Will was a web designer living in Los Angeles and supporting his wife, an aspiring actress. He couldn’t shake the idea that he, too, should pursue his passion. So he started a side business on a new digital platform, AllDone (a pseudonym), which connected skilled service providers with customers. Will created a profile to offer guitar lessons, quickly landed a couple of students, and signed up for a subscription that allowed him to respond to potential clients for a flat fee of $20 per month.

Will’s business grew, and he quit web design to teach full-time. A few months later, he got a call from a customer support agent at AllDone. She had bad news: The platform would no longer offer subscriptions. Will would now have to pay a fee to respond to each potential client—adding up to an unsustainable hundreds of dollars a month. Will panicked and pleaded with the customer service agent to let him keep his subscription. “You guys have shattered my dreams!” he cried, when she told him the decision came from management, and there was nothing she could do.

I learned about Will’s story when I was conducting sociological research inside AllDone, one of many Silicon Valley startups aiming to profit from “disrupting” existing industries and building a new, digitally backed gig economy. Like so many workers who rely on apps to make a living, Will had invested in his business under one set of rules only for them to be suddenly and unilaterally altered. Workers criticized—and organized against—platforms like Uber and Instacart in their early years, when they repeatedly experimented with employment policies and wages in similar fashion.

There has been no shortage of debate about the role of arrogant CEOs and harmful algorithms in defining technological innovation. But we typically hear less about the systemic forces that generate those problems. A key culprit is venture capital (VC), which provides early funding for entrepreneurs who want to transform neat ideas into billion-dollar companies. For a business to have any chance of “changing the world” with its technology, it must mold itself to meet the demands of these funders. VCs have become folk heroes in Silicon Valley, widely revered for delivering innovation. Often, they help create products that succeed in short-term disruption—with questionable or even dangerous long-term effects.

VC compels startups to engage in relentless experimentation to generate exponential growth, ratcheting up their expectations at every stage of a firm’s development. The goal is to increase a startup’s valuation so the investor can sell their stake for far more than they originally paid for it. When a startup succeeds, investors’ profits can be stunning. Sequoia Capital’s initial outlay of $585,000 to Airbnb was worth $4 billion after the company went public.

Many celebrate venture capital’s role in creating a marketplace that nurtures the most innovative ideas. But the ideas that are “best” for capital markets—and for enriching the most affluent among us—aren’t always those that are best for societies. When well-connected entrepreneurs, VCs, and the wealthy institutions and individuals whose money they invest achieve massive payouts, other stakeholders are frequently left behind. For example, following Uber’s IPO in 2019, a combined $27.1 billion—about 40% of the company’s valuation—was captured by just three investment funds and the company’s two co-founders. Longtime Uber drivers, on the other hand, received bonuses that averaged $273 per person, or the equivalent of just a few cents per ride.

Tech startups that succeed are not necessarily those that figure out how to create a stable business model that yields consistent profits. Instead, the winners are often the companies that have attracted more capital than their competitors by pursuing reckless growth. Consumers and stakeholders end up missing out on some of the best, most sustainable, and perhaps even the most innovative products and services—tethered instead to the ones able to meet investors’ ever-escalating benchmarks.

The VC business model is powerful. But it is also relatively new, fueled by policies enacted in the late 1970s that incentivized startup investors, including big cuts to the capital gains tax rate and a Department of Labor ruling that allowed pension fund managers to invest in riskier assets. Since then, a small cadre of funders, over a third of whom are based in the Bay Area, have seized an outsized voice in determining the distribution of the economic risks and rewards associated with innovation.

As a new wave of generative AI startups takes center stage in Silicon Valley, venture capital is once again setting the agenda, unleashing experimental technologies that expose us all to substantial risk. How can we come together to minimize the harms generated by new technologies, while sharing their benefits—and fueling sustainable innovation—more broadly?

It’s time to look for better ways to invest in our future—ways that reward new ideas not just for their ability to inflate a startup’s valuation, but also for the benefits they bring to society as a whole. A brief survey of the tech landscape reveals numerous examples of potential alternatives to the VC model. Craigslist is privately owned and has largely resisted outside investment. Instead of constantly experimenting with its platform to increase engagement, serve advertisements, or harvest user data, the company is free to balance the profit motive with a public-service ethos.

Nonprofit video-captioning and translation platform Amara pays higher wages than similar for-profit labor platforms. Up & Go, a platform that allows customers in New York City to order house-cleaning services, is co-operatively owned and operated by the workers themselves. Ninety-five percent of the revenue generated through the platform is paid out to workers, resulting in wages about $5 per hour above the local average.

What these models have in common is the ability to reduce entrepreneurs’ dependence on external funds, and thus external control. Other measures can loosen venture capital’s grip on our innovation ecosystem, too: federal grant and loan programs that require founders to cap prices or share profits, publicly owned investment vehicles, and eliminating tax dodges.

By promoting and investing in businesses with alternative ownership structures, consumers, workers, activists, and governments can challenge venture capital’s winner-take-all model, creating ecosystems of smaller, more localized and specialized platforms that are more responsive to the people who use them and to the communities in which they are embedded. Workers like Will could build more stable livelihoods doing what they love; consumers could have more choices, and their money could directly support their neighbors and local communities instead of serving investors’ interests. Technological breakthroughs could really make life better, which is what innovation should be about. Curbing VCs’ influence isn’t about stifling innovation—it’s about making room for the rest of us to have a say in our technological future.

The post Are Venture Capitalists Silicon Valley’s Biggest Villains? appeared first on Zócalo Public Square.

In this time of rising polarization, authoritarian populism, and maddening big-money politics, leaders often say that it’s up to we the people to save democracy.

But democracy costs money. And democracy—unlike the governments and special interests that seek to control it—has no budget. So how are you and I supposed to pay for all that democracy-saving?

There’s a new and practical answer to that question—called “Democratic Action Funds.”

I first heard a proposal for these from Marjan Ehsassi, a non-resident future of democracy fellow with the Los Angeles-based Berggruen Institute, at a democracy conference I ran in Mexico City.

Ehsassi has studied some of the world’s least democratic places—Iran, Cuba, and North Korea. But in recent years she has turned her attention to backsliding democratic societies, including the United States, where big majorities of people tell pollsters that they have no real voice or power in government. As a result of feeling powerless, more of us are disengaging from political processes and civic life.

To get people reconnected, Ehsassi and other experts have embraced innovations to give everyday people consequential voice. Among the most promising are innovative deliberative bodies that empower regular people—rather than elected officials—to study an issue and make consensus policy proposals. These bodies are sometimes called citizens’ juries, citizens’ assemblies, or reference panels. I met Ehsassi last summer in Petaluma, in Sonoma County, where she was evaluating the first-ever citizens’ assembly in California.

There have been hundreds of such assemblies around the world—examining everything from snowmobile use in Finland to land-use decisions in Japan. And they’ve often produced significant changes—from the legalization of abortion in Ireland, to new urban plans in cities from Bogota to Brussels. But the practice is still rare, and growth of any democratic innovation is slow—mainly due to the cost of trying something new.

