The approximate rule for most US companies is:

• The company does stuff that generates economic value;
• Some of that value goes to the company’s workers as wages for creating the value;
• The company’s shareholders — founders and providers of equity capital, as well as employees who are paid in stock — share about 79% of what’s left; and
• Society gets the other 21%.

That’s very loose.^[1] But a company does some stuff, it makes some money, it pays some expenses, it has some extra money left over, which is called “income before income taxes.” And then 21% of that money goes to the US government as income taxes, and the other 79% stays at the company — and ultimately belongs to its shareholders — as net income. At a high level, this makes sense. The company benefits from society; roads and national defense and an educated workforce and a functioning legal system help create the conditions in which the company can make money. Society should get a cut of its profits.

Why 21%? That’s just the law, just the headline US federal corporate income tax rate that applies to all companies. You could imagine things working differently. The other 79% — the portion of the company’s economic value that goes to its shareholders — is divided up differently at different companies, depending on those shareholders’ relative contributions and negotiating power. At some companies, most of the economic value goes to the founder; at others, to outside institutional shareholders. You could tell various stories about why that might make sense: Maybe some companies were bootstrapped and owe all of their success to their founders’ efforts, so the founders keep most of the value; other companies grew over time by deploying lots of outside capital and are run by hired professional managers, so the investors get most of the value. Or maybe it’s like “this company raised money from shareholders when valuations were high and terms were founder-friendly, so the founders kept most of the value.”

You could imagine a similar variation in the 79/21 split. Like: “Some companies depend a lot on society, so they should pay more to society; other companies do not depend much on society, so they should not.” Or: “Society wants to encourage some companies and discourage others, so the discouraged ones have to give society more of their profits and the encouraged ones get to keep more.” Nobody quite puts it like that, but there really are a lot of credits and allowances and complications in the tax code, and many of them do gesture in the direction of encouraging stuff society — or at least Congress — wants and discouraging stuff it doesn’t. “Real estate developers are rugged individualists who owe nothing to society and create a lot of value for everybody else, so they should pay lower taxes,” maybe, stuff like that.

And then there is artificial intelligence. The maximalist story of AI — one that a lot of people at AI labs seem to believe — is something like “AI will end up generating all of the economic value in the world, and human labor will be obsolete.” In that world, nobody will get any wages, and all of the economic value in the economy might be owned by the AI companies whose robots are generating the value. But what people will get that economic value? The default answer is, you know, the AI lab founders will be trillionaires, and their employees will be billionaires because of stock options,^[2] and their venture investors will all make huge returns, and society will get 21%.

Is that too low? Society now gets 21% of corporate profits, but corporate profits now are only about a quarter the size of labor income. In a world of no labor income, where all of the value created in the economy goes to AI profits, society might want a bit more.

One thing that you might do, as an AI company, is nudge the number up a bit. Say “hey society, instead of giving you 21% of our value, we’ll give you 26%.” You might do this for altruistic reasons: You might think “hmm, if we actually do end up capturing all economic value for our companies, that will be a bit rough on everyone who doesn’t own our companies, so we should toss in something extra for them.” You’re building AI to make the world better, not to impoverish everyone, and if it turns out that you are impoverishing everyone, you will feel bad and want to give them some money.

Or you might do it for marketing reasons. You might think: “If we create the impression that we expect to capture all economic value for ourselves, that will make a lot of people want to invest in our companies. Offering to give some value to society helps create that impression. We look confident by giving some value away, and that will help us in fundraising and ultimately allow us to keep more value.”

Or you might do it for, like, genuine negotiating reasons. You might think: “Hmm, if we actually do end up capturing all economic value for ourselves, society is gonna be mad. Society is not going to like that. Society might stop us from doing that. Let’s give society a share of our success, so that society will let us have that success.”

Or all three reasons. What is the practical implementation of this? How do you give 5% of your company’s value to society? Back in July, we talked about a proposal from OpenAI to give 5% of its stock to the US government as a sort of sovereign wealth fund; that’s one possibility. Here’s another:

Anthropic PBC said it plans to put 5% of its shares into a new so-called public benefit fund that allows it to make donations that can address “the public good,” including mitigating AI’s impact on the job market.

