Binary Economics - The Eternal Louis O. Kelso

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Louis O. Kelso - Binary Economics



Kelso began to think seriously about economics in 1931, the second year of the Great Depression. Although not yet 18, he was determined to launch his own investigation into the cause of a phenomenon no one was able to explain to his satisfaction.

Kelso prophesied here the crash of 1987 (October 19, 1987) and by extension today's "on steroids" situation.

[youtube:1ffys0s7]http://www.youtube.com/watch?v=lRPT3SFkndA[/youtube]1ffys0s7]


Wikipedia begins the article on Kelso misleading like this :

Louis O. Kelso (1913-1991) was a political economist in the classical tradition of Smith, Marx and Keynes.

Well, Kelso's economical model opposed 180¤ this  very same "Clasical tradition" and even this with style, dressing down this characters. (see under at end page link criticizing Marx's model). Kelso's binary economic system combines the elegance of classical market theory with classical moral philosophy and the highest spiritual values. He points out precisely where Adam Smith, Karl Marx, and John Maynard Keynes fell short theoretically by not recognizing the increasing productiveness of capital as the main source of economic growth and the most logical source of widespread income distribution. This conceptual omission by Smith, Marx and Keynes is embedded in all conventional schools of economic thought, from left to right. Consequently, economic theorists have been led down the path where few of them can ever make accurate predictions about the future or offer sound, long-range solutions to meet the dangers of economic globalization.



Kelso long believed that he had not originated a new economic theory but only discovered a vital fact that the classical economists had somehow overlooked. This fact was the key to understanding why the private property, free market economy was notoriously unstable, pursuing a roller coaster course of exhilarating highs and terrifying descents into economic and financial collapse.



This missing fact, which Kelso had uncovered over years of intensive reading, research and thought, drastically modifies the classical paradigm which has dominated formal economics since Adam Smith. It concerns the effect of technological change on the distributive dynamics of a private property, free market economy. Technological change, Kelso concluded, makes tools, machines, structures and processes ever more productive while leaving human productiveness largely unchanged. The result is that primary distribution through the free market economy, whose distributive principle is "to each according to his production," delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contributions through labor.



Differential productiveness over time concentrates market-sourced income in the hands of those who will not recycle it back through the market as payment for consumer goods and services. They already have most of what they want and need so they invest their excess in new productive power. This is the source of the distributional bottleneck which makes the private property, free market economy ever more dysfunctional. The symptoms of dysfunction are capital concentration and inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the majority of people who depend entirely on wage income and cannot survive more than a week or two without a paycheck. And since, as Adam Smith laid down, economic demand begins with the consumer and consumer purchasing power, the production side of the economy is under-nourished and hobbled.

All of Kelso's financing tools and economic proposals are designed to correct the imbalance between production and consumption at its source, in conformance with private property free market principles identified by Smith and his followers.

Binary theory of economics
Binary economics is a heterodox theory of economics that endorses both private property and a free market but proposes significant reforms to the banking system. The aim of binary economics is to ensure that all individuals receive income from their own independent capital estate, using interest-free loans issued by a central bank to promote the spread of employee-owned firms.These loans are intended to: halve infrastructure improvement costs, reduce business startup costs, and widen stock ownership.

Binary economics is a minority discipline, hard to place on the left-right spectrum. It has variously been characterized as an extreme right-wing ideology and as extremely left-wing by its critics. The 'binary' (in 'binary economics') means 'composed of two' because it suffices to view the physical factors of production as being but two (labour and capital which includes land) and only two ways of genuinely earning a living − by labour and by productive capital ownership. Humans are usually considered as owning their labour, but not necessarily the other productive factor – capital.

Binary economics is partly based on belief that society has an absolute duty to ensure that all humans have good health, housing, education and an independent income, as well as a responsibility to protect the environment for its own sake. The interest-free loans proposed by binary economics are compatible with the traditional opposition of the Abrahamic religions to usury.
Very often the first acquaintance people have with binary economics comes through today's Employee Share Ownership Plans (ESOPs). These stem originally from Louis Kelso & Patricia Hetter Kelso (1967)Two-Factor Theory: The Economics of Reality; the founding of Kelso & Company in 1970; and then from conversations in the early 1970s between Louis Kelso, Norman Kurland (Center for Economic and Social Justice), Senator Russell Long of Louisiana (Chairman, USA Senate Finance Committee, 1966 - 1981) and Senator Mike Gravel of Alaska. There are about 11,500 ESOPs in the USA today covering 11 million employees in closely held companies. As Binary Economics predicts, some studies have shown productivity improvements as an effect of employee ownership  and involvement - binary techniques for this are called Justice Based Management.

http://en.wikipedia.org/wiki/Binary_economics

Ludwig Von Mises Institute (Those "Gold Standard Way" Rothschild's Rats) critizes "Kelso's theories" very  hard, well, something is hurting their lies and IT is at the core of Kelso's model:

http://mises.org/daily/2085#0

Let's face it, Kelso Died very Rich and stil loved by all those workers beneficing from the Employee Stock Ownership Plan, Kelso's company still is one of the 50 largest private equity firms globally. Even in the current economic model that sounds like a "Winner" á la "American Dream", doesn't he ?

My own mild critique, but i'am not sure 100%, is that Binary Economics doesn't go into the debate about the Central Bank (Federal Reserve) been at  the hands of Private Banks, maybe he didn't know by that time about this aspect of the puzzle ? But he was a banker, wasn't he ? I don't know.

In resume - Kelso's Economical achievements were :

the Capitalist Manifesto and other books about Binary Economics
http://www.kelsoinstitute.org/pdf/cm-entire.pdf

and

The Employee Stock Ownership Plan (ESOP) and The Consumer Stock Ownership Plan (CSOP)
http://en.wikipedia.org/wiki/Employee_Stock_Ownership_Plan

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THE CAPITALIST MANIFESTO

http://www.kelsoinstitute.org/pdf/cm-entire.pdf



KARL MARX: The Almost Capitalist By Louis O. Kelso
Louis O. Kelso explains how Karl Marx would have reached a different conclusion had he not made 3 errors.
http://www.cesj.org/thirdway/almostcapitalist.htm

http://en.wikipedia.org/wiki/Louis_O._Kelso

Binary Economics in a Nutshell
http://www.cesj.org/binaryeconomics/be-inanutshell.htm

Introduction to Binary Economics
http://www.globaljusticemovement.org/su ... tro_be.htm

The Kelso Institute
http://www.kelsoinstitute.org/

IMPORTANT DATES IN THE HISTORY OF BINARY ECONOMICS
http://www.kelsoinstitute.org/important-dates.html

Binary Economics and the Case for Broader Ownership - by Professor Robert Ashford. Click here (PDF Format)
http://www.globaljusticemovement.org/su ... hford1.pdf

Other videos with Kelso
http://video.google.com/videosearch?hl= ... =N&tab=wv#

Debating
[youtube:1ffys0s7]http://www.youtube.com/watch?v=prM_0kiuE2o[/youtube]1ffys0s7]

Robert Ashford - Videotaped 01-05-2008
[youtube:1ffys0s7]http://www.youtube.com/watch?v=tyux3HAvsu0[/youtube]1ffys0s7]



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The French Connection is going Strong !

http://binaryeconomics.net/binary-economics








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