An agenda for a peaceful “Second American Revolution” is more than an economic agenda. It is based on the conception of America’s original revolutionaries to create “One nation, under God, with liberty and justice for all.” In other words, it is based on the sovereignty of each person, a concept that subordinates the sovereignty of the state as a critical social prop for securing the life, liberty and property of each citizen. (These elements reflecting the intended higher sovereignty in the citizen, in my opinion, are implicit in the Ninth and Tenth Amendments.) Capital Homesteading would create an economic foundation for a society of economically independent human beings, where all powers of the state are dependent on the power of the people, not the other way around, as it is today under both Republican and Democratic rule. Under Capital Homesteading, freedom, justice and all the more important aspirations of humans (economics being the most urgent but not the most important of human needs) will finally blossom and we can then export our “Happy Revolution” to the world. The power of superior ideas rather than military and financial power will allow America to be admired again as the liberator of the poor and oppressed of the world. [2013].
Kelsoism is not accepted by modern scientific economics as a valid and fruitful analysis of the distribution of income but rather it is regarded as an amateurish and cranky fad. [ The San Juan Star , April 27, 1972.]
You think I don’t know what I want? You think I love the idea of relying on my looks for life? No! It’s pathetic! In my head, I have a nice, quiet, normal job that involves me running my own business. I carry a briefcase around my office with important documents, I have a nice assistant who calls me boss, and people ask me questions—they ask for my advice because I matter! I’m important to them! I’m recognized as something more than a pretty face and a pair of legs. I have a brain and interests and thoughts about religion, and poverty, and economics. I’m not a miserable girl with a number attached to her chest, stripping her clothes off in a room full of people.
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.
In the first place, there is no evidence at all that the planned economies achieve a higher degree of economic justice than does the free market. Even if we assume that there is a consensus on the need to redistribute purchasing power, it can be done without destroying the freedom of choice and efficiency of the market economy… [B]ut those who espouse any kind of planning in the interests of justice and fairness to the poor, never favor voluntary solutions to the problems they perceive in the distribution of income or property. When given the opportunity, the public-planning advocates have invariably accumulated as much power as possible over income and property. Stripped of their masks, what they really want is not justice but control over other people’s lives. [ The War Against Population, The Economics and Ideology of Population Control , Ignatius Press, San Francisco, 1988, pp. 76-77.]
There is a conspicuous void in the arguments and the programs of the counter-culture groups of this country, in that they have produced no well-formulated economic theories…. Unfortunately and ironically, Lou Kelso, who has some very imaginative economic proposals, has been offering them for many years to the establishment, the dinosaur culture….”Two-Factor” economics or “universal capitalism” recognizes the emerging importance of technology, and accepts the diminishing necessity of human labor; it is an economic theory that is beautifully tailored to the values and beliefs of most Catalog readers and those seeking alternatives to dinosaur existence…. These proposals have been laid on presidential candidates, congressmen, newspaper publishers, leading economists, and nearly all key decision makers of the establishment over and over again…. My advice to Lou is: “Come on, Lou, grow long hair, drop all that establishment costumery, immerse yourself in the now generation, and start to work with a constituency that wants you and needs you. [ The Whole Earth Catalog , Spring 1970.]
A study of economics reveals that the best time to buy anything is last year.
Attempting mischievous and salutary irritation of his peers . . . he [Keynes] may only succeed in becoming an academic idol of our worst cranks and charlatans — not to mention the possibilities of the book as the economic bible of a fascist movement…. [Comments on John Maynard Keynes’ The General Theory of Employment, Interest, and Money , in Christian Century , July 22, 1936, pp. 1016, 1017.]
Human affairs are governed by a hierarchy of values, each corresponding to one of the two sides of man’s nature. The priority order of particular activities on these tables of value is inverse, so that an activity which occupies first place on one is in last place in the other. Man is an animal, and his animal needs and wants are the subject of economics. But he is also a spiritual being, with a mind unique in the natural order; he is a civilized or human being. It is from the dual nature of man as both animal and human that the dual scale of values governing his life arises. One is a hierarchy of urgency; the other is a hierarchy of importance. The history of man, at least as we read it, leaves no doubt that he places the highest value on the goods of the mind and the spirit — what Plato called “the wares of the soul; that in the human scale of things, it is the goods of civilization — the arts, sciences, religion, education, philosophy, statesmanship and the like, that weigh the heaviest.… It is equally clear, however, that for all but the most exceptional human beings, the goods and services that minister to the need and desire for creature comforts weigh heaviest on the scale of urgency. Physical goods and services of economics are more urgent. It is only when man’s material needs and desires are satisfied and he is secure in his belief that they will continue to be satisfied — when, in a word, he becomes affluent—that the urgency of economic matters disappears, and the truly important things move into the foreground of consciousness.… Economic planning for a free industrial society that fails to take into account the significance of the inverse dual scale of values implicit in man’s nature is predestined to error. The lesson to be learned … is simple: solve the economic problem of society first, and a floodtide of goods of civilization will follow.” [ Two-Factor Theory: The Economics of Reality , pp. 111-112.]
