Nathan Gardels is the editor-in-chief of Noema Magazine. He is also the co-founder of and a senior adviser to the Berggruen Institute.
The most salient issue of American politics revealed in the recent elections is “affordability” for all those earners not in the top 10%. It is an especially acute concern among young adults facing economic precarity and the lost expectation of upward mobility as technological innovation disrupts labor markets.
Ready to jump on this turn of events as a path forward for a moribund party, progressive Democrats are reverting to the standard reflex in their policy toolbox: Tax the rich and redistribute income to the less well-off through government programs. As appealing, or even compelling, as that may be as an interim fix, it does not address the long-term structural dynamic that’s behind the accelerating economic disparity heading into the AI era.
In the end, the affordability challenge can’t be remedied in any enduring way by policies that just depend on hitting up the richest. It can only be met by spreading the wealth of ownership more broadly in the first place in an economy where the top 10% own 93% of all equities in financial markets.
That means, instead of relying solely on redistributing other people’s income, forward-looking policies should foster the “pre-distribution” of wealth through forms of “universal basic capital” (UBC) wherein everyone gets richer by owning a slice of an ever-enlarging pie driven by AI-generated productivity growth. That ought to be a rallying cry of the emergent “coalition of the precariat,” which encompasses all those who labor for a living when intelligent machines are coming for their livelihood.
The fairness Americans are looking for in today’s churning political economy is not only about constraining concentration of wealth at the top, but also about building it from below.
This agenda could provide common ground for populists in the Trump orbit — notably conservative Catholics like Vice-President J.D. Vance and Steve Bannon, who champion the left-behind working middle class — and the new generation of Democrats who want to restore the inclusive American Dream to an extractive economy that benefits the few at the expense of the many.
Where To Start
OpenAI’s Sam Altman has proposed a redistributive universal basic income (UBI) scheme as a safety net for displaced workers to be funded through the establishment of an “American Equity Fund.” It would be capitalized by taxing companies above a certain valuation at 2.5% of their market value each year, payable in shares. Proceeds from those earnings would be doled out as regular minimum payments to those whose income falls below a certain level.
Aware that this is only a stopgap income transfer that doesn’t change the pattern of wealth distribution, he has more recently shifted away from UBI and toward the idea of UBC, or what he calls “universal basic wealth.”
“What I would want is, like an ownership share in whatever the AI creates — that I feel like I’m participating in this thing that’s going to compound and get more valuable over time,” he has said.
These ideas could be married to extant policy.
The place to start is with an embryonic form of universal basic capital already established by the Republican-dominated U.S. Congress through its MAGA program: Money Accounts for Growth and Advancement.
Beginning in July, the MAGA program will initiate, by auto-enrollment, a $1,000 account for every child under 8 who is an American citizen. That initial deposit will be invested across the market by professional managers in a pool with all others. The funds will grow with compounded returns over the years until the account holder reaches 18. Families can add up to $5,000 per year to the account. All income from investment returns will be tax-advantaged upon withdrawal and can be used for education, starting a small business, helping purchase a home or in other ways.
The MAGA program is funded at roughly $30 billion per year only through 2028. The Trump administration has so far sought to use tariff revenues to pay for it. But rather than tax consumers in this way to keep the funds flowing after 2028, why not place a “productivity and wealth-sharing levy” of, say, 1% of their market value each year on the highly concentrated wealth of Big Tech with their skyrocketing (albeit fluctuating) valuations? This could seed the MAGA investment accounts into 2029 and beyond. Per Altman, such a levy could also be paid in shares.
As AI is integrated further throughout the entire economy in the coming decades, one could envision reducing and expanding that annual levy, making it 0.5% on all businesses worth more than, let’s say, $5 billion, up to an assessment of 5% of their total equity. Once new enterprises reach this valuation threshold, they would also be subject to the same rules.
“In the end, the affordability challenge can’t be remedied in any enduring way by policies that just rely on hitting up the richest.”
The MAGA accounts, just like investments by the richest Americans, promise to boom when productivity gains are realized as AI diffuses through all economic sectors over time. In this way, “ownership of the robots” will be broadened so upcoming generations can share in the wealth creation of generative AI that’s fueled, after all, by the raw material of their (and our) data.
Critically, the UBC idea is also not statist, but individualist. The proceeds of those levies would not go to the government, but only through the state as a collection agency directly into personal and family accounts. Since the state does not become the owner of wealth that remains private, the idea does not qualify as “socialist.” On the contrary, it makes everyone a capitalist.
A New Orientation
Sustaining the MAGA accounts in and of themselves, of course, is not a silver bullet that will slay an inequality chasm that has been building for decades. But it would signal a new orientation in the way we think systemically about how wealth is created and shared fairly in the AI economy of the future — an orientation that can guide other innovative ways to more widely implement the UBC concept across the entire population.
One such idea emerged in a brainstorming session with some of the more socially aware Big Tech titans of Silicon Valley. In this plan, all publicly traded companies with a valuation above a certain threshold could be required to contribute 2% of their value in shares each year to a sovereign wealth fund that supplements Social Security. From those holdings, every adult American — on the condition that they actively vote in elections — would receive a synthetic security, essentially an account indexed across the stock market, that must be vested for at least 20 years to allow the compounded returns to grow. Capital gains would be tax-exempt upon withdrawal.
The idea is to provide citizens with a literal stake and responsibility in the future of the system, both in terms of its economic fortunes and political stability.
Another proposal to get a jump-start on future AI job shock is to build up assets in the intermediate term when employment patterns still hold. This could be done by following the model of Australia’s superannuation fund, which we have often mentioned in Noema. The combination of the fund’s scale of participation, continual inflow of savings from employer/employee contributions into investments and the longevity to term earns compounded returns that have made the fund, started in 1991, worth $4.2 trillion today — more than the nation’s GDP. As a result, the average wealth per adult in Australia is among the highest in the world at $550,000.
The old paradigm of the Industrial Age, which relied on the bargaining power of labor to capture its fair share, just no longer works when intelligent machines capable of doing what most humans do are knocking at every door. As the value of labor diminishes, capital income from wealth ownership will become a significant hedge against diminishing or disappearing wages.
The usual argument against such a levy in a globalized economy has been that companies will leave for better pastures. But, given the enormous investments and political will to make the U.S. the dominant AI player, companies that succeed on that basis are not about to bolt for either anti-tech Europe or America’s strategic rival, China.
Economic Inclusiveness Is On The Right Side Of History
The recent arguments for lessening over-regulatory obstacles that stand in the way of achieving “abundance” are not wrong as far as they go. But abundance does not distribute itself fairly. This is what the idea of UBC proposes.
Sharing the abundant wealth of an AI economy that is socially generated through the use of our data is so sensible a concept that it would, in time, become as normal and accepted a condition of doing business as paying into Social Security and Medicare.
Historically, as the work for which economist Daren Acemoglu was awarded the Nobel Prize in 2024 has shown, those societies that maintain inclusive social and economic institutions have prospered while those where wealth and power are concentrated at the top have ultimately splintered and failed. This is also the theme of Henry Wismayer’s recent essay in Noema on why once successful societies collapse.
Adopting policies that foster universal basic capital for the AI era would place America’s off-track trajectory once again on the right side of history.