Which is where Democratic Action Funds would come in.

The idea—from Ehsassi and her colleague Peter MacLeod, founder of a Toronto-based public participation organization called MASS LBP—is straightforward: set aside a small slice of the billions of dollars that mature democracies now spend on things like elections and legislative operations, and use that money to fund the democratic efforts of regular people.

Under Ehsassi and MacLeod’s proposal, as offered in Mexico, any jurisdiction that conducts elections would allot 5% of the money it spends on elections and legislative operations to the new funds. Why 5%? That’s about what most industries spend on research and development.

Democratic governments at any level—local, regional, national—could establish such funds.  Each fund would be a trust, with monies collected from the government but administered by an independent secretariat.

Most of the fund’s money would go out in grants, for which governments, agencies, companies, NGOs, or others would apply. Under Ehsassi’s plan, a randomly selected group of citizens, not the fund’s administrators, would evaluate and choose which proposals get funded.

The money would be used to support citizens’ assemblies and other “high-quality participatory and deliberative initiatives” that directly involve everyday people in policy reform and addressing public questions. The fund would also set aside a slice of the money for training people involved in these processes, for monitoring and evaluation, and for research and development of best practices in the field.

In the United States, the total cost of the fall 2022 election was $16.7 billion. Five percent would give the country a modest, but significant, Democratic Action Fund of $835 million, enough to inspire a range of democratic innovations in every state.

In California, where an election can cost $300 million to run, a state-level Democratic Action Fund would receive $15 million annually. Such a fund could offer 60 grants of $250,000 every year. Ehsassi anticipates the funds sharing costs with the jurisdictions in which projects take place.

A program like this would involve thousands of Californians directly in democratic innovation and government decision-making. Research shows that such participation improves civic and democratic skills, and engagement, of the everyday people who participate. People learn that complex issues don’t have easy answers, and that the democracy work of representing your fellow citizens is quite difficult, and deserves respect.

Ehsassi stresses that these public participation platforms “are not progressive or conservative. Citizens’ assemblies are citizen-centric, put the public back in policy, and are healthy complements to our representative systems of government.”

In other words, Democratic Action Funds could make people, and our culture, more democratic—and an inexpensive way to help us, the people, save democracy.

The post Saving Democracy Costs Money. How Do We Pay for It? appeared first on Zócalo Public Square.

In early modern times, and really up until the 20th century, one could argue that silver, not gold, was the precious metal that ruled the world. Though minted in Spanish America or Europe, silver coins could be used to buy pepper in Sumatra or cotton fabrics in Bengal, and the same money could be spent on troops or warships. Any monarch or state with ready access to silver harnessed the sinews of war.

But to understand what the costs and benefits of this first global currency were—how it changed the lives of the people who mined it and the natural environments that were upended along the way—consider the story of Potosí, a silver mining town established in highland Bolivia in 1545. Potosí offers sharp lessons about who wins, who loses, and how profoundly a mother lode of shiny metals can shape a region over the course of nearly 500 years.

Potosí, located at a breathtaking 13,200 feet above sea level in the eastern cordillera of the Bolivian Andes, still produces silver today, but miners tend to make more money from related base metals, mostly zinc and lead. In the 19th and early 20th centuries, when silver first went bust, Potosí’s salvation was tin. For a very long time, the Rich Hill, or Cerro Rico, of Potosí had it all, save gold.

But today the city fights for its life amid a drying climate and collapsing, over worked mines. The talk of the town today, despite its toxic environment and challenging altitude, is tourism. The fact that Potosí still lives by mining after nearly 500 years is a riddle that only makes sense in a woefully poor and underdeveloped country.

And this tension—how a place so rich in natural resources could remain so impoverished—has made Potosí a poster child of the so-called resource curse. Locally, the Cerro Rico was and remains the “mountain that eats men.” In colonial times, many of those men were native Andeans sent underground or into mercury-soaked refineries against their will, while the fortunes of Spain’s kings rose and fell on Potosí silver futures. In his still-popular polemic on underdevelopment, Open Veins of Latin America: Five Centuries of the Pillage of a Continent, the Uruguayan writer Eduardo Galeano declared Potosí the epitome of colonial excess.

But a closer look at historical sources suggests that Potosí was something more complex and contradictory than the passive canvas for Spain’s “giant sucking sound” imagined by Galeano. Yes, the colonizer exhausted the mountain. Yes, the colonizer shamelessly abused Bolivia’s native Andean population. And yes, everybody inhabiting Potosí abused the natural environment, fouling streams and stripping every twig from every bush or tree for hundreds of miles around. Indeed, for its first hundred years Potosí could be described as an oasis of horror in a sea of ichu grass—an early modern nightmare.

Countless Andean workers and generations of outraged Catholic priests pled the case for reprieve before the Habsburg monarchs of Spain only to see the infamous draft of indigenous labor, the mita, revived again and again.

Yet, even with this dark knowledge in mind, one stumbles upon paradoxes that complicate the story. The search for silver was not monopolized by European colonizers, and control over the mines and their products was always contested. Though disadvantaged by law and custom, some native Andean miners and refiners made fortunes. Andean women drove a thriving informal economy by seizing on the city’s insatiable need for food and drink, aided by an accidental royal tax exemption.

Unintended consequences and spontaneous acts of charity abounded despite an atmosphere of greed and shortsightedness. The complexities of mining and refining, particularly as shafts dove deeper and ores grew refractory, led to a wide range of technical innovations that then reverberated around the region and the globe. While Potosí’s royal mint was staffed almost entirely by enslaved African men from Angola and Congo, the coins it produced supplied the world with ready money, which transformed societies in ways both positive and negative everywhere it traveled.

Panoramic view of Potosí, Bolivia. Courtesy of Martin St-Amant/Wikimedia Commons.

As early as the 1590s, Potosí’s decade of peak production, the city, mines, and refineries prefigured industrial capitalism at its best and worst, its most innovative and its most destructive. Stamp mills crashed all night, and miners worked around the clock. Everyone suffered the effects of airborne mercury, lead, and other toxic metals in addition to consuming foul water. Yet financial innovations followed on technical ones, giving rise to whole new classes of entrepreneurs, among them the long-distance coca traders of Cuzco, Peru. Merchants from Lima, Peru, brought Chinese silk, Basque iron, and Sri Lankan cinnamon to a wide range of colonial consumers. Potosí consumed the world even as the world consumed Potosí.

A fountain of fortune, Potosí’s iconic Cerro Rico promised socioeconomic gain for all types of people and both sexes, transforming a rigidly hierarchical world where self-fashioning was dangerous. Women and men from many corners of the world came here rather than to Madrid—the center of empire—to flip their own fortunes. With a restless population well above 100,000 at a time when Paris and London were not much bigger, Potosí was a beehive of opportunity for smooth and rough operators: pickpockets, pícaros, charlatans, and assassins. The city’s brothels and gambling dens were infamous, as were its comedians and other entertainers. For over 100 years Potosí boomed before its first great bust.

