A proposed contribution to the independent knowledge, participation and practical preparation through which people can reconsider essential economic systems.
My illustration entitled: “The City That Funds Its Own Redesign” – An epic city rises above a vast drafting table. A visible stream of its wealth finances citizens’ research, deliberation and working models, while residents collectively revise sections of its blueprint.
When prosperity leaves authority untouched
An essential institution can make people better off while leaving them unable to reconsider the arrangements governing their lives. It can distribute reliable services, wages and financial returns while retaining exclusive control over the expertise, information and resources needed to imagine a different future.
I propose a Reauthorial Dividend to address that gap: a justified contribution towards affected publics’ independently governed capacity to reconsider an essential system’s purposes, rules and structures. “Dividend” describes a claim on resources for continuing authorship. It need not mean cash paid to individuals, a shareholder distribution or a fixed percentage of profits.
My question is whether part of an essential system’s economic returns should support people’s practical ability to reconsider the system itself. I believe it should where substantial dependence otherwise leaves that ability subject to incumbent permission. Prosperity strengthens the opportunity to meet this responsibility; it does not extinguish the responsibility through good performance.
By an essential system, I mean an arrangement governing basic needs or effective economic participation where losing access or changing providers carries serious practical costs. Its affected public includes those substantially dependent on, burdened by or exposed to its decisions. Neither every profitable business nor every passing dissatisfaction qualifies.
Benefits and authorship are different goods
A lower water bill improves a household’s circumstances. Funding an independent assessment of water governance improves its ability to judge and influence the arrangements determining those circumstances. Both matter. Neither automatically supplies the other.
Authorship means effective standing to investigate, formulate, debate and help authorise revisions through legitimate procedures. A research budget without access to relevant information is inadequate. So is consultation without a route to reasoned institutional responses and decisions. The dividend must connect resources to usable authority, while preserving individual rights and minority interests.
Eligible uses could include independent technical expertise; operational information in accessible formats; participation support such as translation, childcare and compensation for time; evaluation of competing purposes and structures; and proportionate preparation for a possible transition. Preparation might examine staffing, contracts and service continuity. It should not become an unlimited reserve for implementing an unapproved replacement.
Funding this capacity involves opportunity costs. Money used for independent analysis cannot simultaneously lower prices or repair infrastructure. My argument therefore requires a proportionate budget, rather than treating authorship as a justification for any expenditure.
The predecessors were already asking about economic power
Collective financing of economic influence was not waiting to be invented. Jean Remus’s 1983 study of employee financial participation examined profit-sharing, worker share ownership, savings arrangements and collective employee funds. Such arrangements can distribute gains and sometimes support ownership or influence. Financial participation alone, however, does not guarantee an independently resourced ability to reconsider institutional purposes.
Rudolf Meidner’s 1981 discussion of wage-earner funds addressed Swedish proposals combining profit-sharing, worker share ownership and collective capital formation. The overlap is substantial: economic returns can finance collective capacity concerning economic power. My proposal need not accumulate corporate shares or centre exclusively on employees. Its beneficiaries would be the relevant affected public, and its test would concern practical revision capacity.
Robert Dahl’s A Preface to Economic Democracy, first published in 1985, defended extending democratic principles into economic enterprises, including worker ownership and control. Reauthorism belongs in conversation with that tradition. Changing ownership may strengthen authorship, but an ownership label cannot guarantee that later publics retain the resources to reconsider it.
The OECD’s Citizens as Partners (2001) already identified financial, human and technical resources as conditions of effective participation, alongside accountability and evaluation. My proposed synthesis emphasises independent revision capacity within essential economic arrangements, during successful operation and across succession. These historical precedents support comparison, not a claim that this particular mechanism has been validated.
Which economic returns?
Funding discussions become misleading when profits, rents, revenue and subsidy are treated as interchangeable.
Operating revenue is income from providing goods or services before relevant expenses are deducted. A contribution assessed on revenue can remain payable when an institution makes a loss. Its apparent simplicity therefore says little about affordability.