To the labor of man alone he (Smith) ascribes the power of producing values. This is an error. A more exact analysis demonstrates…that all the values are derived from the operation of labor, or rather from the industry of man, combined with the operation of those agents which nature and capital furnish him. Dr. Smith did not, therefore, obtain a thorough knowledge of the most important phenomenon in production; this has led him into erroneous conclusions, such, for instance, as attributing a gigantic influence to the division of labor, or rather to the separation of employments. This influence, however, is by no means inappreciable or even inconsiderable; but the greatest wonders of this description are not so much owing to any peculiar property in human labor, as to the use we make of the powers of nature. His ignorance of this principle precluded him from establishing the true theory of machinery in relation to the production of wealth (italics supplied). [Say’s critique of Smith and labor theory of value in J.B. Say, A Treatise on Political Economy (1830) 6 th American edition, pp. xl-xli. Cited in Robert Ashford and Rodney Shakespeare, Binary Economics: The New Paradigm (University Press of America, 1999), pp.100-101.]
Two-Factor economics recognizes the importance of technology, and accepts the diminishing necessity of human labor. It is an economic theory that is beautifully tailored to the values of beliefs of most Whole Earth Catalog readers and those seeking alternatives to dinosaur existence. [ Whole Earth Catalogue , Spring, 1970.]
The owners of labor, on the other hand, are being taught, by the most powerful and well-publicized examples, that the highest rewards are not for production, but for the employment of organized power to take over a share of what others produce. [ Two-Factor Theory: The Economics of Reality , Random House, 1967, p. 46.]
Two-factor economics makes it clear that our economic problem is not what one-factor (labor-centric) thinkers assert: an inequitable distribution of income. It is an inequitable distribution of productive power, from which an unworkable distribution of income results.
To an American, that which deprives him of his freedom he regards as injustice, and that which allows him to enjoy that freedom he regards as justice. The concept of justice is as central to the totality of his being as freedom is, and this is not surprising, since the motivating idea behind the American Declaration of Independence was the fervent desire for justice. [Excerpt from The Secret of American Success: Africa’s Great Hope, Ch. 28, “Freedom at the Helm,” pp. 215-217.] If one examines [the American] idea of freedom, the individual, free enterprise, their Constitution, their political and economic structures as well as their mode of exploiting their natural resources, all these are shrouded in the idea of justice.” Ibid. A shocked sense of justice has to be removed and justice restored…. Ibid. In the USA, where so many people compete for one and the same thing, where job opportunities, residential facilities, and food resources have to be spread over so many people, the question of justice becomes more imperative than ever before if communal and individual life is to be made possible and enjoyable. Ibid. [F]or the majority of Americans, collectivist or nationalized economy is morally wrong and therefore unjust. For them, free enterprise meets their keen sense of justice…. Ibid. The U.S.A. economic policy and practice have been largely influenced by this thought that people shall own property in their own right and in order to be strong enough to control their own government. Ibid. It appears it would be quite un-American not to be suspicious of the government or to distrust it. History has taught them a little too much about the tragic frailties of human governments, but it has also driven home to them that they must control firmly political and economic power, which, handed over to any government in their land, could be easily used to oppress them. Ibid. The real struggle between an American government and the people was one of power, which was settled when they designed their Constitution, which conceded the sovereignty of the people when it came to politics, and the sovereignty of the consumer when it came to economics. Ibid.
In Medinah, the Prophet provided that, in the just society every man has a right to capital without interest.… This means that in the pursuit of justice, the power of capital as well as the power of land are available to every member of society freely. The limits of differences are the limits imposed by the man’s own capacity to work and to use factors of production. [“The Theory of the Economics of Islam: The Economics of Tauhid and Brotherhood,” an English condensation of his book The Islamic Economic Theory , 1960.]
The rich and poor have something in common. They both under-consume. [Conversation with Dawn K. Brohawn about Binary Economics, September 2012.]
The libertarian good society lies…in the maximum dispersion of property compatible with effective production or, as process, in progressive reconciliation of conflicts between equality and efficiency. Such process involves increasing dispersion both of wealth among persons and families and of proximate productional control among enterprises or firms.… [ Economic Policy for a Free Society . Chicago: University of Chicago Press, 1948, p. 27.]
