The argument in full

Property, as the founders meant it

Before there was a Declaration of Independence, there was a list of three rights worth declaring independence over. The third was property.

In October 1774 the First Continental Congress resolved that the colonists were "entitled to life, liberty, & property, and they have never ceded to any sovereign power whatever, a right to dispose of either without their consent."⁵ That was the original American trinity. The phrasing came almost verbatim from John Locke, whose work shaped the founders more than any other secular source. Locke's argument was direct: "the great and chief end of men's uniting into commonwealths, and putting themselves under government, is the preservation of their property."⁶ Jefferson substituted "the pursuit of Happiness" in 1776, but everyone reading those words knew which older trinity was being echoed. The Fifth Amendment then made it explicit: no person shall "be deprived of life, liberty, or property, without due process of law."⁷

To the founders, property was the material foundation of freedom itself. A person with no property is dependent. A dependent person is not free. And when they said property they meant something concrete — a farm, a workshop, a printing press. Something the owner had built or bought, knew intimately, controlled directly, and would suffer the consequences of mismanaging. Property in the founders' sense implied stewardship. To own a thing was to be answerable for it.

Consider what "owning" a public corporation means today. If you have a 401(k), an IRA, or an index fund, you are a beneficial owner of hundreds of America's largest companies; if you have a pension, the plan holds them on your behalf. Have you ever cast a vote on how any of them are run? Could you name a single director you helped elect? You cannot. The shares are yours in substance. The votes are cast by the asset managers who run the funds — mostly three of them — and the programs that let you direct your own vote still cover a small fraction of what they vote. You hold the title and bear the risk. Someone else holds the control and takes the reward.

Defenders of the current system invoke "property rights" to shield it from reform. What they are defending is legal title drained of stewardship, operated by people who hold neither the title nor the risk — the precise inversion of what property rights were meant to secure.

That is the thesis of this project, named three centuries early. A commonwealth is a community organized so that property — real, stewarded property — is protected for those who hold it. The modern corporation has become the opposite of a commonwealth. It can be made into one again.

A public corporation, in plain English

Almost none of this is taught in schools. The diagnosis on this site rests on the picture being accurate, so here it is.

What a public corporation is

A corporation is a legal entity created to pool capital and labor toward a productive purpose — building airplanes, selling groceries, refining oil. When a corporation is public, shares of ownership trade on stock exchanges and anyone can buy them. Originally, corporations were chartered by states for specific, limited projects — to build a railroad, dig a canal, operate a bank — and the charter could be revoked if the corporation behaved badly. Today's public corporations operate indefinitely, across every industry, with no automatic expiration.

Who owns a public corporation

Legally, whoever holds shares. Practically: ordinary Americans, mostly without realizing it. The voting power over most of those shares is held by the asset managers — above all BlackRock, Vanguard, and State Street — who pool your money into their funds and vote the shares on your behalf, for the most part without asking what you want. This is the first separation: ordinary Americans own corporate America in name, and have no say in it in fact.

Who runs a public corporation

A chief executive leads the company day to day. The CEO is hired, supervised, and paid by a board of directors — usually eight to twelve people who meet a handful of times a year. In theory the board represents the shareholders. In practice, here is how directors get to the board. Since 2003 exchange rules have required a formally independent nominating committee; in practice the CEO's influence over who is proposed remains decisive, and directors who challenge a CEO are rarely renominated. The names go on a slate. Shareholders technically vote, but the slate is almost never contested. Most directors are other CEOs, retired CEOs, or business associates of the current CEO. They are paid roughly $300,000 to $350,000 a year, mostly in stock, for what amounts to about thirty days of work.²⁹

What a compensation consultant is

This profession exists almost entirely to set executive pay. A compensation consultant is hired by the board's compensation committee to recommend what the CEO should be paid. The consultant's firm — Meridian, Frederic Cook, Pay Governance — depends for its revenue on keeping its clients happy, and a consultant who recommends below-median pay does not get rehired. So the consultant looks at what other CEOs are making and recommends "competitive" compensation. Every consultant does this. Every board accepts it. The benchmark ratchets upward forever.¹⁶

How a CEO actually gets paid

When you read "the CEO made $25 million," that number is almost never salary. In 2025 the average realized compensation of a top-350 CEO was $27.9 million; salary was $1.4 million of it.¹ A typical package breaks down roughly like this:

• Base salary: usually $1–2 million. The smallest piece.
• Cash bonus: tied to short-term targets. $2–5 million typically.
• Stock options: the right to buy company stock at a fixed price later. If the stock rises the options become enormously valuable; if it falls they expire worthless. The incentive they create: push the stock price up during the vesting window, typically three to five years, by whatever means are available.
• Restricted stock units: outright grants of stock that vest over time. The largest single component for most CEOs.
• Perquisites: corporate aircraft, security details, club memberships. Often millions annually, disclosed in proxy footnotes few people read.
• Deferred compensation and pension accruals: set-aside earnings that pay out years later. Often the largest piece of an exit package.

