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WEDNESDAY DECEMBER 1, 2010

                                                       GUEST

                                                                           (Originally aired: (July 1983)

                                            LOUIS O. KELSO 

                                                          (1913-1991 R.I.P.)

 

                       Lawyer / Economic Theorist

                     Author (With Mortimer Adler):

                               

                      "The Capitalist Manifesto (1958)"

                                 Investment Banker

       

Louis O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to production in the American economy of Labor (Physical and Intellectual) and Capital over time assuming reasonably competitive markets.  So ingrained is the “ethic” of the “Labor Theory of Value” that they thought it best to refer to Capital Owners as “Capital Workers” in keeping with their understanding that Capital instruments do “Work” - as surely as the most diligent human surrogate worker – and that indeed the observable trend is for Capital Instruments to do ever more of the Worlds “Work”.  The reflexive prevalent attitude of equating “Economic” man with Essential Human Values including the whole vast array of values around the “Work Ethic” all contribute to camouflage and maintain the fundamental miss-match between the way goods and services are produced and distributed and particularly their trends projected into the future. Cybernetic contributions (now almost exponential) are only adding to the much longer Historical trend. Represents US Economy but applies to World trending.  HHC    

--------------------------------------------------------------------------------------------------

                   

Chart of concentration of capital ownership in the U.S. over time.  The same general pattern applies to virtually all economies of and the World Economy as a whole – Plutocratic ownership and control of the real means of production.  With “The Labor Theory of Value” it only worsens.  HHC - Below Quotes @ www.kelsoinstitute.org

"Conventional wisdom says there is only one way to earn a living, and that's to work. Conventional wisdom effectively treats

capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes

 it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the

machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, 'Voila! The productivity

of the labor has gone up 900 percent!' I say 'hogwash.' All you've done is wipe out 90 percent of the jobs, and even the remaining

ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital

ownership  into the hands of the people who now don't have it."
(Louis O. Kelso, Journal Asset Based Finance, 1982)

 

"The trouble with today's techniques of finance is that they're designed to make the rich richer.  None are designed to make the

 poor richer. That's why the poor are poor. Because they're not rich."
(Louis O. Kelso, San Francisco Examiner & Chronicle, 1978)

 

"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, Bill Moyers: A World of Ideas, 1990)

-------------------------------------------------------------------------------------------------   

                    Louis O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to production in the

American economy of Labor (Physical and Intellectual) and Capital over time assuming reasonably competitive

markets.  So ingrained is the “ethic” of the “Labor Theory of Value” that they thought it best to refer to Capital

Owners as “Capital Workers” in keeping with their understanding that Capital instruments do “Work” - as surely

as the most diligent human surrogate worker – and that indeed the observable trend is for Capital Instruments

to do ever more of the Worlds “Work”.  The reflexive prevalent attitude of equating “Economic” man with

Essential Human Values including the whole vast array of values around the “Work Ethic” all contribute to

camouflage and maintain the fundamental miss-match between the way goods and services are produced

and distributed and particularly their trends projected into the future. Cybernetic contributions (now almost

exponential) are only adding to the much longer Historical trend. Represents US Economy but applies to

World trending.  HHC

---------------------------------------------------------------------------------------------------------------------

Chart of concentration of capital ownership in the U.S. over time.  The same general pattern applies to

virtually all economies of and the World Economy as a whole – Plutocratic ownership and control of the

real means of production.  With “The Labor Theory of Value” it only worsens.  HHC - Below Quotes @

www.kelsoinstitute.org

"Conventional wisdom says there is only one way to earn a living, and that's to work. Conventional wisdom effectively

treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about

labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design

and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom

says, 'Voila! The productivity of the labor has gone up 900 percent!' I say 'hogwash.' All you've done is wipe out 90

percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the

economy needs is a way of legitimately getting capital ownership  into the hands of the people who now don't have it."
(Louis O. Kelso, Journal Asset Based Finance, 1982)

 

"The trouble with today's techniques of finance is that they're designed to make the rich richer.  None are designed

to make the poor richer. That's why the poor are poor. Because they're not rich."
(Louis O. Kelso, San Francisco Examiner & Chronicle, 1978)

