The non-college-educated majority of working Americans, and increasingly even some college-educated workers, face two long-term problems. First, the buying power of their wages cannot keep pace with the cost of the things they need, including healthcare, housing and schooling. Second, their path to upward economic mobility is disappearing because stagnant and falling real wages combined with ever more severe economic segregation limit their ability to invest in themselves or their children, whether alone or collectively, because of the weakened tax base of working-class communities.

It is very difficult to find a way to reverse the downward pull of globalization and global labor migration on the wages of modestly educated people. But that does not mean that we are without a way of improving the standard of living of working people. Ironically, the problem may provide its own solution. Let me explain. Contemporary economic trends are pushing the wages of workers down while boosting the returns to financial capital and knowledge capital. That being the case, the best way to promote economic opportunity for low-wage workers and especially their children is to pioneer collective forms of capital ownership and wealth accumulation. In short, we should work to make every American a capital owner.

One way to proceed is for the federal government to reserve a portion of each year's tax receipts--say, 1 percent of GDP--for contributions into a collective capital account that is invested in a set of privately managed and federally supervised index funds. This capital fund, which I will call the Opportunity Fund, would be a trust fund completely free of government interference, subject to the same rules and regulations as other index and mutual funds. With contributions of tax receipts each year, its value would grow as the financial wealth of the country and the economy grows, generating not only capital gains but also interest and dividend income for the American people.

The interest and dividend income generated by the Opportunity Fund could be used in a variety of ways. It could be used to supplement working families' wage income by providing the funds needed for a basic annual income payment, whose size could vary according to such criteria as age, number of children and income level (perhaps with a work requirement to avoid dependency problems). It could also be used to fund a child savings account system that builds up an inheritance for every child on a progressive basis, with a larger share of the funds going to children from poorer families. The child savings account could be used when a person reaches age 18 or soon thereafter to pay for college, buy a home or establish a retirement nest egg, or to pursue some other approved investment purpose.

The Opportunity Fund form of universal capitalism is, in short, a method for redistributing capital income through collective savings. It could put a more sustainable floor on the income of workers than does our collapsing welfare state. It could provide the financial basis for the children of every working family to be able to invest in their own human capital and their own economic future. It could also help correct the problem of economic and wealth inequality by creating a system of public inheritance that would help those who are not lucky enough to have been born into families that can pass on wealth to their children.

The Opportunity Fund is viable, practical and eminently doable right now. It is also the best way--perhaps the only way--to meet all of our country's most pressing economic and social objectives. Not only must we promote fairness within and between generations; we also need to save more and borrow less (subject of course to Keynes's lesson that too much saving too fast can cause recession and unemployment) so our country will have a more sustainable financial future. And we must also rebuild our economy by investing more in order to be able to better compete in today's world economy. The Opportunity Fund form of universal capitalism is an idea whose time has come because it can meet these objectives better than the current collapsing social welfare system.

This solution is adapted from an earlier article, which was part of a forum entitled "Taming Global Capitalism Anew." It is reprinted with permission from the April 17, 2006 issue of The Nation magazine. Portions of each week’s Nation magazine can be accessed at http://www.thenation.com. Click here to see the problem this solution addresses, which includes a list of the other solutions from the same Nation series.