[Louis Kelso] could be to 21st Century capitalistic economics what Einstein was to 20th Century physics. [ Sunday Magazine , May 17, 1970.]
If adapted to the unique requirements of various regions and peoples of the world, such economic pluralism could have a greater global impact over the next fifty years than the collectivist economics of Marxism and neo-Marxism have had during the half century just past. [“New Directions for American Foreign Policy,”, Orbis , Summer 1969, Published by Foreign Policy Research Institute, University of Pennsylvania.]
The problems of the world cannot possibly be solved by skeptics or cynics whose horizons are limited by the obvious realities. We need men who can dream of things that never were. Kelso, Louis O. [From “Karl Marx: The Almost Capitalist,” American Bar Association Journal , March 1957.]: Error No. 2: Marx’s Failure to Understand the Political Significance of Property. Before examining Marx’s second critical error, it may be helpful to take note of what the concept “property” means in law and economics. It is an aggregate of the rights, powers and privileges, recognized by the laws of the nation, which an individual may possess with respect to various objects. Property is not the object owned, but the sum total of the “rights” which an individual may “own” in such an object. These in general include the rights of (1) possessing, (2) excluding others, (3) disposing or transferring, (4) using, (5) enjoying the fruits, profits, product or increase, and (6) of destroying or injuring, if the owner so desires. In a civilized society, these rights are only as effective as the laws which provide for their enforcement. The English common law, adopted into the fabric of American law, recognizes that the rights of property are subject to the limitations that (1) things owned may not be so used as to injure others or the property of others, and (2) that they may not be used in ways contrary to the general welfare of the people as a whole. From this definition of private property, a purely functional and practical understanding of the nature of property becomes clear. Property in everyday life, is the right of control. Property in Land. With respect to property in land, we need merely note that the acquisition of an original title to land from a sovereign is a political act, and not the result of operations of the economy. If the original distribution of land unduly favors any group or type or persons, it is a political defect and not a defect in the operation of the economy as such. A capitalistic economy assumes and recognizes the private ownership of land. It may, as under the federal and state mining laws and federal homestead acts, encourage private ownership of land by facilitating private purchasing of mining, timber, agricultural, residential or recreational lands. Property in Capital. In a capitalistic economy, private ownership in all other articles of wealth is equal in importance to property in land. From the standpoint of the distributive aspects of a capitalistic economy, property in capital–the tools, machinery, equipment, plants, power systems, railroads, trucks, tractors, factories, financial working capital and the like–is of special significance. This is true because of the growing dependence of production upon capital instruments. Of the three components of production land is the passive1 source of almost all material things except those which come from the air and the sea, while labor and capital are the active factors of production. Labor and capital produce the goods and services of the economy, using raw materials obtained, for the most part, from land. Just as private property in land includes the right to all rents, the proceeds of sale of minerals and other elements or substances contained in land, private property in capital includes the right to the wealth produced by capital. The value added to iron ore by the capital instruments of a steel mill becomes the property of the owners of the steel mill. So in the case of all other capital instruments. Property in Labor. What is the relationship of the worker to the value which he creates through his work? It has been said that no one has ever questioned the right of a worker to the fruits of his labor. Actually, as was long ago recognized by John Locke and Jean Jacques Rousseau, the right of the worker to the value he creates is nothing more than the particular type of private property applicable to labor. Each worker, they said, has a right of private property in his capacity to produce wealth through his labor and in the value which he creates.
Only when the workers themselves acquire capital will the threat to our current social order cease, says the Messiah of the “new economics”…Kelso has hitherto been regarded as an eccentric on the outer fringes of economic thinking. Today his ideas are being taken seriously in influential quarters. Some believe that Kelsoism could be to the 70’s what Keynes was to pre-war economic theory. [ The Illustrated London News , April 11, 1970.]
What is clear from [Louis O. Kelso’s ] description is that money is a “social good,” an artifact of civilization invented to facilitate economic transactions for the common good. Like any other human tool or technology, this societal tool can be used justly or unjustly. It can be used by those who control it to suppress the natural creativity of the many, or it can be used to achieve economic liberation and prosperity for all affected by the money economy. [“A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation,” Journal of Socio-Economics , vol. 30, p. 495, 2001.]
