Louis O. Kelso - July 1983 Air date
Louis O. Kelso (1913-1991 R.I.P.)) was a lawyer, investor 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 and is credited with the creation of the first Employee Stock Ownership Plan (ESOP).
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. The first ESOP which was used by the employees of Peninsula Newspapers Inc., based in Palo Alto, California, to acquire the newspaper chain. Since that time, ESOPs have been used by hundreds of companies, including Avis, Exxon Mobil, Standard Oil of California and Atlantic Richfield.
In 1958, Kelso 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.[2]
Kelso & Company
In 1971, Louis Kelso founded Kelso Bangert & Company as a merchant bank that would be both an advisor and investor in mergers and acquisitions involving Employee Stock Ownership Plans. The firm, which would later come to be known as Kelso & Company, would transition toward private equity investments in the late 1970s and would raise its first private equity fund in 1980. Today Kelso & Company is a $10 billion private equity firm and was among the 50 largest private equity firms globally.
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"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) (less info)