A (somewhat modest) proposal to increase social mobility

Social mobility is a good thing, right?  And we want to see more of it?  And markets are out friends?  The latter seems questionable in the current economic climate, but it still seems to be a fundamental underlying belief in our economic and political systems.

My plan is simple – we increase the tax everybody pays by a small amount, lets say 3-5%.  However, rather than going to the government, this money is put into a government savings account that pays a fair rate of interest – say linked to bank rate, and pays out on the date of the taxpayer in question’s death.

We then sell shares of each of these accounts.

We know, on average, how long someone will live – life insurance depends upon it.  So we can hedge against the possibility that a particular person dies early.  Once we’ve done that, the value of shares is tied in with the amount of income tax the individual pays (lets assume this is a rough indicator of their social success)

At this point, it would pay to find people with high potential from disadvantaged backgrounds, and offer them junior positions:  why?  Because you could also buy that individual’s shares.  And while right now, with little training their shares may be cheap, if they have the success you expect, their shares will later be more valuable.  Indeed, given two similar candidates, it is the one who is more disadvantaged socially you would be more likely to employ.

Exclusive schools might want to seek out the underprivileged and offer them places – places which could be paid for entirely by the expected growth in value of their shares.  Similar strategies could be used to subsidise university education – or to provide grants.

(in this situation, I encourage insider trading – as this is the process of taking information only you know and making it available to everyone, via the magic of market pricing.  We actively want people to be able to benefit by offering a knee up)

The downside is that the amount of tax each person pays becomes public knowledge (or at least easily inferable, assuming any company finding an employee’s shares are lower than they would expect given their salary, would be insane not to buy them).  And also that there might be a market in shorting individuals shortly before redundancies (which feels a little bit horrid)

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