Forward Economics
Prologue
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We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness — That to secure these rights, Governments are instituted among Men.
— Thomas Jefferson, Declaration of Independence, 1776
We the People of the United States, in Order to form a more perfect Union...
— Preamble, United States Constitution, 1787
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Notice what the Founders did not say.
They did not say: we hope things will work out. They did not say: we trust the powerful to govern the people wisely. They did not say: an invisible hand will sort it.
Instead, they built a system to steer an outcome.
They designed it carefully, argued about it passionately, and constructed it with the full knowledge that human nature — brilliant, ambitious, and deeply self-interested all at once — will test every joint and seam. They built not for the best among us, but to survive the worst of us. And they built it to last.
By almost every measure, they succeeded in the most extraordinary way.
Until recently.
This is the first idea to hold in your mind as you prepare to read this book.
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Here is the second idea. Bear with it.
Suppose it’s 1825, and a small group of Americans undertake a bold experiment.
Not a revolution. Not a political movement. But a farsighted decision designed to fully demonstrate the power of free enterprise.
They create a fund that acquires a portfolio of successful American businesses and place them under the permanent stewardship of an independent board. The board is bound by three rules — and only three — that can never be changed.
First: reinvest 50% of all profits back into the fund to spur innovation, grow American enterprise, and acquire new businesses.
Second: distribute 40% of annual profits to the workers creating the value — including management — automatically, every year, by design.
Third: give 10% of all profits each year to noble causes, nominated by the workers themselves.
One additional rule: whenever the fund grows to four times its size, it divides into two fully independent funds, each governed by the same three rules and a new independent board.
Not to limit growth, but to: 1) prevent any single institution from accumulating too much power, and 2) provide resiliency over time so that if any single fund gets corrupted or captured by self-interest, the others continue.
The founding group commits $500M (in today’s dollars) — serious capital, assembled by merchants, industrialists, artists, and landowners grateful for what this country has given them. They appoint an independent board, sign the charter, and step back.
The rules take over.
In its first year, the fund generates $60M in profit on its $500M asset base.
Workers receive $24M in profit sharing — distributed across the workforce. Noble causes receive $6M, directed by the workers themselves to the communities where they actually live.
And $30M flows back into the fund, quietly compounding.
By 1835, the fund has grown to $895M. Workers have received ten years of profit sharing. Noble causes have received ten years of giving directed by the people doing the actual work. The people in the fund’s orbit are thriving.
Through the Gilded Age, while Carnegie and Rockefeller are building dynasties, the fund is building something quieter and more durable.
By 1900, assets approach $40B, and there are 32 different funds. Workers are now receiving nearly $2B annually.
Noble causes are receiving nearly $474M annually — in an era when the entire United States federal budget is less than $500M.
Through the crash of 1929 and the Great Depression, the funds weather what breaks others. Their discipline of reinvestment over speculation has made them resilient.
The workers they employ do not need the New Deal in the same way their peers do.
By 1960, the fund reaches $1.3T. Workers are receiving $63B annually. Their children are going to college. Their grandchildren are starting businesses. The intergenerational cycle that often feeds poverty is, inside these walls, running in reverse.
Through the stagflation of the 1970s, the Reagan revolution of the 1980s, and the technology explosion of the 1990s, the funds keep doing the same three things.
Reinvest. Share. Give.
By 2000, assets reach $13.4T. Workers are receiving $644B in profit sharing annually. Noble causes receive over $161B annually — directed year after year by the workers themselves.
It is now 2026, and there over a thousand funds.
One original founding group. One bold act. One set of rules, carefully crafted for posterity.
$500M committed in 1825. And now behold:
Total assets: $61 trillion — nearly equal to the entire United States stock market.
Annual profit: $7.3 trillion.
Annual worker profit-sharing distributions: $2.9 trillion — every year, automatically, by design, flowing to workers who are accumulating not just wages but generational wealth.
Annual noble cause distributions: $732B — more than the entire United States federal discretionary budget, directed not by politicians or philanthropists but by the workers themselves, to the schools, hospitals, and communities they actually care about.
Annual reinvestment back into American businesses and innovation: $4.4T — patient capital compounding tax-free inside a foundation structure, funding the long-horizon innovation bets that no quarterly-driven enterprise will ever make. [1]
Total capital originally committed: $500M.
