This proposal is part of the weekly Giving America Series. Model it on the roadmap alongside all the other proposals at contributism.org/giving-america.

I think the biggest problem with taxes is that nobody likes paying them. I know that this sounds overly simplistic, but I promise it isn’t.

I do mean it in the simple sense: the experience of paying taxes is pretty unpleasant. Just about everyone in America knows the minor indignity of waiting for your first paycheck at a new job to figure out just how much smaller your take-home pay is than you expected. And although I actually enjoy filing my annual tax return (sometimes I feel like an unpaid spokesperson for FreeTaxUSA), I realize I’m in a very tiny minority.

But I also mean it in a much more nuanced and important way. People tend to treat taxes like NIMBYs treat housing — we’re often on board with the idea of increasing taxes on others, but we reject any suggestion of increasing taxes on ourselves. Politicians understand this, so they usually advocate for lowering taxes on whichever constituency matters the most to them, and increasing taxes on whatever constituency matters the least. Taxes thus become a game of hot potato, where whoever has political power immediately tosses the burden to someone else.

This tends to make for bad policy, but it also makes a lot of sense. Contributism actually explains the problem with taxes quite well: giving is what makes us feel fulfilled and dignified, and taxes are pretty bad as a form of giving. Across the FARE metrics — free, active, relational, and effective — taxation performs poorly on all four. Taxes are not given freely; as Chris Rock once said, “you don’t even pay taxes — they take taxes!” They’re not given actively; you usually find out about the withholding after the fact. They’re not relational; the IRS is the poster child of nameless, faceless bureaucracy. And it is increasingly hard to say that they’re effective, as we regularly hear stories of more billions of dollars spent on foreign wars of uncertain aim, while the government continues to cut essential services domestically.

It is hard to imagine a world in which taxes are truly contributist — where we feel humanized when we contribute our resources to generate socially-distributed goods and services instead of lightly exploited by them. But I think this is a failure of our collective imagination. What I like about contributism is that it provides the language for us to understand problems that are otherwise obscure to us — and to think of solutions.

I don’t think there’s a single solution that will remake taxes into something fully contributist, but there are a number of things that can be done, at all levels of government, to shift our economic relationship with the government into something more politically healthy. The previous proposal in the Giving America series, Participatory Budgeting, aims at making a portion of our tax contribution more free, active, and relational. The proposal before that, G-Corps, would give corporations the free choice to replace taxation with a more direct social profit-sharing structure. And the Giving America Fund would tie funding for social spending to the prosperity of the economy itself, rather than relying on post-hoc extraction from investors.

Today’s proposal would be a step towards making our taxes more active, relational, and effective.

Proposal: Tax Report Cards

I think every government that collects a broad-based tax (property or income tax; city, state, and federal) should be required to provide an annual report card to each taxpayer, detailing where their taxes go. At minimum, these report cards should detail where every dollar the taxpayer contributed went that year. At best, the report card would be the first step in allowing taxpayers to clearly indicate their spending interests to the government, and to have a direct, meaningful say in where their tax dollars go.

Tax report cards are not a new idea: the UK and Australia have both been doing it for about a decade.

I think both of these report cards are great. They are clearly communicated, aesthetically pleasing, and simple enough to fit on one page. And they are personal — they reflect the allocation of the individual taxpayer’s total contribution, which is more comprehensible than the hundreds of billions of dollars that comprise overall spending.

Notably, the fine print on the UK summary indicates that this is not an exercise in tracing the individual taxpayer’s dollars through the government’s financial systems, but a back-fitting of aggregate government spending to the individual’s total contribution. I think this is actually the more honest route. Even if an individual’s particular dollars could be traced all the way from collection to their specific destination, I don’t think that would be as useful to know. I think what taxpayers really deserve to see is a holistic picture of how the government is allocating the funds of taxpayers like them.

And this would be as good for governments as it is for taxpayers. It’s an opportunity to clear up misconceptions and restore a sense of legitimacy to the government’s work. As a pointed example, I think DOGE might have been less eager to slash agencies like USAID if it was common knowledge that foreign aid made up less than 1% of government spending. And I think we all might care a bit more about the federal debt if we received an annual reminder of how much of our taxpayer dollars each year go to paying its interest (the fastest-growing major category in the federal budget!). Ignorance breeds both conspiracy and negligence; transparency would help make the government’s spending more robust.

It is also an opportunity for governments to highlight their successes. In both the UK and Australia, the report cards are federal, and at the federal level, there are of course limits to how much detail these report cards can include. As things get more local, though, there is more opportunity to get specific. States can use these report cards to highlight programs that they think their constituencies should know about, and cities could even trace spending to specific events or milestones (“300 potholes filled!”). At every level of government, the card could display how many teachers, nurses, inspectors and soldiers your money employs. The associated website could include personal interest stories about the recipients of government funding. And of course, any jurisdiction that implements participatory budgeting should include in their report how their taxpayer’s project money was spent.

That’s the baseline; I think every jurisdiction which collects income or property tax should implement something like this.

But the report card can go further. The card should link to a website where taxpayers can adjust some toggles and submit their suggestions on how they would like their dollars to be spent next year. This would be zero-sum, so they would have to choose what to decrease here in order to increase there. (You can see an example of how this would work on our website.) I don’t think legislatures should be required to honor these preferences, but I think they should see them. Legislatures should know if, in aggregate, taxpayers would prefer the education spending to be increased to 12% and environmental spending decreased to 3%.

After adding these taxpayer suggestions, we can go one step further, if we have the public will. These could become true report cards — it could be mandated by law that governments send them, and they could include a letter grade showing how closely their spending adheres to the public will.

Done well, tax report cards would allow taxpayers to be more informed about their taxes, and feel more actively involved in the process, while allowing legislatures to be more effectively responsive to their constituents. They would create a stronger sense of accountability in the government, and a stronger sense of ownership in taxpayers.

Q&A

How would the report card be delivered?

Ideally, it should be mailed to taxpayers on an annual basis. But there are also no-cost options:

• The IRS income tax return site could display it as a receipt directly after you file your federal income taxes. This would have the added bonus of allowing you to submit your suggestions directly. (Imagine how satisfying it could be for the last step of your tax filing process to be telling the government how it should spend your money.)

• Local jurisdictions could include the report card on your property tax bill, which they send annually anyway.

Have we ever tried this before?

Yes and no. The Obama administration created a short-lived webpage that allowed you to input your tax information and see a “federal tax receipt” showing your tax allocations. But I would honestly be surprised if you had heard of it. The crucial difference here is that the report card would be sent out to taxpayers proactively; everyone would see it, whereas almost nobody saw the Obama website.

Would governments really listen to our suggestions?

Politicians are ultimately creatures of popular instinct. They use the information that’s available to them to craft platforms that they expect will help them to gain support. Not every politician would be interested in the aggregate interests of their constituents, but some would. If politicians could point to a graph that says “we want more education spending” and say “I’m the one who will give you what you want!,” I bet some of them would. (And for those who wouldn’t, reporters and advocacy groups could hold that same graph up to them and ask them “why not?”). The report card would allow us to make that graph.

This proposal is part of the weekly Giving America Series. Model it on the roadmap alongside all the other proposals at contributism.org/giving-america.

In 2011, four districts in New York City launched participatory budgeting, a process in which residents can decide how public funds are spent in their community. Now, it’s widespread in NYC for local physical infrastructure projects – usually around schools, libraries, streets – with the simple requirement that they cost at least $50,000 and will last at least 5 years.

Districts hold neighborhood meetings to collect ideas for community improvement projects. Idea collection is focused particularly on hard-to-reach communities, such as immigrants with limited English proficiency, youth, senior citizens, and public housing residents. Volunteers then research community needs and work with city agencies to turn ideas into concrete proposals.

As a resident, it’s a fun process. First, districts hold community meetings where residents brainstorm ideas and appoint volunteer delegates to shape them into proposals. Then, you get a description of a number of proposed projects in your neighborhood and get to choose, say, three of them that part of your community’s tax money will be spent on. Do you want to plant more trees on the streets? Build a lab for the school around the block? Buy an aquatic weed harvester for the local lake? While voting for your local politicians hopefully allows you to be indirectly involved in how the city spends your taxpayer money, it’s nice to feel like you are contributing directly to where some of it goes.

One of the coolest (and most contributist!) things about participatory budgeting in New York City is that anyone can participate. Regardless of incarceration status, citizenship, or age (you can vote even as young as 11!). If you live and pay taxes in the community, you’re able to help direct where some of those taxes go.

Proposal: Participatory Budgeting

When I think of what a contributist society looks like, I think it has to include participatory budgeting in some form. To me, the biggest question is – how much of the budget should be decided by participatory budgeting? A positive about the NYC example is that it directly impacts the immediate community you live in, the schools your kids go to, the streets you walk on every day. Someone in Staten Island isn’t voting for what should be done in the Bronx, and vice versa. I think some amount of participatory budgeting should exist in every contributist community at this hyper-local scale.

As is a challenge with many things in democracy, however, the ideas and proposals that end up being voted on are also themselves selected by the members of the community who show up to meetings – people who are already poised to be very involved, and are probably not representative of the community in many ways. People who have to work long hours or cannot afford childcare are less likely to show up to the meetings and decide what is on the ballot in the first place.

NYC hasn’t necessarily solved this problem, but a couple of things they do are really promising directions. First, they bring more voices in by introducing an abundance of differently-targeted participatory budgeting programs. NYC actually has four different participatory budgeting programs — one that’s city-wide, one that’s district-wide, one exclusively for students in public schools, and one that is exclusively designed to hear from members of low-income housing projects. Second, for the city-wide program, they have an online idea submission process, and then they use a process called sortition to gather Assembly Committees, which essentially means they exclusively invite a random, demographically diverse sample of community members to be the city’s representatives, rather than simply relying on whoever shows up. Again, this isn’t perfect, but it feels like the right direction. Even if more local communities just implemented this process exactly as NYC does, I think our taxation system would feel a lot more contributist.

But what about bigger-budget, larger-scale tax spending? For less hyper-local policymaking, some sorts of participatory budgeting might be possible, but there are even more complications. The concept of participatory budgeting started in 1989 in Porto Alegre, Brazil, and initially spread like wildfire across Brazil before expanding internationally to places like New York. But after a strong couple of decades, it has been a mixed bag in Brazil, and the number of cities in Brazil with participatory budgeting processes has fallen sharply. de Renzio et. al argue that one of the reasons for this is that it’s exciting at first with low scale, but as projects scale it hits budget limits and people become deflated when proposals are not implemented.

I think this fatigue could also hit if too much is required from residents who have other jobs and commitments. If participatory budgeting options involve complicated topics that are not easily understandable by the general public without a lot of research, time, and effort, they might be better delegated to representatives who work on these things with their teams as a full-time job. Moving beyond hyper-local physical infrastructure products (everyone understands trees and water fountains) means that many residents may not feel equipped to decide where the money goes.

Most people, I think, don’t actually want full control over how their tax money is spent – that’s why we try to elect politicians who will do useful things. As a taxpayer, I want the government to be able to provide good infrastructure, sidewalks, roads, public transit, schools, drinking water, libraries, parks, disaster response, and public safety. I want them to spend the money efficiently and be able to complain or vote a politician out of office if I don’t think they’re doing this, but I don’t want to have to vote on exactly how the money is spent to get all these things: I wouldn’t do a great job, and it’s not my full-time job.

But I think there are ways to successfully expand beyond small-scale physical infrastructure, if done wisely. For example, participatory budgeting could focus not only on a specific region but also a specific topic. Maybe a city is planning to turn an empty lot into a park. The community could vote from a menu of options for what should be included in the park, and can vote for as many things as they want as long as their menu of items remains within budget for the park. This allows residents to choose multiple options – maybe they want to include a community garden and a playground and a baseball field – while also ensuring the city does not spend more than was allocated.

The menu of items for a particular, bounded idea also allows participatory budgeting to apply outside of infrastructure while not paralyzing voters by choice. If the city has a certain amount of budget to spend on programs for youth, for example, a participatory budgeting round of proposals from the community and then a round of voting on this could be well-scoped, allowing the city to use, for example, similar processes to scoped RFPs and then put the finalists to vote.

One of the lessons from Porto Alegre is that municipalities need an ongoing source of flexible funding for participatory budgeting. Another issue noted by de Renzio et al is that support for this could suffer if attached to a particular political party. The Giving America Fund solves both of these problems. Part of the GAF could be allocated specifically for participatory budgeting, distributed to municipalities of similar standard size: large enough that projects could be substantive and funds could be disbursed efficiently, but small enough that they would remain hyper-local.

So, that’s the proposal! I think basically all municipalities should do participatory budgeting at the smallest scale, and we should experiment with growing this into a meaningful democratic voice on where your tax money goes for whole areas of larger-scale projects, at the city, state, and maybe even federal level? Finally, while this might ideally be funded by the Giving America Fund in the future, I think this is a step that cities can and should already take on their own, with the participation of the people.

This version of Pablo also writes under her own name at Statistics and Sentiments. Thoughts are her/Pablo’s own and do not represent her employer.

This proposal is part of the weekly Giving America Series. Model it on the roadmap alongside all the other proposals at contributism.org/giving-america.

“I am a cell-sized unit of the human organism, and I have to use my life to leverage a shift in the system by how I am, as much as with the things I do. This means actually being in my life, and it means bringing my values into my daily decision making. Each day should be lived on purpose.” - adrienne marie brown

Do our individual actions change the world, or does real change only happen when political leaders make large-scale policy decisions?

In this brief article, I’m going to suggest a boycott that’s simpler than it sounds, but more radical than the ones you’re probably used to. It will also be arguably much more effective, both in improving your own life and in fighting the systemic problems that may have led you to other boycotts in the past.

But first, the agency question — can individual action change a broken world? This is a debate as old as society itself, and I’m sure you have a position on it, as do I. But I’m not going to answer the question. Instead, I want to challenge a couple of assumptions that are baked into it.

First, the question assumes that there is only one world to change. But there are many. Each of us inhabits our own position in the world, and from that position, we live a wholly unique life. Some of us live in a world where the air has always been clean; others live in areas where the air is very dirty. For some of us, strangers can generally be trusted; for others, strangers are hostile. For some, there is always enough food to go around (and if there isn’t enough, we can buy more); others know what it means to truly go hungry.

The point is, different corners of the world are meaningfully different. This means that change can happen in your corner of the world, even if it lags in other corners. So while it is true that your individual actions will probably not change the whole of America, you can radically transform the world that you inhabit — and improve life for you and your community.

The second assumption in the question is a false dichotomy. Individual action and large-scale policy are not alternatives. They go hand-in-hand — they work together to create change. Policy doesn’t come from nowhere — policymakers are always taking in information about the ways people act, and they use that as a signal for where “the people” are and where they need to go. When you begin to act differently as an individual, you are making a statement, and people are listening. The more visible the individual action, the more likely it is to shift policy.

Finally, I think the question is usually asked in bad faith. I don’t mean intentional bad faith, but something more unconscious and self-sabotaging. As I wrote in the Giving America Manifesto, cynicism is an immune response that we develop over time, as a protective measure against false hope. I think it is our cynicism that tells us that our actions have no value, that we should not act at all; because when we do act boldly, we let hope start to sneak in through the cracks.

Our actions do matter. They are the impetus for policy change, and even when they don’t change the world, they do change our world and that of those around us. And they are a rebuke to our pessimism — they remind us that our own lives can in fact be different, and in these differences, we remember that joy can come from unexpected places.