The announcement comes as the fast-growing artificial intelligence startup prepares for an IPO expected to be one of the biggest ever. At the same time, Anthropic is seeking to address rising concerns about AI safety and its potential unintended impact — from hacking to mass job losses — as companies move to adopt AI agents that can supplant human labor.

The new Anthropic Public Benefit Fund could allow the company to pursue its mission “in new ways,” such as using some of the money to address “labor market impacts,” according to the statement.

Here is Anthropic’s announcement:

Today, we’re committing a portion of Anthropic’s shares to the Anthropic Public Benefit Fund, a new entity with a structure that increases the stake as the company grows. Subject to stockholder approval, 5% of Anthropic’s shares will be committed today, with an additional 2% added at the board’s discretion for every 50% increase in the company’s value above a set baseline. ...

The Anthropic Public Benefit Fund will have increased flexibility and scale, enabling us to pursue our mission in new ways: for example, we might explore large donations to traditional nonprofits or direct distributions to specific populations.

One example is labor market impacts. AI may generate enormous economic value, but it could also cause instability for many workers. 

So (1) society gets 5% today, (2) society’s stake grows to the extent that Anthropic really does capture a ton of economic value for itself, (3) Anthropic — or rather its nonprofit fund — decides how to allocate the money to society (“specific populations,” etc.) and (4) it’s leaning toward giving it to workers displaced by AI. Reasonable, ish. 

There are other possibilities:

Elon Musk pledged to distribute a share of SpaceX to each American child, posting the move just hours after artificial intelligence competitor Anthropic PBC said it would set aside a portion of its shares for the public benefit.

“Next year, I will give one of my SpaceX shares to every kid in America,” the company’s chief executive officer wrote on X, the social media platform he owns. “This will be the first of many.”

It’s not clear how such share contributions would work, and Musk did not elaborate on his donation plans. There are about 72 million children in the US, according to estimates from the US Census Bureau, which would make the donation worth about $10.5 billion at the current $146 share price.

SpaceX has about 13 billion shares outstanding, so this is on the order of 0.5%, but it’s a start.

I guess those are the three possibilities? Give 5% (or 0.5%) of your stock to the government, or pro rata to everyone (or every child), or to a nonprofit foundation that tries to do what is best for society. Each AI lab’s proposal is pleasingly characteristic: OpenAI wants to work with the government, SpaceX is libertarian and individualistic and cost-conscious,^[3] and Anthropic wants to make the decisions about what is best for society. Competing visions about how to build AI, and also competing visions about how to give society its cut.

Arguably the main condition of human flourishing is passive income. Some ancient societies restricted citizenship to people with enough property that they did not need to work for anyone else; working for a living was a disqualifying distraction from the work of citizenship. In 19th-century novels, a gentleman was someone who had ten thousand a year in land rents or government-bond income, and some slob who had to work for a living was not worth discussing. 

Realistically, though, most people can’t live on passive income. Somebody has to make all the stuff that the leisurely aristocrats consume. It takes quite a lot of capital to live on passive income. Traditionally, if you wanted $100,000 a year of passive income, that would require between $2 million and $2.5 million of capital. Much modern financial advice uses a “4% rule,” while Thomas Piketty writes that “in the novels of Jane Austen and Honoré de Balzac, the fact that land (like government bonds) yields roughly 5 percent of the amount of capital invested … is so taken for granted that it often goes unmentioned.”

It’s hard to accumulate that much capital, and so a basic goal of finance is to create higher-yielding forms of passive income. For most of human history, passive income came basically from land, which didn’t yield that much; by the time of Austen and Balzac, there were government bonds with similar yields. But then common stock came along. For a while, you could put $100 into a railroad stock, and the railroad would make enough money to reinvest in its business to grow its profits and pay you $7 a year in dividends. People who in previous centuries would have lived off of 5% government bonds could now live off of 7% railroad dividends, a genuine improvement in human flourishing.

Some railroads did go bankrupt though. One way to give more people access to higher-yielding forms of passive income is to have more economic growth (and give people a share of it). Another way is just to take more risk.

