Trusteeship and Binary Economics

American students are taught that there are only two types of economic systems: free-enterprise (capitalism) and "command" systems (communism and socialism). Actually, there are several others. One of them is Binary Economics. Binary economics was developed by Louis Kelso, who published the basics of his economic theories in a book entitled "The Capitalist Manifesto". Kelso believed in market economies, but also believed market excesses should be controlled. From his perspective there are two components to industrial production, labor and capital. Capital includes land, machines, cash, stocks, credit, etc. A person makes a living either from labor or by using accumulated capital. Since the time of Adam Smith, capital has become by far the dominant part of the industrial production process, while labor has become worth less and less. Ordinary people can no longer make a living by selling labor. Capital, concentrated in the hands of a few, needs to be accessible to everyone. To achieve this, Kelso called for laws that would disallow interest on loans, disallow inheritance taxes, and foster transition from corporate-owned industry to industry owned by employees. Kelso argued that a market economy could be a just economy if the workers were owners (Employee Stock Ownership Programs), if workers could pass accumulated capital to their children (no inheritance tax), and if the banking system was nationalized (to enable zero interest lending). The goal of binary economics is to give every family an accumulated capital base that can be used to help the family earn a living - a perpetual family bank. A perpetual family bank is also the goal of family-centered trusteership. Unwilling to wait for the wealthy few to become voluntary trustees, I believe in exploring other avenues to trusteeship. The family is a more sustainable unit than government. As governments fall and wars are fought, families find that love and family traditions allow them to find ways to stick together through thick and thin. Everyone is more interested in knowing about the grandparent's history than about who ran the government back then. We must find a way to establish a sustainable capital base under individual families. In India, Nehru wanted to do that through land redistribution and local village industry. Good ideas that depended on implementing legislation and, for that reason, perhaps did not go so well. (Perhaps he would have succeeded if he had been able to provide people with simple spinning wheels, and also banned textile factories.) Gandhi appealed to the wealthy to become willing trustees for the poor, as Ralph Nader has been doing in America. So far, not many have heeded their pleas. Binary economics is a system that would go a long way toward correcting the abuses of capitalism. For that reason, the capitalist class will never allow it.