My Journey to Democratic Socialism (pt.3)

My Socialist Model

After a trip down egalitarian lane, I came to the conclusion that a socialist system was morally ideal, since it results in an equitable distribution of ownership and the fruits of ownership. However, I still wasn’t sold on the practicality of a socialist system. All historical attempts had significant drawbacks, like misallocation of capital, unemployment, inflation, corruption, etc.

The best I could do is say that socialist production was ideal, while throwing my hands up on how to get there. That was until I read a couple books that showed me just how common public ownership is and how common it is for governments to underutilize their wealth. Little did I know that these books would give me a workable framework for socialism.

First, to frame my model, I’ll talk about some inherent problems with private ownership. Then I’ll survey some competing socialist approaches before describing the most practical socialist model I can derive from the evidence.

The Problem with Private Ownership

Since, in my previous article, I linked my socialism to my egalitarianism in relation to private ownership, it helps to start by talking about problems with private ownership of production. The single largest problem with private ownership is that it leads to an unequal distribution of power in society. In a plethora of markets, ownership and control are highly concentrated as a direct result of the nature of certain markets and market competition itself.

As competitors eat up their competition, take advantage of market imperfections, and differentiate their products, the distribution of ownership becomes more concentrated, and when markets are both privately owned and concentrated, ownership itself concentrates.

In America, the distribution of total wealth looks like this:

From 1989 to 2025, the top 10% went from owning around 60% of all wealth to around 67%.

Business ownership distribution is even more concentrated.

The top 10% own around 87% of all wealth in corporate equities and mutual funds compared to around 82% in 1989. Regarding private business wealth, the top 10% own over 84% compared to around 78.5% in 1989.

In extreme cases, this concentration not only leads to the creation of oligopolistic and monopolistic competition and/or rent extraction, but also bleeds over into our political system (see also—[1][2]).

In 2024, Elon Musk donated $288 million to support Donald Trump’s election. To make this number make sense to an everyday person, let’s normalize Elon’s net worth to that of the median American. The same year, Elon Musk had a net worth of $400 billion.

The median American’s net worth is around $200,000. That might look like a husband and wife paying a mortgage, owning a couple of cars, with some savings plus various miscellaneous possessions. If Elon Musk was worth $200,000, then he spent the equivalent of $144 supporting Donald Trump’s election. Meaning, $288 million is about as meaningful an amount of money to Elon Musk as a typical husband and wife going out to a nice dinner.

That’s the power of a single person having $400 billion in wealth, and that’s a systemic risk insofar as we care about a horizontal distribution of power in our democracy.

This is only one issue with private ownership in and of itself, but it’s the most salient to me. Yes, taxes, spending, and regulation can reduce inequalities, but these have marginal impacts. Public ownership is a clean way to structure society in such a way as to prevent problems like this in the first place.

Think of horizontalizing wealth like internalizing an externality. The externality being the potential for inequality’s toxic effects on economic, social, and political processes.

Critiques of Alternative Socialist Models

Before I was a socialist, I already knew that private ownership and inequality were problems. However, as I mentioned in the first part of this series, I found a lot of socialist models wanting, so let’s describe the three broad socialist models I encountered before speaking with Matt Bruenig, and why I reject their approaches.

The Worker Cooperative Model

A worker cooperative is a business model where each worker owns and controls the capital of each business. Many reformist Democratic Socialists advocate for a model wherein worker cooperatives serve as the primary socialist unit. That is, there might be state services for things like healthcare, the broader welfare state, and education, but worker cooperatives dominate the market economy.

Some problems with this model—

1. It’s inegalitarian. Workers don’t, in practice, have a completely free and equal choice as to where they end up working. High capital intensity businesses will pay workers far more capital income than low capital intensity businesses. Even assuming workers had free and equal choices as to where to work, distributing capital income primarily to workers isn’t as egalitarian as distributing capital income to society at large. Social ownership models (vs. worker ownership) accomplish equal distribution, or at least society-wide democratic distribution of capital income. Social ownership models also rightly recognize that the constituencies of market production are broader than just direct workers and direct consumers.

