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less capital available, the return on capital may be higher

than it otherwise would be.14

Privatizing Social Security would enable low-wage

workers to participate in the wealth-creating mechanisms of

saving and investment.  If they had the opportunity to save

and invest 12.4 percent of their income--the amount now

taken by Social Security--low-wage workers would be able to

accumulate substantial nest eggs.

That sort of worker empowerment and opportunity for the

poor has brought many liberal Democrats to support the

privatization of Social Security.  As Sen. Robert Kerrey (D-

Neb.) has pointed out, privatizing Social Security is as

much about "generating wealth" as it is about the system's

financing.  Kerrey says that "every American [should have] a

chance to own part of his country."15

Sam Beard, a former aide to Sen. Robert Kennedy (D-

Mass.), calls this process the "democratization of capital"

and points out that privatizing Social Security will give

every American a real stake in our economic future.  Beard

also notes that the benefits are psychological as well as

tangible, emphasizing that "personal participation will make

savings and economic education part of everyone's day-to-day

experience. . . . The benefits of this knowledge for indi-

viduals and families will include increased economic capa-

bility, a confident sense of the future, and more power to

make fundamental choices that effect their lives."16

As a result of the enormous accumulation of wealth by

the working class through their retirement accounts, the

socialist dream of workers' owning the nation's businesses

and industries would be effectively achieved.  Since workers

would own shares in the companies they worked for, they

could have a greater voice in corporate governance and

management decisions.

Overall, the distribution of wealth in the United

States would likely be more equal than it is today.  The

change in distribution would occur, not through the counter-

productive and illegitimate redistribution of existing

wealth, but through the creation of new wealth in workers'

retirement accounts.  In fact, Harvard economist Martin

Feldstein has estimated that if Social Security were privat-

ized, the concentration of wealth in America would be re-

duced by half.17

As the division between labor and capital dissolved as

the nation's workers became capitalists, the social and