Accounting profit is the remainder after the expenses recognised under the chosen accounting rules. It is not necessarily cash available for distribution: investment needs, debt obligations and timing differences matter. Profit also need not represent an economic rent.
Economic rent is a return above what is required to keep a resource or activity in its relevant use. Scarcity, exclusive privileges or temporary innovation advantages can generate such returns. Identifying them requires judgment; high reported profit alone is insufficient evidence. A contribution aimed at rents needs a defensible allowance for ordinary costs, risk and necessary returns.
Public subsidy comes from public resources rather than automatically constituting privately earned surplus. If some subsidy supports revision capacity, that allocation must be explicit. Diverting support intended for basic access could defeat the proposal’s purpose.
Several funding routes, no universal rate
I would begin with the independently assessed cost of missing capacity, then compare funding routes. A profit-related contribution might adjust with financial performance, but could be volatile and vulnerable to accounting choices. A bounded revenue contribution could be steadier while placing greater pressure on institutions with thin margins.
A contribution connected to identifiable rents, a condition attached to a concession, a cooperative allocation or a publicly appropriated participation budget could also be considered. A pooled sector fund might spread research costs across small providers. An endowment might stabilise funding, while introducing investment and governance risks of its own.
Each route needs an appropriate basis in adopted rules or agreements. Reauthorism itself imposes no existing legal liability. Nor does the proposal require a new trust everywhere. An existing independent institution may perform the function better.
A voluntary contribution can help establish capacity, but a gift cancellable by the donor whenever inquiry becomes uncomfortable cannot secure independence. Conversely, compulsory financing needs public justification, fair procedures and scrutiny of burdens. Neither voluntariness nor compulsion settles whether the arrangement gives affected people usable authority. The source of money and the conditions governing it must be examined together.
Predictability matters. Reserves or multi-year commitments could maintain basic inquiry through lean periods, with independently reviewed hardship provisions. Funding should not disappear whenever criticism becomes inconvenient, yet protection against retaliation must not become immunity from justified budget revision.
Who contributes, and who bears the cost?
The legally responsible contributor under an adopted arrangement might be an operating company, concession holder, cooperative or public authority. That identifies who remits resources. It does not establish who ultimately sacrifices income or consumption.
A company might absorb a contribution through reduced shareholder returns, pass some of it into prices, reduce investment or seek savings through wages and employment. A public appropriation may fall on taxpayers or displace other spending. Actual incidence depends on competition, regulation, bargaining power and adjustment over time.
I would therefore reject the assurance that “the institution pays” as a complete defence. Proposals should disclose plausible burdens, uncertainties and protections for vulnerable users. Affordability safeguards and scrutiny of wage effects belong within the design. Relabelling a household charge as a dividend does not make it costless.
My illustration “The City That Funds Its Own Redesign” work-in-progress. The art represents that prosperity should finance people’s knowledge, resources and power to redesign the systems that shape their lives.
Hypothetical illustration: Riverlight
Riverlight is an invented regional water provider. Every monetary figure below is invented solely for explanation and supplies no empirical evidence.
Suppose Riverlight receives $100 million in annual operating revenue and reports $6 million in accounting profit before the proposed contribution. An independent needs assessment identifies a $200,000 annual gap in public revision capacity. Under a prospective arrangement, Riverlight contributes that amount to an independently governed programme.
The programme commissions engineering and financial analysis, makes operational records understandable, supports participation by low-income residents and compares governance alternatives. A limited portion assesses how essential service would continue during a possible transfer. It funds no automatic distribution to households.
Residents might ask whether Riverlight should prioritise lower tariffs, stronger drought reserves or watershed restoration. These are questions about purposes, not simply managerial efficiency. The programme should explain their costs and consequences without deciding the answer on the public’s behalf. Funding inquiry would not itself authorise a transfer of assets or override legitimate contracts.
The figures do not establish affordability. Riverlight might face major replacement expenditure, and reported profit might exceed available cash. Analysts must assess investment requirements and whether customers or workers would bear costs. The public may ultimately retain the existing provider. That outcome can still demonstrate authorship if alternatives received fair examination and future reconsideration remains possible.