Another paradox of Potosí was its longevity. The Cerro Rico sputtered after 1650 but never gave out. It was still mined in 1825 when Simón Bolívar climbed it to celebrate his liberation of a continent.

When the Spanish colonizers left Potosí in the 1820s, the British, French, and ultimately Yankees came, each seeking to do what they believed the despised Spanish had been too stupid or technologically backward to do. In reality, it was Bolivians, including native Andeans as well as the descendants of Spaniards, who kept Potosí alive in the 19th century, often reviving old technologies and managing risk in ways not amenable to industrial capitalism as practiced in the Northern Hemisphere. There were ways to mine silver without thinking of how to maximize returns to shareholders.

There was always more silver inside the mountain, which many believed to be magical, a mother’s womb or Pachamama capable of regeneration. Even in the earlier years, when times got hard, mine owners and native prospectors fanned out into the countryside in search of new bonanzas, transforming a distant mountain or remote range into a fleeting shadow of the great Cerro Rico. Each hinterland boom produced its own wave of violence, harsh justice, wasteful spending, and environmental destruction, but each also produced new innovations amid labor shortages and discoveries of different ore types. One such innovation—born of short hands and hard rock—was to blast out ore with black powder, not safe, but effective.

Only with cyanide processing, hydroelectricity, and railroads in the early 20th century did Potosí begin to look something like a Leadville, Colorado, or a Virginia City, Nevada. A modern brewery arrived to supply miners with Potosina Pilsener by 1907.

But there was always something different in Potosí despite the modern accouterments, something ancient. As in colonial times, modern mining in Potosí has always toggled back-and-forth between the big and the small, the heavily capitalized and the informal or cooperative. A main driver of these swings has been the perennial uncertainty of global commodity prices, coupled with Bolivia’s extreme poverty and shifting government directives.

Eduardo Galeano may be right that what matters in the end is underdevelopment, extraction without compensation, wanton brutality, enduring racism, environmental degradation, all the worst effects of the resource curse in a former colonial backwater. Outsiders are to blame, from Spaniards to Yankees.

But if one asks Bolivian miners inside the Cerro Rico today what they make of Potosí’s strangely durable legacy, they are apt to say that the whole thing, from the very start, has been a devil’s bargain. The resource curse set loose in Potosí now lives inside us all.

The post How a 16th-Century Bolivian Silver Mine Invented Modern Capitalism appeared first on Zócalo Public Square.

This was one happy if serious conclusion from a Zócalo/UCLA Anderson School of Management event titled, “Can Individuals Be Happy in an Unhappy Time?” Before an overflow crowd at the National Center for the Preservation of Democracy in downtown L.A., three scholars who study different aspects of happiness touted a wide variety of research on happiness and offered tips for how to cultivate happiness in yourself.

“When you feel happy, it’s not that you don’t experience those negative things in the world. It’s that those negative things are less intense,” said panelist Cassie Mogilner Holmes, an associate professor of marketing and behavioral decision-making and the Donnalisa ’86 and Bill Barnum Endowed Term Chair in Management at UCLA Anderson. Happiness, she added, “is sort of that immune system that keeps us going.”

The event began with moderator Madeleine Brand, host of KCRW’s “Press Play,” asking the audience to clap if they felt happy at that moment. She received loud—but not overwhelming—applause in response. Brand then pressed the scholars on whether happiness was too fleeting to be an important goal.

The scholars answered that happiness provided such advantages that, one quipped, “it’s almost unfair.” Happier people do better in life by all kinds of measures, from wealth to health. And the benefits accrue, such that the happy get happier.

Holmes emphasized that time has a crucial relationship to happiness. Her research shows that money is less important than people think, and time far more important. Studies from the early part of the decade suggest that once your income reaches $75,000, additional money doesn’t translate into feeling happier in the course of your daily life. Those who focus more on time than money are happier.

“Time leads to greater happiness,” she said, “and people become more deliberate in how they spend their time” over the course of their lives. The trouble is that many of us spend so much of our waking lives doing things—work, housework, commuting—that we don’t enjoy.

Sonja Lyubomirsky, a professor of psychology at UC Riverside and author of the books The How of Happiness and The Myths of Happiness, said her favorite theory in psychology is self-determination theory, which argues that we are happy when we satisfy three basic needs: connectedness, autonomy, and competence.

Genetics, she noted in response to an audience question, can affect happiness. So can other factors. But our own choices, especially around how we use our time to satisfy our needs to connect, to be autonomous, and develop our competence, can help. She carpools when she commutes between her home in Santa Monica and her job in Riverside, because “I’m with other people, and I strengthen my friendships.”

The third panelist, UCLA Anderson behavioral psychologist Hal Hershfield, said that while happiness is very important, “meaning, and the pursuit of meaning may be more important…. If you’re climbing a mountain, that may not be a happy experience, but it’s a meaningful one.”

Hershfield discussed his work getting people to look at their future selves, and to figure out what they’ll need to do to make sure they can fund the sort of life they want in the future. The challenge, he said, is that humans are “really bad at predicting what will make us happy.”

But thinking about endings—the ending of lives or the ending of phases of our lives—seems to allow us to focus on the most meaningful things. Studies of college seniors found that they start spending more time with their very closest friends around graduation, he said.

When Brand, the moderator, asked who the unhappiest people were, the panelists initially differed. Lyubomirsky said it was younger people—ages 14-28—because they have less autonomy and less competence. She also said that the current generation of very young people are less happy, have lower self-esteem and more anxiety than previous generations, and those things may correlate with smartphone use and screen time.

Hershfield noted that many studies point to the greatest unhappiness among people in middle age.

But these differences in part reflect differences in surveys and the fact, noted by Holmes, that people experience happiness differently at different stages of life. Young people associate happiness with excitement and enthusiasm, and older people with calm and serenity.

Older people tend to be happiest, suggested Hershfield, because they have time and experience “to focus more on emotionally meaningful goals.”

In response to a question from Brand, the panelists noted that happiness is a particular challenge for Americans. The “pursuit of happiness” is a defining quality of American life—it’s in the Declaration of Independence—but Americans work more and often take less vacation, even though research shows vacation is associated with greater happiness.

Holmes suggested being more attentive to time and to the people around us in the moment will make us happier. As Americans, she said, “we often make decisions, with our Puritan ethic, that we shouldn’t feel happy right in this moment.”

During a question-and-answer session with the audience, an audience member asked the panelists to name one thing they did that made them happier. Brand, the moderator, said she bought a wood-handled scrubber in a Japanese houseware store that cleans perfectly and looks beautiful next to her sink. “That makes me happy,” she said with a chuckle.

Holmes said optimizing unhappy time; during a long commute, “pick up the phone and call your friend who you haven’t spoken to in a while,” she said. Lyubomirsky said she was trying to spend less time on small talk, and foster connection by having bigger conversations with friends, including old ones with whom she had lost touch.