Proposal: The Great Boycott

The Great Boycott is as simple as the tagline to this article: buy from people, not machines. More specifically, it is a simple commitment not to buy anything without at least one human interaction. You can choose the boycott in one of two flavors:

The difference between the two isn’t about your level of commitment, but the specific type of change you want to achieve in your world. I’ll explain more in the Q&A, but first, I want to explain why I’ve been adhering to The Great Boycott and why you should consider it too. There are a number of reasons for the Boycott, and it comes with a number of benefits.

First, machine transactions are fundamentally alienating. Yes, buying a shirt on Amazon is convenient and gives us a rush of dopamine, but it comes with a cost. It seems like every study in recent years shows that we are all living increasingly lonely, isolated, and anxious lives. Remote work has come with significant benefits, but it has also led to less time spent with friends, more mental distress, and greater use of antidepressants. I recently learned that the average person spoke 28% fewer words per day in 2019 than in 2005. And that was before the pandemic!

When we speak about the loneliness crisis, we tend to focus on the importance of deep friendships and romantic relationships. We give considerably less focus to the loss of weak ties — the small interactions with neighbors, coworkers, baristas, clerks, receptionists, and so on, which used to characterize day-to-day life, but are also steadily decreasing. These interactions may feel meaningless, even annoying at times, but they boost our mental health by making us feel connected to a larger community. Returning to buying from people is a small turn back towards human interaction, but it can have an important effect on our sense of connectedness to others.

Second, machine transactions support the oligarchs. Take a moment to look at this visualization of Jeff Bezos’s wealth; it’s the best one I’ve seen and it’s worth a quick scroll. Today, Bezos has about twice as much wealth as he did when that visualization was created. Have you ever wondered how he got so rich? We all know how — he got much of that wealth by taking a portion of every dollar you spend on Amazon.

Of course, not every dollar you spend online is spent at Amazon. But today, at this point in late-late-late-stage capitalism, we can no longer afford to play dumb about where our money goes. Fundamentally, the more abstract and depersonalized your transaction is, the larger the share of it that ultimately goes directly into the hands of oligarchs. The Great Boycott is a dead-simple heuristic that cuts directly to this truth. If you commit to the Boycott, you no longer need to spend your time trying to determine if this or that shadowy online company is signaling the proper virtues. You can be sure, at least and at last, of one thing: that you are doing a good thing for the person on the other end of the transaction.

Third, human transactions support humans. The structure of the Great Boycott guarantees that the person on the other end of the transaction is a relatively normal human like you. That’s because you won’t have a direct interaction with Jeff Bezos. Of course, it does not guarantee that all of your money is going to that human. But some of it is, and that’s more important than it seems. A company that allows purchases through human interaction is a company that retains a heavy reliance on human labor, and is not abstracting its jobs away to consolidate profits. This is especially important as AI job displacement ramps up; the Great Boycott ensures that you are supporting real jobs for real humans. Plus, even the smallest direct interaction allows you to learn something about the company’s vibes — do its workers seem contented or exploited? Are they well-paid? (You can even ask!) The Great Boycott ensures you’re taking the right first step, and you can make further decisions from there.

Fourth, human transactions support communities. Perhaps the most important economic impact of the Great Boycott is that you are choosing which communities your dollar supports. This is especially true if you’re doing the hard boycott (in-person interactions), because it means that, by definition, every transaction is helping someone in your physical vicinity — your lived community. Again, The Great Boycott isn’t perfect — if you’re shopping at Walmart, you’re still supporting the Walton family’s $500 billion fortune. But it’s unambiguously taking a step in the right direction — at least you are supporting local workers, who also need to eat. (And since you’re out anyway, why not pick up what you’re looking for from a locally-owned grocery or clothing store instead?)

Fifth, human transactions provide you with the right to give. This is best explained in the most popular article on the Contributist Reader: “What is the Right to Give?”. Contributists argue that the act of giving is the humanizing act. Of course, not every human transaction is an act of giving, but it can be. In a machine transaction, on the other hand, the transaction is facilitated end-to-end by automated processes, so there is no opportunity for us to give at all. The transaction is guaranteed to be an act of empty, lifeless consumerism. The Great Boycott is, above all, a rejection of lifeless consumerism and a commitment to re-assert your own humanity, to become a person who lives, and whose life is characterized by giving.

There is much more that could be said, but I think, in this period of late-late-late capitalism, this proposal mostly speaks for itself. As I said, I have been adhering to The Great Boycott, and it has been a challenge in some ways, but an ultimately engaging one, which I intend to continue indefinitely — I’ll post an update on my experience in the near future.

My challenge to you is to commit to trying The Great Boycott yourself for just one week to see if you like it. See what it would require of you, and how it would change you. See if it gives you a bit of joy and a bit of hope.

And if you’re still hesitant, you can visualize exactly what the Great Boycott would look like for you and your household on the Giving America website.

“Your no makes the way for your yes. Boundaries create the container within which your yes is authentic. Being able to say no makes yes a choice.”

- adrienne marie brown

Q&A

What’s the difference between the soft boycott and the hard boycott?

The soft boycott allows “machine purchases” as long as there is a direct human interaction involved at some point. This could be a simple chat, email, or phone call. Uber Eats counts if you text your driver “Thanks!” Etsy or Ebay also count if you chat with the seller directly.

The hard boycott requires that there is an in-person interaction involved. This means that Uber Eats only counts if you actually meet the driver at the door. Etsy and Ebay are probably off-limits as well.

The soft boycott is for those who see their community in broad terms, or for those who simply want to take steps to stop supporting oligarchs. The hard boycott is for those who want their dollars to support the economic growth and development of those in their local community, or those who want to push themselves to engage more deeply with their community in its physical spaces.

Can I pay for online subscriptions like Spotify? What about HelloFresh or Book of the Month?

The simplest distinction is that you can buy online things online, but any physical things should be bought in-person. So Spotify is okay, as is your favorite creator’s Patreon. Book of the Month is a very cool program, but I would argue that it’s even cooler to go to your local (almost certainly struggling) bookstore once a month and see what they’re recommending — they always are, and the recommendations will be more personal and passionate than anything you’ll get from an online service.

What if I do it but have a cheat day, or a cheat purchase area?

Nobody’s forcing you to do this! I strongly recommend making the commitment fully, embracing the discomfort, and exploring where that discomfort leads you. The discomfort is what forces you to give more of yourself, to interact more with others, to better your mental health by building more weak ties, and maybe even discovering some strong ones. It’s the discomfort that shakes you out of your status quo and forces you to find yourself in unexpected places. But again, nobody is forcing you. Try it for a week and see what you think. And if you need a cheat day, take a cheat day — I won’t tell!

This proposal is part of the weekly Giving America Series. Model it on the roadmap alongside all the other proposals at contributism.org/giving-america.

“For what shall it profit a man, if he shall gain the whole world, and lose his own soul?” — Jesus of Nazareth

When big businesses in America do bad things — when they make their products worse for consumers through shrinkflation or planned obsolescence; or when they get us hooked on ultra-processed foods or infinitely-scrolling outrage feeds; or when they underpay or overwork their employees; or when they pollute shared rivers, or cut down forests to build data centers for AI; and so on, etc. — they don’t do it because they hate us, or because it somehow excites them to see communities suffer.

They do these things because they are, ultimately, amoral beings. They are simply doing what their corporate structure requires them to do: increase profit for their shareholders.

The profit motive is an interesting thing. It is an emergent property of corporations, not something that is decided by any nefarious individual at the top, or even any set of individuals. In fact, the often-reviled CEO of a company is the biggest slave to the profit motive, not its master.

The CEO knows that if she fails to produce satisfactory quarterly growth numbers, she will be replaced with someone who will.

Replaced by whom? The board, who is initially determined by the corporate charter, then periodically voted into position by the shareholders, and whose primary job is to fire and replace the CEO if she does not act according to their will.

And who are the shareholders, and what is their will? Usually, nobody really knows. Or to be more precise, as a company grows, so do the ranks of its shareholders and their interests become quite diffuse. The shares of large private companies are usually bought up by hundreds of private investment firms, each of which must act as a fiduciary on behalf of its own diffuse set of funders. For a public company, the roster is even more byzantine — if you own a retirement account, you are probably a shareholder of hundreds of America’s biggest corporations, including the ones that are lobbying to get your children hooked on sports betting, or the one building the data center in your backyard. Is it your will that they’re considering when they seek shareholder profit at all costs?

Actually, yes, sort of1. Because the will of the shareholders is so diffuse and difficult to determine, boards generally defer to the one interest that they can assume all shareholders have in common: the desire for their shares to increase in value — in other words, the profit motive. You may not want that data center to be built, but your 401k is counting on it.

In this way, every corporation is one big collective action problem. Nobody actively creates the profit motive, and yet no one has the power or incentives to challenge it. This is why businesses become worse as they grow: not because the people controlling the businesses are evil2, but because the businesses are not controlled by people at all. The people are controlled by the structure of the business.

But not all businesses act in this way. Though it is rare, some very large companies have managed to break the mold and be very successful doing so: for example, Costco has a number of surprisingly pro-social business practices, including a constraint on profit margins. Arizona Iced Tea maintains an admirable commitment to 99¢ iced tea, and Patagonia is the rare large corporation with a true social mission.

But there’s a reason companies like these can be counted on one hand. The reign of the profit motive, and the havoc it creates, is a structural problem. And as any true entrepreneur knows, when you can identify a structural problem in a business model, that’s good news, not bad news. It means there’s room for innovation.

The American corporate business model isn’t working as it should. In fact, it is working against us — it resists regulation, it is hostile to our physical and mental health, and it is no longer making everyday Americans prosperous. Worse, what many consider the two greatest threats to humanity — catastrophic climate change and AI-enabled decay — are brought closer every day by the seemingly unstoppable force of our own corporations. Our business model is in desperate need for a structural refresh.

Proposal: G-Corps

The G-Corp (aka, Commonwealth Corporation) is an elegant solution to the problem of corporate moral decay. At its core, the problem is one of ownership. When entrepreneurs trade shares of their company to investors in exchange for capital, they are giving up ownership, in both senses of the word. Once investors have bought up the majority of the shares, the entrepreneur no longer has ownership of what was once their business — and in fact, no one does. Its priorities are shaped by a diffuse set of investors, whose least-common-denominator interests drive the business to act in amoral and antisocial ways that nobody can truly control.

Some entrepreneurs recognize this intuitively and hold out from selling for a long time. But this has its own drawbacks. It can be nearly impossible for a business to grow without the infusion of capital that investors can provide. For this reason, the most ambitious founders eventually give in. Slowly at first, then more rapidly as the need for cash compounds, they sell off bits of their company’s soul.

A better structure would allow businesses to raise the capital they need to succeed while keeping hold of their “souls.” It would prevent them from ever diffusing into a least-common-denominator logic, and allow them to instead stay responsive to the human interests of their stewards and the societies that they are embedded within — to be givers and not takers. It would empower their leaders to approach business decisions with a holistic and nuanced understanding of corporate success, integrity, and longevity, and encourage them to make the appropriate tradeoffs. Finally, it would strengthen, rather than weaken, the business’s competitive edge.

G-Corps do all of this through a simple restructuring of how the business governs itself, how it relates to its community, and how it relates to government.

The G-Corp is an optional, tax-exempt corporate designation that splits corporate shares (that is, voting power and profit) across three groups: capital investors, workers, and community. Each group gets about a third of the company’s shares, so that the three each have a meaningful voice in corporate governance. And the government actually pays for the community shares directly, giving the company the capital investment it needs to be competitive.

By adopting this structure, the company gets a simple and reliable source of startup cash, becomes tax-favored while retaining a profit motive, avoids adversarial labor union politics, and gets to keep its soul — the thing that gets a founder to wake up in the morning excited about the important role their business plays in the world.

I’ll explain all of this below as I describe the details of the structure. I’ll keep it as concise as possible, but there are a lot of details here — this one is for the business, economic, and policy wonks. (For everyone else: I promise next week’s proposal, The Great Boycott, will be a lot more fun!)

The G-Corp Structure

A G-Corp, like any legal business entity, is established with a charter. (You can see a sample of what a G-Corp charter might look like on the Giving America Series website, where you can also play around with how various sample businesses — like the local coffee shop MyBeanz or the mega-corp Big M Market — might fare as a G-Corp, and how G-Corps could impact the economy more broadly.)

The biggest thing that the G-Corp charter must decide is how its ownership will be split. A too-diffuse model of ownership, as I have described at length above, is both the most underestimated and most consequential failure of the modern American business model. The G-Corp structurally prevents this problem by dividing ownership into three groups, activating a natural system of checks and balances in which competing interests regularly surface and resolve. All three groups remain invested in the profit motive, but the company is constantly challenged beyond it; it retains a living and responsive soul.

The three groups are investors, workers, and community. Each of the three groups must be allocated between 20%-40% of the company’s shares; none can ever have a majority, ensuring that the three groups each maintain a meaningful voice in corporate governance.

The investor slice would work almost exactly as most company shares do now, with a few benefits. Most importantly, because G-Corps would be exempt from corporate taxes, they would represent the end of double taxation. Traditionally, investors are actually taxed twice, from an economic standpoint — the company pays corporate taxes out of its profits before those profits ever reach investors, and then investors pay capital gains taxes when they sell their shares. Investors would actually make about a quarter more profit per share if they invest in a G-Corp rather than an identically-performing C-Corp. (More on corporate income taxes below.)

Additionally, to sweeten the deal, investors at the time of G-Corp formation would receive a fully uncapped QSBS-style tax exemption on the sale of stock, as long as they hold it for five years. The point of this is to incentivize founders to stay invested in their company’s success. But it also means that founders and initial investors would be not only avoiding double-taxation; they could potentially avoid taxes entirely. (More on how G-Corps are a structural improvement on taxes below and in the Q&A.)

Finally, one minor constraint: any distribution to shareholders — whether a dividend or a corporate buyback — is a single distribution event shared across all three classes in proportion to ownership. This way, whenever shareholders benefit from buybacks, it’s a windfall for the rest of us too.

The worker slice would be split between all current employees, and would pay out dividends at an annual or shorter cadence3. (Investors would actually be compensated for these shares at fair market value, but it would happen over time. See the Q&A for more details.)

Workers would have flexibility in how they organize and use their voting power (they can and should still bargain collectively!), but the shares would be required to be distributed between workers on an hours- and tenure-weighted basis, with any contractors working meaningful hours included in the shareholding class. When new employees join, they get a share that grows with their tenure, and when employees leave, their shares rebalance into the hands of the existing workers. If there is a board, workers get to elect a share of board members proportional to their ownership share.

Workers would use their voting power to exert pressure on the company to maintain business practices that are good for employees, as well as good for consumers, to the extent that workers have strong ties to the communities that the business serves. But because worker income would be tied directly to corporate profit, workers in G-Corps would also have a strong incentive to ensure that the business is profitable. The relationship between workers and executives in a G-Corp would be utterly unlike the adversarial union/executive relationship, in which workers have little reason to value business profitability and labor contracts tend to be composed of gritted-teeth compromises and postponed pain for short-term gains. The structure of the G-Corp would genuinely bring workers and executives around to the same side of the table.4

Finally, the community slice would be a special ownership structure managed by federal and state-level sovereign wealth funds. A dedicated arm of the federal Giving America Fund (GAF) would be the anchor (with a mandatory share of at least 10%), but the G-Corp’s charter could also allocate a portion of the community slice to a state-level sovereign wealth fund if one exists in its principal place of business.

As with the worker share, the community share would pay out dividends at an annual or shorter cadence, as determined by the G-Corp’s charter. These dividends would go directly into the sovereign wealth funds’ coffers, and their use would be restricted to the funds’ social expenditures exactly as described in the Giving America Fund proposal.