The shift from salary to stock is what produced the explosion. Salary increases are constrained by board scrutiny and public visibility. Stock-based pay explodes when the stock price explodes — and the stock price can be made to explode through buybacks, cost-cutting, and short-term financial engineering, all of which the CEO controls. The mechanism does not just let the pay follow the price. It rewards moving the price.

Who loses property under the current arrangement

The mechanism is invisible because the loss is spread across many constituencies, none of whom has a single voice. Named clearly, every one of these is a loss to someone with a legitimate claim on the enterprise — and several are property in the plainest sense.

Almost everyone senses that something has gone wrong — that the people at the top stopped playing by the same rules. The instinct is correct. But the diagnosis usually stops at "greedy CEOs" or "broken capitalism," and neither is right. The correct diagnosis is that the protector role inside the modern public corporation has been emptied out, and the predictable consequence is that the surplus of productive enterprise — what a company earns beyond its costs, the profits and the gains from rising productivity — flows to whoever has the closest access to it. That is not capitalism. It is capitalism's inverse, wearing capitalism's clothes.

Where stewardship has been hollowed out

Not all public corporations behave the same way. The runaway ratio concentrates in a specific kind of corporation, and understanding which kind is the key to the remedy.

Every corporation passes through three stages of life:

Founder-led and family-stewarded companies produce runaway ratios less often and less severely; exceptions exist. The research on founding-family firms finds them managed with longer horizons and fewer of the agency problems that inflate pay.²³

Boeing: the most documented case

Boeing was William Boeing's company. For decades it was run by people who had spent their lives building airplanes and believed in them. In 1997 it crossed into Stage 3: the merger with McDonnell Douglas installed a generation of executives whose backgrounds were in finance rather than aviation. Between 2013 and 2019 Boeing spent roughly $43 billion buying back its own stock — inflating the share price its executives were paid in — while the 737 MAX program was run to a budget and a schedule. Engineers who raised safety concerns were sidelined. Two crashes followed, in 2018 and 2019. 346 people died. The CEO departed with about $62 million in stock and pension benefits. The company was charged; no executive was. No clawback.²²

Boeing is the case this site draws on most heavily because it is the most extensively documented, not because it is unique. GE under Welch and Immelt, Sears under Lampert, Wells Fargo under Stumpf, Intel through the 2010s, and AT&T after deregulation each show the same pattern, and a fuller portfolio of cases is in preparation.

The historical equilibrium

From 1965, when the modern series begins, to 1978, the American market held the CEO-to-worker ratio between 21:1 and 31:1 without any law requiring it — and the longer record shows executive pay essentially flat in real terms from the 1940s to the mid-1970s.¹⁴

From 1945 to 1978 the United States ran the most productive economy in human history. Between 1948 and 1979 output per hour more than doubled, and the typical worker's compensation rose 91 percent with it — on EPI's chart the two lines track each other until the late 1970s, and then part.² The CEO of a large company earned twenty to thirty times what his workers did, a single income commonly supported a household, and the forty-hour week was settled. No statute set the ratio. The market produced it — a market whose governance architecture was intact.

What the equilibrium ran on

It was not an accident of postwar dominance, and it was not the owner in the room. It was a set of institutions, each identifiable and most of them restorable:¹³

• Pay in salary, not stock. Executive compensation was overwhelmingly salary and cash bonus; stock options were a minor instrument until the 1980s.¹⁴
• Retain and reinvest. Boards kept earnings inside the firm and spent them on plant, research, and people. The shift to "downsize and distribute" — buybacks and dividends first — came after 1982, when the SEC's Rule 10b-18 gave repurchases a legal safe harbor.¹⁵
• A wage tied to productivity. The 1948 General Motors contract wrote an "annual improvement factor" into wages — a raise indexed to national productivity growth — and the pattern spread across industry, union and non-union alike.¹³ The link between productivity and pay was not a hope. It was a clause.
• A tax structure that favored reinvestment. Top marginal rates of 70 to 91 percent made an extra million in personal compensation worth far less than a million reinvested in the enterprise. Whatever one thinks of those rates, they changed what a board bothered to pay.
• Pay norms with teeth. A CEO who paid himself fifty times his workers in 1960 would have answered for it to his board, his bankers, his senator, and the business press. The norm was enforced by embarrassment, and embarrassment worked.