Abraham Lincoln freed the slaves only in the legal sense. Technology was the slave’s real emancipator. Technology freed the slave by transferring his toil onto the tireless backs of non-human slaves driven by water, steam, petroleum and electricity. But the Black man…has never owned, and never had a chance to own, the machine that replaced and indeed, surpassed his power to toil a thousandfold. When he lost his servitude he lost his livelihood. As Frederick Douglas said, “Emancipation made the slaves free to hunger; free to the winter and rains of heaven…free without roofs to cover them or bread to eat or land to cultivate.” For all his good intentions, Lincoln didn’t free the slaves. He fired them.… People who teach economics are mostly white, but the people who understand economics are mostly Black.… Slavery taught us WHO had the leisure, WHO had freedom, WHO had wealth. Not the slave, but the slave owner. Not the sharecropper, but the land-owner. Not the employee, but the capital owner. [Statement on 1969 founding of Soul City, North Carolina on the 160th Anniversary of Abraham Lincoln’s birth; former President of the Congress or Racial Equality (CORE).]
Capital Homesteading is the bottom-up solution that puts money power and ownership power in the hands of every citizen, and that is what distinguishes the Just Third Way from all competing systems that contain elements of both socialist and capitalist systems. [Response of January 18, 2010 to Chris Dorf on Kelso Binary Economics Discussion Group Listserv, Kent State University.]
We believe that “Kelsonian economics”… constitutes a revolution in economic thinking, and a possible channel for the real American revolution that needs to be undertaken.… The economic emancipation of the vast majority of citizens not through redistributing other people’s wealth…but through the creation of new wealth and new ownership…. The real revolution in the United States economically is to make operative the promise of capitalism for the masses instead of building the wealth of a few at the expense of the many. [Editorial, “For A REAL Berkeley Revolution — Individual Ownership for All,” November 23, 1970.]
When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are the students who instruct in error. Let there be no question: economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed.
Dear Miss Manners: My home economics teacher says that one must never place one's elbows on the table. However, I have read that one elbow, in between courses, is all right. Which is correct? Gentle Reader: For the purpose of answering examinations in your home economics</p> class, your teacher is correct. Catching on to this principle of education may be of even greater importance to you now than learning correct current table manners, vital as Miss Manners believes that is.
Economics is the study of the value and meaning of J. K. Galbraith.
-- Mike Harding, "The Armchair Anarchist's Almanac"
<Intention> "It's classic percolate-up economics, recognizing that money is like manure: It works best if you spread it around." <Knghtbrd> Intention: Carter's correlation: People with lots of either usually smell funny <Intention> Knghtbrd: You SO win.
-- John Kenneth Galbraith
There is no word more “dangerous” than liberalism, because to oppose it is the new “unforgivable sin.” The word can be used in three senses: (a) As a philosophy which believes in the progressive achievement of civil, social, political, economic and religious liberties within the framework of a moral law. (b) As an attitude which denies all standards extrinsic to man himself, measures freedom as a physical power rather than a moral power and identifies progress by the height of the pile of discarded moral and religious traditions. (c) As an ideology generally identified with the doctrine of laissez faire. The first kind of liberalism is to be encouraged, prospered and achieved. The last two are false for reasons well known to those who are familiar with Laski, Hocking, Tawney, Weber and the Papal Encyclicals. [ Communism and the Conscience of the West , Preface, 1948.]
When capital owners are few, the private-property conduits of necessity create vast savings reservoirs for those few. If there were many owners, the same conduits would broadly irrigate the economy with purchasing power.
Did you know that if you took all the economists in the world and lined
<...> slaves became the major form of Southern wealth (aside from land), and slaveholding became the means to prosperity. <...> The later impoverishment of the South nourished the myth that the slave economy had always been historically “backward,” stagnating, and unproductive. We now know that investment in slaves brought a considerable profit and that the Southern economy grew rapidly throughout the pre–Civil War decades. It is true, however, that the system depended largely on the international demand for cotton as the world entered the age of industrialization, led by the British textile industry. There was an increasing demand for clothing that was cheaper than linen and not as hot and heavy as wool.
Under the old social philosophy which had governed the Middle Ages, temporal, and therefore all economic, activities were referred to an eternal standard. The production of wealth, it distribution and exchange were regulated with a view to securing the Christian life of Christian men. In two points especially was this felt: First in securing the independence of the family, which can only be done by the wide distribution of property, in others words the prevention of the growth of a proletariat; secondly, in the close connection between wealth and public function. Under the old philosophy which had governed the high Middle Ages things had been everywhere towards a condition of Society in which property was well distributed throughout the community, and thus the family rendered independent. [ The Crisis of Civilization, Being the Matter of a Course of Lectures Delivered at Fordham University, 1937 . Rockford, Illinois: Tan Books and Publishers, Inc., 1991, p. 107.]