Comment by Banthum

"if we can get the benefits of capitalism when most equity is owned by a passive investment fund like an index tracker, then what's the problem with the state owning all the equity in that tracker, and redistributing the proceeds to the population?"

This is the "fixed amount of wealth" fallacy, wherein the author regards the amount of wealth in the society as an invariant, rather than a variable.

The only reason that equity exists at all is because of the efforts of people who created it (and thus own it). Without those efforts, there would be no equity for the state to own. Without a promise of owning that equity, nobody has a reason to make those efforts. Thus, any state policy to "own all the equity" also removes the reason that equity exists in the first place.

And now you're in the Soviet Union; enjoy eating your two bananas every year, because nobody has a reason to bring you any more.