Challenging inequality, the Uber way

There's a lot of talk in Washington these days about economic inequality, but not much by way of constructive ideas for how to reduce it. The loudest voices call for steeply higher taxes on wealth, which would certainly feel like justice — except that even if you just transferred all those taxes directly to the poor, you might not actually do much to make middle-income Americans more secure.

Others talk about reforming an educational system that was once the ladder for economic mobility, which probably gets us closer to an enduring solution, but that's politically divisive and will be a generations-long project, in any event.

Now from the West Coast comes an intriguing idea: a business venture called Aspiration, whose mission is to give middle-income families access to the same variety of investment vehicles that richer Americans have. I don't know if that can work, but it does strike me that trying to democratize Wall Street might be a better strategy than sitting around and railing against it.

Aspiration springs from the unusual mind of Andrei Cherny, who at 39 has already been the youngest White House speechwriter in history, an author and editor, prosecutor, business consultant and (unsuccessful) Democratic candidate for a couple of offices in Arizona. Cherny is a friend of mine from many years back, but more to the point, he is among those whose thinking on politics influenced my own.

Beginning with his first book, "The Next Deal," almost 15 years ago, Cherny has long urged his party to embrace technological change rather than resist it, to modernize the last century's inflexible government programs so that they better reflect the personal choice and customization that modern Americans expect. It has not always been an easy sell.

Sometime last year, as the Democrats' populist rhetoric was reaching a crescendo, Cherny started thinking about how small a number of elite Americans actually got to bank with Wall Street investment houses.It seemed to him a little like cross-country travel before Southwest and other bargain carriers came along; drinks and linen napkins for businessmen and jet-setters, Greyhound and Amtrak for everyone else.

In the case of Wall Street, the wealthiest percentile of Americans choose from complex investments, like hedge funds, that most of us can't use and really don't understand very well. If you're super-wealthy and can afford the $100,000 minimum investment, you have all kinds of financial products from which to choose, and most of them are designed either to pay off exponential returns or to insulate you from crushing loss. Or maybe both.

But if, like the rest of us, you've got a few bucks to invest but don't own a couple of houses or a spare Tesla, then you're basically limited to some combination of stocks and bonds in a traditional mutual fund. And if your savings are locked up in those funds when the market just happens to crash, as it did in 2008, there goes college or retirement.

And so Cherny started talking ideas over with a friend, Joseph Sanberg, who had made a modest fortune on Wall Street. What if ordinary Americans could pool their money and get into specially tailored funds or money-market accounts designed for the purpose of maximizing return or minimizing exposure? What if you created a sort of next-generation Etrade, where online shoppers in the vast exurbia could educate themselves and choose from a wide menu of investment products made specifically for them?

That's the main idea behind Aspiration, which launched its first liquid alternative mutual fund this week. (A series of other financial products are slated to follow soon.) The goal is to do to Wall Street investment houses what Uber is doing to the taxi industry or what Travelocity and Priceline did to travel agents: decentralize and expand the universe of choices for average Americans.

You need only $500 to invest in Aspiration, and you don't pay the standard 5 percent fee, as you would with a Wall Street bank; you voluntarily contribute whatever commission you think is fair, or none at all. Aspiration will donate a tenth of every dollar it earns to Accion, a group that extends microloans to lower-income Americans who want to start businesses.

All of which is, frankly, kind of crazy. Aspiration is making two very big and questionable bets of its own. The first is that people are ready to make complex investments on a website, the same way they now order groceries or pay their utility bills. The second is that, if people do invest and make a little money, they're going to be grateful and fair-minded enough to hand over a percent or two.

"We have seen a whole series of companies born in areas where a lot of people said technology would never be able to challenge old business models," Cherny told me last week. "Every time people have said that, it's been proven wrong. The financial sector is one of the last vestiges of the old business models." (To underscore the point, one of Aspiration's board members is Jeff Skoll, a founder of eBay.)

This gets back to Cherny's long-standing argument about trusting voters — or, in this case, consumers — to make educated choices, rather than offering one-size-fits-all programs. And it rests on his conviction that those same consumers will more readily part with their own hard-earned money (whether through taxes or fund commissions) if they feel it's being well spent.

"The businesses that have been real breakthroughs in the past 20 years are those who have taken big steps in rethinking trust," Cherny said. "They're all part of a trust-based economy. Ten years ago, if you said, 'I'm going to stay in the extra bedroom of some guy I met online,' or 'I'm going to get in a car with a total stranger,' people would have said you were crazy. But these are now global, successful businesses."

I'll have to leave it to financial columnists to decide whether Cherny's funds are worth your grand or whether his business model can even work. The only thing I know about investing money is that it usually involves some kind of colored pie chart.

What I find relevant to our politics, though, is that, once again, Cherny is looking at the pressing issue of the day from a slightly different perspective. The problem at the core of inequality, as the economist Thomas Piketty and many others have well documented, is that capital is piling up profit while wages are going nowhere. In other words, if you have wealth to invest, you're getting wealthier, and if all your money is made from a 40-hour workweek, you're at best standing still.

The solution to this problem is generally expressed as a simple matter of social justice. A small number of people control too much wealth, and the only available answer is to confiscate and redistribute vast amounts of it.

What Cherny is banking on, quite literally, is the flip side of that proposition — that instead of simply taking more wealth away from those who have capital, you might find ways to expand the benefits of capital to those who work. What if you could somehow disperse the opportunities that come with affluence, as opposed to simply punishing it?

I find that notion both plausible and hopeful. Cherny may or may not be the guy who sets in motion the breakup of Wall Street's monopoly over wealth creation. But take a look around. Sooner or later, you'd have to think somebody will.