Hershfield said he is trying to create more traditions and routines in his life. He found that taking his daughter to breakfast at the same restaurant every Tuesday made him happier. “It’s the first time I’ve been a regular at a place,” he said.

The post Yes, You Can Be Happy in Sad Times appeared first on Zócalo Public Square.

Americans’ ready embrace of the phrase in the 1950s seems foreign to a contemporary politics when so many Americans find invocations of Christianity in American politics frustrating. But seen in another light, the story of “In God We Trust” actually sheds light on the reasons behind that frustration. The phrase seems straightforward and clear, but any interrogation of it shows how quickly its meaning dissolves into ambiguity. The “God” of the phrase is by implication—though not explicitly—the monotheistic deity of the Hebrew and Christian Bibles. But what it means to “trust” is unclear, and “we” is undefined. Does it refer to all Americans? More, the same is true for the word “Christian” itself. What does it mean to be a “Christian candidate”? What does it mean to have a “Christian nation”? During the Cold War, Protestants like Bennett imagined the existence of a religious consensus and coined the phrase “Judeo-Christian” to describe it—but whether that consensus actually exists remains up for debate.

Putting the name of God on American currency was not a new idea in 1955. The words “In God We Trust” had first been placed on coins in 1861 at the direction of Treasury Secretary Salmon P. Chase, at the urging of a Christian minister named M.R. Watkinson. For a week, Chase pondered on Watkinson’s letter, which suggested placing the phrase “GOD. LIBERTY. LAW.” on coins. Then the treasury secretary instructed the director of the Mint to stamp the declaration on the money, but he changed the wording to “In God We Trust,” which Chase—always pompous—thought stylistically superior to Watkinson’s suggestion. The phrase appeared on American coins intermittently from Chase’s time until 1938, when it began appearing on all metal currency.

Bennett’s resolution fixed its appearance on paper currency as well. In the 1950s, with the country feeling under siege, his proposal to revive Chase’s plan received wide support from both political parties and President Dwight Eisenhower. At almost precisely the same time that Bennett’s measure passed, Congress voted to add the phrase “under God” to the Pledge of Allegiance. Senator Homer Ferguson, a Republican from Michigan, explained that he supported that resolution because “Our nation is founded on a fundamental belief in God, and the first and most important reason for the existence of our government is to protect the God-given rights of our citizens.”

Americans’ enthusiasm to publicly declare their faith in God—both in the turbulent 1860s and 1950s—was more than simple piety; these were acts of public theology. American Christians did not merely advocate for public acknowledgement of God; they offered interpretations of what that faith should mean for U.S. democracy. Bennett, Ferguson, and Chase each performed a ritual of national sanctification, trying to bind together in the public eye what they took for granted: that American democracy depended upon the virtues of what they thought of as simply “Christianity,” but which in retrospect seems to be Protestantism.

Chase, Bennett, Ferguson, Eisenhower: all were Protestants, and as Protestants they argued that Christian theology provides a transcendent rationale for the importance of democracy and human freedom. Protestants had been suspicious of authority—whether spiritual (as in church leadership) or worldly (as in kings and queens)—since the Reformation. Only a few years before the American Revolution, for instance, a popular political cartoon depicted a band of restive Boston colonists banishing an Anglican bishop that the British crown had sent to them. The protesters are shown shouting slogans like “No Lords Spiritual or Temporal in New England” and “Liberty & Freedom of Conscience.” Words like “liberty,” “freedom,” and “rights” linked Christianity to individual independence, and fueled what Protestant Westerners in general and Protestant Americans in particular thought of as Christian civilization: a society in which democratic politics and Protestant religion were intertwined into a creed of personal liberty.

Grasping this connection helps explain why some American Protestant activists today insist that the health of the state depends upon whether their form of Christianity is given space in the public sphere to thrive. And yet, that insistence occludes the fact that even within American Protestantism, there have been distinct visions of the form of Protestant faith that democracy depends on.

Dwight Eisenhower, for instance, was famously convinced of the importance of religious belief to American democracy, holding to the same mainline Protestant convictions as Bennett or Ferguson. He was baptized Presbyterian soon after he was inaugurated as president because he believed in the importance of Protestantism to the health of the state. “A democracy cannot exist without a religious base,” he argued, famously stating that, “Our government has no sense unless it is founded in a deeply felt religious faith, and I don’t care what it is”—a seeming ecumenical gesture he quickly qualified by asserting that the United States was based upon the “Judeo-Christian concept.”

For Eisenhower, as for many other Cold War American Protestants, the “Judeo-Christian” tradition was a way to unite Protestants, Catholics, and Jews. It dismissed niceties of theology or particularities of religious ritual in favor of a nebulous sense of solidarity. In practice, however, “Judeo-Christianity,” like the people who used the word, often took for granted Protestant assumptions: suspicion of religious hierarchy, association of religious faith with individual piety and moral practice, an emphasis upon personal feeling rather than corporate participation. All these things were to them compatible with American democracy.

But to other American Christians—even American Protestants—the generalities of Eisenhower’s Judeo-Christianity were not sufficient, and the words “In God We Trust” took on very different meaning. The struggle over what it means to be a Christian in America are thus very much up for debate, with some insisting the obligations of the term extend far beyond Eisenhower’s gentle platitudes.

For example, the pastor David Barton runs a large evangelical ministry devoted to demonstrating that the American Founding depended upon Christian ideas. Barton is representative of the politically and theologically conservative subset of Protestants today sometimes called the “Religious Right.” Barton goes much further than Eisenhower, formulating a Christianity of much more detailed theological expectation and far less comfort in the mainline of American culture. Not content to claim that Christians share simply generalized pieties, Barton argues that the American Founders shared his own particular brand of American evangelicalism, marked by the importance of affirming Jesus Christ, by social conservatism, and by small government. For Barton, then, not only were American leaders from the Revolution through Eisenhower influenced by Protestant ideas of liberty; they explicitly intended to found a state shaped by the sort of pious evangelical Christianity that Barton himself embraces.

Surveys have shown that conservative activists like Barton have been somewhat successful in claiming the term “Christian”—many young Americans now associate the term “Christian” with Barton’s conservative social politics. But Barton faces a number of Protestant critics, like historian John Fea, who argue that his form of evangelical patriotism is not simply bad politics, but bad Christianity. For Fea, Barton’s veneration of the American Founders is idolatry; hardly Christianity at all.

Similarly, other Protestants contend that the relationship between their faith and democracy should point American politics in different directions than Barton’s economically libertarian and socially conservative ideology. While Fea offers a theological criticism of Barton’s faith, Jim Wallis maintains that Barton’s politics are distant from what Christianity demands. Wallis, a Methodist pastor and political activist known best for assailing American capitalism and calling for a stronger welfare safety net, argues that Protestant liberty means that the Christian community should use civil authority to promote the economic independence and well-being of all its members. For Barton, Protestant morality requires social conservatism, opposition to abortion and same-sex marriage. For Wallis, Protestant morality means hospitality and welcoming the stranger.