Finance keeps moving, though, and a century or so later, there is a vast industry that takes the following form:

1. You invest $X in our thing.
2. We pay you a passive income of much, much more than 4% of $X every year.
3. Wheee!

A lot of this industry is, like, Instagram accounts about buying short-term rentals with leverage, though I gather the bottom sort of fell out of that one. Today’s Wall Street Journal has a story titled “The Internet Told Them Owning a Laundromat Was Easy Money. It Was Anything But” and, yes, exactly. There are weirder approaches. In 2021 and 2022, there was a hard-to-explain-now vogue for high-yielding crypto projects sometimes referred to as Ponzicoins; we once talked about one that advertised a yield of 83,687.5%.

Here’s a story about people who treat selling options as a passive income strategy, because it is marketed to them that way:

Jae Hyouk Jang travels for months at a time, making his way across Thailand, Vietnam and Laos in the past year. The 43-year-old recently quit his job as a security specialist and didn't walk away rich. Instead, he’s living off just $130,000 in savings using a supercharged investment strategy that’s allowed him to leave the 9-to-5 behind.

“I know some people might look at my decision and think it’s risky or even irresponsible,” Jang said in a social media post as he embarked on his adventure. “To me, the real risk is spending your life doing something that doesn’t bring you joy, waiting until you’re 65 to start living.”

Jang is part of a nascent community of self-styled “dividend nomads” who fund a life of itinerant travel through a combination of investments in exchange-traded funds and cheap living abroad. …

Yet there are drawbacks, as Jang discovered earlier this year. He bought several derivative income ETFs including YieldMax COIN Option Income Strategy ETF (ticker CONY), which boasts an annual payout rate of 58%, generated by selling call options on the stock of cryptocurrency brokerage Coinbase Global Inc.

When Coinbase stock began to tumble last fall, CONY’s value plunged nearly 40%, cutting into the size of the fund’s weekly distributions. Uneasy with the volatility, Jang shifted his holdings away from the fund. While he managed to break even across his income portfolio, he is taking a more conservative approach today, moving money into safer ETFs, such as ones that track the S&P 500.

“Dividend nomads.” I feel like there’s a traditional idea of dividends where a company produces economic value and gives some of it to shareholders as a dividend. But the category of “dividend” is capacious, and you can put arbitrarily risky gambles into a corporate form and distribute the winnings as dividends.

You can get $100,000 a year in passive income with capital of just $172,500, if your capital yields 58%, so this really does fill a certain need. But also: What? If I told you “you can make a living by selling weekly options on Coinbase stock,” you’d probably say, “huh, that sounds kind of like work, and risky.” And if I told you “you can make a nice passive income by letting someone else sell options on Coinbase stock for you every week,” you might ask why. “The profitable trades that exist in the world are either (a) the ones you’re intimately involved in running, or (b) the ones that are inaccessible to you,” says Agustin Lebron. “There is no (c).” And if I told you “the real risk is spending your life working to generate economic value; everyone should just retire and live on the income from options selling,” I feel like it’s pretty clear that that couldn’t possibly work? 

Obviously the final stage of all of this is in the previous section: Give everyone a stake in the AI companies, produce limitless abundance via AI, and let everyone live in leisure off the AI dividends. It will be a bit tricky getting there, though.

Ughhhh. In March 2025, I wrote: “I kind of think we are about two years away from a sports gambling ETF?” Did I think I was kidding? I would say, I hoped I was kidding. But this July, we talked about an actual filing for a proposed sports gambling exchange-traded fund. I had some notes. The proposed ETF — the Subversive All Season Sports ETF — would be actively managed and somewhat opaque: You’d give it your money, it would gamble your money on sports, and you’d get the winnings. Where, I asked, is the fun in that? I wrote that there should be semi-passive sports gambling ETFs, so that you could buy a Mets ETF that was a bet on the Mets. Because the point of sports betting is that you want to bet on outcomes, not let someone else bet for you. Did I think I was kidding? Did I hope I was kidding? I think that by that point I had abandoned all hope, about this subject matter. I just sat there dead-eyed, typing “sure whatever Mets gambling ETF.” That’s a thing to put in your retirement account. Absolutely. Whatever. 

On Friday, Bloomberg’s Vildana Hajric wrote:

We have more than 5,000 ETFs. What if there were 10,000 more? How about 20,000?

According to FutureSports Co-Founder Leigh Taylforth, there’s a coming wave of new funds, all centered around sports, various franchises and maybe even big-shot players.

