Louis O. Kelso, the inventor of the ESOP, was a lawyer and investment banker who co-authored "The Capitalist Manifesto" with Mortimer Adler, publisher of the Great Books of the Western World series. In 1957, Kelso wrote an essay, "Karl Marx:the Almost Capitalist" in which he argued that Marx had made three critical mistakes: 1. adopting Ricardo's labour theory of value, 2. failing to understand that private property is indispensable to political freedom and 3. thinking that the "wealth produced by capital" was actually surplus value produced by labour. According to Kelso, these alleged errors caused Marx to overlook the "productiveness" of capital. Kelso eventually codified his own view (correcting Marx's alleged errors) as "binary economics."
Paul Samuelson described Kelso's binary economics theory as "an amateurish and and cranky fad" and Milton Friedman called it a "crackpot theory." It is hardly a dishonor to be called a crank or a crackpot by the likes of Samuelson and Friedman but Kelso's enumeration of Marx's "mistakes" was based on incomprehension of what Marx actually wrote. Perhaps he had consulted the Reader's Digest condensed version of Capital? Kelso's ESOP was predicated on his notion that capital was an autonomous and increasingly important factor of production. His Utopian aspirations are evident in the title of his 1967 book, "How to Turn Eighty Million Workers into Capitalists on Borrowed Money." Eventually, his ceaseless proselytizing paid off when he scored a dinner meeting in November 1973 with Senator Russell Long of Louisiana, son of Huey and faithful protector of the oil and gas companies: "The senator was very patient, asked many questions," Kelso recalls. "The > waiters were standing around waiting for us to get out. It must have been > around midnight. Then the senator said to me, 'Are you saying that using > financing techniques based on a two-factor (labor and things) economic > theory can make haves out of the have-nots without taking it away from the > haves?' I said, 'Senator, you put me to shame. I take three hours to > explain something and you cover it in a sentence.' 'That's the kind of > populism I can buy,' he said. Of course, "mak[ing] haves out of the have-nots without taking it away from the haves" is an oxymoron, as Dorning Rasbotham understood 200 years earlier. After all, if it wasn't for the poor who would till the fields of the rich or pay them rent? Nevertheless, Kelso's ESOP idea has a certain critical value as a *reductio ad absurdum. * As bizzare and ass-backward as Kelso's criticisms of Marx were, they nevertheless enabled him in 1960 to come close to an "accidental Marxist" critique of the notion of full employment, as it was understood by "bastard" Keynesians like Leon Keyserling in the 1950s. Kelso's 1960 American Bar Association Journal essay, "Labor's Great Mistake: The Struggle for the Toil State" was prefaced with the following summary: Mr. Kelso declares that it is a mistake to assume that full employment is a > desirable condition of society. Labor, he explains, is no longer the only > source of economic wealth, since modern technology makes it possible to > produce many goods and services primarily by the use of > capital. What is needed, he suggests, is not full employment, but > participation in production by all, which in the case of the owner of > capital would mean leisure instead of employment. To achieve this, he says, > we need an economic system that will make a rapidly growing number of > capitalists possible. On Sat, Jul 6, 2013 at 10:20 AM, Max Sawicky <[email protected]> wrote: > > Moral of that story is don't do business with grifters. > > > On Saturday, July 6, 2013, Jim Devine wrote: > >> didn't Enron sell a lot of its stock to its employees? >> >> > July 5, 2013 >> > The Legacy of the Boomer Boss >> > By GAR ALPEROVITZ >> >> -- >> Jim Devine / "Reality is that which, when you stop believing in it, >> doesn't go away." -- Philip K. Dick >> _______________________________________________ >> pen-l mailing list >> [email protected] >> https://lists.csuchico.edu/mailman/listinfo/pen-l >> > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > > -- Cheers, Tom Walker (Sandwichman)
_______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