2. It leads to structural unemployment. Inviting a dilution of capital income every time a business hires a worker provides a financial disincentive to hire the marginal worker relative to a system where society, rather than firm-level workers, receives capital income.

There are other criticisms of this model, but these are the two biggest reasons to prefer a social ownership model over a worker-centric ownership model. Worker cooperatives exist today, and they would exist in my system, but I wouldn’t want the primary socialist unit in society to be the worker cooperative.

My preferences are public wealth funds, public holding corporations, state-owned enterprises, and general government services. These things distribute benefits more equally and aren’t as susceptible to structural unemployment.

Socialism without Free & Fair Democracy

Many socialists don’t believe in free and fair democracy. These socialists often call themselves Stalinists or Marxist-Leninists. They tend to favor the models of places like Cuba, the Soviet Union, China, Vietnam, etc.

These countries combine state-owned enterprises, general government services, and private capital ownership (with strict state scrutiny) with illiberal political institutions. Marxist-Leninist political institutions generally take the form of a developed school of thought (i.e., Stalinism, Maoism, Fidelismo, Juche, etc.) inspired by Soviet-style Marxist-Leninism, as the primary legally tolerated ideology.

It’s not that these countries don’t have some elections that are sometimes fair (i.e., no stuffing of ballot boxes), but at a minimum candidates must tread lightly before stepping outside each of these societies' orthodoxies, lest they face consequences ranging from political expulsion to imprisonment.

Some problems with this model—

1. I believe in democracy. Democracy seems both intrinsically important on egalitarian grounds and instrumentally important.

2. On the instrumental value of democracy—(1) It’s well-founded that transparent, democratic regimes run state services and enterprises more efficiently (i.e., less political graft, more mission-focused, and higher social and economic returns). (2) Part of the reason that’s true is democracy allows creative destruction in the government itself. The problem with strict government-enforced orthodoxies in political organizing is that the orthodoxy is sometimes incorrect. Sometimes it’s deeply incorrect, and free and fair democracy ensures accountability for the government’s ideas by widening democratic debate.

One last related point is that Marxist-Leninists often favor a style of economic organization like China's, where state ownership is a significant, though not totalizing, portion of the economy. Norway and the broader Nordics fit this mold, and they do so with free and fair elections.

Marxist-Leninists will sometimes justify the illiberal nature of China-like political institutions as a means to reinforce the socialist nature of the economy. After all, if we allow capitalist parties to run, they’ll do a capitalism. Despite this, given the Nordics as an example, and given sustained progress in areas like social spending, healthcare, and education, it’s not clear to me that this justification holds much weight.

Even insofar as the Marxist-Leninists are correct that, all else equal, society will have more private ownership in a world with free and fair democracy, I prioritize political democracy over undemocratic state ownership.

Anarchist Models

The final general model I’ll write about is the anti-state, or Anarchist, socialist. This type of socialist hates the state. The state is nothing more than a means by which the elite reinforces its own unjust hierarchy. Therefore, depending on the Anarchist, the best path towards socialism includes mutual aid efforts, expansion of cooperative enterprise, and/or anti-state agitation, both violent and non-violent.

Many Anarchists also view involvement in state institutions as doomed to fail. Zoe Baker, an Anarchist historian, makes the point in her book Means and Ends: The Revolutionary Practice of Anarchism in Europe and the United States:

Socialist parties that attain power within parliament would, in order to exercise that power, have to become effective managers of the bourgeois state and the national economy. Doing so requires, given the nature of capitalism and the state as social structures, the ongoing reproduction of the domination and exploitation of the working classes. As a result, state socialists in power would inevitably develop interests opposed to the wider working classes and side with capital against labor in order to maintain their own position of rulership and influence.

Some problems with this model—

1. There’s a lack of evidence Anarchist models work. As much as Anarchists point to mutual aid networks or historical ‘Anarchist’ models, these examples don’t often present a compelling case. Poverty either remained very high or they were unstable societies. On poverty, we have good evidence that state models of welfare reduce poverty, and it seems that most modern states are pretty stable institutions.

2. There are egalitarian concerns. Anarchists rely on procedural theories of justice, where as long as we have a sufficiently non-state, non-hierarchical process, then we can expect a just distribution. I disagree with this on several fronts.