 

"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, Bill Moyers: A World of Ideas, 1990)

---------------------------------------------------------------------------------------------------------------------

Charles Handy citing the 1930 reference by Lord John Maynard Keynes projecting “Technological Unemployment”

for the future world of his grandchildren.  That would be right about now as technological advancement not only

provides the possible means for Humanity’s collective “Transcendence of Scarcity” but poses the problem to

progressives by their commitment (along with virtually all economic theorizing) to the “Labor Theory of Value”

currently informing virtually all National Economies on Planet Earth &  the International System as well.    HHC 

---------------------------------------------------------------------------------------------------------------------

  Originator of "Binary Economics" the Systems Understanding Of the National and World Economic Order as Both are Being Forced to Finally Transcend Their Historical Commitment to "The Labor Theory of Value" Which The Future Requires in View of the Looming Reality of a Jobless Recovery Devoid of Effective Ability to Distribute Demand and Buying Power to the Long Suffering Masses of The Entire World.

------------------------------------------------------------------------------------

The program can be viewed in its entirety by clicking the you tube link below:

 http://www.youtube.com/watch?v=o0mWfrj1H6k - LOUIS KELSO Air date: July 1983

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More about: LOUIS O. KELSO

About the Kelso Paradigm
  Questions and Answers
  Quotes
Lectures
Important Dates
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    in English
    in Russian
    en Español
Literary Legacy
Contact Us  
"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)
------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------

About the Kelso Paradigm
Questions and Answers
Quotes
Lectures
Important Dates
 
Publications
Bibliography
Book Reviews
Papers
Downloadable Books
    in English
    in Russian
    en Español
Literary Legacy
 

 

 

 

What are the financing tools of binary economics?

ESOP: Employee Stock Ownership Plan. The ESOP is designed to build capital ownership into employees of a business in the course of efficiently financing its growth or other worthwhile corporate objectives, without touching employee paychecks or savings. As to employees, the ESOP is that constitutionally-mandated missing link that gives them access to credit to buy the employer's capital stock and, without personal risk or liability, to pay for it from the pre-tax earnings of the assets underlying that stock. In other words, equalizing their access to capital credit with that of the already rich.

MUCOP: Mutual Capital Ownership Plan. This financing method is intended to provide pooled ESOP financing for a number of corporations while building diversified portfolios of their stocks individually for their employees.

CSOP: Consumer Stock Ownership Plan. This technique is intended for use by public utilities, banks, insurance companies, and other businesses where long-term relationships between the producer and its customers are the rule. Through the intelligent use of credit, it builds capital ownership for customers while providing unlimited low-cost financing for growth of the corporation, thus raising the power of the consumers to pay for their purchases of goods and services while raising the power of the corporation to produce goods and services. It would normally be used in conjunction with an ESOP for employees.

GSOP: General Stock Ownership Plan. The GSOP is designed to build capital ownership into politically designated classes of consumers within the jurisdiction of the authorizing government - state, local or federal.

ICOP: Individual Capital Ownership Plan. A financing device intended to create viable capital estates for selected categories of individuals while opening broad markets for equity financing by corporations.

RECOP: Residential Capital Ownership Plan. This financing plan, in combination with commercially insured credit financing, would enable home buyers to purchase homes at less than 25 percent of the out-of-pocket principal and interest cost of similar transactions today, by having their acquisitions treated by tax and other relevant laws as capital assets, rather than as consumer items as at present

COMCOP: Commercial Capital Ownership Plan. Ownership of rental structures, such as office and apartment buildings, factories, mines, railroads, hotels, resorts, etc., is a major source of capital cash income. Today such structures and real estate generally are owned by the excessively wealthy (whose resulting income is thereby sterilized for purposes of the consumer economy and denied to those who could use it if the financing had been COMCOP structured), who use such acquisitions not only to satisfy their antisocial greed, but to wipe out their income taxes. COMCOP would enable commercial structure ownership legitimately to be spread over large numbers of people where it can raise their power to produce the incomes they need to make them powerful and self-supporting consumers, maintain their lifestyles, and to diversify their holdings in businesses in which they become employed as capital workers.