Every piece of that was dismantled between 1978 and 1993, and the ratio left its equilibrium within a decade. Some of the postwar settlement cannot or should not be restored — America no longer holds half the world's industrial capacity, and the settlement excluded too many Americans from its gains. But the architecture that bound pay to productivity inside the firm — the company's own rules on pay, boards, votes, and earnings, as distinct from the market around it — was law and contract, not geopolitics. That part can be rebuilt.

Twenty-four centuries, one finding

The postwar equilibrium was the modern expression of a very old judgment. Every serious thinker who has asked how far the leaders of an enterprise may stand above the people they lead has arrived in the same neighborhood.

Three phases, four structural failures

The divergence wasn't random. It happened in three distinct phases, each with an identifiable mechanism, and it was held in place by four failures in the structure meant to prevent it.

It's not one CEO. It's an entire governing class.

In the 1950s, board service was a modest stewardship stipend. Today it is a second income stream — roughly $300,000 to $350,000 a year on average at S&P 500 companies, more at the largest — for people already wealthy enough to be appointed, paid predominantly in stock through the same mechanism that drove CEO pay.²⁹ The full numbers, and the twelve ways a ratio rule gets gamed, are on the Pay Gap page.

The constitutional argument

Name the act by its nearest legal relative. In any other fiduciary relationship — a trustee, an executor, an agent — a person who diverts entrusted property to himself has committed embezzlement.

Corporate executives and directors hold what the law itself calls a fiduciary duty — a legal obligation to act in the interest of the enterprise and its owners, not themselves. They are entrusted with the productive enterprise. Through compensation structures they design, recommend, and approve for one another, they divert its surplus to themselves on a scale with no precedent in the postwar record. It is not embezzlement in law, and this site does not claim it is: the law treats a board's approval as the owners' consent, and board-approved pay is legal. But the board is chosen by the person being paid. The consent is the capture. Every element of the offense is present in substance, and what is missing is a law willing to see it — which is why the remedy on this site is enforcement of duties that already exist, not a new crime.

The long-lived public corporation, in its current form, is property severed from stewardship. Legal title flows through accounts, funds, and intermediaries. The people exercising control hold a sliver of the stake. The people with the stake have no control. Workers whose labor created the value hold no claim on what they built. Shareholders whose capital funded it cannot direct how their votes are cast. Long-tenure employees, who bear concentrated and undiversifiable risk, have no governance rights. Meanwhile the people who run the company, with no genuine ownership, keep the surplus, set their own compensation through oversight they appoint, and face no accountability when the consequences arrive.

Three thinkers, three questions

The project's intellectual lineage runs through three thinkers asking three different questions. The answers converge on the same diagnosis and the same remedy.

The fiduciary law already requires what the project asks

None of this requires a court to recognize a new kind of property right. The duty of loyalty, the duty of care, and the prohibition on corporate waste have been settled Delaware law for generations.²⁴ What has changed is enforceability. In re Walt Disney is the textbook: a $130 million severance for fourteen months of work survived judicial review because the business judgment rule, as courts now apply it, defers to almost any board process that produces a paper trail. The instruments on this site do not invent duties; they make existing ones enforceable — by the owners, by the workers who bear the risk, and by regulators with statutory teeth. They are federal law, and they displace some of what Delaware now leaves to the business judgment rule. But a reform that asks courts to recognize a new kind of property right faces years of litigation before it operates; a reform that gives teeth to duties the law has recognized since the nineteenth century starts on settled ground.

Who keeps the productivity dividend

The last forty years already ran the experiment Bezos is describing. Productivity rose. The question of who kept it was answered by the architecture of the firm, not by the size of the gain.

The record

Put the pieces together. AI will produce the gains; on that, Bezos is probably right. The record says who keeps them under current rules. The three-day week comes only with an architecture that distributes the gain — boards with the workforce on them, executive pay bound to the median worker's pay, surplus retained and reinvested rather than bought back, owners who vote their own shares. Rebuild the factories, secure the hemisphere, anchor the dollar, and leave the inside of the firm as it is, and the AI dividend goes where every dividend since 1979 has gone.