I think there’s evidence that democratic states do a pretty good job of satisfying people’s sense of need and justice. If the critique of democratic states is inherent, that all states are oppressive hierarchical institutions, the Anarchist and I have radically different instincts on what justice and domination look like.

The Model

After a survey of competing approaches, let’s talk about how I came to my preferred model of socialism.

It starts with me reading The Public Wealth of Nations and its sequel The Public Wealth of Cities, by Dag Detter and Stefan Fölster. Dag Detter is an investment banker, while Stefan Fölster is an economist. Both books concern how governments can unlock growth using public wealth management. They also go into detail about the breadth and depth of public ownership that already exists, while being mindful of political considerations throughout.

They’re fantastic books for anyone interested in a thoughtful overview of public wealth and how we should design public wealth management institutions to best suit society’s interest. They point out that the best way to manage public wealth is with transparency, clear goal setting, and accountability through the independent holding corporation.

I did a book review of The Public Wealth of Cities, and I’ll eventually do a review of The Public Wealth of Nations, but for now, without going over everything in each book, I want to take my inspiration from these books and describe what my ideal socialist system would look like.

Let’s outline some caveats to the model I’m about to describe.

1. I’m under no illusions that this system will be easy to implement. No massive societal change is, but I’d say, on egalitarian and practical grounds, this model is worth pursuing.

2. A requisite to this model’s success is a proper institutional arrangement, which I will describe later. As much as the institutional arrangement isn’t optimal, that’s as much as the model isn't optimal, and it would require a thoughtful analysis to determine if a suboptimal implementation is worth it.

3. With the above in mind, not all predominantly socialist models are preferable to all mixed models. I would rather live in present-day Norway than in the Soviet Union, North Korea, socialist Yugoslavia, Cuba, etc. It depends on the model.

To address the problems with private ownership and alternative socialist approaches, with inspiration from Dag Detter, Stefan Fölster, and Matt Bruenig, I bring you—

Socialism with Econoboi Characteristics

Given my values and issues with other socialist models, my model has a few goals in mind:

1. The model should distribute income and wealth as equally as possible.

2. The model should produce efficient allocation, innovation, and growth comparable to our current economic system.

3. The model should be compatible with democratic frameworks.

Given the fact that the profit motive and market competition are good ways to incentivize production to deliver goods and services society wants and needs, I will maintain this, socialize the broad swath of the economy, and do it all without expropriation. I’ll start with the ideal end state and then give a realistic path toward the end state given our current institutions.

The Independent Holding Corporation(s)

Detter and Fölster point out that when Sweden reformed its state ownership in the 90s, it decided to run its portfolio of public wealth in a more entrepreneurial fashion, narrowing operations in order to focus on commercial objectives. As part of these reforms, and in response to ongoing problems with political meddling, the Swedish government took a hands-off approach to its public wealth managers.

This was a mistake since public wealth managers need some system of accountability. This is where the independent holding corporation comes in. Public wealth managers (i.e., the managers running the companies within the public’s portfolio) would answer to an independent holding corporation, which is accountable to the public.

This system allows professionals to allocate capital (the managers of the holding corporation), but in a way that insulates both the politicians from the consequences of poor public wealth management and the public's wealth from political meddling. This system also looks exactly like our current system, where large private wealth conglomerates manage equally large portfolios of capital, and said capital is made up of various public companies, private companies, fixed income, real estate, etc.

Society should have a number of independent holding corporations competing against each other, each with the goal of maximizing the long-term value of the fund and returning dividends and capital income to their owners (the public). The initial capital for these holding corporations could come from any number of sources, from debt issuance to tax revenue to seigniorage. The state forms these holding corporations, capitalizes them, and sends them on their way.

They would seek out investment opportunities in an array of different industries and attempt to allocate capital to meet their return goals. This might look like purchasing open market stock in a publicly listed shipping company, investing in the building of a large apartment complex, or offering the owners of a private infrastructure company a partial buyout.

