Universal Basic Capitalism: The Next American Revolution Or More Trickle Down Economics?

“The pinnacle of capitalism is still flawed. Any idea that it’s perfect — this idea of the perfect union — is deeply flawed as a concept and always has been.” — Keith Teare

With July 4 finally done, we can look forward to the next American revolution. Just as AI is revolutionizing the economy, so too are radical ideas about harnessing this disruption for the benefit of all Americans. One idea that is acquiring more and more currency in and out of Silicon Valley is what we might call universal basic capitalism.

Six months ago, nobody knew what “universal basic capital” even meant. Now everyone is talking about it. What if the answer to inequality, AI disruption, and the slow hollowing out of the American economy isn’t a return to socialism — but a new, more distributive kind of capitalism? As That Was The Week’s Keith Teare argues in our weekly tech roundup, universal basic capitalism offers the best way to simultaneously empower all Americans without turning them into the welfare “queens” so disparaged by neo-liberals.

Economists agree that AI is going to eliminate vast numbers of jobs, probably within the decade, certainly in time for America’s 300th anniversary. One fix is the democratic socialist strategy of tax and spend through the state. Universal basic capitalism, in contrast, takes the wealth generated by AI companies, puts it into a sovereign wealth fund, and distributes the dividends directly to citizens. Rather than an ever-more-bloated bureaucracy redistributing wealth, the state miraculously shrinks.

It’s a neat idea. Instead of welfare queens, we get shareholding kings. But is this really the next American revolution? Or just the trickle-down economics of the DOGE crowd for an AI age of mass unemployment?

Five Takeaways

•       America the Beautiful — and Its Profound Flaws: Keith’s 250th editorial acknowledges America’s extraordinary achievements: the growth in wealth, living standards, and democratic governance over two and a half centuries. The fact that Donald Trump won the presidency, Keith notes, is itself evidence that the people still rule — most intellectuals didn’t want him, but the people voted for him. At the same time: capitalism at its best still has huge swathes of poor people who can barely eat. The perfect union is deeply flawed as a concept and always has been. America has probably peaked in world terms. The next 250 years are not a foregone conclusion.

•       1,200 New Millionaires a Day: The American Prosperity Machine: The stat of the week: the United States added 1,200 new millionaires a day last year, bringing its total to nearly 24 million. China has just over 5 million; Italy, the Netherlands, South Korea, Australia, France, and the UK are all under 3 million. The math: US GDP per capita is around $85,000 a year; China’s is around $20,000-something. In California in particular, where house prices routinely exceed $1 million and there are 50–60 million residents, the numbers are doing a lot of work disguising a highly skewed distribution concentrated in coastal cities.

•       Universal Basic Capital vs Democratic Socialism: The State Shrinks: Keith draws a sharp distinction between UBC — the sovereign wealth fund model — and democratic socialism as practised by Mamdani, Sanders, and AOC. In the socialist tradition, you seize the state through elections and use taxes and spending for good ends. Under UBC, the sovereign wealth fund becomes the distribution mechanism and the state shrinks to an administrative function: roads, health, education, defence. The actual AI companies don’t become the state. The state becomes a shareholder in the fund. Money flows to c