PUBCOP: Public Capital Ownership Plan. This plan is designed to provide low-cost financing for capital instruments used by public bodies of all types - office buildings, streets and sidewalks, parks, street lighting, schools, universities, subways, waterworks, harbors, etc. It permits broad individual ownership, through facilities corporations, by great numbers of people, while providing low-cost capital facilities to be leased at market rates to cities and other municipal corporations, states, the federal government, and other public bodies. PUBCOP is another tool in the arsenal of binary economics to assure that each individual can become employed as a capital worker and that governments do not acquire economic power that should be diffused throughout the citizenry. PUBCOP financing would employ the dual functions of binary financing devices. It would be a major means of eliminating the cost of wasteful, inefficient, and inadequate public employee pensions while providing much greater economic security and incomes, both before and after retirement, to public employees and others.

All of these plans are discussed and diagramed in more detail in Democracy and Economic Power: Extending the ESOP Revolution through Binary Economics.


 

 

 


Unless otherwise noted, all material contained in this website Copyright © 2000 by Patricia Hetter Kelso. All rights reserved, domestic and international. Articles by guest authors are the product and property of the individual author. Contents may be downloaded, printed or reproduced only for non-commercial, non-profit, educational purposes.

 

 

------------------------------------------------------------------------------------------------

About the Kelso Paradigm
Questions and Answers
Quotes
Lectures
Important Dates
 
Publications
Bibliography
Book Reviews
Papers
Downloadable Books
    in English
    in Russian
    en Español
Literary Legacy
 

 


Download Now »

© Copyright, 2000, by Patricia H. Kelso.

All rights reserved under International and Pan American Copyright Conventions.

Library of Congress Catalog Card Number:58-5268

 


Download Now »

© Copyright, 2000, by Patricia H. Kelso.

All rights reserved under International and Pan American Copyright Conventions.

Library of Congress Catalog Card Number:61-6562

 

 

 

 

 

 

 

 

Louis Kelso's books, The Capitalist Manifesto and The New Capitalists, are now available to download in PDF form. You will need the Adobe Acrobat Reader to view and print them.

Go to Download Page »

The Capitalist Manifesto and The New Capitalists together comprise the first public statement of Louis Kelso's seminal contribution to political economics - a thesis Mortimer J. Adler, the co-author, declared "the first clear and systematic statement of the idea of capitalism that has ever been presented to the world."

Despite its Cold War title, The Capitalist Manifesto of 1958 is neither a defense of traditional capitalism nor a polemical call to revolution in the style of The Communist Manifesto of 1848. It is a theoretical blueprint of the physical and institutional structure of the western private property, free market system identified by Adam Smith and the classical economists; repudiated by Karl Marx and the socialists,
and pragmatically compromised by J. Maynard Keynes. It presents specific proposals for correcting and perfecting the present system in the line of, and in the light of, its own logic and principles. It invites men and women of good will to set to work on the task of building an economically just and generally affluent society on the foundation of a Capitalism redeemed of its historical flaws.

Louis Kelso's vision of Capitalism was, in Dr. Adler's description, "the economically free and classless society which supports political democracy and which, above all, helps political democracy to preserve the institutions of a free society." To Dr. Adler's mind, this conception was "the most revolutionary idea of the century."

Ten years after his death Louis Kelso is beginning to be recognized as the originator of a genuinely new paradigm in political economics. Although introduced more than forty years ago, its concepts are still virgin terrain because, despite their osmotic influence in the United States, western and eastern Europe, Russia and now China, relatively few people are familiar with them.

Make no mistake, Louis Kelso's ideas are just as controversial today as when he and Dr. Adler introduced them in 1958. The Austrian economist Schumpeter famously defined Capitalism as "creative destruction." That is also the effect of a new paradigm on its parent discipline. Louis Kelso's new paradigm targets, first of all, the conventional premises of economics. But since those premises are also embedded in western political, economic and business institutions, particularly the institutions of finance, Louis Kelso's binary view exposes the fallacies at their heart as well.