The question this site does not take up

There is a second AI question — what the systems were trained on, and what is owed for it — and this project leaves it alone. It is a separate debate about intellectual property, live in the courts, and it stands or falls on its own argument. The question here is the output: when AI raises a firm's productivity, who keeps the gain. That runs through the three instruments below — the ladder that makes surplus routed to the top progressively costly, the compensation title that measures executives on workforce and investment rather than share price, and the Utah plan that requires a certified firm to say in writing how AI gains inside the firm are shared with the people who use it.

Three instruments. One framework.

Real ownership requires three things: stake, voice, and accountability. The current system assigns stake to shareholders, voice to executives, and accountability to no one. Each instrument restores a piece of the alignment.

The pay ratio is the entry wound — the most visible facet of the loss. But the property destruction has three faces and each needs its own remedy. The Corporate Pay Accountability Act makes the runaway ratio costly and architectural reform rational. The ROCA Act rebuilds the architecture — who sits on boards, how votes are weighted, what the asset managers owe. The Utah Bill tests the model in one state.

"The pay a company can set for its chief executive without a vote of its owners rises only when the median worker's pay rises. Prosperity is shared — or it isn't real."

The modern Homestead Act

The American System — Hamilton's program, named by Clay in 1824 and carried out by Lincoln: protective tariffs to build home industry, a national bank to supply credit, and roads, canals, and railroads to bind the country into one market — did not assume the gains of production would reach the household. Its founders legislated it.²⁶ In the same Congress that passed the Pacific Railway Act, the land-grant colleges, and the national banking system — and raised the Morrill Tariff of 1861 twice more — Lincoln signed the Homestead Act of 1862: 160 acres to any citizen who would live on the land and work it. Some 1.6 million households proved up their claims and 270 million acres — about a tenth of the country — passed to them.²⁵ The tariff built the industry. The railroads bound the market. The banks supplied the credit. And the Homestead Act decided who would own the ground the system was built on: not whoever could buy the most of it, but the household that would work it. Production and distribution were legislated together.

In 1862 the thing worth owning was land. Today it is the productive enterprise, and the household's share of it has been quietly separated from the household. The modern Homestead Act is not 160 acres. It is a share in the enterprise, with a voice in how it is run, for the household whose work makes it productive. Same principle. Different ground. That is what the three instruments are for. The American System is being revived today in four modern pillars — build it here, protect the wage, secure the hemisphere, secure the dollar — which The New American System follows in detail; all four concern the conditions around the firm, and none decides where the surplus goes inside it. This project is the fifth pillar, keep it in the household, and a completion of the system rather than a critique of it.³⁰

Before it breaks

Everything in this argument points toward a conclusion that the right, of all people, should be the first to embrace: reform now, precisely so that revolution never comes.

It would be easy to read this far and reach for a radical answer. That instinct is the one this project rejects. History is unambiguous about where rupture leads. The French Revolution began in grievance and ended in the Terror and then Napoleon. The Russian Revolution began with real suffering and produced Stalin. Even the most justified rupture creates a vacuum, and the most ruthless fill it.

There is one pattern that recurs in every society that let this go too far. A class takes the productive surplus and pulls steadily away from everyone else. The taking is legal — defended by the elite as the natural order of things. Moderate corrections are proposed and refused, again and again. The grievance builds. And then, having exhausted every peaceful avenue, the populace turns — not to reform, which was no longer on offer, but to whoever promises to tear the structure down. The French aristocracy could have accepted moderate reform through the 1780s. They refused, confident in their position. The revolution is always, in retrospect, the fault of the elite who refused every reasonable reform until only unreasonable ones remained.

We are in the early chapters of that pattern now. The pattern has run here for forty years. The young have noticed: in survey after survey, Americans under thirty now view socialism about as favorably as capitalism, having concluded that the system is rigged and that capitalism is the name of the rigging.²⁸ They are half right. The system has been rigged. But what rigged it was not capitalism — it was the hollowing-out of capitalism, the severing of property from stewardship. The tragedy is that too few on the right will tell them this, because telling them means confronting a donor class that profits from the arrangement.

Now add the accelerant. Artificial intelligence is about to multiply the productive capacity of the American economy faster than any prior technology — and, under the current architecture, to multiply what the people at the top take from it. If the structure is not repaired before that wave fully arrives, the pressure it creates may exceed what any peaceful correction can contain.

This is the discipline of the entire framework. It does not nationalize. It does not seize. It adjusts the rules of corporate governance — who sits on boards, how votes are weighted, how executives are paid — so that stewardship becomes the natural, even self-interested, choice. It works entirely within the constitutional order and the market system. It is reform in the Burkean sense: change in the service of conservation.

We've been fooled. The question is what we do now.