Louis O. Kelso was a lawyer and economic thinker who sought to find a way
to preserve capitalism from the competition of communism as an alternative
within the context of the early Cold War. His non-conformist "capitalism"
might be compared to the peoples' capitalism ideas of
G. K. Chesterton in which ownership is distributed to as many people as
possible within the economy. Kelso developed the idea of
Binary Economics to explain the need for expanded capital ownership in
light of industrial production and the dominance of capital instead of
labor. In 1956 Louis Kelso invented the Employee Stock Ownership Plan (ESOP)
to put his ideas into practice. In 1958 he collaborated with the philosopher
Mortimer Adler to write The Capitalist Manifesto that is considered the
primary source of his economic theories.
Publications
BOOKS
The Capitalist Manifesto, by Louis O. Kelso and Mortimer J. Adler,
Random House, New York: 1958; reprinted Greenwood Press, Westport,
Connecticut: 1975. Also published in French, Spanish, Greek and Japanese.
The New Capitalists, by Louis O. Kelso and Mortimer J. Adler,
Random House, New York: 1961; reprinted Greenwood Press, Westport,
Connecticut: 1975. Also published in Japanese.
Two-Factor Theory: The Economics of Reality, by Louis O. Kelso and
Patricia Hetter, Random House, New York: 1967; paperback edition, Vintage
Books: 1968. (Originally published under the title How to Turn 80 Million
Workers into Capitalists on Borrowed Money.) Also published in Spanish and
German.
Democracy and Economic Power: Extending the ESOP Revolution Through
Binary Economics, by Louis O. Kelso and Patricia Hetter Kelso, Ballinger
Publishing Co., Cambridge, Massachusetts: 1986; reprinted by University
Press of America, Lanham, Maryland: 1991. Also available in Russian and
Chinese.
WRITINGS BY LOUIS O. KELSO
Karl Marx: The Almost Capitalist, American Bar Association Journal,
March, 1957.
Corporate Benevolence or Welfare Redistribution?, The Business
Lawyer, January, 1960.
Labor's Great Mistake: The Struggle for the Toil State, American
Bar Association Journal, February, 1960.
Welfare State - American Style, Challenge, The Magazine of Economic
Affairs, New York University, October, 1963.
The Case for the 100% Dividend Payout, Trends (published by
Georgeson & Co.), New York, December, 1963.
Poverty and Profits, by Hostetler, Kelso, Long, Oates, the Editors,
Harvard Business Review, September-October, 1964.
Beyond Full Employment, Title News (the Journal of the American
Land Title Association), November, 1964.
Cooperatives and the Economic Power to Consume, The Cooperative
Accountant (published by the National Society of Accountants for
Cooperatives), Winter, 1964.
Why Not Featherbedding?, Challenge, September-October 1966.
(Reprinted in American Controversy: Readings and Rhetoric, by Paul K.
Dempsey and Ronald E. McFarland, Scott, Foresman and Company, Glenview,
Illinois: 1968.)
The Economic Foundation of Freedom, The American Prospect: Insights
into Our Next 100 Years, Houghton Mifflin Company, Boston: 1977.
Labor's Untapped Wealth: An Address by Louis Kelso, Air Line Pilot,
October, 1984.
WRITINGS BY LOUIS O. KELSO AND PATRICIA HETTER KELSO
Uprooting World Poverty: A Job for Business, Business Horizons,
Fall, 1964. (Reprinted in Mercurio, Anno VIII, No. 8, Rome, Italy, August,
1965; Far Eastern Economic Review, Vol. L, No. 1, Hong Kong, October,
1965. Winner of the First Place 1964 McKinsey Award for Significant
Business Writing.)
Poverty's Other Exit, North Dakota Law Review, January, 1965.
Equality of Economic Opportunity Through Capital Ownership, Social
Policies for America in the Seventies, edited by Robert Theobald,
Doubleday & Co., New York: 1968. (Excerpts from this essay reprinted in
Current, April, 1968.)
Reparations and the Churches, Business Horizons, December, 1969.
Invisible Violence of Corporate Finance, The Washington Post, June
18, 1972.
Man Without Property, Business and Society Review, Summer, 1972.
Corporate Social Responsibility Without Corporate Suicide,
Challenge, July-August, 1973.
Employee Stock Ownership Plan, Business & Government Insider
Newsletter, July 30, August 6 and August 13, 1973.