Funds’ voting power would be used to protect the interests of the community. Each fund would be required to establish and maintain a public charter, which could only be amended by ballot measure in their jurisdiction5 — politicians would have little-to-no control over it.

Fund charters would include two types of rules:

1. Mechanical rules. These could be rules on things like executive compensation (e.g. “AGAINST any executive compensation package exceeding 20x median worker compensation”), environmental and product-safety disclosure (e.g. “FOR any rule that reduces pollution of public waters”), or anything else the citizens want. They should be structured to require minimal interpretation6, so that business leaders could apply the votes themselves in most cases, and only reach out to the fund’s lean staff when there is an interpretive dispute.

2. Sovereign principles. These are the principles that govern votes on which there is no clear mechanical rule. Things like “The Fund favors the health and longevity of the company over any single payout,” or “A product should leave its user better off.” When a vote raises a question that the mechanical rules don’t answer7, the fund abstains on the immediate vote, and the question is referred to the fund staff, who consult the principles and publish an answer in a fund guidebook, which would govern all future votes on similar issues. Over time, this precedent would determine an ever-growing share of questions, allowing the staff to remain lean.

With this structure, the community slice is shielded from political actors and motives, and works to democratically protect the interests of citizens. And as a bonus, it creates a renewed sense of civic pride in American business — when a company in your area is a G-Corp, it really does work for you.

It also ties citizen interests to corporate success — the more profit the corporation makes, the better off the citizens’ sovereign wealth fund. Importantly, this means that the community share acts as a check not just on investors, but also on workers — fund charters are incentivized to be pro-worker to the extent that workers are part of the community, but they are also incentivized to oppose any effort by workers to enrich themselves to the detriment of the corporation’s success.

Finally, the funds would pay a fair value for the community shares. This is perhaps the most important feature of the G-Corp from a founder’s perspective. G-Corps would provide an alternative source of capital that would be both competitive with investor capital and more reliable.

The way this would work would be both mechanical and elegantly simple. The base 20% of the shares that go to the community would not be compensated directly, because they would instead be offset directly by the tax exemption. (The current corporate tax rate is 21%; so the exemption is actually worth slightly more than the shares. And if the corporate tax rate increases in the future — as I believe it should — the value proposition only improves.)

All additional community shares would be paid for directly from the Treasury, just like the GAF’s other investments (yes, we can afford this — see the Q&A). If the company is not already public, the valuation would be determined by a simple matching program — whenever a company issues shares in an arms-length investment round, the GAF buys its proportional amount of shares using the round’s valuation. With a 40/30/30 split, the community shares would essentially provide a 25% match to every investor dollar raised8. Combined with the tax exemption, this would mean that every investor dollar goes nearly 60% further, in after-tax terms, than it would in a traditional company.

Alternatively, if a founder prefers not to sell shares to investors at all, they can still access capital through community shares. If there has been no arms-length investment round, they can instead request funding based on a valuation derived from some predetermined multiple of the company’s multi-year trailing profits (or a 409A appraisal), with the capital metered out annually over time.

This way, G-Corps give founders a way to raise all the cash they need while selling as little as possible of their corporation’s soul.

Why Would Anyone Use It?

The G-Corp designation would be entirely optional. Like the LLC or the 501(c)(3) nonprofit, it would be introduced as one of many options for corporate designation. But just as the LLC grew from an experimental structure in Wyoming in 1977 to the majority choice for new business formations by the 2010s because of the flexibility it provided, I suspect the G-Corp would quickly gain traction because of its social, economic, and regulatory benefits.

We’ve discussed the social and economic benefits. On the regulatory side: I think there are a number of benefits and incentives that federal, State, and local governments can and should offer to G-Corps. For example, G-Corps can be given priority in government procurement and licensing contracts. States might even consider providing carve-outs from things like state-level data center bans for G-Corps which allocate a large enough share to the State sovereign wealth fund. This is because the relationship between a G-Corp and citizens is fundamentally different from the often-adversarial relationship that citizens have with corporations. Citizens have a say not just in how governments regulate G-Corps, but also how G-Corps regulate themselves.

And if that isn’t enough to convince you: so far, this proposal has been all carrots; but there is one stick — taxes. There is no need to impose a corporate tax on G-Corps, because a sizable portion of their profits automatically redound to the collective good. In fact, even the smallest possible community share (20%) would replace the value that the current corporate tax rate (21%) brings in the form of taxes, with the added benefit that the G-Corp profit share is much more difficult to dodge.

But we shouldn’t let the existence of G-Corps distract us from the fact that traditional corporations have been avoiding paying their fair share. In 2017, the Tax Cuts and Jobs Act slashed the corporate tax rate from its decades-long position at 35% all the way to 21%. This led to a profound increase in wealth inequality. Profits boomed for corporate investors, and that money did not trickle down. We should restore the old 35% tax rate for traditional corporations (either all at once, or phased in over time, if that’s more politically feasible). This is the right thing to do on its own, but it would also help further incentivize businesses to take on the G-Corp designation. At the standard 35% tax rate, the basic math makes G-Corps the financially-optimal choice for most businesses, notwithstanding the social and regulatory benefits (See Q&A for details).

Conclusion

The G-Corp gives businesses back their soul, by restoring their balance. It solves the problem of the runaway profit motive, gives workers true power and ownership, gives communities and citizens a voice. And it makes businesses more efficient and successful, not less, by constraining each group’s ability to leech from the others, while encouraging them to work together towards productivity for all, a healthier profit motive. In other words, it works because it is truly contributist — the corporate embodiment of all four of the contributist principles, most especially the fourth: “We believe ownership rights belong to those who give.”

You probably have questions! There is a Q&A posted as its own separate article, and you can feel free to leave comments and questions below.

Won’t traditional businesses tend to beat G-Corps because they have more access to capital? Because they can be more ruthless?

For the overwhelming majority of businesses, G-Corps have better access to capital, because every investor dollar can trigger a guaranteed match of community dollars at the same valuation. And the tax exemption makes each dollar go farther, increasing the relative capital advantage.

With respect to ruthlessness: people tend to think that companies with an unchecked profit motive are the ultimate competitors. But the reality is a bit more complicated. An unchecked profit motive drives businesses towards short-term gain. This gain gives them an advantage in short-term margin, which they then wield to outcompete their less-ruthless competitors.

But if you can find a way to overcome this short-term margin advantage, you can compete effectively in the long-term while retaining your soul. Costco and Arizona Iced Tea are both perfect examples of this — they offset their self-imposed profit caps by keeping costs lower than their competitors through streamlined operations, reduced expenditures (e.g. minimal marketing budgets), and innovative revenue streams. Costco buys in bulk, sells straight off of the pallet, limits its SKUs, and charges an affordable membership fee that increases shopper loyalty. All of this allows it to remain competitive against unchecked profit maximizers in the short term, so that it can focus on the long-term, where its careful practices allow it to dominate.

Because of their 21-35% tax advantage and their increased access to capital, G-Corps get the same kind of margin advantages that Costco works so hard for, without having to do any of this work. Add to this the lower turnover, cheaper compliance, and consumer goodwill that will likely result from their G-Corp designation, and I suspect G-Corps will be a lot more competitive than you might think.

What are the exit opportunities for G-Corps? Can they be bought by traditional corporations? Can they de-convert?

They have all the traditional exit opportunities, with a couple of caveats. They can IPO with the investor shares, though the worker and community shares would remain sheltered. They can be bought, but again, the worker and community shares would remain sheltered, and the charter would remain in force unless it is dissolved by a supermajority vote of the workers and investors. Finally, de-converting from a G-Corp would require not just a supermajority vote, but also a buyout of the worker and community shares (and potentially a tax clawback, depending on the circumstances of the exit).

Don’t nonprofits already serve this purpose?

Most nonprofits are tax-exempt, but that’s about the only thing they have in common with G-Corps. Nonprofits generally perform services that are structurally not profitable, and rely on grants or donations for their operating budget. G-Corps are normal, profit-seeking businesses, like an LLC or a C-Corp, just with a different corporate structure.

Won’t employers be disincentivized to hire, to avoid diluting shares?

With respect to profit sharing: this is actually the same employee cost question that every employer faces, just reframed as a question about shares rather than wages. Hiring an employee costs money (compensation), and employers will only hire if they expect the new employee to increase profit by a larger margin than they cost. As far as diluting shares for the purpose of voting: tenure-weighting helps balance the power of incoming employees so that hiring waves don’t create too much disruption.

Can we afford to make all these companies tax-exempt?

The tax exemption is offset directly by the community share. Citizens get 20% of the company exchange for the corporate tax exemption (which is currently 21%). Additionally, consider that many of the largest companies find ways to shield some or all of their profits from taxes through tactics like off-shoring. G-Corps structurally solve this loophole by replacing taxation with a direct profit share — if the investors are profiting, so are the rest of us.

Can the Treasury afford to offer reliable capital to all of these businesses?

Probably! The Treasury only directly provides capital to businesses that opt for a community share greater than 20%. This will be more likely in smaller businesses that aren’t already fully investor-owned. We could always implement an annual limit on Treasury purchases of community shares, but in my projections, investments by the Treasury would be well within our means. You can model this for yourself on the Giving America website.

How are worker shares paid for?

Giving up ~30% of the company’s shares to workers would be a real cost to founders/investors, so the investor class is compensated for it at a fair market valuation (a fixed calculation based on dividend value1). The shares would essentially be provided to workers as a loan, paid back over time with market-rate interest through worker dividends.

Here’s how it works. Let’s say a company worth $10 million, with 15 workers, converts to a G-Corp and the workers get a 30% share. That share is worth $3 million, which will be paid back to investors through the worker shares’ dividends over time.

If the company distributes $1 million in profit in the first year, $300k belongs to the workers. But before the worker payout happens, a portion — say, 80%, or $240k — goes to paying down the loan, so what is split between the company’s 15 workers is the other $60k.

Early payments mostly cover interest, so the $3 million loan amortizes slowly at first and accelerates as profits grow. As the loan balance declines over time, the share of the dividend that workers keep increases. Depending on the loan terms (which would be flexible around a baseline) and the company’s performance, it could take anywhere from 10-25 years to pay off the loan.

One nice side effect of this is that it encourages employee loyalty — coupled with tenure-weighted shares, the worker’s profit grows significantly over the time they stay at the company.

This structure is not novel — it’s a common funding structure for ESOPs (a type of retirement plan that relies on employee ownership), which cover millions of employees in the US, and Employee Ownership Trusts, which cover hundreds of thousands in the UK.

And to provide extra peace-of-mind to investors, the Treasury should guarantee these loans at 80% in the event of bankruptcy (or a sale that doesn’t cover the balance of the loan), through an FHA-style self-financed fee-based insurance program.

Why would an existing, successful business convert to a G-Corp?

The better question is: why wouldn’t they? The raw math is actually roughly break-even, and the social and regulatory benefits provide additional intangible value.

Three things happen to today’s shareholders when a company converts (say, at a 40/30/30 investor/worker/community split):

First, they trade the base 20% of shares to the community in exchange for the permanent tax exemption. A 21% tax on profits is economically equivalent to owning about 21% of the company’s equity, so shareholders are giving up 20 points to escape a 21-point claim — a slightly favorable trade (and even more favorable if you consider that this shields them from potential corporate tax increases by future administrations).

Second, the GAF buys any community shares above the base 20% (in this case, 10%) at fair market value. That isn’t a loss at all.

Third, the worker slice is essentially a loan from investors, paid for over time, with interest (see the Q&A entry above). This might cause some wistful reflection for investors if the company grows faster than the interest compounds (as it would if the company is successful), but that is strictly a winner’s problem. Plus, what is lost in upside risk is somewhat compensated in reduced downside risk by the Treasury guarantee. This essentially allows them to “lock in” the value of the company at the moment of conversion as a fixed, guaranteed income stream, while keeping the rest of their equity untouched.

Convert to G-Corp: (1 − .20)/(1 − .21) × V ≈ 1.01V

Stay as C-Corp, with return to 35% tax rate: (1 − .35)/(1 − .21) × V ≈ 0.82V

And this calculation doesn’t include the QSBS-style exemption on future appreciation, the Fund’s match on future raises, or the regulatory benefits.

But there are a few reasons existing businesses might not want to make the switch. Boards and executives might be skeptical, even if the shareholder math works out. Private, founder-owned businesses may not want to give up control. Corporations that are currently successfully dodging their taxes may see the tax-rate math a bit differently. Most importantly, it’s new, the transition would be onerous, and big businesses are conservative. Most would (fairly) want to wait and see how the new structure performs over time before committing to a corporate restructure.

Won’t everyone just maximize the share given to investors (40%), and minimize the share given to workers and the community?

On first blush, this may appear like the optimal strategy for the purely self-interested founder, but the reality is actually much more complex. There are incentives to maximizing the shares given to each group.

Since the Giving America Fund will reliably buy shares at a fair value with few strings attached, the founder who is optimizing for access to capital will likely want to allocate a small amount of shares to investors to set a favorable valuation, and then maximize the shares owned by the community (40% to community). In fact, because the Fund matches each raise in proportion to the split, a 40%/40%/20% community/worker/investor split would be optimal for aggressive growth — in this scenario, every dollar raised from investors would be doubled by the Fund’s match.

On the other hand, the self-interested founder who is optimizing for cash flow will want to offset wages with a strong employee share (40% to workers). Because the workers’ compensation includes the profit-sharing dividend, the higher the worker share, the less the employer has to spend on biweekly wages2. And when it comes to paying out worker dividends, the house always wins — the cost of the dividend is directly proportional to the success of the business. In this way, the dividend operates both as a cash-flow-friendly payment structure for the founder and a motivator for the employees. (Additionally, as long as the founder remains an employee and retains shares as an investor, they can personally double-dip in both the worker and investor shares.)

The only self-interested founder who is incentivized to optimize for investors is the risk-taker. This is the founder who would limit access to capital in order to keep as much of the founding shares for herself (taking advantage of her capital gains tax exemption), or who believes she can attract investors who will pay a much higher rate than the fair valuation she would get from the Giving America Fund.

In reality, I suspect most founders will be motivated a bit by all three of these factors, plus their intrinsic desire to be good to their workers and contributors to their community.

Okay, I get that the Giving America Fund isn’t communism, but surely this one is communism!

Still not communism! For a number of reasons.

First, the G-Corp designation is entirely optional; no one is forced to take it on. G-Corps compete on the free market with all other corporations.

Second, political leaders have almost no power over the community share. Community shares are owned by sovereign wealth funds, and are governed by direct democracy in the form of ballot measures. Political leaders do not have the authority to change the charters of their sovereign wealth funds, or to decide how they vote. Voting happens mechanically, and funds maintain lean staff. There is almost no discretion within this structure for governments to abuse.

Third, the community share may have strong opinions, but it does not direct company policy. Although it is owned by governments, it is structurally limited in a few ways. Perhaps most importantly, the funds would not have the power to initiate any votes. They are passive actors; they only respond mechanically to actions initiated by workers or investors. Additionally, with a maximum share of 40%, they would be structurally incapable of accomplishing any result on their own. Regardless of what is in the fund charter’s “rules,” a significant share of either the workers or investors would have to actively choose a business decision before it happens.

This point is really important. The government shouldn’t be able to muscle a company into anything — that’s how we get into worries about communism and authoritarianism. But with a G-Corp, what a (democratically-governed) sovereign wealth fund can do is throw its significant weight behind anyone within the worker or investor class who is concerned about, e.g., pollution or outrage-driven social media feeds. By voting a “FOR” or “AGAINST” line into the charter, citizens can basically put out a bat signal to anyone within a G-Corp who is willing to act on their behalf. I think this restores the company’s soul in a structurally-ideal way.