In truth, the relationship between American democracy and American Christianity remains open to debate—and the spectrum from Barton to Eisenhower to Wallis encompasses only white American Protestants.

When he proposed adding “In God We Trust” to American currency, Charles Bennett declared that the sentiments behind the phrase were “indigenous to our country.” He assumed a common heritage and common understanding of what Christianity might mean. But contemporary disputes, like those between Barton and Wallis, illustrate that the argument about that relationship has never been so simple as any particular American, or American Christian, might wish.

The post In Whose God Do Americans Trust? appeared first on Zócalo Public Square.

And while you may not know it, the American government has long put a price tag on Americans themselves. The Obama administration pegged the value of the average American life at $9.1 million. That was up from $6.8 million under the Bush administration.

Americans have developed the penchant for measuring nearly every aspect of their lives in dollars and cents, a process of seeing humans as assets that is so deeply ingrained in American life and decision-making that it constitutes a national philosophy.

Consider the price tags that Americans place on nature. According to “willingness to pay” surveys, dog owners will shell out $7,000 more than cat owners to save their pets, while Americans would pay $257 to save the bald eagle from extinction and $208 to save the humpback whale. (That may sound noble but should be compared to the survey finding that Americans would pay $225 to drop ten pounds.) Think the purple mountain majesties of a Yosemite or a Yellowstone are priceless? Think again. The total economic value of the National Park Service was recently estimated at $92 billion.

Finally, there is the planet itself: Americans are willing to pay $177 a year to avoid climate change and save the world. That’s about 75 percent more than what they pay for cable TV per month.

Reward notice for bilingual runaway slave, Oppenheim, New York, 1824. Image courtesy of the New York Public Library Digital Collections.

What is the impetus behind such calculations? The short answer: cost-benefit analysis. In 1981, President Ronald Reagan passed executive order 12,291, which mandated cost-benefit analysis for all major environmental and health-and-safety regulations. Many of the above examples were the product of such analyses. But if you look back further—before the Reagan era—to the mid-19th century, you ‘ll find that the pricing of everyday life has long been an American pastime. Go back even further, to the 18th century, and you will uncover some of the deep—and disturbing—origins of this American penchant to price everything and everyone.

In 1830, for example, the New York State Temperance Society measured the social damage produced by excessive drinking by pricing the overall cost to the city. “There cannot be a doubt,” the society concluded after a series of in-depth calculations, “that the city suffers a dead yearly loss of three hundred thousand dollars” due to “time spent drinking,” “drunkenness and strength diminished by it,” “expenses of criminal persecutions,” and “loss to the public by carelessness.” An 1856 article titled “The Money or Commercial Value of Man” in Hunt’s Merchants Magazine—the first national business magazine in America—valued the education of New York children at a profit of $500 million to the country.

In 1910, an article in The New York Times headlined “What the Baby is Worth as a National Asset” utilized Yale economist Irving Fisher’s money valuation of human beings to deduce that “an eight pound baby is worth, at birth, $362 a pound.” By 1913, as eugenics became the rage, the National Committee for Mental Hygiene asserted that the insane were “responsible for loss of $135,000,000 a year to the nation.”

Such acts of social pricing, while rare in the early 19th century, were ubiquitous by the early 20th. The common thread running through these examples is that the men (and they were nearly all men) who made these calculations were imagining American society as a capitalized investment and its inhabitants as income-generating units of human capital.

Aspects of everyday life such as education, mental health, or alcohol consumption could only be given price tags if one treated American society and its residents as a series of moneymaking assets, thus measuring their value in accordance to their ability (or, in the case of hungover employees surfing the net, their inability) to generate monetary income. This uniquely capitalist way of conceiving of the world, which I have called “investmentality,” was already poignantly on display in that 1856 Hunt’s Merchants Magazine article which priced the value of a child’s education.

“The brain is … an agricultural product of great commercial investment,” noted the author, and the “greatest problem of political economy” was how to “produce the best brain and render it most profitable.”

Today, as the term “human capital” crops up everywhere and countless self-help experts encourage Americans to become more productive by “investing in yourself,” an investmentality has achieved the status of common sense.

The investmentality that sparked the pricing of everyday American life emerged out of the rise of American capitalism. The key element that separates capitalism from previous forms of economic organization is not market exchange or monetary spending (those have been around for thousands of years) but rather widespread capital investment. Such investments are acts through which various aspects of everyday life—be they natural resources, industrial factories, cultural productions, or technological inventions—are reconceived as income-generating assets and valued as such. As capital flowed into various investment channels across the United States in the 19th century, distinctly capitalist quantification techniques escaped the confines of the business world and seeped into every nook and cranny of society.

Like capitalism itself, the pricing of everyday life is not an exclusively American phenomenon. Similar examples of investmentality and social monetization first appeared in 17th-century England and can now be found across the globe. What distinguishes America is the enthusiasm with which our elites embraced money measures. As early as the 1830s, Alexis de Toqueville recognized that “as one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?”

There are various reasons why the United States embraced the pricing of everyday life more than other nations—including the long-standing American tendency to leave much of the responsibility for the allocation of resources, cultural production and economic development in the hands of private capitalists rather than public states.

Yet one reason demands a few final words: American slavery. The “chattel principle” and the rise of an economic institution in which human beings were actually bought and sold helped to jumpstart, legitimize, and normalize the pricing of everyday life. On the rare occasions when early Americans did seek to evaluate social developments in monetary values, slaves served as their main source of both inspiration and data.

The earliest instances of the pricing of everyday American life I discovered in my research were from South Carolina in the 1710s—the colony with the highest proportion of slaves and the most capital invested (especially in large rice plantations). By the 1740s, South Carolina Governor and slaveholding planter James Glen anticipated the invention of Gross Domestic Product two centuries later by calculating the income generating “value” of all inhabitants of the colony at £40,000 a year.

Up north, similar developments were afoot. In 1731, Benjamin Franklin priced the social cost of a smallpox epidemic in Philadelphia by calculating each loss of life at £30 because that was the going price of slaves in the city. He was not alone. “Calculating the value of each person, in a pecuniary view, only at the price of a negro,” the newspaper called the Weekly Magazine estimated the monetized worth of all Americans as “equal to nearly one hundred million sterling” in the 1790s.

It was, in short, often the institution of slavery that set important historical precedents by first enabling early Americans to price the residents of their young nation, be they free or enslaved. By the mid-19th century—following a half-century in which southern investment in human bodies (alongside northern investment in real estate, railroads, and factories) had fanned the flames of American investmentality—slavery finally came to an end. The pricing of everyday life, however, was just taking off.

 
*An earlier version of this essay stated: “Americans are willing to pay $177 a year to avoid climate change and save the world. That’s about 75 percent more than what they pay for cable TV.” It should have indicated that the cable TV amount is per month, not per year.

