Years after Tom Paine helped spark the American Revolution with his essay Common Sense, he advised the revolutionary government of France to cement its newly won political equality with economic citizenship. The means to true commonwealth, he wrote, was universal stakeholding. Paine's plan: Grant every youth turning 21 a cash grant of 15 pounds sterling to get started in life; later, at age 50, every surviving worker would receive an annual retirement allowance.

No less revolutionary is the proposal today by Bruce Ackerman and Anne Alstott to promote equal opportunity by giving every American, at age 21, an $80,000 grant to spend as he or she sees fit. The amount reflects the average cost of a private college education, which Ackerman and Alstott -- both professors at Yale Law School -- clearly hope will expand access to higher education.

Yet this is no mere college scholarship program. The authors expect that the primary beneficiaries of these start-up grants would be the millions of "forgotten Americans" who decide that even a two-year college is not for them.

More than anything, this book is a battle cry for the rapidly receding American value of equal opportunity -- not equal outcomes, but a level playing field to compete in the game of life. The authors note that the 25% of today's 20-somethings who get their tickets punched with a B.A. or professional degree are, by and large, born on second base.

Income and wealth inequality is rising rapidly as the New Economy rewards the sort of education, skills and connections that accrue disproportionately to those born on the right side of the tracks.

Giving Joe Six-Pack a stake

"Rich kids get a big head start in life," they write. While only 60% of high school grads from low-income families go on for any higher education, 93% from high-income households go on for at least some college. This already-privileged group is then showered with public grants and subsidized loans -- not just at university, but later as owners of the most expensive homes (since mortgage interest is tax deductible) and as retirees (since the top 20% of earners receive two-thirds of the tax incentives for pension saving).

"Joe Six-Pack is every bit as much of an American as Joe College," Ackerman and Alstott write. "And for the first time, his claim to equal citizenship will be treated with genuine respect."

It is tempting to dismiss this book because the precise proposal is politically unrealistic. Not only is the cost enormous ($255 billion a year, as much as the nation spends on public education), but the authors would pay for it with a 2% annual wealth tax on the 40% of Americans who actually have a non-trivial net worth. Decades hence, the authors propose, today's young stakeholders would repay their grants through a kind of death tax, turning the program into a sort of self-sustaining, inter-generational loan fund.

The reason that the book is important despite its improbability is that it articulates the values underlying a reform concept showing signs of support across the political spectrum. Consider the "Kids Save" legislation introduced in Congress by fiscally conservative Sen. Bob Kerrey (D-NE). Kerrey's plan has the government setting up a $1,000 savings account for every newborn and adding another $500 a year until age 5. Invested wisely, this initial $2,500 turns into $20,000 in time to pay for college, vocational training or the down payment on a first home.

Or consider President Clinton's proposal to add a private savings component to Social Security by creating Universal Savings Accounts (USAs) for every worker. Families with average and lower incomes -- most of whom do not benefit at all from today's $90 billion-a-year tax subsidy for employer-sponsored pension funds -- would receive a $600 annual credit, plus a $1-for-$1 match on their own voluntary deposits up to $700.

Think of USAs as a public 401(k) for those who do not get one at work. A couple that capitalized on that saving incentive for 40 years would have a $250,000 nest egg (in today's dollars) on top of today's modest-but-guaranteed Social Security benefit.

A third example, focused on empowering the working poor, is a pilot program of Individual Development Accounts pioneered by the San Francisco-based Corporation for Enterprise Development.

From the Homestead Act to the GI Bill

Making opportunity more equal through public stakeholding has historical precedent as well. Nothing is more American than the Homestead Act of 1863, which gave 160 acres free to any citizen who staked a claim in the Western territories and toughed it out for five years. Similarly, in the 1950s the GI Bill helped a generation of veterans get a college education. In Alaska, Republican political leaders designed a stakeholding scheme that distributes about $1,000 each year to every citizen from North Slope oil royalties.

Ironically, these precedents point up the most fatal flaw in the Ackerman-Alstott version of universal development accounts. When public wealth is redistributed -- and especially when the revenues are collected through progressive taxation -- it is essential that the money is spent prudently and serves (at least generally) the public interest. The problem is that Ackerman and Alstott would, as a matter of principle, give youth the freedom to spend their $80,000 for anything, from starting a business to buying a BMW.

The authors address the risk of "stakeblowing" -- that young people might, wittingly or not, waste their stakes. But with a sort of ill-fitting libertarian logic, they dismiss this concern as basically none of the government's business. Stakeblowing will be minimized by societal pressure on youth to shepherd their stakes, they argue.

More fundamentally, they suggest that the grant should be unconditional because it represents a share in a common patrimony -- a sort of advance pay-off for young people's acquiescence in a political economy that is managed to maximize total wealth, despite the ill effects of grossly unequal distribution.

The Founding Fathers saw such an important link between property and responsible citizenship that they initially allowed only male "freeholders" to vote. While today citizenship is far more inclusive, James Madison's notion that "economic citizenship" is tied to a tangible stake in society must surely weaken as inequality widens. That Bill Gates has a net worth greater than the total assets owned by 45% of the American population is only the most startling aspect of this growing gap.

While Ackerman and Alstott may need to trim the sails on their ambitious flagship proposal, they are certainly headed in the right direction. They make a convincing case that unequal opportunity is a growing problem in need of new ideas that replace the handouts of discredited welfare programs with the personal empowerment of widespread asset accumulation and access to resources to invest in lifelong learning.