G-Corps aren’t communist, they’re contributist. No one is seizing the means of production here. Instead, ownership is balanced in a healthy tension between all who give to the company — investors, workers, and the community in which the company exists — and everyone is incentivized to make the company a profitable and successful contributor to the world.

Why G-Corp when Commonwealth Corporation starts with a C?

C-Corp was taken, and G is for Giving. Commonwealth Corporation is the official name because it captures the structure and gravitas of the designation for formal documents, while G-Corp remains the easy thing to say. But this is just a proposal, the name doesn’t have to stay.

But what about [insert concern here]?

There is, of course, much more to address, but not everything deserves space in this proposal. I believe the structure is sound; more implementation details will be hammered out in time. If you have additional thoughts or questions, post them in the comments and I’ll try to respond!

This proposal is part of the weekly Giving America Series. Model it on the roadmap alongside all the other proposals at contributism.org/giving-america.

“Anything we can actually do, we can afford.” - John Maynard Keynes

One of the most persistent dissonances of modern American life is reading headlines regularly declaring record stock market highs, strong GDP growth, and eye-popping corporate earnings, all as life for the everyday American becomes increasingly unaffordable, constricted, and socially and economically precarious.

This is neither reasonable nor inevitable. It is fundamentally unfair. It is a product of structural decisions about who deserves the fruit of our shared labor — not the people, but wealthy investors. America’s economic prosperity should not be so divorced from the prosperity and well-being of the average American.

There is a solution to this problem — a real, genuine solution — that addresses the inequality at its root, without sacrificing the complex set of market incentives that make the American economic engine run. And it doesn’t require massive revolution; but it will lead, over time, to the erosion of exploitative business practices, and to the end of extreme economic inequality. We call it the Giving America Fund.

The Giving America Fund is a proposed new economic institution, operated by the Federal Reserve, that would make available a variety of benefits for Americans that are currently seen as unaffordable (real income for stay-at-home parents and caregivers, free education from pre-K to college, universal healthcare, etc.), drastically reduce wealth inequality, revitalize the job market, discourage corporations (including the AI ones) from operating in ways that are harmful for employees and consumers, and actually reduce taxes across the board, both for individuals and for corporations.

If all of this sounds too good to be true, that is only because we have become so accustomed to a dysfunctional social and economic system in which the vast majority of the trillions of dollars of wealth that our economy produces is siphoned off into the hands of a very small investor class.

This is to say, we have the means to afford social investment programs of vastly larger scope and ambition than what our current political and economic imagination allow. We just haven’t figured out how to structure the American economy in a way that makes efficient use of its wealth to generate American prosperity. This is what the Giving America Fund is designed to do.

Proposal: The Giving America Fund

The Giving America Fund is a uniquely-structured sovereign wealth fund, operated by the Federal Reserve, which would invest financially in America’s corporations, and use the proceeds of these investments to fund otherwise infeasible social programs that make everyday Americans happier, more secure, and more productive.

A sovereign wealth fund is a government-run economic institution which holds wealth-generating assets and directs their proceeds on the behalf of society at large.

Most sovereign wealth funds are run by nations with rich oil deposits, and are designed to invest oil revenues into financial markets to generate income for various types of national spending.

The Giving America Fund would be very different from existing sovereign wealth funds, in part because it would be an agency of the most economically-generative nation in the world. The total stock market value of public US companies currently sits at roughly $75 trillion, a little over half of the entire global market. And the US market has generated an average of 10% per year in wealth for the last hundred-odd years. These yearly stock market earnings (~$7.5 trillion in today’s economy) exceed both total federal tax revenues and total federal spending on social programs.

America’s greatest financial asset is not oil, but the American economy itself, which is so reliably generative that the entire world’s economic system rests on the US dollar.

And yet, almost none of these market earnings make their way to improving the prosperity of ordinary Americans. This was true at the beginning of the modern stock market, and it has only become truer over time, as taxes on capital gains have been reduced and kept far below taxes on wages and wealth has been allowed to pool at the top. The theory that keeping wealth in the hands of the wealthiest class somehow helps lower classes (“trickle down economics”) has been widely discredited. The economy has never been better for the rich, and yet the rest of America struggles to afford the skyrocketing prices of housing, groceries, and gas.

The Giving America Fund is an elegant solution to this problem, and the Fed is uniquely positioned to run it. As a sheltered, independent agency with a broad mission to promote a stable and healthy economy, the Fed can and should invest in the American stock market alongside these wealthy investors, and ensure that a portion of our national wealth makes it into programs that make Americans more prosperous — more happy, healthy, and socially and economically productive.

The Endowment (The Business Investment)

Let’s first discuss the Fund’s endowment. The Giving America Fund’s endowment would be primarily made up of two major assets:

1. A total US market investment fund

2. A minority ownership share of all G-Corps

I will only discuss the market investment fund in this article, as it has more predictable economics, and is thus simpler to model. G-Corps, which would be a more economically and socially effective alternative to 501(c)(3) nonprofits and B-Corps, will be described in the next article in the Giving America Series.

As noted above, the total stock market capitalization of public US companies is roughly $75 trillion. Of course, “public” companies is a bit of a misnomer, as the vast majority of this stock is owned by private investors. This is by design — private ownership is a core feature of the American economy. Private owners create a competitive market and shape the incentives which drive businesses in their relentless pursuit of profit. Of course, this orientation towards shareholder profit has many drawbacks, but it is also undeniably one of the primary reasons America is by far the wealthiest country in the world.

The Giving America Fund would capitalize on this profit orientation, not compromise it. It would involve no expropriation of private wealth, and would not be the nationalization of private industry. It would fit directly into our current economic structure by investing in American companies in the most boring and traditional way possible — by simply buying stock on the public market.

Specifically, the Fund would invest a sum equivalent to 1% of GDP every year (~$300 billion today, about 0.4% of the total market cap) in public US companies. This would be a broad-based, cap-weighted investment in the total US market, and would be regularly rebalanced like any modern index fund. And every year, the Fund would sell roughly 5% of its stock to fund its social programs.

This would result in a yearly social distribution budget that starts small ($16 billion in the first year), but grows over time, reaching over half a trillion at year 25 and over $2 trillion at year 50. Below is a graph depicting a hypothetical “average growth” scenario. Keep in mind that timing the market doesn’t really matter here, as the very best and very worst case historical scenarios largely converge to the mean over time (see the “economic downturn” Q&A item below). This is because, unlike with other federal government concerns like Social Security or the National Debt, the unyielding math of cumulative returns actually works in the Fund’s favor.

I’ll describe what this budget will be spent on soon, but first, I’ll describe the fund’s investment philosophy.

Investment Philosophy

The Fund’s investment philosophy would be staunchly apolitical to avoid any risk of corruption. This is why it would be housed in the Federal Reserve, the only federal institution currently sheltered from presidential overreach, with its portfolio walled off from monetary-policy operations (just as Norway separates its fund from its central bank’s reserves). And this is why its investments would be total market investments — it would not be in the business of picking winners and losers.

The Fund’s ownership share of any individual company would start very small. In the first year, it would buy roughly 0.4% of the shares of every public US company. It would come as a small boon to American businesses, but it would not, at first, have any impact on their operations.

But over time, with repeated yearly investment, the Giving America Fund would begin to grow its ownership share. Within 15 years, depending on market outcomes, the Fund would grow to own roughly a 3-10% share of every public US company (with a legally-imposed cap of 10%). This would make it one of the largest shareholders in every public company in America.

This means that, while it would never come near to majority stakeholder status, the Fund would begin to exert a noticeable, growing pressure on the companies it is invested in. This is by design as well. Every investor implicitly shapes the priorities of the businesses it invests in. The much-discussed corporate “profit motive” exists because every company’s leadership has a fiduciary duty to be a faithful steward on the behalf of its owners. But many owners have priorities other than profit. If a meaningful portion of the company’s ownership has an unambiguous social purpose, the profit motive remains, but it sits alongside that social objective.

As a government institution and a voting shareholder, the Giving America Fund would be in a unique position to encourage (but not force) companies to act in ways that are good for the American people. It would not have majority power over any business, but it would be legally bound to vote according to its guiding principles. Those principles would be determined by the legislature, but I suggest that they should be the following: 1) to generate profit to grow the Fund and 2) to follow the four contributist principles — in sum, to expand and protect the right to give.

In other words, the Giving America Fund would give the American people a meaningful voice in American corporate governance. It would grow, over time, into a powerful activist investor on the behalf of the American people, shifting the basic priorities of every American business. It would also lend the weight of its voting power to other investors who want to press company leaders to act with more social responsibility.

The Distribution (The Social Investment)

A core defining feature of the Giving America Fund is that it is an investment on both sides — the money that goes into businesses is a direct investment from the US Treasury into the American economy, and the profit that comes out of the investments and is funneled into Giving America’s social programs is also an investment into the American economy, though this side is an investment into America’s human capital rather than its purely economic capital.

To ensure that this remains true, every social program funded by the Giving America Fund would have to, by design, be dedicated to increasing the capacity of Americans to participate in the productive effort of making our communities thrive. That is, increasing Americans’ capacity to give, in their own way, to the shared goal of making America a wonderful place to live.

There is no limit to what sorts of programs can be designed and funded, but to start, this distribution would be used as a funding source to make possible a series of programs which will be described in later proposals in this series. These include:

• Education

  • Community college for all

  • Vocational training (through business partnerships)

  • Replacing student loans with Giving Fund income-share program

• Family

  • Basic income for new parents and caregivers

  • Free child care through Pre-K

• Health

  • Universal healthcare

  • “Drug bounty” pharmaceutical program and investment in generics

• And more!

Additionally, as it grows, the distribution would become a replacement source for much of our current tax-funded social spending, meaning that we could actually reduce taxes over time because of the Fund. This would begin with smaller income security programs like WIC and SNAP, saving taxpayer dollars while accomplishing the Fund’s mission.

But its potential would grow over time. With time, it could fill the Social Security funding gap. It could lead to not only a balanced budget, but a surplus. And ultimately, powered by the diligence and determination of American industry, the Giving America Fund could bring into reach the sort of programs that are currently seen as economically infeasible — including a truly contributist take on a Universal Basic Income (proposal coming soon!).

Q&A

How can we afford ~$300 billion in extra spending per year?

It’s helpful to compare this to the $5.2 trillion COVID stimulus response of 2020-21 or the $800 billion bailout of 2008, both of which were funded by adding to the Treasury’s debt, rather than levying new taxes.

The Giving America Fund is significantly more fiscally responsible in two major ways. First and most crucially, this time the borrowing buys an appreciating asset instead of vanishing. This is a government investment, not government spending, and as an investment, it is as robust as the US economy. The stimulus and bailout were backed by vague promises of economic stimulation; the investment in the Giving America Fund would be backed by the growing coffers of the Fund itself.

Second, the investment would over time grow large enough to pay for social programs that are currently funded by taxes, reducing the spending deficit. Over a long enough time horizon (roughly 30-40 years), the Fund would ultimately save the US government more money than is invested into it. And even at its most expensive moment, the Fund’s entire twenty-year cash commitment would still be smaller than what we spent responding to COVID in twenty-four months.

The key thing to remember is that the money that goes into the Fund every year isn’t spending; it’s investing. Asking how we can afford it is a bit like asking someone how they can afford to take $300 out of their bank and put it into an index fund. The money isn’t spent until it is disbursed from the Fund, so the most that will be spent in a year is not the invested 1% of GDP; it’s the sold off ~5% of the cumulative value of the Fund. And in almost every possible scenario, that 5% will just be the earnings of the investment itself.

The Giving America Fund is not new government spending; it’s a new government funding source, redirecting investor wealth into productivity-enhancing social programs.

Does this plan require us to tax a lot of wealth from the rich?

Surprisingly, no. It is true that the long-term consequence of the Giving America Fund would be that wealthy private investors would own a meaningfully smaller share of America’s wealth. But the Giving America Fund doesn’t require any new taxes.

Of course, the yearly investment could come from a wealth tax. But I suspect it would be both more politically viable and economically robust to just source the money straight from the Treasury.

What happens to the Fund if there’s an economic downturn? What happens to the programs it supports?

The 5% yearly distribution I described above is an over-simplification. The real calculation would approximate 5%, but would be a bit more complex, and include a number of built-in supports for this type of scenario:

• First, the Fund would use a rolling-average of 5% of its value over the past five years (this follows the Alaska fund’s model), which dramatically reduces volatility and allows the Fund to essentially smooth out all but the longest-term downturns.

• Second, after 15 years (to allow for maturity), distributions will be capped at a YoY increase of 10%, allowing excess gains to essentially form a reserve for downturns.

• Third, In the event of a market downturn, the Fund will increase its distribution to up to 7% to smooth the downturn even further.

• Finally, and counterintuitively, short-term economic downturns are actually good for the Fund, because they allow it to essentially “buy the dip,” and secure larger gains for the long term.

This is simply a proposal, so the details may change, but rules like these would ensure that Fund returns remain relatively stable in even the worst market conditions.

Could the Giving America Fund really support a Universal Basic Income?

Maybe! We'll discuss a contributist version of a UBI in a future article. An Andrew-Yang-style universal basic income of $1000/month for every adult would cost about $3 trillion per year in today’s dollars. Depending on market performance, the Giving America Fund could reach that amount (inflation-adjusted) on its own in 50 years, so it’s possible that we could fund a UBI this century.

Even more encouraging is the fact that the UBI wouldn’t have to be funded on the Fund’s market returns alone. G Corps (described in a later article) will also provide revenue that the Fund can allocate. And if the Fund’s social programs replaces the need for some existing taxpayer-funded social services, we could instead funnel that tax money into the UBI, increasing the available budget by another $1-2 trillion.

As Keynes said, “Anything we can actually do, we can afford.” The problem isn’t that it can’t be done; it’s simply that we don’t realize we can afford it. We have a $75 trillion economic engine, but it is near-totally disconnected from our collective national budget. The point of the Giving America Fund is to tie our incredible economic means to our lofty economic goals. When that’s done, there will be almost nothing we can’t afford.

Government ownership of companies? Isn’t that communism?

No, this isn’t communism. It is simply a way for the American people to get a share of the wealth generated by American industry without having to be wealthy investors themselves. Currently, market prosperity isn’t tied to national prosperity — it only makes sense to ensure that all boats really do rise with the market’s lifting tides.

Importantly, the government wouldn't “own” companies in the traditional sense, because it is not taking anything close to a majority ownership stake (the legal maximum would be 10%). Companies are not compelled to do anything the Fund wants. In fact, the Giving America Fund is actually a bit weaker than the average investor would be with the same ownership stake, because it doesn’t even have the ability to opt out of investing. And to the extent that the Giving America Fund has influence through its voting power, it is legally bound to operate only according to its democratically-determined principles.

And if you are still worried about the Fund’s influence, consider this: an interesting function of the investment model (1% of GDP yearly, with a 5% sell off yearly) is that the fund actually shrinks as a share of the market when the US market is doing well, and grows its share when the market is doing poorly. In our historical modeling, the fund hovers at around 3% in strong markets, and only approaches the 10% cap in periods of protracted recession or stagflation.

That means that the Fund’s influence is an ideal governance mechanism — it kicks in when “unfettered” capitalism is failing, and retreats when markets are doing well.

And remember, the Giving America Fund is on the companies’ side — its goal is to ensure American markets are profitable, because for the first time in the history of American markets, it would ensure that when the companies win, so do we.

Thoughts on this proposal? Leave a comment below!