In showing the obsolete ideas at the root of key institutions - the institutions that concentrate wealth and frustrate the operating logic of the free market - Louis Kelso changes the terms of the age-old debate between Conservatives and Liberals and Capital and Labor. And in doing that, he moves to new and higher ground the ideological issues that have made western society a battleground ever since the Industrial Revolution. To understand Louis Kelso's binary paradigm is to look at the economic and political world with new eyes, from an exhilarating new perspective. The social implications of this new view are revolutionary in the best sense of that word.

Louis Kelso was fascinated by technology. He began his investigation of the Great Depression with painstaking research on the effects of technological change on occupations, industries and the macro-economy. While still in law school, he published a monograph on how the computer, hardly invented then, would revolutionize the practice of law. He eagerly looked forward to the day when the computer would make instantaneous world-wide communication possible. Unfortunately he died a few years before the Internet could make this a reality for him.

Now as we enter the new century and the new millennium, Louis Kelso's binary economic paradigm is even more important than when first introduced. The demise of the Soviet Union has left the western market economy free to dominate the world on its own terms. Understanding market forces and learning how to exploit them to build stable industrial democracies that are also Good Societies for everyone who lives in them is our most urgent task. Louis Kelso has given us the tools - both conceptual and practical - to accomplish this task. He has also inspired us with his generous vision of the Good Society that advanced technology still promises despite centuries of misunderstanding and misuse.

In gratitude for the life and work of Louis Kelso, and also in honor of his co-author, the late Mortimer J. Adler, whose encouragement and collaboration made these books possible, the Kelso Institute takes great pleasure in electronically publishing both The Capitalist Manifesto and The New Capitalists. In so doing, we fulfill Louis Kelso's dearest wish in life - that his ideas be made accessible to those who will use them to build institutions that advance civilization and support individuals in realizing their highest potential.

Go to Download Page »


Unless otherwise noted, all material contained in this website Copyright © 2000 by Patricia Hetter Kelso. All rights reserved, domestic and international. Articles by guest authors are the product and property of the individual author. Contents may be downloaded, printed or reproduced only for non-commercial, non-profit, educational purposes.

 

---------------------------------------------------------------------------------------------

From Wikipedia, the free encyclopedia

 

Louis O. Kelso (1913-1991) 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.

 

Louis O. Kelso

From Wikipedia, the free encyclopedia

 

Louis O. Kelso (1913-1991) 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. Kelso and Adler followed this book with The New Capitalists (Random House, New York: 1961). Both books are readable online from the Kelso Institute.

Louis O. Kelso had significant discussions concerning a Basic Income Guarantee with Russell B. Long and Daniel Patrick Moynihan.[1]

Kelso has inspired many economic thinkers including James S. Albus, Robert Ashford, and Norman Kurland begin_of_the_skype_highlighting     end_of_the_skype_highlighting.

[edit] Publications

  • The distributive dynamics of capitalism by Louis O Kelso, self-published; 2nd edition (1956)
  • 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. ISBN 0-8371-8210-7
  • The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings, by Louis O. Kelso and Mortimer J. Adler, Random House, New York: 1961; reprinted Greenwood Press, Westport, Connecticut: 1975. Also published in Japanese. ISBN 0-8371-8211-5
  • 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. ISBN 0-8191-7909-4

WRITINGS BY LOUIS O. KELSO

  • Karl Marx: The Almost Capitalist, American Bar Association Journal, March, 1957. [2]
  • 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, Encyclopœdia 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.

