a simple way to fund social wealth funds
offsetting investment drops is countercyclical and weakens the bargaining power of capital without giving too much discretion to politicians
Here is a simple rule for how to build a social wealth fund:
When net private investment falls by x over some time period and inflation is below y, print rx money and put it in an index fund.
So if r=0.5, if NPI falls by $100 million, the government creates $50 million in banknotes and puts it into its index fund. If net private investment is expanding and/or the economy is experiencing extreme inflation, no such investment would occur (at least, not automatically, via this rule.)
Exact values of y and r subject to political haggling, of course. R should be below 1 but could be quite close to it. I’d probably select somewhere around 10% for y.
What’s the value of this?
Countercyclicality
By design, this rule injects money into a (so far) capitalist economy precisely when it needs Keynesian pump-priming. In this it’s like other automatic stabilizers, or a basic job guarantee, as I argued here:
However, direct state investment blunts downswings at the source - swings in investment. Investment is much more volatile than consumption or government expenditures, and is the proximate cause of business cycles.
One might worry that in the aftermath of large downswings, the government is precisely investing when it is least valuable to invest. But the stock market already takes any such rational expectations into account - they’re priced into the initial drop.
no picking winners
If we invest in an index fund, politicians aren’t asked to know more than the market, or tempted into (as some say) “punishing friends and rewarding enemies.” The rule also means that politicians don’t have a lot of discretion over timing.
This isn’t to say there’s no role for industrial policy or very deliberately chosen investments (for instance, in green energy.) However, we don’t need our mechanisms to require that such knowledge is always available, especially before a thriving epistemic ecosystem for socialist investment is established.
Once the government has a major stake in many companies, there is of course the question of how to participate in governing them. I think the default of “let all ballots be cast by the sitting government” introduces too many potentials for cronyism; alternatives are worthy of a separate post. But note that two “dumb” solutions are simply to serve as a sleeping partner or to hand voting power over to employees of the company, as in codetermination.
weakening the threat of a capital strike
Capitalists might attempt to reject policies of a socialist-in-intention, or simply fairly progressive, government through a capital strike. This rule directly blunts the political bargaining power of capital without presuming to tell firms what particular investments make sense for them.
Block grants to provinces, munipalities, &c. also being partially based on offsetting private investment would also help them have a stronger bargaining position vis-a-vis corporations deciding whether to invest there. But this may also be worthy of a separate post.
Which is the problem and which is the solution?
You seem to be combining three separate mechanisms which have been tried and found difficult to implement by governments. If you want to build something on top of this rickety foundation, it sounds like a terrible idea. If you can get their problems to cancel out, that would be great, but if so, you should be a lot more explicit about which problems you are trying to address.