On March 1st, IVY hosted Facebook Co-Founder Chris Hughes, former owner of The New Republic, and current Co-Chair at The Economic Security Project. His new book, Fair Shot: Rethinking Inequality and How We Earn, draws on these experiences while arguing for a guaranteed basic income for all working Americans. Over the course of an eye-opening IVY Ideas Night presented by smartwater®, Chris shared his life experiences and offered his thoughts on politics, the economy, and the most impactful ways to make a difference.
By now we’ve all heard the story.
In 2004, a couple of young roommates launch a website from their Harvard dormitory. Not five years later, that website becomes among the most popular ever created, and shortly after that, the platform for one of the 10 largest companies on the planet.
We’re talking, of course, about the meteoric rise of Facebook, which has not only reshaped the way humans connect with one another, but also the way we think about business and the acquisition of wealth.
Due in no small part to the wild success of Facebook, we now live in the era of “unicorn startups.”
Although the chances of a nascent company quickly reaching a valuation of $1B mark remain incredibly slim (hence the fabled “unicorn” moniker), the idea has nevertheless captured the public’s imagination and caused us to rethink the way businesses operate. Reddit, Zocdoc, Coinbase, Vox Media, Warby Parker — all are startups that, like Facebook, experienced explosive growth shortly after their founding, and are well on their way toward going public.
Of course, this era of unicorns and exponential growth has done more than just create value in the marketplace. It has also created a new class of overnight multi-millionaires, and sometimes, billionaires, who after only a brief time in business, have accumulated a massive amount of capital.
This is to be expected, but it comes at a time when economic inequality is staggeringly high, with a gap between the top 1% of earners and the bottom 99% that seems to widen every day. Not only does such a wide gap between the mega rich and the poor have the potential to spur political turmoil and civil unrest, it also has bearish implications for the economy. By way of historical reference, this is the same level of inequality we saw just before the Great Depression.
It’s no surprise then that for many, from hedge fund managers to low-income earners, this is a problem — especially for Chris Hughes, one of those overnight multi-millionaires and original Harvard roommates.
Having grown up in what he defines as an all-American family that was about as “middle class as it gets,” Chris fits neatly into this new class of the mega-wealthy. He didn’t come from money, attended college on financial aid, and after only three years of work, received half a billion dollar reward.
Chris believes that more than just a lucky break, this reward was “totally out of line,” and indicative of mounting income disparity in the United States.
The question was what to do about it. Should he put his money toward building hospitals? Or curing diseases? Invest in education? Or support microloans? Help animals at home? Or people abroad? The opportunities for philanthropy are many, but it can be difficult knowing how to make the biggest impact.
For Chris, it was simply a matter of returning to his Lutheran roots. Explaining that he could count on one hand the number of times his family wasn’t in the pews on Sunday, Chris grew up no stranger to tithing, or giving away 10% of your income to church. Years later, it dawned on him that he could adapt this practice to give back in a very direct way.
Numerous studies conducted both within the United States and abroad suggest that despite pervasive stereotypes, you can and should trust low-earners with money, providing what has been called by some a “boost to the bottom-line.” Doing so improves health and education outcomes, bolsters financial security, and offers myriad other benefits to individuals, families, and the wider economy.
According to Chris, providing cash with no strings attached is not only the most effective way of giving back, it also preserves human dignity by allowing individuals the freedom to discover what it is they want to do with their time.
“At the richest point in human history, if you’re working to improve the lives in your community, you should not live in poverty.” This is a self-evident truth for Chris, and one that with a little bit of effort, he believes is attainable.
Of course, offering a guaranteed income to working Americans isn’t a “silver bullet.” Chris admits that while he has studied the issue extensively, his specific plan — $500 per working individual in households that make under $50,000 per year — might not be the magic solution.
With that said, at a time when technological capabilities, globalization, and market instability are a looming threat to wage earners everywhere, something has to be done.
“I do think that sometimes the best solution is the simplest,” Chris explains. “We have a tendency to overlook giving people cash. But the best solution might be right under our noses.”
But even if you’re not as wealthy as Chris (besides, he and his husband are working on giving most of it away), that doesn’t mean you’re helpless to make a difference in others’ lives. Each of us has the power to make change happen, be it through direct donations or civil advocacy.
Politicians, economists, and leading minds from all schools of thought have supported some form of guaranteed income, so while it may sound trite, picking up the phone and calling your congressman, or proposing a plan yourself at the municipal or state level, may just have a bigger impact than you think.