The Binary Economics of Louis Kelso: A Democratic Private Property System for Growth and Justice

by Robert H. A. Ashford, © 1994 Robert H. A. Ashford. Reprinted with permission of the author.



Binary economics is fundamentally different from modern capitalist and socialist economic theories in all of their forms. It may be properly viewed as classical, free-market economics modified to reflect the post-industrial age. It is also a different system of private property—distinct from all private and public property in all existing capitalist and socialist economies. The word “binary” is an all-inclusive term. It views all factors of production as falling under one or the other of two mutually exclusive categories, “labor” or “capital.”Binary economics embraces all types of labor input (physical and mental) and all types of capital input (i.e., things like land, tools, structures, and processes) and describes how to match production and consumption most efficiently and justly under free-market, private property conditions.