Louis O. Kelso Quotes about Wisdom

The point is to make the pie grow faster and distribute the new growth more equitably.

Labor is the source of subsistence, capital is the source of affluence. My idea is to make everyone a capitalist, and therefore, financially secure.

The path the capitalist revolution will take faces in exactly the opposite direction from that taken by the communist revolution. It seeks to diffuse the private ownership of capital instead of abolishing it entirely. It seeks to make all men capitalists instead of preventing anyone from being a capitalist by making the State the only capitalist.

The schemes to set up blacks in cleaning stores, gas stations, hamburger stands and fried-chicken franchises, all the low-profit, low-capital enterprises, will rivet the Black man to the least remunerative section of the economy forever. The best such prospects offer are the dissatisfactions of blue-collar life. The big money ain't in pumping rationed gas in an Amoco station leased in your very own name, but in having stock in Exxon.

Most of us owe instead of own. And the less the economy needs our labor, the less able we are to "save" our way to capital ownership.

Everyone should own a piece of the wealth-producing capital of this country, but not everyone can be a manager. Or should be.

The political objective of universal capitalism is maximum individual autonomy, the separation of political power wielded by the holders of public office from economic power held by citizens, and the broad diffusion of privately owned economic power.

Equality of economic opportunity, in the context of private property, means equality of opportunity for the millions of capital-less households of today to buy, pay for, and employ in their lives the non-human factor of production, capital.

Full employment is a socially hazardous goal. In effect, it aspires to restore through political expedients the pre-industrial state of toil that science, engineering, technology and modern management are pledged to overcome.

Technology has no function except to save labor. Yet how often do we hear that the purpose of new capital formation is to create jobs?

The poor lack money. They lack money because they do not know the secret of productive wealth. They know it is possible to be old, unemployed, uneducated, lazy - even halt, deaf, dumb, and blind-and still be excessively rich. But you have to be in on the secret, and the poor by definition are not.

The uneasy ghost of Marx must suffer the torments of the damned at the truth glaring from the pages of history that one does not abolish property by transferring it to the state.

But would the young do any better under the same circumstances? Will they do any better when their turns come? The answer is that youth would not and cannot, given the financial and economic framework within which the elders are operating. While the moral convictions of individuals are important in the long run, it is institutions that determine the immediate course of events - particularly the institutions of finance.

All this plan does is make everybody a capitalist. I know that the New York Stock Exchange says there are 25 million shareholders in the United States, but let me tell you something: about 15 million of those people could save their dividends for 10 years and maybe buy a new suit. That's not what I call capitalism.

The primary cause of disorder and lawlessness today, as throughout history, is the poverty of the many in contrast to the affluence of the few. But a new element of unrest has been added: a growing awareness that mass poverty is caused by defective institutions that prevent our harnessing the physical capabilities of science, engineering, management and labor to create general affluence; in other words, a growing awareness that poverty in any country that is or can be industrialized, is man's not nature's fault.

We have an economic policy that is just about 10,000 years out of date.

There's only one honest way to measure affluence; that's by comparing the capability of producing goods and services with the desire of people to enjoy them. It's a lousy, crooked trick to compare this society with China or some such place and then say we're affluent. It's a piece of intellectual crookery even to compare this economy with itself ten or twenty years ago. We should compare what we have with what we could have.

The sole missing link is the recognition that the acquisition of capital ownership by the millions is an indispensable goal. That is the turning point - our recognition of the proper goal.

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.

The way the system now works, credit is extended to those who don't need it and denied to those who are in desperate need of it.

If capital produces most of the economy's wealth and income is distributed on the basis of productive input, the individual can hardly reach his goal - an affluent level of income - solely by means of his labor.

While no inference is intended here, it is worth noting, in connection with Milton Friedman's comment that "Kelso just turned Marx upside down," that it is not necessarily amiss to turn a fellow upside down if that in fact straightens out his thinking.

The purpose of finance is to enable business to acquire the ownership of capital instruments before it has saved the funds to buy and pay for them. The logic used by business in investing is things that will pay for themselves is not today available to the 95% born without capital. Most of us owe instead of own. And the less the economy needs our labor, the less able we are to "save" our way to capital ownership.

That which is inherently nonfinanceable is financed. That which is inherently financeable is not financed. And the illogic of poverty amidst eagerness and ability to produce plenty goes on.

Thus, the capital owner is not a parasite or a rentier but a worker - a capital worker. A distinction between labor work and capital work suggests the lines along which we could develop economic institutions capable of dealing with increasingly capital-intensive production, as our present institutions cannot.