Total assets generated: $61 trillion.
A 122,000-times return on capital governed by three rules that never wavered — over 200 years. [2]
In the sweep of human history, the 200 years required to accomplish this astonishing result is but a heartbeat. The Constitution has been governing this country longer. For many readers, it is but three or four of your lifetimes.
Now ask yourself: what kind of country would we have today if that bold experiment had been undertaken — and this model of free enterprise was now largely the norm?
This is the second idea to hold in your mind.
We will soon explore its full ramifications. And towards the end of the book, we’ll consider what the third century of such an expansion might entail.
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The third idea starts with an observation, and it’s a bit harder to sit with.
Back in today's version of capitalism, real wages for over 80% of American workers have barely moved in 50 years — even as the economy has quadrupled in size on a per-capita, inflation-adjusted basis.
Meanwhile, the average American family carries more debt, works more hours, and retires with less security than their parents did.
One out of three Americans cannot cover an unexpected $400 expense.
35 million live in poverty.
The promise of upward mobility — the animating idea of the American dream — has quietly become a statistical improbability for those born without advantage.
The American political system is fracturing along the fault lines of this economic disappointment.
When people work hard, play by the rules, and still fall behind — when they feel the rules are rigged and the system is running for someone else's benefit — they stop trusting our democratic institutions and start looking for someone to blame.
Division follows. Demagogues rise.
And the democratic experiment our Founders built with such care begins, slowly, to hollow out from within.
None of this is the product of bad character, weak values, or the failure of the American spirit.
Our Founders, however, would recognize the problem. And they’d immediately know what to do about it.
It’s a failure of architecture.
The same wisdom and discipline that gave us the Constitution — rigorous, unsentimental rules, designed to outlast the people who crafted them — has never been fully applied to the economic system that now governs the daily conditions of American life more powerfully than any government ever could.
We can be the generation to change that.
Like our Founders before us, we can study the evidence. We can argue about what makes for good design. And then we can act, by building a system of free enterprise with fundamentally better rules.
This is what this book is about.
We are the direct beneficiaries of extraordinary vision, courage, and ultimate sacrifice. That legacy expects something of us. Every freedom we exercise, every durable institution we rely on, every human right we take for granted — was built and paid for, in blood, and struggle, by others. We live inside this incredible blessing and extraordinary privilege.
How, then, are we to honor those who gave us so much?
How shall we pay off this debt?
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Above all, this book is an invitation.
It is not about starting something new.
It is about finishing something old — the work our Founders gave us.
Let’s take the most powerful engine of prosperity ever placed in human hands — free enterprise — and give it the enduring architecture it needs so that it consistently produces the outcomes our children, and our children's children, deserve.
Rules that are fair. Rules that are durable. Rules designed for the betterment of the many, not the few. Rules that provide prosperity not for the next quarter, or the next year, but for the next century — and the one after that.
And then set it free to do what it alone can do: take us to our more perfect union.
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[1] For context, total US private investment today is approximately $4T annually. This one fund and its descendants collectively reinvest more than that in 2026. Every year.
[2] The projections in this thought experiment assume a 12% annual return — modestly above the S&P's long-run, 20th-century return benchmark of ~ 10.5%. The 2% premium is defensible on structural grounds: the forward fund operates as a tax-exempt foundation (like Newman’s Own), meaning reinvested profits compound without the 21% corporate tax drag that C-corporations bear. There are reasons to think this estimate is conservative. Additional structural advantages of the “forward business model” (see Chap 6: Why the Forward Model Will Win) include the elimination of shareholder extraction, a profit-sharing workforce with greater motivation, higher customer loyalty, and a permanent reinvestment mandate that prevents drift toward financial engineering. The effective asset growth rate is 6% annually after sharing with workers. The fund's requirement to split (after quadrupling) rule is a governance mechanism only — it divides the fund into independent units to prevent concentration of power but does not affect aggregate compounding math. It does, however, provide for long-term durability as any single fund can fail while the others continue. This is a thought experiment, not a forecast. Its purpose is to illustrate the scale effects of long-horizon reinvestment and recurring worker sharing under stable rules, governed by an architecture designed to last. An independently verifiable spreadsheet model of the projected growth is available at www.forward-economics.com.