These holding corporations would engage in the same entrepreneurial activities as fund managers do today. The staffing would occur in much the same way as well. The boards of each holding corporation would come from a curated list of qualified professionals who would appoint management, who would then hire employees to run analyses on investments.

The ownership portfolios of each holding corporation would come to include investments from all over the place that they would monitor in real time, making decisions to sell existing assets or purchase new ones. Perhaps the best example of this in the world is Temasek, a large holding corporation owned by the public in Singapore that manages hundreds of billions of dollars in capital and employs over 900 people.

As the capitalization of the funds grows, they begin to eclipse the privately owned capital of the world, not through expropriation, but through voluntary transactions. These funds begin to soak up the ownership of the economy, and in so doing, they marginalize the billionaire class as the public begins to own more and more of the economy. Eventually, through competing holding corporations, the great bulk of production in the economy comes into public ownership.

That’s the broad outline. Instead of having several dozen competing large, privately owned, asset managers, the public itself owns several dozen competing asset managers. It sounds simple enough, but we’ve seen this playbook before. State ownership? How do we know it’ll actually work, and not just end up like other state ownership socialist models with stagnant growth?

That’s where Detter and Fölster make their most important contribution to my understanding. Their books outline perhaps the most optimal way to manage public wealth to avoid much of these historical problems, so let me describe their framework in some detail.

The institution of the holding corporation

I’ll start by outlining a few main goals we should want to accomplish with public wealth management:

1. Maximize portfolio value

2. Limit political meddling

3. Limit corruption

There are a few ways to accomplish these from a structural perspective, so let’s go one by one.

1. Board appointments must be curated and rules based.

Board appointments to holding corporations should come from an independent committee process wherein industry professionals without conflicts of interest review applicant resumes and submit them to the executive for nomination. Applicants should be required to meet certain basic standards, like submitting to a full audit and background investigation. Applicants should also have no conflicts of interest and possess a minimum level of relevant experience.

After passing these requirements, the applicants would receive the final nomination and approval from the executive branch and the legislature respectively.

2. The holding corporations themselves require transparency and accountability.

The holding corporations should each be subject to annual reporting and third-party auditing requirements, similar to publicly traded corporations. Transparency ensures accountability from the public and improves operations.

3. The job of the holding corporation is to maximize value.

Some socialists believe societies should manage public wealth in a way that simultaneously accomplishes social goals. For instance, let’s own a public energy company with a profit motive but force it to sell energy at artificially low prices. This is a mistake. Social goals create mixed objectives for asset managers that make both the social and commercial goals more difficult to accomplish.

Social goals are better internalized as pure government services, and allowing the holding corporations to operate under a value maximization paradigm provides more dividends to the public. Compartmentalizing goals makes achieving them easier because each goal having a dedicated group in charge makes each group better at accomplishing them.

In other words—“Never half-ass two things, whole-ass one thing.” - Ron Swanson

4. Holding corporations should have hard budget constraints

One of the downfalls of a lot of public ownership is the ‘soft budget constraint.’ This is the idea that state-owned enterprises don’t really need to make a profit or run efficiently because the government will bail them out. This comes from politicians using state-owned enterprises as job programs or influence peddling. This also happens when politicians view state-owned enterprises as a part of national pride (i.e., having a single state oil company in a nation known for its oil wealth).

After initial capitalization, the holding corporations should operate on their own. This means holding corporations might have to go out and raise capital to cover any shortfalls. This also means holding corporations might need to go bankrupt if worse comes to worse.

The goal of a state portfolio of holding corporations is not for all of them to succeed all the time, but rather for the portfolio at large to succeed on a risk-adjusted basis. Not all investments within each holding corporation and not all holding corporations will succeed together. That’s the competitive process, and that’s what will produce returns for the public.

5. Holding corporations shouldn’t receive subsidized capital and they should have third-party credit ratings.

When it comes to raising capital, state-owned enterprises often receive favorable capital from the state in the form of below-market interest rate loans. This adds to the problem of the soft budget constraint. If a holding corporation wants or needs capital for an investment opportunity, development activity, or in order to float a cash shortfall, it will need to go to commercial banks, third-party investors, or other sources of market capital. This ensures a competitive, non-distortionary process for holding corporations to participate in investment activities.