“The ultimate, hidden truth of the world is that it is something that we make, and could just as easily make differently.” - David Graeber

What does America need most right now? Listening to Americans on the left and the right, of every race, religion, and social class; I have heard very different answers. Some say we need more abundance; others say we must learn moral restraint. Some say fewer wars abroad; others murmur, with a nervous chuckle, of the approach of a cleansing war within. Some say we need to balance our budget. Others say we must stop paying so much attention to budgets. And I have heard over and over again, with great urgency and even greater mystery, that something must be done — and quickly — about the Rule of Law.

But there is one thing — a very quiet thing — that I have heard in nearly every one of these conversations, which somehow conveys more than the whole collection of theories. It is almost never said outright; but it is almost always there. Sometimes it’s in the quiet space just after someone voices a real frustration or calls out one of the many hypocrisies of their political opponents. Other times, you hear it in their sighs or in their sarcasm. Often, it’s just a shared look in all of our eyes.

It’s our disillusionment; our world-weary cynicism. Americans used to believe that things would improve over time — the moral arc of the universe would bend towards justice; and if it didn’t on its own, that we would make it so. Now, we don’t really believe in anything, except perhaps the inevitability of crony capitalism. You can see it in our eyes.

Our pessimism should be very surprising to us. It is a genuinely new tone for America, one that was foreign to us even a couple of decades ago. Even the most oppressed Americans have always stubbornly believed in some vision of their future: whether it was MLK’s bending arc, or the Black Panther Party’s utopian vision built on mutual aid. But our turn towards cynicism has happened over time — a product of forces so slow, persistent, and methodical, that we have scarcely recognized the shift.

What I have noticed most, as I listen to Americans of all kinds, is that the discourse in America has grown very dark. We can no longer muster a positive vision of the future, much less a path to get there.

What America needs is hope.

The Giving America Series

When a people’s hope has been lost, it can’t be bought back cheaply. Cynicism is an immune response — an adaptive hostility to optimism that we learn over time, as a protective measure against false promises.

If we want to regain our optimism, to believe that there is a better world for our children, and perhaps even for ourselves, it is no longer enough to say good words like “Democracy,” “Equality,” “Hope,” and “Change.” We must instead have a real, concrete vision — a clear sightline to a beautiful future, a trustworthy roadmap with practical means and concrete ends.

This is the goal of the Giving America series. We believe that, over the course of this series, we will provide a vision of and towards the future that has enough clarity, rigor, and conviction to restore in you some hope. Not hope that the future will be good on its own, but hope that you and I can, and will, make it so.

The first phase of the Contributist Reader was focused on theory — on developing a robust understanding of what makes individuals, communities, economies, and societies flourish. We believe we have come to understand that theory well. Giving to one another is the humanizing and the generative act, and when we can give well (freely, actively, relationally, and effectively), both we and our communities thrive. The entirety of our theory is expressed in short form on the Core Ideas page of the Contributism website, and in longer form in the Intro to Contributism series on the Reader.

This next phase of the Reader will be about practice. It will unfold over the coming months, in the shape of a weekly series of practical proposals, aimed at all facets of our life and society, that will together describe what it looks like to get from here (today’s America) to there (a contributist society).

You will read about how we can build better relationships by restoring “good friction” to our lives. How the American business model can be restructured to ensure that companies behave better, rather than worse, over time. How we can use American capital as the engine to fund everything we need, even a Universal Basic Income. How we can restore civic belonging and responsibility; right-size the ballooning costs of healthcare and education; heal our broken systems (and mindsets) on immigration and citizenship; repair America’s atrophied democratic structures; even transform taxes into a true act of giving rather than one of taking.

Some of the proposals will be things we can adopt as individuals, and some will require broader social change. Some of the proposals will strike you as simply incremental; others as revolutionary. This is by design. We want to be painstakingly careful not to cast a vision that feels out-of-reach, nor one that feels milquetoast. To do this successfully requires a complex roadmap of ideas, some of which are feasible today, and others which will appear more and more feasible over time.

Not every proposal will speak to every reader, and that’s okay. But every proposal will be both boldly contributist and relentlessly pragmatic, and will fit into a broader story of an American future that we think you can honestly believe in, and we hope you will find honestly exciting.

The Giving America Roadmap

The proposals in the Giving America Series are not just articles; they are calls to action. We don’t just want you to read them, we want you to understand their impact (including their costs as well as their benefits), then advocate for the ones you believe in — in your own life, your community, and your politics.

We have a broad vision for how we will help you to do this, which we will roll out over time. The first step, which we are making available now, is the Giving America Roadmap.

The Roadmap is an interactive, customizable model of your vision of a contributist society. Every week, as a new proposal is released, it will be added to the roadmap, where you can visualize its costs and impact over time. Within the roadmap, you can stress-test our proposals, replace our assumptions for your own, and pick and choose the ideas that you want to see made real in the world. By spending time building out your vision, and sharing it with others, you are taking the first step to making it a reality.

We are trying to build something genuinely new here. Stick around and we think you’ll like what you see over the next few weeks, but we haven’t thought of everything. So, as always, we want your input to help us become better givers. If you have something to say or would like to help with this project in any way, please leave a comment, contact us, or help us develop proposals.

See the Giving America Website

Wondering what happened to contributism? The short story is, we decided to go local. Last summer, shortly after we shifted our efforts from the pure writing project that was The Contributist Reader into something more community-oriented (and launched contributism.org and hosted a few events), a few of the writers here all serendipitously found ourselves moving to the Bay Area at roughly the same time. We took this as a sign and opportunity to engage on a more personal scale. Could we build community more effectively by engaging with our real life neighbors rather than connecting solely over the internet? In any case, wouldn’t it be more contributist that way?

Since then, we’ve met regularly locally, and spent some time thinking about how we want to engage with our community, and the world around us. We’ve refined our ideas a bit, and thought carefully about our messaging. Ultimately, we decided we wanted to start two initiatives: the Contributist Pamphlet Series, and Contributist Meetups.

The Contributist Pamphlet Series

As we noted in our intro series, contributism can be hard to describe, because, like capitalism, it encompasses a lot of interconnected things. It’s a descriptive lens that explains the ways people and societies operate, but also a prescriptive lens that advocates for new ways they should operate. It’s in tension with capitalism in some ways, but it’s not exactly opposed to it; in fact, some of us have come to describe it as a more efficient capitalism — it incentivizes productivity in much of the same ways, but it structurally cuts out the hoarders at the top.

Anyway, we’ve found that, instead of trying to explain the whole thing at once, it’s most effective to just tell one piece of the story at a time, through parable, essay, and illustration. So we’re writing pamphlets – little zine-sized booklets that each capture just one aspect of contributism, in about 10-15 pages.

We aim to write a couple dozen of these over the next year or so, in sets of three or four, each organized around a specific topic area or target audience. We’ve started with a three-pamphlet series called Contributism for Everyone. We’ve begun distributing them for free around Stanford’s campus and in Oakland.

On the back of each pamphlet is a QR code explaining how to find more pamphlets. The best way to do so is through a pamphlet swap at a local contributist meetup.

The Contributist Meetups

The other initiative we’ve started here in the Bay Area is a spin on community organizing called contributist meetups. These are public community events, in which we serve our community in some FARE (free, active, relational, and effective) way. This month, we have two events planned: we’ll be going fruit picking on Stanford’s campus and donating the produce to a local food pantry, and joining the Trash Falcons for a trash cleanup at Lake Merritt in Oakland.

After we serve, we’ll do a pamphlet swap, where you’ll give your pamphlet to someone else (if you have one) and get a new one to read. The purpose of every event is to build community while engaging in some form of giving — the ultimate humanizing act.

If you’re in the Bay Area and want to join either event, or a future one, find more details on our website: contributism.org/meetups. And if you want to be kept up-to-date on future contributist events and developments, join our Discord!

A few months ago, one of our authors wrote an article called “Giving can (and should) be easy,” which argued that each individual should give in the ways that come naturally to them. They wrote: “As individuals, we should feel more eager and less guilty about finding ways where it is ‘easy’ and natural for us to give, and as society, we should break down barriers that make it ‘hard’ to give.”

In this direction, we at the Contributist Reader have been considering what it would look like to challenge both ourselves and you, our readers, to begin to become intentional givers, in a way that both comes easily and is truly effective. Is there a simple way that we can change our behavior in our daily lives — seeing the world by a clearer lens, playing the game of life by a more generous, more winning strategy — that both brings more joy and meaning to our lives and makes our communities flourish?

The answer is yes — and it comes in our spending. There is a simple way to make your everyday spending a true act of giving, with all of the earned dignity, real impact, and joyful feeling that true giving brings: choosing to be a contributist consumer.

It can be hard to remember this, but spending is actually a form of giving. The reason this is hard to see is because, in our current stage of capitalism, most of our spending has become so deeply transactional (so emptied of its human and relational qualities) that it often feels much more like mutual taking.

But take a quick moment with me to reflect on what spending may have felt like in societies before our own. In a pre-industrial society, before most of your spending was mediated through large, unfeeling corporate entities, when you bought from the butcher or the tailor or the shoemaker, you knew exactly where your money was going. As you handed over a few shabby bills and/or assorted coins, you knew that they were going into the pockets of the workers who in turn gave you the product of their labor — the money would go to helping feed them and their families, or to procuring their own set of comfy shoes. These were members of your community, and when you gave your hard-earned money to them, you experienced the warm feelings associated with giving — with being a contributing member of a rich and complex community.

In today’s society, we don’t get to experience these feelings very often when we spend. The problem is not that our money doesn’t ever go to our community members; in fact, a large portion of our modern spending still does go to helping our community. Whenever you dine out, or buy groceries, or really, shop in-person anywhere, some of the money you spend goes to the employees you interact with, who are members of your community.

The problem is that we have become accustomed to the understanding that only a small portion of the money we spend goes to helping these workers. The bulk of it goes into the unfeeling corporate entity, and exits out the back to its wealthy owners, who we neither know nor trust, and who we vaguely suspect may even be exploiting those very workers who we would like to happily support. In other words, we have become disillusioned and desensitized in our spending. We have trained ourselves, through the repetition of thousands upon thousands of these unhappy transactions, to become numb to the human feelings of spending entirely. It is telling that one of the reasons we feel good when we tip is that we know that at least that money is actually going to the workers. Remember, that’s the feeling we were once rewarded with simply by making the actual purchase.

Although this picture of modern spending is pretty depressing, it also reveals an opportunity. If we can find a way to ensure that our spending really does go to helping the people of our community, then not only do we make our spending an effective act of giving to our communities (and an effective corrective to the growing problems of wealth inequality and oligarchy), we can also re-sensitize ourselves — we can begin to capture again the warm feeling of giving with every dollar we spend.

This is both the theory and the promise behind contributist consumption. Your spending can become again an act of giving, a simple and direct way of being a contributing member of your rich and complex community. In order for this to be the case, you simply have to be confident that you are spending at businesses that are themselves contributist. This just means that they are contributing positively to their communities, and are supporting their employees well. (Our ongoing “Reclaiming Business” series gets into some detail about what makes organizations contributist, and why that makes the difference between them having a long-term positive or a long-term negative impact on their communities.)

This is simpler than it sounds. To make it easy to determine whether a business is contributist, we’ve developed something that we call the Community Stewardship Test, which is a simple, three-question measure that you can use to evaluate whether a business is contributist in a few seconds, or at most a few minutes. Here’s the test:

If a business meets two of the test’s three measures, you can consider it partially contributist, and if it meets all three, you can consider it fully contributist.

We don’t recommend that you attempt to make all of your purchases at contributist businesses. Instead, we recommend that you make an intentional commitment to shift some of your spending to partially or fully contributist businesses. With every intentional act of spending at a business that you know meets these measures, you reclaim your spending as an act of giving — both becoming a contributist and reaping, alongside your community, the rewards.

We’ve landed on three recommended tiers of commitment, ranging from super-easy to super-committed, which we describe on the Contributist Consumption page of our new website. (We’re also working on a directory of local contributist businesses!) If you’re interested in what it might be like to be able to spend joyfully — and with a clear conscience — go check it out!

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You may have noticed that there hasn’t been a new article on the Reader since February. The reason isn’t that we’ve abandoned contributism — in fact, it’s exactly the opposite.

If anything has become clear in the last few months, it is that we are in urgent need of exactly the sorts of things that contributism aims to bring to society: dignity and belonging for all individuals; culture and policy built on a framework that rewards givers rather than takers; strong, robust communities held together by mutual care and responsibility; an economy aligned to the needs of society rather than a society held captive by the needs of its most powerful economic actors.

As our small community has grown — and as the state of American society and politics has become ever more precarious — we’ve realized that it’s time to move beyond simply writing and reading about these sensible, hopeful ideals. If we truly want them to come to fruition, we have to begin to make them our reality.

So, we’ve been hard at work building out the next phase of the contributist movement, and we’re ready for you to come start building it with us.

You can find out all about our movement at our new online home: contributism.org. There you can read (among other things) our core ideas, our positions on policy + politics, our declaration, what it means to be a contributist, and most importantly: how you can get involved.

If you’ve been struggling to explain contributism to your friends, we now recommend you send them there instead of here; we hope it gives a much more direct and concise picture than what the Reader’s “online journal” format can provide. (Though we still recommend the intro series for those who want an in-depth understanding of contributism).

And if you want to get involved, come join us at our first biweekly online contributist meetup! (Or, if you live in San Diego or Detroit, join us at one of our in-person local contributist meetups, which will be starting in May.)

Of course, we’ll keep writing and publishing articles here at The Contributist Reader — there’s a lot more to be said about contributism, and this remains the best place to say it. But the Reader is no longer the center of contributism, because the new (and true) center of contributism is not online at all. It’s in our communities and our actions; it’s out there in the real world.

— Pablo Parabola

I was raised in the evangelical church, and something that my parents and their church stressed was the need to care for others, that one of the most important virtues was to care for the poor as Jesus did.

So I became an aid worker, first working for a small nonprofit overseas, and then working for the US government. I worked with farmers struggling to grow enough crops to keep their children fed and in school, and doctors taking care of the dying with limited equipment, and volunteers trying to make sure sick newborns were taken care of. And the whole time, though I left evangelicalism, I carried with me the words of Christ:

‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? When did we see you a stranger and invite you in, or needing clothes and clothe you? When did we see you sick or in prison and go to visit you?’

The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’

(Matthew 25:37-40 NIV)

About a month ago, one of the first actions of the new US administration was to try and completely abolish my agency. One Monday morning, we thought we could work as usual, and by Monday afternoon, we were prepared to be gone tomorrow. They left tens of thousands of Americans and international workers without jobs. They abandoned thousands of people mid-clinical trials, leaving them with experimental devices and drugs in their bodies. They have likely left millions of people without food, vaccines, and lifesaving medicines.

They seemed to think it was funny.

There has been nothing in my life that has made me understand the Old Testament so much as the past month. The Bible verse I have repeated to myself over and over again — like Job, like King David — is “why do the wicked prosper”?

How long, O Lord?

Good and reasonable people can disagree on the size of the government, amounts of foreign aid, levels of immigration, and so on. You can’t work effectively in foreign aid without making common cause with people very different from you, who have beliefs that you deeply disagree with. I have worked to end poverty and disease with many, many men who think that I am lesser because I am a woman, because you cannot work to end poverty in this world without such allies, and because I do not want to make the same mistake as them.

Good and reasonable people do not delight in traumatizing other humans, do not make memes of suffering, do not call good evil and evil good. It’s usually easy for me to see the humanity in people, so congratulations to them, I guess, for so delighting in evil that it eclipses their souls. I said a prayer for their souls but I wondered if it was more for my own.

