics has seen much more emphasis placed on responsibility and equality of opportunity and has reopened an old debate.
Some famous recent work on the policy efficaciousness of universal basic capital or asset-based egalitarianism has been conducted by Bruce Ackerman and Anne Alstott in The Stakeholder Society. [4] In this policy proposal, the method of funding the 'stake' was by means of a wealth tax and provides a sum of $80,000 for those reaching the age of majority.
In actual policy, Gordon Brown and the British Labour Party initiated the United Kingdom Child Trust Fund, while in the United States the idea has been implemented in the form of individual development account and argued for by Michael Sherraden. [5] These remain the nearest practical examples.
One of the motivations of the related policy such as the Child Trust Fund is clear from this excerpt:
The account can give your child a head start as a young adult. It will help your child understand personal finance and the importance of saving for their future. The account belongs to them and when they turn 18, the money is theirs to use as they think best. [6]
Asset-based egalitarian policies, such as the Ackerman and Alstott proposals, are often criticised as not being egalitarian. Due to different people having different abilities and talents to utilise financial wealth, there is always a risk that those without formal financial education would alienate their own freedom by dissipating their capital or "stakeblowing". Stuart White argued that unless education corrected for this, there would be an inegalitarian outcome, as people fundamentally have different asset-management capacities. [7] See Time preference and Deferred gratification.
Inheritance is the practice of receiving private property, titles, debts, entitlements, privileges, rights, and obligations upon the death of an individual. The rules of inheritance differ among societies and have changed over time. Officially bequeathing private property and/or debts can be performed by a testator via will, as attested by a notary or by other lawful means.
Citizen's dividend is a proposed policy based upon the Georgist principle that the natural world is the common property of all people. It is proposed that all citizens receive regular payments (dividends) from revenue raised by leasing or taxing the monopoly of valuable land and other natural resources.
Guaranteed minimum income (GMI), also called minimum income, is a social-welfare system that guarantees all citizens or families an income sufficient to live on, provided that certain eligibility conditions are met, typically: citizenship and that the person in question does not already receive a minimum level of income to live on.
A wealth tax is a tax on an entity's holdings of assets or an entity's net worth. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts. Typically, wealth taxation often involves the exclusion of an individual's liabilities, such as mortgages and other debts, from their total assets. Accordingly, this type of taxation is frequently denoted as a netwealth tax.
A child trust fund (CTF) is a long-term savings or investment account for children in the United Kingdom. New accounts can no longer be created as of 2011, but existing accounts can receive new money: the accounts were replaced by Junior ISAs.
Agrarian Justice is the title of a pamphlet written by Thomas Paine and published in 1797, which proposed that those who possess cultivated land owe the community a ground rent, which justifies an estate tax to fund universal old-age and disability pensions and a fixed sum to be paid to all citizens upon reaching maturity.
The inequality of wealth has substantially increased in the United States in recent decades. Wealth commonly includes the values of any homes, automobiles, personal valuables, businesses, savings, and investments, as well as any associated debts.
Asset poverty is an economic and social condition that is more persistent and prevalent than income poverty. It is a household’s inability to access wealth resources that are sufficient to provide for basic needs for a period of three months. Basic needs refer to the minimum standards for consumption and acceptable needs. Wealth resources consist of home ownership, other real estate, net value of farm and business assets, stocks, checking and savings accounts, and other savings. Wealth is measured in three forms: net worth, net worth minus home equity, and liquid assets. Net worth consists of all the aspects mentioned above. Net worth minus home equity is the same except it does not include home ownership in asset calculations. Liquid assets are resources that are readily available such as cash, checking and savings accounts, stocks, and other sources of savings. There are two types of assets: tangible and intangible. Tangible assets most closely resemble liquid assets in that they include stocks, bonds, property, natural resources, and hard assets not in the form of real estate. Intangible assets are simply the access to credit, social capital, cultural capital, political capital, and human capital.