[edit] 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)

[edit] External links

---------------------------------------------------------------------------------------------

       

Louis O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to production in the American economy of Labor (Physical and Intellectual) and Capital over time assuming reasonably competitive markets.  So ingrained is the “ethic” of the “Labor Theory of Value” that they thought it best to refer to Capital Owners as “Capital Workers” in keeping with their understanding that Capital instruments do “Work” - as surely as the most diligent human surrogate worker – and that indeed the observable trend is for Capital Instruments to do ever more of the Worlds “Work”.  The reflexive prevalent attitude of equating “Economic” man with Essential Human Values including the whole vast array of values around the “Work Ethic” all contribute to camouflage and maintain the fundamental miss-match between the way goods and services are produced and distributed and particularly their trends projected into the future. Cybernetic contributions (now almost exponential) are only adding to the much longer Historical trend. Represents US Economy but applies to World trending.  HHC    

--------------------------------------------------------------------------------------------------

                   

Chart of concentration of capital ownership in the U.S. over time.  The same general pattern applies to virtually all economies of and the World Economy as a whole – Plutocratic ownership and control of the real means of production.  With “The Labor Theory of Value” it only worsens.  HHC - Below Quotes @ www.kelsoinstitute.org

"Conventional wisdom says there is only one way to earn a living, and that's to work. Conventional wisdom effectively treats

capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes

 it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the

machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, 'Voila! The productivity

of the labor has gone up 900 percent!' I say 'hogwash.' All you've done is wipe out 90 percent of the jobs, and even the remaining

ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital

ownership  into the hands of the people who now don't have it."
(Louis O. Kelso, Journal Asset Based Finance, 1982)

 

"The trouble with today's techniques of finance is that they're designed to make the rich richer.  None are designed to make the

 poor richer. That's why the poor are poor. Because they're not rich."
(Louis O. Kelso, San Francisco Examiner & Chronicle, 1978)

 

"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, Bill Moyers: A World of Ideas, 1990)

-------------------------------------------------------------------------------------------------   

                    Louis O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to production in the

American economy of Labor (Physical and Intellectual) and Capital over time assuming reasonably competitive

markets.  So ingrained is the “ethic” of the “Labor Theory of Value” that they thought it best to refer to Capital

Owners as “Capital Workers” in keeping with their understanding that Capital instruments do “Work” - as surely

as the most diligent human surrogate worker – and that indeed the observable trend is for Capital Instruments

to do ever more of the Worlds “Work”.  The reflexive prevalent attitude of equating “Economic” man with

Essential Human Values including the whole vast array of values around the “Work Ethic” all contribute to

camouflage and maintain the fundamental miss-match between the way goods and services are produced

and distributed and particularly their trends projected into the future. Cybernetic contributions (now almost

exponential) are only adding to the much longer Historical trend. Represents US Economy but applies to

World trending.  HHC

---------------------------------------------------------------------------------------------------------------------

Chart of concentration of capital ownership in the U.S. over time.  The same general pattern applies to

virtually all economies of and the World Economy as a whole – Plutocratic ownership and control of the

real means of production.  With “The Labor Theory of Value” it only worsens.  HHC - Below Quotes @

www.kelsoinstitute.org

"Conventional wisdom says there is only one way to earn a living, and that's to work. Conventional wisdom effectively

treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about

labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design

and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom

says, 'Voila! The productivity of the labor has gone up 900 percent!' I say 'hogwash.' All you've done is wipe out 90

percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the

economy needs is a way of legitimately getting capital ownership  into the hands of the people who now don't have it."
(Louis O. Kelso, Journal Asset Based Finance, 1982)

 

"The trouble with today's techniques of finance is that they're designed to make the rich richer.  None are designed

to make the poor richer. That's why the poor are poor. Because they're not rich."
(Louis O. Kelso, San Francisco Examiner & Chronicle, 1978)

 

"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, Bill Moyers: A World of Ideas, 1990)

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Charles Handy citing the 1930 reference by Lord John Maynard Keynes projecting “Technological Unemployment”

for the future world of his grandchildren.  That would be right about now as technological advancement not only

provides the possible means for Humanity’s collective “Transcendence of Scarcity” but poses the problem to

progressives by their commitment (along with virtually all economic theorizing) to the “Labor Theory of Value”

currently informing virtually all National Economies on Planet Earth &  the International System as well.    HHC 

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Humanity's  Current "Fork in the Road"          

              

After 200,000 years of biological existence Humanity has arrived at a crucial juncture.  On the one hand we possess

weapons, which can obliterate the Species.  On the other - an "Obverse Scenario" might well reveal an unprecedented

capability for providing an ecologically sustainable and increasingly improved level of   "Life Support" for all of Humanity. 

