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Ian Troesoyer's avatar

Good article. I like sovereign wealth funds, but... I think you are giving them too much credit in their ability to functionally decrease the social effects of inequality. Can Alaskans mobilize their sovereign wealth to prevent foreclosure on their houses or prevent medical bankruptcy? No. Can they use it to influence political campaigns that might sway policy in their favor? No. Can they use it to pay for their kids' educations or plan for their own future? No.

I think sovereign wealth is insufficient on its own. In addition people need highly functional democratic control of the fund to pay for basic services, they need strong redistributive policies, or...

They need to radically reconsider how the allocation of wealth is accomplished by the state in the first place.

For example,

1. Taxing the full rental value of nature/location (full Georgism)

2. Real public ownership/control of utilities (functional monopolies) and rights of way

3. Elimination (or serious reconsideration) of government-issued monopolies (like patents)

4. Rethinking of why the state assigns total ownership of corporations to the founder or whoever they sell it to. Corporations are privileged legal creations that are definitely NOT just manifestations of a free market. I'm a fan of having corporations owned by the people who actually create their value: user coops for utilities/monopolies and worker coops for corps that must compete in a market.

It would be weird for the campfire that those campers made to be exclusively owned by the person who asked everyone to help make it.

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Casilliac's avatar

Good article, posted it in the gc.

Another benefit of sovereign wealth funds might be that they could provide a really effective means of corporate governance. I was reading abt how large index funds try to influence major corporations to adopt more prosocial corporate governance standards (more transparency, better FTC/SEC compliance, etc.) because the index funds depend on stable long term growth and abhor instability. There's even a conspiracy theory to be had here that corporate interests turned ESG into a culture war thing because they hate the governance portion.

Instead of doing a bunch of lengthy marginally effective SEC enforcement stuff when there's fraud the government could just vote it's shares every quarter.

Of course the capacity for abuse could be disruptive but you could (and probably would) have the funds managed by a Federal Reserve-style independent entity.

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