I hold out hope, though, that most of my countrymen are not evildoers, that they did not know what they voted for.

I hold out hope that if they saw a starving child in Sudan they would give him something to eat, if they saw a thirsty woman on the side of the road in India they would give her something to drink, if they saw a man sick with malaria or HIV they would give him medicine and look after him.

I hold out hope that in the world closer to theirs, that they hold sympathy for the veterans who have been cruelly and illegally fired after work hours, for hard-working people who have been cheated and lied to, for the fathers who can no longer afford healthcare for their families.

There is still time.

Principle 2: Maximizing Value Rather Than Profit

What does a contributist business look like in action?

Consider the below excerpt from a 2005 New York Times article describing Costco’s business strategy under its then-CEO Jim Sinegal:

Combining high quality with stunningly low prices, [Costco’s private-label dress shirts] epitomize why some retail analysts say Mr. Sinegal just might be America's shrewdest merchant since Sam Walton.

But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

I recommend reading the full NYT article, which details how Costco continues to outperform its more profit-centric competitors, and how Wall Street analysts continue to oppose its generous strategy despite the evidence. Although Sinegal, who started his career as a grocery bagger, argues persuasively that his business model is more sustainable in the long run, you can tell that what truly motivates him is providing value to his customers and caring for his employees (his dual responsibility).

In other words, the difference between Sinegal and his competitors and critics is not simply about business savvy, or shrewdness. (And he’s certainly not a careless spender — the article describes his cutthroat negotiations with suppliers, and his unwillingness to overcompensate executives.) The true source of controversy here is his business’s contributist orientation.

But wait, you might be thinking. You can’t call Jim Sinegal a contributist! He’s almost certainly never even heard that word. Isn’t he basically just a different kind of capitalist?

He certainly might describe himself that way. But I would argue that one of the key first steps to developing better ideas is to start using more precise language. And Costco’s business strategy is strikingly different from its competitors; I think this difference is something worth naming.

So, humor me. For the sake of this discussion, let’s use a somewhat more precise definition of capitalist: a person who operates according to the principles of capitalism, chief among which is the profit motive. A contributist is someone who instead operates according to the principles of contributism, chief among which is the right to give — to participate in society by contributing to it.

In practical terms, this means that the capitalist business aims to maximize the profit that they can sustainably extract, while the contributist business aims to maximize the value that they can sustainably provide. As Costco’s example shows (and as I’ll get into more detail on below), this means that contributist businesses tend towards increased quality and lowered prices as compared to their capitalist competitors.

To be perfectly clear, when I say the capitalist does this or the contributist wants that, I’m talking about the perfect capitalist and the perfect contributist. In messy reality, no one is a pure capitalist and no one is a pure contributist. But we are capitalists insofar as we choose to let the concerns of capitalism guide our behavior. And we are contributists insofar as we choose to be guided by the concerns of contributism.

By my understanding, most of our business leaders actually fall somewhere in the middle — encouraged, perhaps, by their communities and their consciences to be contributists, but ultimately guided by the current prevailing ideologies and corporate structures to become capitalists.

Also, I’m focusing here on primary motives. Of course the capitalist wants to create a good product, but this goal is secondary to their goal of achieving profit. When improving their product is helpful for increasing profit, as it often is, the capitalist will improve the product. But when the two goals are in conflict, they will always choose a better profit over a better product. The contributist, on the other hand, will strive to make a profit when it helps them to provide a better product. But when the two goals are in conflict, the contributist will choose a better product over a better profit.

My goal in this article is to show you why I think the contributist business’s orientation is better than the capitalist one, both holistically and economically. Because while maximizing profit may appear to be in the best interest of the business, it only looks that way from a very short-sighted perspective.

What Is a Good Business?

According to capitalist economists, a good business is one which is able to maintain low production costs while maintaining high consumer prices. The difference between these two amounts is called the margin, and it is what the business takes as its profit. Capitalist businesses will tend to increase their prices to the point of maximum profit — that is, the highest price point at which consumers will still buy the product. In a capitalist economy, prices will settle here, having reached what is called an equilibrium — each party having maximized the value they can extract from the other.

But not all businesses are capitalists, nor are all economists. Alongside the economists who designed the capitalist models that have now become normative (John Maynard Keynes, Milton Friedman, etc.), there have always been those who saw deep inefficiencies within capitalism. Henry George, whose book Progress and Poverty was reportedly more popular than Shakespeare in the early 20th century, coined the term economic rent to refer to the practice of charging more for a good or service than is warranted based on its cost of production. He saw this practice as the primary cause of poverty in developed societies, and famously argued that a tax that effectively recaptured economic rent (specifically from land-owners) and redistributed it across society would be sufficient to eradicate poverty entirely.

The contributist is more Henry George than Milton Friedman — though reasonable contributists might disagree on the proper role of taxation. In any case, from the contributist perspective, maximizing margin is not a hallmark of a good business. Instead, the contributist sees maximizing value as the best business strategy.

Remember the NYT excerpt from the beginning of this article? Here’s another excerpt from the same article, explaining Costco’s approach to profit margins:

He also dismisses calls to increase Costco's product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street's advice to raise some prices would bring Costco's downfall.

"When I started, Sears, Roebuck was the Costco of the country, but they allowed someone else to come in under them," he said. "We don't want to be one of the casualties. We don't want to turn around and say, 'We got so fancy we've raised our prices,' and all of a sudden a new competitor comes in and beats our prices."

At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more.

How is it possible that this strategy works for Costco? Because contributist businesses see business strategy differently. Although extracting maximum value from the consumer might increase the capital controlled by the business in the short-term, the contributist takes a more expansive view, and sees that this isn’t necessarily the best outcome for anyone involved, holistically or economically.

Maximizing Profit Hurts the Human

First, let’s look beyond economics. The profit maximization strategy may look good when we maintain a purely economic lens, but if we take a more holistic perspective, it becomes easy to see that seeking to maximize margin is not an optimal way of being for the business leader.

Giving is the act of providing value to another that might otherwise be kept for oneself. This act humanizes us and provides us with dignity. In an act of giving, the giver and the receiver see one another, and thereby enter into a true human relation; the giver both becomes and feels valued by their community. For business leaders, these benefits only multiply as a business scales — a business leader whose business provides value to a large swath of society becomes a person of immense dignity.

But when a business leader’s goal is to set the price of their goods or services at the highest point that people will pay, they forfeit all of these benefits. They are no longer giving, because they refuse to provide any value to the consumer without full compensation. And they are perhaps even taking, if they manage to get the consumer to pay more than the product is credibly worth. What could have been an act of giving instead becomes an act of unfeeling transaction at best, or cold exploitation at worst, from which both parties leave hardened, their relation and their dignity unimproved, and perhaps worsened. No one sees the other in these transactions, because both parties are too busy being oriented towards themselves. The result is that, regardless of the economic picture, the society itself is worse off, each transaction ever-so-slightly loosening the social bonds that hold it together.1

Economic welfare is not equivalent to social welfare. A society which teaches itself capitalism — which insists that it is economically necessary to maximize what we can take rather than what we can give — ultimately leads itself to social disarray, regardless of the economic robustness of the capitalist position.

Maximizing Profit Hurts the Economy

That said, it is still worth emphasizing that the capitalist position is not economically robust. The problem with profit maximization extends beyond our dignity and humanity — it is also an economically suboptimal business strategy. By capturing as much excess value as possible, the capitalist business actively limits the generative economic potential of its own capital.

To understand this, let’s put on, for a moment, a “purely economic” lens — putting aside all the talk of dignity, holistic welfare, and social good — and delve a bit further into the boring stuff: economic theory.

From a purely economic perspective, the core problem with the capitalist argument is that it under-appreciates the consumer’s role in economic markets. In reality, the consumer is just as important to economic markets as the producer. By choosing how and where to spend their money, the consumer guides businesses to make products that better meet their needs.

In other words, the consumer’s buying power is what creates economic competition. It is what incentivizes businesses to create better products — so that the consumer will choose to spend money on their products rather than those of their competitors.

Because the consumer’s buying power is capital, it is fungible — this means that it can be used to buy a wide variety of different types of goods and services that a person might need or want. When consumers have a lot of buying power, they spread that buying power all across the economy — increasing competition in groceries, car manufacturing, housing, movie-making, pottery, video game development, and so on and so forth. As a diversity of consumers employ their buying power across the economy, every industry gets a small slice of this benefit, and the whole of the economy improves, making the quality of goods increase over time. Everyone in the economy, even the business owners, benefits from this wholesale economic improvement.

But the inverse is also true. When consumers have less buying power, they do less to generate economic improvement. When consumers can’t afford much more than their basic needs (housing, groceries, transportation, etc.), they become less quality-conscious and more price-conscious — rather than seeking the best product, they begin to seek the lowest price. This changes the incentives for businesses, as they find that the penny-pinching consumer actually prefers a worse product if they can get it for dirt cheap. So, output remains high, but the quality of goods and services decreases over time. And just as the benefit of strong consumer buying power is spread across every industry, so is the impact of weak consumer buying power. Everyone in the economy, even the business owners, lives in a society that is increasingly populated with worse stuff.

Here’s where we begin to see the problem with the profit maximization strategy. A business’s profit doesn’t come from nowhere — it comes directly from the consumer.2 The economic relationship between the business and the consumer is (again, from a restricted economic viewpoint) zero-sum. Every dollar above cost that the business takes from the consumer (economic rent) is one less dollar of buying power that the consumer is left with. That is, it is one less dollar leading to the overall economic improvement of society.

At this point, anyone who has ever run a business will likely have a host of concerns with this line of thinking, and may already be preparing counter-arguments: Don’t businesses need to make a profit to improve their product and to outperform their competitors? Don’t business leaders need to make a profit in order to be incentivized to keep innovating? Aren’t business owners also consumers whose buying power can stimulate the economy? Don’t businesses re-invest some of their earnings back into the economy by paying their employees?

The contributist answer to all of these questions is: actually, yes!

The difference between the contributist business and the capitalist business is not that the capitalist seeks to make a profit and the contributist avoids making one. Rather, what distinguishes the contributist business leader is that they are oriented towards giving. When they do seek a profit, they do it in service of their goal of providing further value with the resources they take. This means that a contributist business leader aims not to take a single dollar from a consumer except that they are confident that the dollar will go to good use.

Note that Jim Sinegal didn’t set Costco’s margins to zero. He set them to 14 to 15% — a number significantly lower than his competitors, but presumably, the number that he believed best accounted for all of the questions above.

This is an entirely different orientation than the capitalist’s orientation, which seeks to maximize profits. The capitalist doesn’t ask the questions above — at least not in good faith. They’re not truly interested in performing a cost-benefit analysis about whether this or that amount of profit really provides the best value to society. Strategically, they’re working in the opposite direction — they’ll provide only as much value as will allow them to make the maximum profit.

The difference is that contributists enrich their communities, while capitalists accelerate their decay.

Maximizing Profit Hurts the Business

But still, isn’t it in the best economic interest of the capitalist’s business to seek to maximize profits, even if it is not in the best interest of society? Even if society is worse off overall, can’t the shrewd capitalist business leader extract enough benefit for herself and her company that she still comes out ahead?

This perspective is short-sighted for multiple reasons. First, we must remember that the economic lens is itself limited. Even when a business leader comes out ahead economically using the capitalist business model, they generally do so at the cost of their own dignity, and they usually find that they have sacrificed much of what they valued most along the way.

Second, the economic benefit of the capitalist business model is always precarious, because any effort to help oneself at the expense of society is inherently a product of short-term thinking. Despite their endless efforts at shoring up personal economic security, the capitalist can never truly insulate themselves from their detrimental impact on broader society. Economic gluttony ultimately catches up to all of us. Our global economic system has experienced multiple severe crashes due to the profit maximization model, and it will happen again. Meanwhile, humanity faces the existential crisis of climate change as a direct result of the capitalist business model, and instead of helping to solve this problem, the wealthiest capitalist businesses continue to lead us headlong into it by investing billions into technological cold wars with worrisome impacts on our climate. And lest our government regulate us into a better trajectory, these same billionaire capitalists are now “shrewdly” working to turn it into an oligarchy that can be expected to serve only their short-term interests, even to the long-term detriment of the survivability of their own planet.

Finally, profit maximization is simply less effective than value maximization, because it is less attractive to consumers. As Costco shows, contributist businesses can outperform capitalist competitors because consumers simply prefer to buy from businesses that provide them with great value while aligning with their values. At the time of that article’s publication twenty years ago, it was the fifth-largest retailer in the world — now it’s the third, while maintaining its strict limit on profit margins.

It is worth noting that Costco exists in as free a market as any of its competitors. There is no regulation forcing Costco to restrict its profit margin to 15%. It chooses to do this not because its freedom is restricted, but exactly the opposite: because its leaders realize that they have the freedom to do so.

Conclusion

So why, then, does it seem that the most successful businesses today are not the most contributist ones, but actually the ones that are the most ruthlessly capitalist, sacrificing the consumer’s interest whenever profit and product are in conflict? Fully explaining this phenomenon is beyond the scope of this article, but there are multiple reasons which are worth mentioning.

First, as discussed in our 800lb companies piece, our society has adopted a distorted view of what it means to be successful. Perhaps if we scrutinized our criteria a bit more, we would notice that many of the businesses we see as successful are actually in a state of constant crisis — plagued with mistrust and discord internally, and fighting tooth-and-nail to maintain their narrow competitive advantage externally — while many that we see as less successful are actually highly productive and secure.

Second, consider the role that education (both cultural and formal) plays in the development of new businesses. The most authoritative voices in our culture tend to assert that the capitalist mindset leads to the best overall economic growth and efficiency. But they usually assert this without having first seriously considered the alternative that contributism provides. There are no contributist business schools. (At least not yet!) If we teach our business leaders that the only way to succeed is to become capitalists, then we should not be surprised when the vast majority of them do, even if it isn’t true.

Finally, capitalist companies have long held control of government policy, giving themselves unfair advantages in markets in which they cannot naturally win. This is touched upon in The Capitalist’s Secret from our intro series, and even more effectively described by Katherina Pistor in The Code of Capital: How the Law Creates Wealth and Inequality (and in this excellent podcast episode, for those who prefer to listen).

All of this has led us to the position we are now in. But the fact that capitalism dominates the business world now does not mean that this will always be the case. Societies do not simply develop into the best versions of themselves on their own; they become so when we choose to make them so. And since our business leaders are the social leaders of our society, they play a more critical role in its direction than we tend to acknowledge. To a large extent, the orientation of our business leaders becomes, over time, the orientation of our society. Let us hope that more of them choose to be oriented towards giving.

Enough theory — let’s discuss practice. What does it look like to run a contributist business rather than a capitalist one?

In many ways, it looks largely the same. The contributist is not looking to reinvent the wheel of business — they only want to change the direction in which the wheel is rolling. The general principles of entrepreneurship and business strategy do not change when we shift from a capitalist orientation to a contributist one; what changes is the ultimate impact our work has on the world around us. As we discussed in Part I of this series, the differences between the capitalist and contributist business mindsets are subtle, but highly consequential — they are what determines whether the role a business plays in its community and broader society is ultimately generative or extractive.

These differences stem from a difference in understanding in three areas: the business leader’s role, the business’s orientation, and the business’s decision-making (ownership) model. Businesses which take a contributist mindset in these three areas (as described below) are contributist businesses, whether or not they have ever heard of the term. By their very design, these businesses have a holistically-positive impact on society, and even some strategic and economic advantages over their capitalist competitors. A careful, discerning observer can recognize that these businesses are categorically different from those businesses which embody and perpetuate the worst tendencies of capitalism. To the contributist, these businesses are not enemies, but crucial partners and friends.