Independence without a new unaccountable authority
Riverlight’s management should not select the questions, dismiss critical researchers or withhold agreed funding. Independent access to relevant records needs enforceable arrangements, with proportionate privacy and confidentiality protections rather than blanket secrecy.
The governing body could combine representatives of affected groups with residents selected by lot, supported by expertise. Selection rules, limited terms, disclosed interests and recusal should prevent domination by the operator, a political party or a single organised constituency. Funding sources and large donors should be visible.
A published mandate should define eligible expenditure and allocation criteria. Competing proposals, including retention of current arrangements, deserve fair consideration. Minority groups need a route to challenge exclusions. Grants should not finance party campaigning, incumbent publicity or personal enrichment.
Transparent budgets, procurement records, independent audits and accessible complaints procedures are necessary. Evidence of fraud should permit recovery and proportionate sanctions through fair procedures. The programme’s own funding formula and governance should face scheduled review. If Riverlight changes ownership, responsibility for preserving adequate revision capacity should be allocated explicitly; the existing programme need not survive unchanged.
Investment, duplication and the limits of the proposal
The investment objection deserves a serious answer. Returns reward risk and finance future provision; treating every surplus as available for redistribution could weaken both. Predictable rules, restrained budgets and attention to necessary returns can reduce that danger. They cannot guarantee its absence. A proposal whose expected burdens outweigh the capacity it adds should be reduced, redesigned or rejected.
Consumer costs are equally real. Where a provider can pass charges into essential bills, the design may require wider public funding, affordability protection or a smaller programme. If no workable arrangement protects basic provision, that dividend proposal is disproportionate. An abstract commitment to authorship does not justify preventable deprivation.
Duplication is another objection. Regulators, unions, ombudsmen, universities and public audit bodies may already provide expertise and scrutiny. Before establishing another organisation, I would ask what is missing: access, independence, representation, resources or authority to initiate reconsideration. If existing bodies already provide adequate capacity, an additional dividend may be unnecessary.
Misuse cannot be answered by good intentions. Review should examine whether spending improved access, supported credible alternatives and reached people otherwise excluded. It should not reward a predetermined number of reforms. A fund that must continually recommend replacement to justify itself would acquire an institutional bias towards disruption.
Review must also permit reduction or closure when the identified gap has disappeared, provided equivalent capacity remains available. Otherwise a programme created to challenge institutional permanence could demand permanence for itself. Preserving authorship is the obligation; preserving one organisation’s budget is not.
Likewise, ordinary competitive enterprises without substantial essential dependence do not automatically attract this obligation. Small systems may need shared expertise rather than expensive permanent staffs. The appropriate mechanism depends on the demonstrated gap and the least burdensome credible response.
Conclusion: Returns that preserve reconsideration
I understand the Reauthorial Dividend as a proposed responsibility attached to governing conditions on which others substantially depend. Prosperity can help finance that responsibility without settling its institutional form or rate.
The case succeeds only when resources become independent, accountable and usable capacity, with proportionate costs and a genuine route to reconsideration. Paying benefits while reserving every consequential question to the incumbent leaves authorship incomplete. Yet financing participation without safeguards merely creates another concentration of power.
The ambition is that essential systems help sustain the practical freedom to judge them, retain them, revise them or replace them responsibly. An institution’s success should enlarge that freedom, including the freedom to decide that its next chapter should be different.
Bibliography:
- Meidner, Rudolf. “Collective Asset Formation through Wage-Earner Funds.” International Labour Review, volume 120, issue 3, pages 303–317, 1981.
- Remus, Jean. “Financial Participation of Employees: An Attempted Classification and Major Trends.” International Labour Review, volume 122, issue 1, pages 1–21, 1983.
- Dahl, Robert A. A Preface to Economic Democracy. University of California Press, first published 1985. The publisher page linked in the article describes the August 1986 paperback.
- OECD. Citizens as Partners: Information, Consultation and Public Participation in Policy-Making. OECD Publishing, 11 October 2001. DOI: 10.1787/9789264195561-en.