Two large ideas seem to have been "missed" by the World Intellectual Community, which are worthy of consideration in

the quest for the Hearts and Minds and perhaps the very Survival of the People of the Planet:    

 

1.      Humanity's technologically augmented productiveness has offered the Capability to provide "life support"

to increasingly greater percentages of the World population through time.  Serious investigation of the

proposition could provide a measurement of Mankind's store of "Proven" Life Support in a manner 

similar to that used for assessing "Proven" Oil Reserves - a measurement of humanity's  "Proven 'Life

Support Capability.”  Careful measurement would most likely demonstrate that in terms of our collective

Capability,  and within  reasonable,  if debatable,  agreed to definitions of terms,   there have been, for thirty

years or so, more  "Haves" than "Have Nots" !   This for the first time in all of human history. 

R. Buckminster Fuller, with his World Game assertions, attempted such a measurement and concluded

humanity reached and crossed the 50% mark in the year 1970.  This is about the same date we

crossed the threshold of our "Proven" capability to obliterate the species.  Intuition and pragmatic

investigation have lead many, but not enough, to agree both with his monumental broad assertion and the

date he came up with for the Transformation.   If correct it has been realistically appropriate to say

Humanity has existed in a "Post Scarcity" Ontological reality for 33 years.  It is possible to assert that this

change - if true - is one of the most important developments in the evolution of all Biological processes

on this planet!   Consideration of the many interrelated implications it presents is worthy of the highest

priority on the agenda of Intellectual investigation and deserves a "front and center" place in the

World's seriously concerned discussion, study and debate.

 

(The best source of investigating the proposition remains the writings of Buckminster Fuller and particularly

the findings of his World Game Inventory of World Resources which provides the single best "Systems

Template" for factoring in developments since he authoritatively introduced the concept.   Back of the envelope

calculations including recent near exponentially increasing cybernetic contributions - strongly indicate positive

trends to date.)

GOOD SITE FOR INTRODUCTION TO  R. BUCKMINSTER FULLER:  WWW.BFI.ORG 

 

2.      The increased productiveness of the World Economy and the "Transcendence of Scarcity" has not been

able to adequately inform pragmatic political and economic thinking largely through the adherence to

outmoded Economic Theory.   The World Economic Model is not based on a workable understanding

of the changed Ontological reality.   It does not, or will not, address the questions involving both

growth and equity required to allow real Systems efficiency in the time ahead.  Currently all "accepted"

economic theory (despite all protestations to the contrary) is predicated on various interpretations of the

"Labor Theory of Value" which dictates  that for the vast majority of the World population an individual's

right to income is predicated on his or her labor (physical and intellectual) contribution to increased

productivity.  Virtually all non-labor aspects of production are owned by a relatively miniscule Plutocratic

class at the very pinnacle of World Society - and their capital assets are increasingly responsible for

actual production gains.  There is no adequate provision for democratizing the access to capital

credit for investment in assets which will pay for themselves out of their future earnings - to the citizenry

of any individual Nation - or to the people of the World.  Under current policy assumptions there is no

way forward toward a workable World Economic Democracy.  Given oncoming massive technological

displacement of labor by capital assets (as Lord Keynes predicted for these very days) Economic Democracy

must be a sine qua non goal of responsible systems analysis.  Anemic, erratic growth rates and

persistent economic underproduction will not allow Humanity to achieve sustainable levels much less

realize it's "‘Proven’ Life Support Capability".  Increasing awareness of an unavoidable growing gap

between the World Economy's Capability and its Performance will inevitably create unacceptable Political

instability beyond even that so evident today.   The World Economic system currently in place must

be seriously challenged by New Theoretical understanding and Economic policy assumptions.   