In the United States, the estate tax is a federal tax on the transfer of the estate of a person who dies. The tax applies to property that is transferred by will or, if the person has no will, according to state laws of intestacy. Other transfers that are subject to the tax can include those made through a trust and the payment of certain life insurance benefits or financial accounts. The estate tax is part of the federal unified gift and estate tax in the United States. The other part of the system, the gift tax, applies to transfers of property during a person's life.
Redistribution of income and wealth is the transfer of income and wealth from some individuals to others through a social mechanism such as taxation, welfare, public services, land reform, monetary policies, confiscation, divorce or tort law. The term typically refers to redistribution on an economy-wide basis rather than between selected individuals.
The social dividend is the return on the natural resources and capital assets owned by society in a socialist economy. The concept notably appears as a key characteristic of market socialism, where it takes the form of a dividend payment to each citizen derived from the property income generated by publicly owned enterprises, representing the individual's share of the capital and natural resources owned by society.
Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to work. In contrast a guaranteed minimum income is paid only to those who do not already receive an income that is enough to live on. A UBI would be received independently of any other income. If the level is sufficient to meet a person's basic needs, it is sometimes called a full basic income; if it is less than that amount, it may be called a partial basic income. No country has yet introduced either, although there have been numerous pilot projects and the idea is discussed in many countries. Some have labelled UBI as utopian due to its historical origin.
Asset-based welfare is an economic theory of poverty eradication based upon the redistribution of productive assets in an economy rather than income.
Children's Savings Accounts (CSAs) are a type of savings accounts in the United States, usually specifically designed for higher education savings. They are often available through state or local government programs or nonprofit organizations, in partnership with banks and credit unions. CSAs can be based in state-sponsored 529 plans or other investment products such as Coverdell Education Savings Account, and usually allow deposits from children, parents, and relatives as well as third parties such as school districts and scholarship programs. Many CSAs begin with an initial deposit from government or a nonprofit in the name of the child and subsequent family contributions are often encouraged by matching funds. CSAs often incorporate incentives to encourage saving by disadvantaged youth and families. Withdrawals from CSAs are generally limited to higher education expenses, after the child turns 18. Following college graduation, unspent funds can often be used for other asset purchases or for retirement savings. CSA programs can also include financial education to teach children and families about financial institutions' products, smart consuming and saving practices, and strategies for long-term investing.
Universal basic income (UBI) is discussed in many countries. This article summarizes the national and regional debates, where it takes place, and is a complement to the main article on the subject: universal basic income.
Real utopian sociology is an emancipatory social science created and practiced by Erik Olin Wright, a utopian studies scholar. The apparent contradiction in its name is intentional: this sociology seeks to find existing utopian projects and evaluate their potential to replace systems of domination, particularly as an anti-capitalism strategy. Simply put, real utopian sociology is the study of feasible utopian models for society and pathways to achieve them.
Universal basic income and negative income tax, which is a related system, has been debated in the United States since the 1960s, and to a smaller extent also before that. During the 1960s and 1970s a number of experiments with negative income tax were conducted in United States and Canada. In the 1970s another and somewhat related welfare system was introduced instead, the Earned Income Tax Credit. The next big development in the history of basic income in the United States came in 1982, when the Alaska Permanent Fund was established. It has delivered some kind of basic income, financed from the state's oil and gas revenues, ever since.
Anne Lester Alstott is Jacquin D. Bierman Professor in Taxation at Yale Law School and an American legal academic. She graduated summa cum laude from Georgetown University in 1984 and graduated from Yale Law School in 1987. Following law school, she served as associate attorney at Sullivan & Cromwell and as Attorney Advisor at the Office of Tax Policy.
Baby bonds are a government policy in which every child receives at birth a publicly funded trust account, potentially with more generous funding for lower-income families. Economists William Darity and Darrick Hamilton proposed the policy in 2010 as a mechanism to reduce the racial wealth gap in the United States. A 2019 analysis of the proposal by Naomi Zewde projects that baby bonds would reduce the median racial wealth gap between white and black young Americans from a factor of 16 to a factor of 1.4.
Universal inheritance or basic inheritance is a proposal for all citizens, upon reaching a certain age, to receive an economic endowment from the State.
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