The post Why Americans Insist on Putting a Price Tag on Life appeared first on Zócalo Public Square.

But that choice was accompanied by a healthy skepticism of the role of money in the halls of government. As the years went by, recurrent scandals prompted rounds of reform, fostering an intricate system of rules to promote ethical conduct.

The result is a daunting interface between private and public life, the line marked by financial investigation, disclosure, and divestiture. Still, from the early 20th century, U.S. presidents began to routinely call on leaders from business and industry to head key agencies of the government. And despite nagging public suspicion, the moguls drafted into service were consistently free of accusations—let alone outright findings—of corruption or misconduct.

Keep in mind, the sort of corruption threatened by the rich and powerful is quite distinct from the more garden-variety graft usually associated with public officials—bribery, principally; or undue allegiance to one political party or another. Such concerns were addressed in the late 19th century by the institution of the civil service, when federal employees were subjected for the first time to entrance exams, and protected from political removal. It marked the advent of a new kind of entity: the career civil servant.

Reckoning with the threat posed by wealthy appointees—that they might place their private interests ahead of the public’s, using their positions to help their friends or augment their fortunes—came later, and required more elaborate safeguards.

It was the onset of the first World War and the attendant task of retooling the nation’s industrial economy for wartime production that brought a surge of business executives into the government. Drafted by President Woodrow Wilson, starting in 1917, they signed on for service in new government bureaus at the nominal salary of a dollar a year.

First among these wartime stalwarts was Bernard Baruch, a financier and speculator known in his day as “the lone wolf of Wall Street.” Appointed head of the new War Industries Board, Baruch recruited a bevy of his tycoon chums and together they put the peacetime economy on footing to produce uniforms, tanks, and ammunition.

Another Wilson appointee was Herbert Hoover. A mining executive then based in London, Hoover emerged on the public stage by leading humanitarian war relief efforts for neutral Belgium. Calling Hoover back to the U.S., Wilson named him Food Administrator, and charged him with limiting domestic consumption and keeping the U.S. Army and its allies fed in the field.

Both of these men—and the dozens of other businessmen drafted to assist them—performed capably. Though these appointments came at the height of the Progressive Era, and the wary view of wealth that went with it, the American public came to accept these appointments as legitimate without audible objection.

Skip forward a decade, to 1929, and wealthy office-holders had become a routine feature in the federal government. More than that, it was a non-partisan phenomenon. Bernard Baruch had become the titular head and chief fundraiser for the Democratic Party, while Hoover, after a brief dalliance with the Democrats, won the presidency as a Republican. When Hoover became president, he decided to continue the dollar-a-year tradition, donating his salary to charity.

During Hoover’s tenure the crisis was not war but the Great Depression, and he again turned to men of wealth. One of Hoover’s principal innovations was to launch the Reconstruction Finance Corporation, which would channel bailout funds to foundering banks and railroads. Selected to lead the new agency was Charles Dawes, a Chicago banker with a history of moonlighting for the government—he was the nation’s first Comptroller of the Currency, under President William McKinley, and later elected vice president with Calvin Coolidge. In 1925 he was awarded a Nobel Peace Prize in recognition of his adroit management of postwar international debts.

Dawes immersed himself in launching the RFC until the bank owned by his family, the Central Republic Bank of Chicago, began to founder. Despite Hoover’s protest, in June 1932 Dawes resigned his post and rushed home to wrestle with panicked creditors. Soon after, now against Dawes’ private protest (he feared, rightly, political blowback), Central Republic was named recipient of the largest loan yet issued by the RFC. Though the bank ultimately closed, the bailout made for an orderly transition and the loans were repaid. But public resentment over what appeared to be an in-house deal damaged the reputation of Hoover and of the relief agency.

Here was just the sort of misconduct that critics had feared from the outset—men of wealth protecting their personal interests. But the election of Franklin Delano Roosevelt later that year seemed to clear the air.

Roosevelt was more sparing in his reliance on the men of industry and finance—and yes, all were men—but utilize them he did, especially when faced with a new World War. As the crisis loomed, like President Wilson before him, Roosevelt called on the dollar-a-year crowd. Leading this troop of civilians was Bill Knudsen, then-president of General Motors. An expert in mass production, Knudsen was appointed in 1940 chairman of the Office of Production Management and member of the National Defense Advisory Commission, at a salary of $1 a year.

As production ramped up, Knudsen brought with him executives from car companies, AT&T, and U.S. Steel. New Deal bureaucrats and labor activists denounced the appointments, but despite all the procurement contracts, all the millions spent, there was hardly a whiff of scandal.

By 1942, when Knudsen was awarded with a formal commission as Lieutenant General in the Army, the worst his critics could say was that he had been too slow in converting from peaceful industrial production to a war footing. “We are beginning to pay a heavy price for leaving the mobilization of industry in the hands of business men,” the Nation warned in 1942. Steel makers, in particular, were fighting expanded production “as a menace to monopolistic practices and stable prices,” argued an editorial. It was “Dollar-a-Year Sabotage,” The New Republic headlined.

But those criticisms were drowned out by the din of factory production, the great outpouring of armament that yielded an “arsenal of democracy,” as Knudsen phrased it, that carried the Allies to victory. “We won because we smothered the enemy in an avalanche of production,” Knudsen remarked later. For all the fears of conflicted interest, the businessmen had proved their worth.

The dollar-a-year appointment routine went out with World War II, but presidents continued to tap the moneyed elite for advice and expertise, a practice that became the source of a growing thicket of regulations designed to forestall malfeasance. Roosevelt broke first ground here, in 1937, with an order barring purchase or sale of stock by government employees “for speculative purpose.” Later, his War Production Administration required its dollar-a-year men to disclose financial holdings and undergo background checks.

From there, safeguards advanced by stages. John F. Kennedy, during his aspirational 1960 campaign, called for a new standard, by which “no officer or employee of the executive branch shall use his official position for financial profit or personal gain.” Upon his election, he followed up with an executive order barring any “use of public office for private gain,” and then lobbied Congress for parallel laws. The result was new criminal statutes covering bribery and conflict of interest.

Lyndon Johnson was never an exemplar of disinterested politics, but early scandal in his administration, involving influence peddling by Johnson intimate Bobby Baker, a businessman and Democratic party organizer, prompted a new round of rulemaking. Each federal agency should have its own ethics code, Johnson ordered, and all presidential appointees were now required to file financial disclosure statements. In the 1970s, the fallout from the Watergate scandal, together with the troubles of presidential chum and advisor Burt Lance, prompted a new round of reform from President Jimmy Carter.

As with so many things, the status of ethics in an administration tends to reflect the character of the chief executive, regardless of the rules in place at the time. Consider the following exchange, in 1934, between Franklin Roosevelt, Joe Kennedy, and presidential aide Ray Moley, prior to Kennedy’s appointment at the SEC.