With this in mind, below are the three principles which, together, make up what you could call the contributist business model. Each is described in its own short article, and they will be published over the next few weeks. The first, published today, is The Dual Responsibility.

1. The Business Leader’s Role

2. The Business’s Orientation

3. The Business’s Decision-Making Model

There is no perfect contributist, as there is no perfect capitalist. In reality, our organizations are as complex as we are, and they shift between modes and motives constantly. But every business, and every business leader, has a story of themselves — a self-understanding of who they want to be and what they are pursuing. The contributist business leader is simply one for whom this story is contributist, and who is driven by the principles described above rather than their capitalist counterparts. This is true even when (as is true in most cases) the implementation details are constantly in flux.

By the same token, any organization which follows the contributist business model is a contributist organization in practice, even if its leaders have never used or heard the word “contributism.” I suspect that many organizations would look at these three principles and find them familiar, if not downright obvious. This is because contributism is not some complicated new frame that must be imposed on us, but something more inherent to us than capitalism, which can arise quite naturally in the absence of a dominant capitalist frame, or which can even arise as a healthy form of rebellion against capitalism.

The value of adopting new language like contributism is that it provides clarity and precision for those things which are already in our minds, but are muddled and suppressed, and it allows us to better evaluate our own decisions, actions, and motivations, as well as those of others.

Principle 1: The Dual Responsibility

A contributist business leader understands that their primary responsibility is not to endlessly increase their own wealth or that of their shareholders, but to steward their business’s contribution to its community. More specifically, this core responsibility can be understood as having two parts:

1) Effectively managing their business’s unique contribution to society.

2) Enabling their employees to participate in that contribution (to give).

They, of course, also care about their own wealth and that of their shareholders. But they recognize that economic well-being is not equivalent to holistic well-being, and they know that doing something useful for their community is what will ultimately generate the greatest benefit for everyone involved.

The capitalist, on the contrary, sees this responsibility to provide a valuable product and care for employees as secondary to the responsibility to generate wealth for themself and their shareholders.

To be clear, the capitalist mindset still allows capitalists to do some good, because in many cases, the goals of contributing to society and increasing shareholder wealth are aligned. But when these things come into conflict, the capitalist is oriented more towards the extraction of wealth than the generation of value — they will usually choose to cut corners in their pursuit of their business’s mission or their responsibility to their employees before they will abandon an opportunity to increase their profits.

The contributist business leader sees this as backwards. Their goal is to give something of value to society, not to extract value from it.

Managing the business

Consider, for example, when Facebook’s internal researchers found that their product’s algorithm was polarizing its users, pushing them away from agreement and towards heightened division and extremism. This ran directly against the business’s unique purpose, as represented in their mission: to "give people the power to build community and bring the world closer together." The researchers warned that, if allowed to continue, this problem would only get worse and worse over time. But on the other hand, they also found that the divisive content increased engagement, which in turn brought in more advertiser dollars, and shareholder wealth.

If Facebook’s leaders were contributists, they would have immediately directed their engineers to find a way to solve this algorithmic problem. Regardless of the impact on shareholder wealth, they would be opposed to offering a product that did the exact opposite of what it was intended to do — harming society rather than contributing to it. Failing to accomplish the business’s mission would mean failing to effectively steward their business’s contribution to society, and thus failing their role as business leaders.

But Facebook’s leaders were not contributists. They were capitalists. This means that they understood their primary responsibility to be the generation of shareholder wealth. When that responsibility came into conflict with the business’s effectiveness, their capitalist mindset led them to choose profit over effectiveness. Facebook’s leaders chose to bury the findings, and to leave the algorithm as it was.

When a business chooses profit over mission, as capitalist businesses often do, a contributist would say that that business has become less effective, not more.

Giving employees “the right to give”

Equally important to the contributist business leader is their responsibility to ensure that the humans under their direction can spend their days participating in joyful, dignifying, meaningful, and productive work.

With respect to their employees, the contributist business leader is operating on the second level of social involvement — they are not only concerned with their own right to give, but with providing that right to others as well. This is the special role of the employer, and it is the main reason why business leaders are some of the most important members of society. When they are effective, they give the rest of us the opportunity to find our place — to have a role to play in the continued thriving of our communities.

This means more than simply providing employees with a set of responsibilities and a salary.

In order to be truly enabled to give, we must not just have the opportunity to give, but also the time, resources, and energy to do so. Additionally, our work environment must also be one that we can gladly participate in — we must not feel that we are exploited or coerced, or else we are not giving; we are being taken from.

The contributist business leader understands the complexity of this responsibility to their employees, and works to ensure that their employees’ needs are met (financial and otherwise), so that they are able to give freely to the business, rather than being exploited by it.

This has many important consequences for employee well-being. For example, while a capitalist business leader might happily lay off an employee if it makes their business more lean or efficient, the contributist business leader understands that this is ultimately a failure to uphold their core responsibility. Even though it may help them meet one side of the dual responsibility (ensuring the effectiveness of their business’s contribution), it comes at the direct expense of the other (enabling their employees to participate in that contribution).

The contributist employer would instead do all that they could to protect the employee’s right to give (including attempts at reskilling or upskilling) before laying them off. And if they find that there is truly nothing that can be done to ensure that a current employee is able to give effectively to the organization, they would at least do what they could to help the employee find a new role elsewhere.

Even what the outcomes are ultimately the same — sometimes the market is unforgiving, and people simply must be laid off — this difference in the employer’s motivation has a profound impact on the experience of the employee. Capitalism has become so deeply entrenched in our society that some of us have come to believe that its cold and antagonistic employer/employee relationship is a necessary part of business. It is neither necessary nor natural. Contributism restores the dynamic between the employer and the employee from one between economic actors to one between humans.

For more on this dynamic, read Olivia’s Remorse, the second part of the short story series The Contributist and the Capitalist, which traces the diverging trajectories of a successful contributist business and a successful capitalist one.

This first principle — the dual responsibility — recasts “business success” from the brutal and unfeeling profit motive that is encouraged by capitalism, to something more human. And although finding ways to satisfy both responsibilities isn’t always simple, the contributist business leader strives to try, because this effort is precisely what makes their work meaningful.

The business leader sits in a complicated position in contemporary American society. On one hand, running a successful business is seen as one of the most prestigious and valuable things an American can do. The leaders of small businesses are often praised for their industriousness and entrepreneurial spirit, and the leaders of our largest businesses have long been idolized by many as the modern heroes of society.

But on the other hand, to many of those within the growing share of our society that is critical of capitalism, business leaders are seen as the embodiment of its anti-social impact (in fact, the term “capitalists” is often used colloquially to refer to business leaders) and therefore as the ultimate enemies of societal good.

Which side is right? Well, in a way, both are. As is almost always the case in disagreement, each side recognizes a core truth, but they diverge in their conclusions because of differences in information and perspective.

The reality is that business leaders are best understood as social organizers who play a critical and necessary role in stewarding the spaces, resources, and efforts of our society. But the prevailing guidance of modern capitalism has taught many of them to perform that role badly. By taking on a contributist lens, we can understand what business leadership should look like, what has gone wrong, and exactly how we can do better.

The True Role of a Business Leader

Businesses are at the core of a community’s ability to meet the needs (physical, social, emotional, spiritual, etc.) of its members. I use the term business expansively here — roughly, I am referring to an organization made up of a group of people who spend the majority of their time working towards some productive action. Commonly, people use the term business to refer specifically to for-profit organizations, while excluding non-profit and public (state-run) organizations. That distinction is helpful in some contexts, but is not so helpful when we are taking a contributist view from above, making an attempt to consider the ultimate value and purpose of things, rather than thinking from a capital-first lens. Whether a business’s owners keep most of its profits or reinvest them in the business, or whether a business is affiliated with the government — these are important considerations, but they are secondary to the core idea of business: a group of people organized towards productive action. This is why individuals can move between the public, private, and non-profit sectors, and although the cultures may differ, the basic sense of their role remains the same — they “go to work” every day; they have an “employer”; their organization has a mission, values, and objectives; they get paid at regular intervals for their labor; and so on.

Businesses are the means through which we collectively create much of what is good in society. They create and maintain the shared spaces where we come together and fill our lives with meaning — our coffee shops, our restaurants, our dance studios, our wedding venues, our places of worship. They develop and manage the infrastructure that allows us to function and connect — our water and sewage systems, our roads and airports, our electricity, our internet. They even enable many parts of our lives that we consider deeply personal — they provide the materials for our artistic pursuits; they print the books we love to read and they distribute the music we love to listen to; they build our homes; they provide us with medicines when we are ill and the personal care products that keep us well. Through the effective organization and division of labor, businesses enable us to thrive in ways that we as individuals would never be able to on our own.

The role of a business leader is to organize and direct a group of people to work together to provide one of these societal contributions. This is why business leaders are at the core of society, and why they are best understood as social organizers. If we take a bird's eye view — setting aside, for a moment, the complex details of contracts, capital, wages, etc. — what a business leader does is provide direction for the day-to-day lives of some of the humans in their community, giving them the resources they need to participate in the business’s contribution to society. A good business leader is one who performs this role exceptionally — who enables the humans under their direction to spend their days participating in joyful, dignifying, meaningful, and productive work, and whose business’s output meaningfully improves society beyond what those individuals could have done on their own.

This is all very simple — you might even call it common sense. Unfortunately, one of the most consequential problems with our capitalist lens is that it tends to lead us away from our common sense, driving us to forget simple realities in favor of distortions that come in the guise of rational economics. This is perhaps nowhere more true than it is in the case of the business leader. Rather than encouraging them to take seriously their position as social organizers — and its potential to help improve all of society — our capitalist milieu tends to encourage our business leaders to abdicate this responsibility, and to believe that the primary purpose of their position is instead to extract wealth for themselves and their investors.

This self-centered belief is not inherent to the business leader; it is taught to them. Consider that many, perhaps most, effective business leaders initially go into business or entrepreneurship not because they are selfish, but because they are enterprising and ambitious. They have a knack for directing labor to productive use — whether their own or that of others — and they are uniquely passionate about it. Often, so passionate that they are willing to pursue entrepreneurship at some personal risk, rejecting stable employment to devote themselves wholly to their ambitious vision. This makes them unlike most of us, who are more comfortable participating in good work that comes with some structure and direction than we are initiating and leading new ventures on our own.

In contributist terms, these passionate leaders, when successful, have found a way of giving to society that is, for them, free, active, valued, and effective. Because of this, their labor is accompanied by a natural reward: it provides them with dignity, meaning, and a place within their community. It is also generative (as all true acts of giving are): by effectively providing a service that meets a demand, they naturally improve the overall quality of their community.

In this way, the business leader’s natural orientation is towards contributism — the desire to provide value to their community through their unique and critical contribution (to give) — and this has positive externalities for the whole community.

But instead of appealing to this natural, sensible orientation, our society’s dominant capitalist lens counterproductively appeals instead to the business leader’s selfishness. It points them to the wealthiest business leaders (rather than the most fulfilled) as its exemplars of success. It encourages them towards decision-making frameworks that are aimed at multiplying numbers in their bank accounts, rather than ones that are aimed at allowing them to live the best lives and inhabit the best society. It warps their mindset, leading them to maximize capital returns to themselves and their fellow shareholders (read: gluttony and greed) rather than maximize their contribution to society (sustainability and health). In sum, it makes them short-sighted, leading them to forget both their responsibility to society, and their own dependence on it. This comes at the detriment of their own dignity and well-being, the dignity and well-being of their employees, and the positive impact they might have had on all of society.

The Problem Lies in the Orientation

What is important to understand is that the problem identified here is not the concept of business itself or even business leaders — both are critical to society. Business leaders are not the “enemies of societal good” naturally; they only become so if they choose to abdicate the core responsibilities of their role as business leaders — organizing people towards providing societal value — in order to instead focus on extracting capital from their communities.

But the problem is also not profitability in itself. Good labor is nearly always generative in some way, and when labor produces surplus resources, it is important that the laborer benefits along with the rest of society. Every laborer — even business leaders, whose labor is leadership, strategy, and organization — requires capital resources to live a good life, and it is only reasonable that they are allowed to source these resources from the fruits of their labor — otherwise their work would not be sustainable.

The problem is also not the for-profit sector. For-profit businesses can be good, non-profit organizations can be bad, and government organizations can be just as self-serving and detrimental to society as the worst for-profit businesses (as we in Trump’s America are currently finding out).

The true heart of the problem that so often makes capitalist business detrimental to society is motivational. The issue posed by capitalism has very little to do with what sort of work a capitalist business leader does — in fact, capitalism has generated an enormous amount of practical value to society in this regard, by helping us to better understand markets and better organize our labor. Instead, it has everything to do with why he or she does the work.

Is the business leader oriented towards organizing people to effectively provide value to their community, or are they oriented towards effectively extracting value from that community to enlarge their personal stockpile? Is the business leader oriented towards giving to society, or towards taking from it? This difference in orientation is the whole sum of the difference between contributism and capitalism. From this orientation flows everything else: business practices, ownership models, leadership styles, contracts and wages, etc. And because business leaders are the core social organizers of society, the overall orientation that a society’s business leaders take largely determines whether the society bends over time towards increasing the prosperity of its people, or towards ultimately dismantling itself.

The LA wildfires have brought climate disasters front of mind for many people in the US, and following from this, many are wondering how they might be able to live to contribute to a more sustainable future. As we consider how small we are in the wake of a devastating fire, it can be overwhelming to consider what we might do. Contributism gives us a framework to think about how to live as interconnected individuals in a society that has problems beyond what any of us individually can solve, but that we can all make a contribution to. As individuals, we should feel more eager and less guilty about finding ways where it is "easy" and natural for us to give, and as society, we should break down barriers that make it "hard" to give.

I am a vegetarian who takes public transit almost everywhere. Since both of these things are a bit unusual in the US, people who are very into climate or pollution reduction or animal ethics are often impressed by this; or when they find out, they immediately start apologizing for eating meat or driving a car.

However, I don’t make these decisions based on climate or any noble goal; I make them because they are actually what I prefer in life.

I am someone who does not like the taste of meat and does not like driving. I would legitimately rather eat falafel than gyros and wait for a bus over getting behind a wheel.

Being a train-taking vegetarian to me, to quote, “isn’t a bug, it’s a feature!” It also just happens to have the happy byproduct of being good for the climate.

In fact, I don’t really make all that many decisions based on giving back to the climate, although I am trying to make more. I’m writing this from a plane from the US West to East Coast – it’s estimated that me taking this trip alone would emit almost 1.5 times the carbon as a journey of equivalent distance in a car – the carbon footprint of my round-trip flight is roughly 1.4 metric tons of CO2 emissions. This suddenly makes me feel much less ethical. I take this trip multiple times a year. I also take long showers, don’t compost, and do many other things that are suboptimal for the climate and in which I should do better.

Vox’s Sigal Samuel, in “Should I go 100% flight-free for the climate?”, addresses just this in terms of balancing different ethical concerns: “Yes, protecting our planet is a crucial value. So is, say, nurturing relationships with beloved family members and friends who live abroad. Or developing a career. Or learning about other cultures. Or making art. So, even though minimizing how much we fly is a virtuous thing to do, some thinkers would caution you against treating that as the only relevant value.”

For most people in the US, this complexity goes beyond philosophical commitments: under a capitalist system, they must own cars to make money to survive.