 

(The best initial source for effectively arriving at a "Systems" Challenge to the unworkable Economic Status

Quo is the "Outside the Envelope" thinking developed by Louis O. Kelso and Mortimer Adler in their

earlier writings including The Capitalist Manifesto and currently in the pattern presented in the Book by

Robert Ashford and Rodney Shakespeare: "Binary Economics The New Paradigm". 

WEB  SITE: WWW.KELSOINSTITUTE.ORG 

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      A Consideration of the Financial Crisis of 2008 & 2009 - Which Continues Lacking a

                                     Meaningful Long Term Comprehensive Solution

 

       Sunday September 21, 2008

Secretary of the Treasury Paulson has submitted a three page bill to congress aimed at addressing the current financial crisis.  He and many of the country’s leaders strongly recommend quick passage to avoid a disastrous “Melt Down” of the National and World Economy.  A “Once in a Hundred Years Event” in the words of Alan Greenspan – and many others.  Its definitely “Paradigm Shifting Time” – BIG TIME – here on planet Earth and there are bound to be many variegated reactions to the Historical event.

I suggest that World citizens follow the “Three Page” limitation accepted by Secretary Paulson and lay out their idea and context within a similar - “Three Page” -  limit of the causes, implications and prognostications as to their thoughts on the matter – a sort of collective Brain Storming exercise in citizenship, participation and responsibility.  It would seem fair that links could be included in the Three Page Formulas – but we certainly want to keep the dialogue pithy dare we say “poetic or artful economy of language” yes we dare so propose! - suitable to the so very apparently limited attention spans of the people at the other end of postings on the marvelous Internet which we obviously need to get any good word out - which might emerge out of the exercise – way out there. Communications is the name of the game & in the interest of that I am going to attempt to get it down to “Three Little Pages” to mimic the sentiment of the popular song “Three Little Words” in support of an understanding under the rubric of “Binary Economics” and suggest that all interested parties - from hard core Marxists to Friedmanites - might do likewise. But before I make the effort let’s consider the official language of the Paulson Proposal.

September 20, 2008

Text of Paulson Plan

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.- -The authority of the Secretary to hold any mortgage- related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term mortgage- related assets means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term Secretary means the Secretary of the Treasury.

(3) United States.--The term United States means the States, territories, and possessions of the United States and the District of Columbia.

There is lot of the “What” addressed in Secretary Paulson’s proposal.  It would seem the United States Government is in the process of establishing (belatedly?) what might be seen as a “Re Insuring” role (putting the “Full Faith and Credit” of the United Stares Government) behind a seemingly inadequate Commercial Capital Credit Insurance Underwriters - that is an Insurance Industry against Business loss – despite all the inventive use of Swaps and Derivatives and related procedures by the banking Industry – to deal with the various levels of risk in the Economic order.

Interestingly these were the two aspects of a General Theory Model proposed by Louis O. Kelso and Mortimer Adler in their 1958 Book “The Capitalist Manifesto” – A precursor document in the foundation of the “Binary Economics” Paradigm.   They referred to and  suggested a new institution to be created to be named the “CAPTIAL DIFFUSION  REINSURANCE  CORPORATION (CDRC)”.  They suggested this 50 years ago as essential to a ”Systems” approach - as part of an overall “Paradigm”.  Unfortunately our leaders have not had the wit, wisdom or understanding (more about that later) to institute a “Binary” understanding of Economic reality - hence the current financial crisis.

I would suggest that is what Secretary Paulson is in the beginning process of instituting and - further that the institutional arrangement which will emerge out of the current crisis -  could not more appropriately be named than the “Capital Diffusion Reinsurance Corporation (CDRC)” right there next to the Federal Reserve Bank (FED) on the “General Theory” Chart below.  Better late than never – but 50 years is a mighty long wait – and the battle is still not won and will be fought tooth and nail by untold backsliding tendencies. The CDRC perhaps is now coming into being – finally – under dint of sheer necessity – always a less than optimum circumstance – but encouraging none the less as it could/would perform the much needed “Backstop” function in the Economic Order that is  presently needed - and even more significantly perhaps - which the future now not only requires but also - newly now - allows.

