At Project Syndicate, Dank Rodrik talks about the need to update our thinking of capitalism in relation to labor, calling for a publicly managed venture capital system where the technology gains of modern capitalism can be realized while funneling some of the profits back to society.
“Financial markets in the advanced economies provide risk capital through different sets of arrangements – venture funds, public trading of shares, private equity, etc. But there is no reason why the state should not be playing this role on an even larger scale, enabling not only greater amounts of technological innovation but also channeling the benefits directly to society at large…
Imagine that a government established a number of professionally managed public venture funds, which would take equity stakes in a large cross-section of new technologies, raising the necessary funds by issuing bonds in financial markets. These funds would operate on market principles and have to provide periodic accounting to political authorities (especially when their overall rate of return falls below a specified threshold), but would be otherwise autonomous…
The public venture funds’ share of profits from the commercialization of new technologies would be returned to ordinary citizens in the form of a “social innovation” dividend – an income stream that would supplement workers’ earnings from the labor market. It would also allow working hours to be reduced.”