Employee Stock Ownership Plans: A Micro-Application of
Macro-Economic Theory, The American University Law Review, Spring, 1977.
The Greatest Financial Planning Tool of All . . . Could ESOP Save
General Motors?, The Financial Planner, November, 1981.
Sychophantasy in Economics: A Review of George Gilder's Wealth and
Poverty, The Great Ideas Today, Encyclopśdia Britannica, Inc., Chicago:
1982.
The Right to Be Productive, The Financial Planner, August and
September, 1982.
Tax Reform Is Not the Answer, Chief Executive, Spring, 1983.
How We Can Achieve Lifetime Employment, Chief Executive, Autumn,
1983.
Damning Binary Economics With Faint Praise, Workplace Democracy,
Summer, 1987.
Leveraged Buyouts Good and Bad, Management Review, November, 1987.
The Great Savings Snafu, Business and Society Review, Winter, 1988.
Why Owner-Workers Are Winners, The New York Times, January 29,
1989.
Why I Invented the ESOP LBO, Leaders, October/November/December,
1989.
Don't Meddle With ESOPs, The Journal of Commerce, October 2, 1989.
Looking in a Marxist Mirror, The Journal of Commerce, January 11,
1991.
ALSO RECOMMENDED - BOOKS
Curing World Poverty: The New Role of Property, edited by John H.
Miller, C.S.C., S.T.D., Social Justice Review, St. Louis: 1994.
Binary Economics: The New Paradigm, by Robert Ashford and Rodney
Shakespeare, University Press of America, Lanham, Maryland: 1999.
ALSO RECOMMENDED - WRITINGS
The ESOP According to Kelso, by Stuart Nixon, Air Line Pilot,
October, 1984.
The World According to Kelso, by Steven Hayward, Inland Business,
April, 1987.
Louis Kelso, Capitalist, Bill Moyers: A World of Ideas II, edited
by Andie Tucher, Doubleday, New York: 1990.
The Binary Economics of Louis Kelso: The Promise of Universal
Capitalism, by Robert H. A. Ashford, Rutgers Law Journal, Vol. 22, No. 1,
Fall, 1990.
Louis Kelso's Binary Economy, by Robert Ashford, The Journal of
Socio-Economics, Vol. 25, No. 1, 1996.
Binary Economic Modes for the Privatization of Public Assets, by
Jerry N. Gauche, The Journal of Socio-Economics, Vol. 27, No. 3, 1998.
A New Market Paradigm for Sustainable Growth: Financing Broader
Capital Ownership with Louis Kelso's Binary Economics, by Robert Ashford,
Praxis: The Fletcher Journal of Development Studies, Vol. XIV, The
Fletcher School of Law and Diplomacy, Global Development and Environment
Institute, Tufts University, Medford, Massachusetts: 1998.
The Theory of Productiveness: A Microeconomic and Macroeconomic
Analysis of Binary Growth and Output in the Kelso System, by Stephen V.
Kane, The Journal of Socio-Economics, Vol. 29, No. 6, 2000.
The Ultimate Management Team, by Chris Bayers, WIRED, January,
2002.
Employee Ownership and Corporate Performance: A Comprehensive
Review of the Evidence, The Journal of Employee Ownership Law and Finance,
Vol. 14, No. 1, National Center for Employee Ownership (NCEO), Oakland,
California: 2002.
Binary Economics, Fiduciary Duties, and Corporate Social
Responsibility: Comprehending Corporate Wealth Maximization and
Distribution for Stockholders, Stakeholders, and Society, by Robert
Ashford, Tulane Law Review, Vol. 76, No. 5-6, June, 2002.
Quote
"The Roman arena was technically a level playing field. But on one
side were the lions with all the weapons, and on the other the Christians
with all the blood. That's not a level playing field. That's a slaughter.
And so is putting people into the economy without equipping them with
capital, while equipping a tiny handful of people with hundreds and
thousands of times more than they can use."
--Louis O. Kelso in
Bill Moyers: A World of Ideas, 1990)
"The basic
moral problem that faces man as he moves into the age of automation, the
age of accelerating conquest of nature, is whether he is really fit to
live in an industrial society; whether his institutions will adjust
rapidly enough; whether he will rivet himself with an absurd institution
like full employment in the economic order when it is not only unnecessary
but unadministratable in anything but a slave society; whether freed from
the necessity to devote his brain and brawn to the production of goods and
services, he can address himself to the work of civilization itself."
(Louis O. Kelso, 1964)