It’s also important that each holding corporation pursue a third-party credit rating for this purpose. This ensures another incentive and layer of accountability to operate each holding corporation professionally.

6. Holding corporation executives and staff should have competitive pay packages.

Something of a wedge issue in leftist circles is executive pay in large investment firms and corporations. This shouldn’t be the case in the public’s holding corporations. If a holding corporation makes $8 billion in profits in a given year, the CEO taking home $20 million isn’t the biggest deal. The public socializes the total returns, after all.

Competitive pay packages also ensure the best people will want to work at the holding corporations. We don’t want a dual market, where all the best talent in the investment industry works at private firms. To attract the best people, the pay packages need to be competitive.

7. Holding corporations should be able to be publicly traded themselves.

This might sound odd at first, but inviting in some private investors will, similar to obtaining a third-party credit rating, ensure some independent oversight into the operations of each holding corporation. Holding corporations would need a policy of only allowing a certain portion of their shares to be open for trading (i.e., the shares openly traded would only equal up to 33%, 45%, or 49.9% of total ownership in the fund), and the decision for, and management of, a partial initial public offering would come from the board of each holding corporation.

The Federal Reserve regional banks operate in a similar manner, where three of the board seats come from private banks. The Federal Reserve is generally seen as one of the most well-governed and technocratic aspects of the U.S. Federal Government, and it owes part of this success to its mixed board structure.

8. The fruits of the holding corporation

Each holding corporation would have the goal of maximizing value and returning capital to its shareholders (the public). The government would likely have a loose return target (such as a 6% annual increase in portfolio value) and another loose dividend guideline for each holding corporation.

The reason this guidance is ‘loose’ is that we want each holding corporation to make sound long-term financial planning decisions. That might mean not paying a dividend in a given year or accumulating cash for one reason or another.

Lastly, there would be a fiscal rule to sell off part of the value of the entire public portfolio each year to capture capital gains income. A significant portion of each holding corporation’s assets would be liquid assets such as stocks, bonds, REITs, ETFs, mutual funds, etc. The public could sell these assets each month to return money to the public treasury. For instance, Norway has a ‘fiscal rule’ where it sells around 3% of its sovereign wealth fund portfolio each year for general public revenue.

A Practical Way Forward

This won’t be an easy thing to accomplish. It requires thoughtful public management and an eye for long-term decision-making, but governments across the world, in various forms, have proven their ability to accomplish great things for public purposes.

I'll outline three main ways to kickoff this plan:

1. A full accounting and segregation of public assets.

2. Establishing holding corporations or wealth funds with direct seed funding.

3. Utilizing the central bank as a tool for this process.

Assuming a country has very few public wealth management institutions (like America), the best way for the government to start down this path would be to produce a consolidated list of assets already owned by the public. Detter and Fölster make it clear that the scale of public ownership is already very large.

For instance, they reference a came where Sweden underwent this accounting an consolidation of public assets and realized the single largest owner in the country was, in fact, the public. Most governments don’t have a robust system of accounting for public wealth, meaning governments literally do not realize how much they own.

This would involve hiring a team of auditors to investigate, consolidate, and report all public wealth owned by the government. This portfolio should then split into two buckets: commercial and non-commercial. The commercial assets could be things like undeveloped public land, empty buildings, condemned property, state enterprises, etc. Non-commercial assets might be things like public parks, libraries, or schools.

Although non-commercial assets might not be developable, it’s still very important to have a transparent book of them. For example, let’s say a local government owns and operates a school, but the school is very old and a bit rundown after decades of wear and tear. However, this school is in a popular part of the city, making the land very valuable.

The government could sell the land underneath the school after locating a cheaper piece of undeveloped land in the city. This gives the government enough money to build a new, modern school without calling up the taxpayer.

After the auditors produce this portfolio, all commercial assets will transfer to the first (or first few) independent holding corporation(s), with the goal of developing the assets and maximizing value.

Detter uses a general rule of thumb to estimate the value of public wealth. He says the value of public wealth, unbeknownst to the government, is equal to at least one times GDP. In the U.S., this means the federal government owns a portfolio of public wealth equal to at least $29 trillion (as of 2024). They just don’t realize it yet.

