Ganesh Sitaraman and Anne Alstott’s ‘Public Option’ Argues for Reinvestment in a Common and Ignored Government Institution

Mark Schmitt reviewed the new book The Public Option in the Stanford Social Innovation Review.

The more intriguing question is, why does their insight feel like news? How did our public conversation so fully lose sight of the role played by these public institutions thriving within market-driven systems? It seems that for decades, politicians and constituents across the ideological spectrum alike have drawn a sharp line between the public and private spheres. Where this idea has been challenged has mostly been from the private side: Social innovation has been defined as harnessing private motives for public good. That’s the premise behind most public-private partnerships, social impact bonds, and “double bottom-line” enterprises, as well as the proliferation of tax incentives, culminating in the debacle of “Opportunity Zones”—a provision in the 2017 tax bill that has done little beyond creating a shelter for capital gains income from lucrative projects in gentrifying or wealthy communities.

The historic success of public options should encourage us to look at the public-private relationship in another way. Rather than trying to induce private motives to serve public ends, we should acknowledge that public initiatives, and particularly public structures, can strengthen market-based systems by ensuring equity, creating market-based accountability, and expanding their reach.

In thinking about these issues, I recalled a provocative and admirable earlier book by one of these authors. In 1999, Alstott published The Stakeholder Society with a colleague, the prolific legal theorist Bruce Ackerman. In that book, Alstott and Ackerman proposed giving every young adult a stake of $80,000, funded mostly by a tax on wealth. Offering the most expansive version of the “assets movement” that had some momentum and bipartisan support in the 1990s and 2000s, Alstott and Ackerman emphasized that by simply bringing everyone to the same starting gate, their plan wouldn’t challenge the workings of neoliberal capitalism in the slightest: “Our plan seeks justice by rooting it in capitalism’s pre-eminent value: the importance of private property,” they wrote.