As recounted by Joe Kennedy biographer David Nasaw, Kennedy warned Roosevelt that he had “done plenty of things that people could find fault with.” At that point, Moley interjected: “Joe, I know you want this job. But if there is anything in your business career that could injure the president, this is the time to spill it.”

Kennedy’s reaction was quick and sharp. “With a burst of profanity he defied anyone to question his devotion to public interest or to point to a single shady act in his whole life. The president did not need to worry about that, he said. What was more, he would give his critics—and here again the profanity flowed freely—an administration of the SEC that would be a credit to his country, the president, himself and his family.”

After an exchange like that, codes and rules might seem superfluous. To outsiders, the Kennedy appointment appeared rash; “setting a wolf to guard a flock of sheep,” one critic charged. But Roosevelt was unfazed. Asked why he’d named such a notorious crook as Kennedy, Roosevelt quipped, “Takes one to catch one.” In the event, while nobody ever proposed Joe Kennedy for sainthood, he was never accused of misconduct or self-dealing while presiding at the SEC.

The post When the President’s Best and Brightest Were Also the Richest appeared first on Zócalo Public Square.

Inside the union hall and behind the big room used for banquets is a library named for Edward Tchakalian, an Armenian-American labor activist who uncovered a statewide scheme of paying janitors sub-minimum wages for long hours of work within the Ralphs, Albertsons, and Vons/Safeway grocery chains.

When I visited the hall recently, I met Juan Estrada, a shy man who’s worked as a janitor in Universal City for 18 years. He and six of his coworkers participate in what’s called a cundina. It is a lending circle, and a method to build savings. A cundina, also known as a tanda, which translates roughly to “taking a turn” or “doing a circle,” is a worldwide phenomena for poor people whose access to capital is limited. In Korean it is called kye, susu in West Africa and the Caribbean, juntas in Peru, and hui in China.

There are many variations of cundinas, but the easiest way to do it is to pool your resources. Typically each cundina takes contributions from at least six and as many as 12 people. Each participant contributes a certain amount monthly, from $50 to $200 or so. Then, you draw a number from 1 to 12. You receive the whole pot for the month that corresponds to the number you drew.

Estrada told me that he participated in a cundina back home in Guatemala. But this cundina was different for two reasons. First, it was established through Building Skills Partnership, a partnership between building owners, employers, and the union. And second, it’s connected with a bank called Mission Asset Fund. The bank reports the savings of the cundina members to credit agencies and allows the participants to build credit. (The participants also attend a credit class and learn about their credit histories). And the bank arranges things so that the cundina contributions and disbursements are automatically drawn and maintained through each of their bank accounts.

As a modern updating of an old tradition, the cundina epitomizes the union hall where it operates. “Union hall” may sound archaic, like a place where men in coveralls sit around and wait for their number to be called before heading to Walgreens for a malt. But SEIU-United Services Workers West is a different sort of union. It’s relatively young, forged by janitors who organized in L.A. office buildings in the 1980s and ‘90s. Today, its members are 40,000 security officers, janitors, and airport workers across the state. For this union, serving members means offering classes and training that allows them to build skills and gain power.

I’ve been spending time in union halls since I was a teenager who, having grown up in L.A.’s foster care system, was trying to find a voice and do something different. I’ve worked for unions, and even drove around the country visiting union halls. But I hadn’t encountered a union hall with programming quite like this.

Members of the cundina. From left to right: Dolores Santa Maria, Juan Estrada, Ana Velasquez, and Nynor Galindo.

On the day I visited the union hall, a group of janitors was taking an English as a Second Language class from an instructor from Los Angeles City College. They practiced vocabulary amidst some foldout tables, a low-hanging chandelier, some intricate curlicue molding on the ceiling, and, embossed on the walls, residual imprints of the funeral parlor. The union also offers computer literacy classes, citizenship classes, nutrition classes, a green janitor education program that teaches people how to clean in ways that produce less waste, and financial literacy classes.

The union’s emphasis on financial literacy, and its support of cundinas, is designed to counter payday lenders that are all too prevalent today, especially in poorer parts of Los Angeles. Dr. Steven Graves, a professor of geography at California State University, Northridge, has mapped the prevalence of payday lenders across L.A. Low-income areas with a high percentage of African American and Latino residents have many more payday lenders than other neighborhoods. Graves has mapped 50 payday lenders just in South Los Angeles.

The long-term consequences of the quick cash offered by these lenders can be severe. According to the Center for American Progress, one in five title loan borrowers will lose their car, one in four online payday loan borrowers’ bank accounts will close, and four out of five borrowers will need to borrow multiple times just to stay afloat.

Traditional cundinas are not always a beneficial alternative, however. Some people have shunned them for fear of getting scammed or someone taking off with their money. Dolores Santa Maria, another union member who participates in the cundina, told me, “I’ve never believed in a cundina before. There are many other people that leave with all the money. I always figured I can work on saving by myself.”

But she tried this one, and noticed that, as she built credit, she started to get offers of credit cards—she mentioned Best Buy—“because people can see I’m a responsible borrower and my credit is going up.”

Nynor Galindo, a now-retired janitor, participates in the cundina in part because there are no fees or interest payments. In response to every point made during the cundina gathering, Galindo would chime in, “And zero interest!” With the cundina, he and his partner Ana Velasquez were able to pay off all of their credit card debt 18 months earlier than expected and avoid high interest payments.

The collaborative nature of the cundina can make the difference. Estrada said when his family had an emergency in Guatemala, he was able to switch numbers with a friend in the cundina so he could collect his money in an earlier month and send it to his relatives.

Now with the help of the union’s cundina and financial literacy courses, Estrada is thinking far beyond payday—he’s saving up so he can buy a piece of property back home in Guatemala.

The post Inside a South L.A. Union Hall, a Tool for Saving Money—and for Fighting Predatory Payday Lenders appeared first on Zócalo Public Square.

Savings and assets—homes, cars, retirement funds—are launching pads to something better, even as they cushion against today’s inevitable emergencies. But for generations, policies to help families build the savings and assets they need to give their children a better life have created a persistent and widening gap in net worth between white families and African-American and Latino families.

As a country, we don’t like to talk about race. Our inequality conversations are often framed more generally, as the difference between the “1 percent” and the rest of us. But when nearly 70 percent of children living below the federal poverty line are non-whites—a rate much higher than the representation of nonwhite children in the overall U.S. population—it’s time to look honestly at the role race and ethnicity continue to play in the prospects of future generations.

A long and shameful pattern of discriminatory policies—from redlining by federal housing authorities to disparate access to the benefits of the GI Bill—have disadvantaged African-American and Latino families, among others, in developing savings and assets for generations. While those overtly discriminatory policies have been taken off the books, a legacy of different fates remains.

Between 2010 and 2013, for example, as the U.S. economy was climbing out of the Great Recession, the net worth of white families increased by 2 percent while black and Latino families saw their assets plummet by 34 percent and 15 percent, respectively. The gaps show African-American and Latino families face steep odds when it comes to building any kind of financial cushion, while white families are more likely to inherit a house or savings. A median white family is likely to have a month’s income in savings on hand for emergencies, while a median Latino family has only 12 days’ worth, and a median African-American family only five days’ worth.