His company is behind a slew of indexes measuring the performances of Major League Baseball and National Hockey League teams, with additional partnerships on the horizon. The value of each benchmark fluctuates throughout a game and season based on dozens of performance statistics — think wins, losses, etc. CME Group has listed futures tied to gauges for every NHL and MLB team and ETF issuers are already lining up to file for funds based on the index futures.

“I know this is giving people some heartburn — it will be in the thousands. Long term, potentially tens of thousands,” Taylforth said on this week’s Trillions recording with Eric Balchunas and his firm’s Head of Index Services Jodie Gunzberg about the prospect for fresh products. “There’s endless possibilities in some of these new areas.”

Absolutely. Whatever. Eventually 99% of ETFs will be sports gambling. Will everyone’s retirement accounts be sports gambling? Probably not, but at this point anything is possible.

At the New York Times, Cambridge business school professor Chris Marquis claims that:

1. Many students go to business schools “hoping to learn what business schools say they teach: how to manage people, how to allocate capital and resources and how to make the world a better place through leadership,” not just to make a lot of money.
2. However, the MBA curriculum instead “can reshape the worldviews of those who enter it, often undermining the very ambitions that brought them there,” by teaching students to make a lot of money for shareholders rather than to improve the world through leadership.
3. Therefore, universities should do away with the MBA — “dismantling the business school as a single high-status silo that professionalizes private gain” — and “create ‘schools for organizing’ rather than schools for business, centered on how humans coordinate for shared ends. Students would study co-ops, unions and social movements alongside the shareholder corporation.”

My skepticism is mostly about Point 1? Like I feel like the economic function of business school is pretty well understood? Students who want to make a lot of money go to prestigious business schools, and they pay those schools a lot of money to get an MBA. Quite possibly students who want to organize social movements would want to go to a school for organizing and get a degree in organizing, but is there money in that? You gotta sell the stuff that people want to buy, seems like an important thing they teach in business school.

Maybe the most famous fact about US commodities markets is that you can’t trade onion futures. There is a specific federal law, the Onion Futures Act of 1958, that bans trading of onion futures. (It now also bans “motion picture box office receipt” futures, sure.) Why are onion futures, alone, prohibited? Well, some guys cornered the onion futures market in 1955, and that made people so mad that Congress passed a law against onion futures. 

I always assumed that this was sort of silly and path dependent. We talked once about a jokey effort among University of Chicago undergraduates to repeal the Onion Futures Act. (“To draw attention, the group brought approximately 100 raw onions to the quad in a large cart. They encouraged passersby to participate, saying that any student who ate an entire onion would be featured on their website,” etc.) Apparently they’re doing a protest at the Chicago Mercantile Exchange today; they’ve got someone dressed as an onion and are chanting “Fifty eight, out of date! Let our onions speculate!” Good for them.^[4]

I assume this is mostly for fun, but they’re not wrong. Surely, here in 2026, we don’t really need a law against onion futures? Sure there was an onion corner 70 years ago, but what are the chances of that happening again?

Well here’s this:

The Philippines’ antitrust watchdog said it’s imposing record fine on several onion traders over their scheme that made the price of the vegetable more expensive than meat in 2022.

The Philippine Competition Commission found six firms and their officers liable for “participating in an onion cartel that engaged in an illegal market allocation scheme” in the importation, cold storage and wholesale distribution of red and yellow or white onions, according to a statement on Thursday.

Onions, man! 

The Crypto Cop Who Took Down a Global Scam Network from Brooklyn. BoE scrutinises Barclays over claim traders misrepresented private credit exposure. Mark Walter Probe Dings a Guggenheim Funding Machine That Powers Wall Street. A Hedge-Fund Billionaire’s Two Bitter Wars—Against His Wife and His Business Partner. From Verizon to UnitedHealth, Corporate America Is Balking at ‘Tokenized’ Stocks. CME Plans Tungsten Futures as US, Europe Seek Price Stability. Startups Are Extracting More Copper Using Microbes. KKR accused by EU of misleading regulators over €22bn telecoms deal. Nearly All Volume on FIFA-Linked Prediction Market Is Circular Trading. The AI Boom Is Creating a New Market for $500,000 Matchmakers. Big Law’s Latest Weapon to Win Talent and Clients: Corporate Branding. Hedge Fund Veteran Who Took Down Argentina Sets His Sights on Miami Condo.

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