Here is the General Theory Chart

 

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But there is not much there in terms in Secretary Paulson’s Proposal as to the “Why” of it all.  It would seem that might be a good place for us to begin – at a theoretical level of understanding? What do you think about it all?  Does it matter – the Why of it all?  Does the Why of it all have any bearing on the fierce burning immediacy of the present calls to immediate action - with such far reaching implications? Avoiding the ultimate questions whose answers are destined to be synergistically encompassed – shrouded even - within higher orders of mystery – including the modeling which could indicate humanity might well have transcended “Material Scarcity” within the same Yin and Yang recognition of Universe – from the modeling - that the technological weapons systems seem to indicate a “totally new” Existentially significant “Species Lethal” quality now.  Both are now at the level of capability. But short of all that – in the more “realistic” – practical  realm of “Economics” – it would seem  a very important conclusion as to why the CRISIS is summed up by the general idea  – “Mankind Has Not Made His Peace With The Machine” or in other words with the Technology.  At a economic theoretical level we have been fixated on the “Labor Theory of Value” which informs or even essentially underpins virtually all Economic theory  from Smith.,  Ricardo,  Marx,  Marshall,  Keynes, Schumpeter, von Hayek, Mundell right up to & including Friedman, are all accepting of - built upon “accepted” Economics – all share the same  myopia.  The only exception would seem to be Louis O. Kelso – in a time of “Change” which will emerge.

 See: http://en.wikipedia.org/wiki/Labour_theory_of_value

The basic Policy Grounding Statement of the American Economy is “The Employment Act of 1946” - That will have change within the “Binary Model” which is now emerging.  Good.

See: http://en.wikipedia.org/wiki/Employment_Act_of_1946

Louis O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to production in the American economy of Labor (Physical and Intellectual) and Capital over time assuming reasonably competitive markets.  So ingrained is the “ethic” of the “Labor Theory of Value” that they thought it best to refer to Capital Owners as “Capital Workers” in keeping with their understanding that Capital instruments do “Work” - as surely as the most diligent human surrogate worker – and that indeed the observable trend is for Capital Instruments to do ever more of the Worlds “Work”.  The reflexive prevalent attitude of equating “Economic” man with Essential Human Values including the whole vast array of values around the “Work Ethic” all contribute to camouflage and maintain the fundamental miss-match between the way goods and services are produced and distributed and particularly their trends projected into the future. Cybernetic contributions (now almost exponential) are only adding to the much longer Historical trend. Represents the US Economy but applies to World trending.  HHC   

Whether income to “The People” will finally or eventually be in keeping with the way goods and services are actually being produced will ultimately be politically decided. But we seem trending in the right direction. Once we get the “Facts” straight we may well be on our way toward  freedom from “Wage Slavery” through “Similfinancing” – both supply and demand in tandem -  moving toward the liberation of the Ecologically sound Human Spirit for concerns with the “Goods of Civilization”  which the future requires if we are to well be The time is now – Finally - NOW - to get it right - subsuming not overthrowing History - the way the Future requires !?

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Carbon 60 as the Base of Nanotechnology & Information TBeginning? See Reuters piece below

                           

The latter -- also known as “buckyballs” – are C60 molecules discovered serendipitously by a team at Rice University, led by Dr. Richard Smalley in 1985 (below).  Named after R. Buckminster Fuller, inventor of the geodesic dome (discussed in “the “fullerene’s” 60 carbon atoms (!) are arranged spherically, as 12 pentagons and 20 hexagons (below), in the most symmetrical molecular form known.

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Reuters Last updated: 11:14 am May 21, 2009  Posted: 2:25 am May 21, 2009

"Five-dimensional" discs with a capacity 10,000 times greater than current DVDs could be on the market within 10 years, researchers reported yesterday.

A team from Swinburne University of Technology in Australia said in the journal Nature that by harnessing nanoparticles and a "polarization" dimension to existing technology, a disc's storage can be massively boosted to hold thousands of feature films or millions of songs.

Researchers said the technique allowed them to store 1.6 terabytes of data on a disc with the potential to one day store up to 10 terabytes. 

                                                                  

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