Reforming capital markets to build broad-based prosperity and reduce economic inequality

This 2-pager describes the Predistribution AI Lab, a new initiative advancing bipartisan, ownership-based policy solutions to economic dislocation in the US caused by AI and automation. It lays out the Lab's core concept: Broad-Based Equity Compensation (BEC), a three-pillar model giving workers, communities, and creators current income, equity participation, and diversified, portable investment accounts as AI reshapes the economy. The 2-pager also introduces the Lab's June 2026 paper series, Beyond Ghost GDP: Who Owns Our Future?, which examines the risks of AI-driven economic disruption and proposes a predistributive blueprint for the transition.

As employee ownership gains traction across the political spectrum, Tom Powdrill draws on a groundbreaking Spanish initiative to argue that ownership alone isn't enough. Examining the report from Spain's International High-level Expert Committee on Democracy at Work, convened to activate a long-dormant constitutional provision, Tom highlights its two-pillar framework distinguishing ownership (participation in wealth creation) from voice (participation in governance decisions). The Committee's ambitious proposals include minimum equity thresholds of 2–10% for companies based on size, alongside citizen-controlled investment funds that diversify worker wealth beyond a single employer. Tom argues this distinction, that equity participation is not a substitute for collective bargaining or genuine governance participation, should inform how companies, investors, and policymakers everywhere approach broadening economic participation.

In this paper, the Predistribution Initiative (PDI) explores how economic inequality is a macro-financial risk to markets and diversified portfolios. It explains how inequality manifests across people, firms, regions, and capital value chains and traces structural drivers—including financialization, deregulation, monetary policy, market concentration, and traditional corporate governance structures.  Proposals are made for predistributive solutions such as living wages, freedom of association and collective bargaining, grievance mechanisms, employee and community ownership models, and corporate governance reform that better aligns the incentives of investors, investees, and their stakeholders.