Another path (or at the same time) the government could use tax revenue from any source or debt financing to capitalize the first fund or form additional funds. The government could also use the same revenue sources to form a sovereign wealth fund. Sovereign wealth funds are a little different from holding corporations because sovereign wealth funds focus on purchasing financial assets (think stocks, bonds, or ETFs).

As the government’s sovereign wealth fund grows, it could eventually split off into a number of independent holding corporations, as described above.

Lastly, central banks around the world engage in a practice called ‘quantitative easing’ where the central banks, often during downturns, create currency to purchase open market securities in order to stimulate the economy. The central bank then ends up selling the assets once the economy recovers.

My suggestion would be to hold onto those assets and transfer them to the sovereign wealth fund. This increases the rate at which the fund expands while stimulating the economy.

These are three separate, but not mutually exclusive, ways for governments across the world to begin unlocking the potential for public wealth management. It starts with transparent accounting for all existing public assets, forming either a sovereign wealth fund or an independent holding corporation, and using quantitative easing to broaden the capitalization of the funds/holding corporations.

As these holding corporations/funds begin to grow, they begin to horizontalize the wealth of society. Norway and Singapore are the best examples of these institutions in practice, but they are far from the only examples.

Closing Thoughts

That’s my practical utopia. The economy, as structured now, with institutional investors allocating capital for value creation, still exists. However, the state creates a number of wealth management firms through the holding corporation to invest capital on behalf of the public, with a mandate to create value, similar to private investors.

As capital in these holding corporations accumulates, the holding corporations split off, and the public’s total portfolio value begins to eclipse the commanding heights of the economy. Wealth and capital income now flow in an egalitarian fashion (think even more equally than the modern Nordic economies), and the economy continues to thrive.

Some advantages of this model are that it maintains a familiar economic structure that we know works pretty well at incentivizing production and innovation. Society now not only benefits from the availability of production and innovation, but also from the profits of production and innovation.

One bonus advantage of this model from a practicality perspective is that it’s coherent to advocate for on a local level. Leftist policies are sometimes fraught at the local level. It’s difficult for a city government to fund a basic income and single-payer healthcare. However, a local city can copy and paste the practical playbook I outline above (besides the central bank part). After all, I began my journey to Detter and Fölster by reading The Public Wealth of Cities.

Every system has its downsides. One significant downside of my system is the potential for political influence on public assets. However, even the United States, which has a turbulent history with public wealth management, managed to create a technocratic, non-partisan institution that’s well-respected across time and political persuasion: the Federal Reserve System.

The Federal Reserve has the power to print as much money as it wants, dictate a significant portion of banking regulation enforcement, and set the basic lending terms for the entire economy. The reason the Federal Reserve System works so well isn’t luck or a lack of politicians trying, at points, to bring overt partisanship to the Fed. The reason the Federal Reserve System works is in large part due to its structure.

We created an independent, professional structure so airtight that even the unitary executive theory-believing right-wing Supreme Court agrees with the Fed’s independence.

My point is that the way we structure public wealth management matters, both in terms of expected outcomes from day one after the bills become law, but also in how we might expect public wealth management institutions to exist in the long run. As pointed out in the books by Detter and Fölster, there’s a certain strategic political economy to public wealth management institutions in a country.

If it’s the case that independent, professional public wealth management works well, and the treasury begins to receive trillions of dollars in dividend checks and capital gains, then politicians will think twice about mucking up the system, as they do with the Federal Reserve.

We know how to make public wealth management work. All we need to do is take the first step.

Questions people might ask

As with any economic model, questions arise. I know when I started debating socialists, I had a lot of questions about how their economic ideals would work in practice, so I figured it would help to provide a Q&A section at the bottom of this article with questions and my attempt at brief answers.

1. Would people still be motivated to start businesses? How would that even work?

People would have the ordinary incentives and processes available to them to start businesses as they do now. Let’s say a person has an idea to open a shoe company. They would need to develop a business plan and speak to investors to raise capital. Some of these might be the holding corporations themselves, private investors, family and friends, or various banking institutions for credit.