Having grown up in the Northeast U.S. a 10 minute walk from a train, I experienced a bit of this while trying to take public transit in Northern California. To get to my office in the city center from one location, I had to take an infrequent bus to an infrequent subway; the entire journey took about two hours, when it would’ve been one hour by car. From a second location, I had to walk 300 meters along the shoulder of a highway to a bus stop to catch a bus that came once every hour. As I sat on an eerily empty subway for hours and waited in the middle of nowhere for an infrequent bus, it was no mystery to me why most Americans prefer cars.

I am sometimes too hard on myself, tending to take the stance that virtue only really counts if it’s hard for you. It’s not really virtuous, I think sometimes, for me to be a vegetarian or to avoid driving if it’s easy — if that’s actually the state of being I enjoy more. However, it’s undeniable that eating lots of meat or taking lots of planes has negative effects on our climate. We are now witnessing this most directly in the unpredictable weather patterns that are currently affecting people in LA, but we should remember that the devastation is global — fires, floods, typhoons, and hurricanes are all becoming more intense, and their global impact falls primarily on people who never take planes and who do not have the savings to cover their devastating losses.

So despite my misgivings, easy giving still matters, because all giving matters. And the types of giving that come naturally to us as individuals have some advantages over those that don’t:

• Because they are easy, we are more likely to engage in them — and to keep doing them — than harder forms of giving, so they may end up resulting in more practical value.

• They often feel natural to us because they are more in line with our other important ethical commitments. Harder forms of giving are often hard because they are costly to our other values, like those quoted from Samuel above.

• Giving that comes natural to us is more contributist, because it is more free. We are better givers when we give freely, rather than out of coercion. And if we get into the practice of giving freely — where it comes naturally to our unique selves — rather than giving out of guilt — only giving when it's "hard" — we set ourselves up for joy and dignity, rather than generosity-burnout and its accompanying shame.

• Finally, by giving where it is easy, we train ourselves to live in an orientation of giving, which makes us better prepared to give in more difficult circumstances as well.

The fact that some forms of giving feel easy does not mean that they are necessarily worse. Although giving must be oriented towards the other — it cannot be primarily about personal benefit — it also can, and should, be joyful. So how can we make living a different lifestyle to benefit the climate (or any other goal beyond oneself) easy, natural, and perhaps even better than life otherwise might’ve been?

I think there’s both an individual angle here and a societal/policy one.

On the individual level, people can think through the ways that might be easiest and most enjoyable for them personally to give in any given way. Maybe you really like gardening and can collect compost to use for this. Maybe you can look up good recipes made out of chickpeas or tofu and make it part of your routine; or if you’re already plant-based, make some delicious food for your friends. Maybe you can take up sewing and repair or tailor old clothes rather than throwing them away. Maybe you can take the train instead of fly.

Sometimes these things will come very easily: maybe sewing is something you always wanted to learn, and being more climate-friendly meshes perfectly with these goals. And sometimes these things may come with more of a sacrifice or change to a slower lifestyle at first, but it will ultimately be more rewarding because you are better exercising your right to give. What is important is that you give where you can — where it is most accessible, ethical, and perhaps even liberating — rather than wasting your effort beating yourself up about not giving where it is sufficiently hard.

On the policy level, we need to figure out ways to set up society to allow people to give better. I know plenty of Americans who would love to not have to drive, but can’t afford to live in the 5-10 expensive metro areas in the U.S. where you don’t need to own a car.

For many Americans, the only option to get to work outside of a car is a bus that comes every hour and you have to walk through a death trap to get to. If you could take a frequent and pleasant and cheap 30-minute train to work, I’m sure many Americans would choose that.

For this, we need policy that is friendly to both the climate broadly and people’s acute needs, solutions that give people the freedom to give. While this isn’t going to be a comprehensive policy piece, and I do believe that technology won’t fix everything and people will need to give things up and make lifestyle changes to reverse climate damage, there are a number of things that really are win-win solutions. Bus rapid transit systems, which give buses a dedicated lane, are much cheaper than rail, and mean buses that carry a lot more people than cars with the same space can bypass traffic and become a more viable commuter option. Many more people would take buses, I think, if it got them to work 20 minutes faster than being stuck in commuter traffic. Electric buses in particular are very pleasant to ride: I used to commute to work on a zero-emissions trolley bus, and whenever I brought visitors they would comment on how quiet and nice the bus was. Plus you can nap on it which you can’t while driving!

Targeted government subsidies, either to producers or consumers, in some areas can also start to deal with some of the negative externalities to climate of daily life and allow people to be directly part of the solutions. A well-known example is solar panel subsidies. The US government and private sector invested to spur R&D in solar technology, and states provided subsidies/rebates to consumers who might want to purchase them and both lower their monthly electricity bills and be more environmentally friendly. Now in many places, solar is even cheaper than fossil fuels.

It is central to contributism that we are not an island; that it is both necessary and fulfilling to live in community, to make decisions based on others and not just for ourselves. Sometimes this will be hard, but other times, it will be easy – and it is a key, contributist role of society to work to break down the barriers that make it unnecessarily difficult for people to give.

This author writes from Los Angeles, just outside the reach of the Eaton fire that swept East and West along the 210, ravaging homes and communities in the northeast corner of the LA Basin.

The author would like to promote the following organizations, and encourage your support to them however possible:

LA Food Bank

Pasadena Humane

WatchDuty, a app for monitoring evacuation warnings and news

California Fire Foundation, for the families of fallen firefighters

Los Angeles is my home, and will always hold a special place in my heart. I was raised by its multiculturalism, glitz and glamour, and near constant drought. Wildfires are a deeply ingrained part of my childhood. I still vividly remember in seventh grade, walking out of class into the orange-brown haze, stunned at the ash falling from the sky. My first thought was confusion, thinking that the bits of angry ash were snowflakes, until I connected the dots between the haze and the smell. Though I moved away to the Bay for a period of time, the fires were never far behind. I lived through the dystopian haze of the 2018 and 2020 wildfires, and am well equipped to handle the physical effects.

But this time was different. This was the first fire where I really considered evacuating my home. Weighing what to take, and what to leave behind. I had just moved down from the Bay and most of my possessions were still in highly flammable cardboard boxes. What was worth unpacking and repacking? What should be left behind? Where would I go from here?

I write this now in a state of relative safety. The air quality has returned to normal, which is famously never that fresh and clear in the city, but a marked improvement relative to last Tuesday evening as the fire engulfed thousands of acres of arid land. The fires are burning, but containment is steadily progressing. Contributism is hard at work, bringing in support from neighbors local [1], national [2][3], and international [3][4][5].

While there is much to be written extolling the virtues of continued international cooperation, especially in the face of rising isolationist rhetoric, I want to take this opportunity to contribute my vision of the future, and how we both as Californians, and as a modern society, reflect on what has happened and rebuild.

Contributism is not just about fighting fires as they erupt. As inspirational and uplifting as it is to see international unity in these times, it would be so much more effective and efficient to practice this same conscientiousness and cooperation daily, in less stressful times.

What does that look like? Much has been written on the fact that many of the homes affected by the fires were built in areas prone to wildfires, that have been burned in the past, and will likely be burned again. Insurance, the marriage of cooperation and capitalism, exists to help protect those who live in these areas from absolute financial ruin, by leveraging the aid of the collective. Recognizing that this may incentivize risky behaviors, the California legislature has passed new regulations on insurance companies to enable increasing premiums on homes in fire prone regions. This is what thoughtful, concerted, and supportive leadership looks like. We recognize that there will continue to be those in our society who are drawn to the beauty of living in those hills. It is not our right to restrict them from settling there, but it is also not our duty to subsidize their loss. We can and should show compassion, but we must also ask for compromise.

This is the harsh reality of climate disasters, whether they be fires or floods. [6] The American expansion of sprawling suburbia has led to an untenable system of land use that has disregarded the inherent environmental risk in order to slake our thirst for larger, more comfortable homes. [7] From the very beginning this was unsustainable, but now it is time to pay the piper, and accept the financial and environmental costs.

Understanding this context, what comes next? The bitter optimism of this moment is to recognize that in many respects, fire can be cleansing. Just as the ecosystem of Los Angeles uses wildfire to germinate seedlings, the devastation wrought by these concurrent fires can give life to a new tomorrow. [8]

This author argues that we cannot rebuild as before. Sparsely populated, sprawling homes, built with more preference given to aesthetics than fire prevention, would show little respect for the efforts of all involved to contain these fires, but also continue to put lives at risk again in the future.

Whether or not these fires are a direct result of anthropogenic climate change, the expectation is that fires will become more frequent, and with that increased frequency, more damaging. This is an opportunity to be more efficient in our land use, to increase housing density in areas that are more safe from fires, and for those who choose to live in more fire prone regions, to migrate towards greater resilience.

Increasing housing density as means to increase housing affordability, needs to become a rallying cry for the future. Removing parking minimums, designing streets and cities to be safer for all road users, not just cars. As I followed the news last Tuesday, waiting to see if I would need to evacuate, I quickly decided to evacuate using my bike, and avoid the freeways. People fleeing the Palisades fire were met with complete gridlock, along PCH, and I did not want to risk getting trapped in my car along the 710. [9]

Los Angeles is the archetypal American city. It exemplifies urban sprawl, leveraging the mobility of the automobile on a scale that had never been seen before. It is necessary for Los Angeles to take on the mantle of leadership again, to blaze a new path in building resilient, efficient, sustainable cities, capable of weathering the storms to come.

If you’re interested in participating in this growing community, click the Become Pablo button at the top of the website.

Dear Reader,

The Contributist Reader is excited to announce “Dear Pablo,” an advice column offering a contributist perspective on your everyday problems. We want you to ask us about anything that’s been bothering you: whether it’s about interpersonal dynamics, workplace drama, personal growth, or social and political issues.

Ever since we started the Reader, some of us have taken to asking each other: what would be the contributist take on this? We ask it about political issues, but we also ask it about more personal matters: feeling slighted by a friend, choosing between two jobs, navigating conflict with family. Even when it’s brought up as a joke, we’ve found that taking a moment to consider a problem from the contributist lens is surprisingly helpful.

Maybe this shouldn’t be so surprising — contributism is a framework for restoring dignity and building community through generosity. If you look carefully, you’ll find that dignity and community are at the root of many of our personal troubles. This is why contributism starts at the personal level, and expands outward.

So, one of our contributors with experience as a counselor has offered to run the Dear Pablo column, which will begin in the next few weeks. We encourage you to submit your questions, no matter how big or small. By sharing your struggles and seeking advice, you're not just finding solutions for yourself — you're contributing to the collective project of building a more generous and fulfilling world. The contributist society begins with the contributist act.

Send in your questions here or to pablo@thecontributistreader.com, and we’ll answer them (fully anonymously) on this column.

Let's build a better society together,
Pablo Parabola

Every year, Christmas comes around as a bit of a paradox — there is no time of year more associated with giving, but there’s also no time more laden with commercialism. This may be because giving and taking are so easily confused — especially within a culture that seems increasingly accustomed with asserting the right to take, and increasingly forgetful of what it looks like to give.

But that doesn’t mean we shouldn’t try. In fact, the more commercial our surroundings feel, the more important it becomes that we maintain a season that reminds us to focus on giving. Around this time every year, the Peanuts kids dance across TVs all over the country in A Charlie Brown Christmas, and millions of families are treated to Charlie’s woeful observations about commercialization (“My own dog gone commercial, I can’t stand it!”), Linus’s reminder of the true meaning of Christmas, and the heartwarming hums of a community that comes together, with gifts and decorations, to create miraculous beauty out of what was once a sad little tree.

Traditions like these serve as repeated reminders of the power of giving, and of what truly matters to us. So, without further ado, let’s take some time to appreciate five of the most contributist Christmas movies of all time.

Happy holidays!
Pablo Parabola

5. Die Hard

No list of great Christmas movies would be complete without a Die Hard mention, so we’ll get it out of the way first. In a way, perhaps Die Hard is the most obviously contributist Christmas movie of all. It is a film about a man who finds himself in a position to give that he is uniquely suited for (one can argue that Detective McClane’s actions throughout the film are supremely free, active, valued, and effective). Not only that; the film also arguably serves as Bruce Willis’s most perfect contribution to the world.

4. The Nightmare Before Christmas

Tim Burton’s gothic stop motion masterpiece The Nightmare Before Christmas is a Christmas movie dressed in the dark tones of Halloween, and it can at times seem like it trades Christmas morals for goofy Halloween scares. But it is, in fact, an earnest film to its core. It is a story about learning to appreciate the fact that everyone has something to give, and that the best world is one in which everyone can find their own way to give, even if we don’t understand them. Jack Skellington learns this the hard way, after he attempts to hijack Christmas because he doesn’t think it’s scary enough. But he eventually realizes that Halloween and Christmas serve different purposes, and there can be room for both. Ideally, we too can build societies where everyone has a role and can give in a way that is free, active, valued, and effective.

3. How the Grinch Stole Christmas

The Grinch hated Christmas! The whole Christmas season!
Now, please don’t ask why. No one quite knows the reason.
It could be his head wasn’t screwed on just right.
It could be, perhaps his shoes were too tight.
But I think that the most likely reason of all
May have been that his heart was two sizes too small.

— Dr. Seuss, How The Grinch Stole Christmas!

Dr. Seuss’s classic children’s book How The Grinch Stole Christmas! has been adapted many times, though the original 1966 animated TV special is probably still the best. It tells the story of a monstrous creature who is tired of Christmas and thinks he can end the whole affair by stealing all of the Christmas gifts and decorations. To his surprise, the people’s joy came from their community, not their commodities, so they celebrate Christmas undeterred. When the Grinch sees this, his heart grows three sizes and he brings back the presents and joins their Christmas feast. There are layers of contributist messages here, including that we find joy in community, and that anyone can join in that community if they choose to give rather than take.

2. A Christmas Carol

Charles Dickens’ A Christmas Carol, which has also been adapted into film multiple times and is perhaps the grown-up’s version of “How the Grinch Stole Christmas,” is the classic tale of greed and redemption. It is the perfect illustration of how the capitalist impulse to take and to hoard can become dehumanizing both to the self and others, but also of how even the most cold-hearted capitalist can be healed if their right to give can be restored to them. In fact, we’ve already referenced the story twice in the Reader, in our intro piece on the right to give, and in our piece about whether a good job has to be freely chosen. Here’s a quote from the former:

“In other words, the contributist sees A Christmas Carol’s Ebeneezer Scrooge as a man badly damaged — lacking the right to give and in need of its restoration — and the ghosts of Christmas Past, Present, and Future as wise contributist agents of change, providing him with exactly the service he needs to be restored his right. And crucially, the contributist sees the world at the end of the story, in which Scrooge regains the right to give and is thus reconciled to his community, as a more just outcome than any world in which he goes to his grave still unable to give.”

1. It’s a Wonderful Life

It’s a Wonderful Life is not only the most contributist Christmas movie, it’s perhaps the most contributist movie, period. And according to the American Film Institute, it’s also the most inspirational film of all time. It’s the story of George Bailey, a man who wants to “shake the dust of this crummy little town off my feet and see the world,” but instead repeatedly finds himself stuck at home, contributing to his community. As a father, husband, and empathetic owner of a successful small-town bank, he gives and gives to everyone around him, enabling their dreams while postponing his own. He eventually becomes suicidal when some trickery by the big banker Mr. Potter leads him to believe that his giving has been neither valued nor effective. But after some good ol’ Christmas-y divine intervention, he comes to realize just how valued and effective his giving really was. And by the heartwarming conclusion, it’s become obvious to everyone involved (including every misty-eyed viewer like myself) — a life characterized by giving is the most wonderful life of all.