Saving money isn’t easy—nearly half of Americans don’t have enough put away to handle even a $400 emergency. And the more a family depends on its income for daily subsistence, the less there is to put away. An unexpected bill or health crisis can be financially crippling to families operating on a thin margin. Poor families might not qualify for conventional loans and resort to payday lenders whose ready access comes at a high price. Predatory lending practices cost families $8.7 billion a year in interest and fees, perpetuating the cycle of poverty.

The Annie E. Casey Foundation, where I use my background as an economist to analyze and communicate data, recently released a brief with four practical policy recommendations to help all families build the savings and assets they need for their children to succeed. The Institute on Assets and Social Policy at Brandeis University analyzed two of these policies at our request and found that both could reduce the racial wealth gap—one of them quite substantially.

One of these vehicles, the federal My Retirement Account program (known as myRA), was established in 2014 to allow workers who lacked vehicles for retirement savings through their employers to save up to $15,000 in a no-fee, government-backed starter retirement account. If participation were expanded and everyone eligible were to save the maximum, myRA could reduce the black-white wealth gap by 5 percent and the Latino-white gap by 7 percent, the analysis indicates. And because myRAs are funded with after-tax dollars, contributions can be available for emergencies without incurring tax penalties.

The other policy analyzed—a more ambitious, broad investment in children’s savings accounts—showed potential for the greatest social dividends. The recommendation was that federal funds seed accounts for every child born in the U.S., with larger deposits for infants in low-income families with minimal savings. At age 18, a young person could use the money for tuition or training, a business or a home. Countries from Singapore to the United Kingdom have already offered accounts like this.

Research suggests that children in the United States with savings accounts in their own names are substantially more likely to go to college than those who don’t. And the Institute on Assets and Social Policy analysis found that, depending on how much is invested in each account, the racial wealth gap could be narrowed by 20 to 80 percent or even more.

The models show the United States can begin to narrow its racial wealth gap with modest public investment, and get more impact the more we invest. Are there other ways to spend our money? Of course. But ensuring all children have opportunities to succeed would strengthen our economy and help realize our American ideals of fairness and equity.

Retirement accounts and children’s savings accounts would make the biggest impact in combination with other policies, such as raising the amount of savings and assets families are allowed to keep while still qualifying for public benefits and expanding access to programs that promote saving for homeownership.

Children from families without savings and assets are more likely to struggle at school and have low self-esteem. While Americans rush to keep pace with our global competitors in innovation and technology, we can’t afford to leave so many of our citizens permanently behind. Instead, let’s help them grow what they have worked so hard to earn.

The post How Opening a Savings Account Can Close the Racial Wealth Gap appeared first on Zócalo Public Square.

That was the main message of Zócalo’s first event of 2016, a talk by Richard L. Hasen, the Chancellor’s Professor of Law and Political Science at the University of California, Irvine, and the author of Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections. In front of a full house at Los Angeles’s Grand Central Market, Hasen broke down the nuances and complexities that are often missed in discussions of campaign finance, and what he believes are the key steps to limiting money’s current outsized influence on the political process.

Hasen opened with an anecdote about the power America’s wealthiest campaign donors have over presidential hopefuls: In early 2014, New Jersey Governor Chris Christie accidentally upset billionaire Sheldon Adelson, a prominent supporter of Republican candidates, by using the phrase “occupied territories” in discussing areas like Israel’s West Bank. Christie hastily apologized, meeting with Sheldon, a conservative Zionist, in private to clarify his support of Israel.

Who could blame Christie the candidate, asked Hasen, for his obsequiousness? Adelson represents a small group of super-elites who contribute most of the money that goes into presidential campaigns. In the first part of the 2016 election campaign cycle (through June 2015), just 158 families and the companies they own or control contributed nearly half the funds that were raised to support presidential candidates. Adelson himself spent upward of $150 million on the 2012 election—only a third of which was reported to the Federal Election Commission.

And yet, Hasen pointed out, the Republicans who raise the most money aren’t winning elections. Newt Gingrich, a huge beneficiary of Adelson’s spending in the 2012 presidential race, didn’t become president. Jeb Bush, whose super PAC raised more money in the first half of 2015 than President Obama’s main super PAC did for the entire 2012 election cycle, still trails in popularity behind Donald Trump, who has spent just a fraction of Bush’s campaign.

This goes to show, said Hasen, that money isn’t corrupting 21st-century elections in the way that liberals claim it has since the landmark 2010 Supreme Court case Citizens United v. Federal Election Commission removed restrictions on campaign financing. “The new Citizens United era is not full of politicians taking bribes or elections going to the highest bidder. To claim this puts the spotlight in the wrong place,” he explained. “The more central problem of money in politics is something just as troubling, but a lot harder to see. It’s a system in which economic inequalities, inevitable in a free market economy, are transformed into political inequalities that affect both electoral and legislative outcomes.”

He went on to detail how this system plays out in subtle, granular ways. Money skews public policy toward the interest of the wealthiest political donors, for instance. Even the threat of big money being spent against a person or cause is enough to influence policies, Hasen contended.

And while expensive advertising alone isn’t enough to sway well-informed and engaged voters, “we know that in a close election, advertising can swing voters, who are generally the least informed,” he said. And that can influence election outcomes.

Hasen contended that money’s influence on politics is only growing and creating greater inequality. But there are ways to reform the way we handle money in politics—without completely overturning the Citizens United ruling.

The challenge, Hasen said, is toeing the line between promoting political equality and “not squelching too much political speech”—i.e., imposing censorship. He proposes creating a voucher system in which every voter in an election is given $200 to donate to whatever campaigns and interest groups they please. The idea is to guarantee public funding that goes into what people actually care about.

On top of this voucher system, Hasen would like to impose a $25,000 cap on campaign spending per federal election—and a $500,000 cap per two-year election cycle. This limit would apply to candidates themselves, and any combination of individuals’ contributions to organizations and direct contributions. Overall, the limit would affect very few voters, but would keep the exclusive group that has an outsized influence in check.

In a lively question-and-answer session, Hasen elaborated on his vision for change, reflected on the media’s importance in educating voters, and underscored how important the upcoming election is in determining the country’s future—largely because of the influence it will have on the Supreme Court. Considering the advancing age of many of the justices, the next president is likely to appoint multiple new members, which Hasen notes will give the president immense power over many issues, including election financing.

“No one pays attention to the Supreme Court,” he said. “But if you think of all the hot-button issues, it all goes through the Supreme Court.”

If Hasen had to boil his overall project down to a single mission, he said, it would be “trying to show these new justices that the time has come to rethink 40 years of mistakes, and to accept that political equality is a reason for limiting money in elections, so long as it can be done in a way that has the ability to protect First Amendment rights of political competition.”

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