Then, once investors line up, they start purchasing the necessary labor and equipment to start their business. Let’s say things go well, and the business is profitable. The founder/CEO of the company will decide how to manage these profits.

Let’s say things continue to go well, and the founder decides to expand. The capital structure of the business remains the same, as dictated by the original founder (and any equity investors he or she invited in). Maybe after a while of things going well, the private shareholders (along with the founder) decide to take the business public.

The initial public offering goes well, and now public shareholders own the company. These shareholders would be a diverse mix of institutional investors like the holding corporations, retail investors, foreign investors, and other miscellaneous investors.

What I’m trying to get across here is that the basic process for business formation, management, and destruction does not change. The big change is that the distribution of profits from capital voluntarily sold to the public’s holding corporations now flows horizontally.

2. Would billionaire still exist?

It’s possible. For instance, let’s assume a person comes up with a good product and somehow develops this idea to the point that the associated business runs well, so well, in fact, that the owner becomes a billionaire from the ownership of the business alone. Michael Bloomberg, one of the richest men in the world, gained the bulk of his wealth primarily through owning the vast majority of the business he founded.

However, let’s imagine a world where the richest person on the planet is Michael Bloomberg, but, at the same time, the net worth of the American public is $150 trillion from the wealth owned and managed by the public holding corporations. This marginalizes the power of the wealthy by making the public a key source of direct capital investment (i.e., the public benefits from direct ownership in many ventures or returns from fixed income).

We can address other concerns on the margin about the wealthy’s influence through an efficient tax code or reforms in the news media and elections, where international experiments seem to work well.

3. Would private ownership of the means of production still exist?

Yes, to some extent. I don’t think it’s worth making private capital ownership illegal or mandating some essential ownership structure. The economy should be dynamic and flexible to accommodate changing times. It also helps to have some external experimental private management schemes as a reference for the public holding corporations to learn from.

The People’s Policy Project published a piece on the giant consumer cooperative called the ‘S Group’ in Finland, and it speaks to the value of this approach:

S Group isn’t run by the government, nor does it propose to abolish private property. On the contrary, the competition from Kesko [a private competitor] was quite important in motivating S Group’s successful transformation. “You need some external pressure. If you are just a monopoly, not only would it be bad for prices, but it would be bad for efficiency,” Panu Kalmi, a professor of economics at Vaasa University, told [The People’s Policy Project].

4. What about the workers?

Some will say this approach ignores the struggle for workers' rights and worker ownership. It’s true that many socialists argue that socialism is when the workers own the means of production, not necessarily when society owns the means of production.

I reject this approach on egalitarian grounds, and I also think it’s less efficient (as mentioned above). However, another big reason I reject this approach is that I believe in worker board membership and unions.

Unions do a great job protecting workers' rights, compressing wage scales, and promoting worker solidarity. Workers also don’t always desire to own part of their business. Many workers prefer to avoid the risk of ownership, and that’s an understandable position.

My ideal economy would have heavy unionization, worker board membership (partially mandated), and some employee ownership through retail investing, employee stock plans, and worker cooperatives. Workers are much more empowered in my ideal society than in today’s society. I just happen to think social ownership is better than worker ownership.

5. Is this model really socialism?

To answer this, all I can say is that I think so. My ideal economy looks something like the public owning 85%-90% of the wealth of society, most workers being part of unions, tens of thousands of workers serving on corporate boards, and the vast majority of GDP coming from publicly owned entities through holding corporations, other SOEs, and general government services.

I think if someone gets an 85% or 90% on a test, that’s usually considered a passing grade. However, if some socialists want to quibble and say this doesn’t fit the socialist binary in their heads, that’s fine with me. In some senses, this economic model is incomplete.

Market distribution still results in some level of power imbalance and inequality in society. Some level of private ownership does the same. However, I’m at the practical end of the road with this model. To go back to the G.A. Cohen point in my previous article, we might not know how to get to a perfectly just society, much less a perfectly just economy.

Despite that, this model represents a monumental leap in the right direction, and my egalitarian ideals, which make me a committed socialist at this point in my life, are made that much more whole.