To add a missing piece to your genealogy of these ideas, it’s worth anchoring this evolution in the mid-20th-century breakthroughs of political economist and corporate lawyer Louis Kelso. While many know him simply as the inventor of the ESOP, Kelso’s broader vision was much more radical. He laid out an economic system he called “Binary Economics” and a blueprint program known as the "Second Income Plan", which provided the moral and financial foundation for a society where the right of access to capital ownership is universal. While it wasn't branded as the "Ownership Economy," it certainly fits the bill as it extends and secures property rights to every citizen.
The Center for Economic and Social Justice (CESJ.org) has long formalized Kelso’s systemic alternative as the "Just Third Way." This framework is distinct in that it explicitly rejects both capitalism and socialism, viewing them as wealth- and power-concentrating systems. Capitalism inevitably concentrates the property rights and powers over the means of production in a few private hands. Socialism concentrates even more economic power in the hands of those who control the state. The Just Third Way is a wealth-democratizing system that transcends moral deficiencies of both and reforms key institutions, focusing particularly on the monetary and tax systems.
Thanks for sharing! I hadn't come across CESJ's work, which sounds very similar to distributism and to Rawls' property-owning democracy, and I'm looking forward to learning more!
From a CESJ perspective, the key difference is that Distributism and Rawl’s POD primarily alter the distribution of existing wealth and opportunities. Louis Kelso’s paradigm seeks to distribute future capital growth more democratically by allowing every citizen throughout their lifetime to participate in owning newly created productive assets as these are financed and formed. The financing is done through self-liquidating, insured loans, with profits from the future earnings paying off those loans.
That distinction explains why CESJ often describes the Just Third Way not as another theory of redistribution, but as a proposal for restructuring the monetary and financial system so that widespread ownership becomes a normal outcome of economic growth rather than of redistributed taxes, or coercive transfers of wealth and income.
I agree! Kelso had the formula for this kind of ownership to be accessible to all. You can check it out at cesj dot org or EDANetwork dot org ... Provides a way for any stakeholder to become a shareholder without pre-existing wealth.
Inspired by Mondragon (employee cooperative) and Buurtzorg (distributive management/nonprofit) we are ready to launch an in-home care agency in Alabama USA. But are finding that the startup capital is still majority owned by the capitalists.
And are met by way too many well meaning employee cooperative and change-maker pundits with the door closing advice "it's very hard to get startup funding for a cooperative".
How do we change the way of work in the US with no support for even a meager $200,000 loan? How do workers start something on their own, with no real assets of their own?
To add a missing piece to your genealogy of these ideas, it’s worth anchoring this evolution in the mid-20th-century breakthroughs of political economist and corporate lawyer Louis Kelso. While many know him simply as the inventor of the ESOP, Kelso’s broader vision was much more radical. He laid out an economic system he called “Binary Economics” and a blueprint program known as the "Second Income Plan", which provided the moral and financial foundation for a society where the right of access to capital ownership is universal. While it wasn't branded as the "Ownership Economy," it certainly fits the bill as it extends and secures property rights to every citizen.
The Center for Economic and Social Justice (CESJ.org) has long formalized Kelso’s systemic alternative as the "Just Third Way." This framework is distinct in that it explicitly rejects both capitalism and socialism, viewing them as wealth- and power-concentrating systems. Capitalism inevitably concentrates the property rights and powers over the means of production in a few private hands. Socialism concentrates even more economic power in the hands of those who control the state. The Just Third Way is a wealth-democratizing system that transcends moral deficiencies of both and reforms key institutions, focusing particularly on the monetary and tax systems.
Thanks for sharing! I hadn't come across CESJ's work, which sounds very similar to distributism and to Rawls' property-owning democracy, and I'm looking forward to learning more!
From a CESJ perspective, the key difference is that Distributism and Rawl’s POD primarily alter the distribution of existing wealth and opportunities. Louis Kelso’s paradigm seeks to distribute future capital growth more democratically by allowing every citizen throughout their lifetime to participate in owning newly created productive assets as these are financed and formed. The financing is done through self-liquidating, insured loans, with profits from the future earnings paying off those loans.
That distinction explains why CESJ often describes the Just Third Way not as another theory of redistribution, but as a proposal for restructuring the monetary and financial system so that widespread ownership becomes a normal outcome of economic growth rather than of redistributed taxes, or coercive transfers of wealth and income.
I agree! Kelso had the formula for this kind of ownership to be accessible to all. You can check it out at cesj dot org or EDANetwork dot org ... Provides a way for any stakeholder to become a shareholder without pre-existing wealth.
Thanks for sharing! I signed up for CESJ's website and look forward to learning from them.
I am sending you some of my Substack articles, which I also posted on Facebook"
The Great Labor Question https://substack.com/home/post/p-200039546
Modern Monetary Theory Vs Economic Democracy Act https://substack.com/home/post/p-199253748
The Consequences of Concentrated Capital Asset Ownership — and Whether the Economic Democracy Act Can Remedy Them https://substack.com/home/post/p-198642144
Who Owns America, But Should Own? https://substack.com/home/post/p-197056657
Is Education The Panacea? https://substack.com/home/post/p-196707291
Reform Corporate Income Tax Policy
https://substack.com/home/post/p-191409069
Future Savings: The Smart Policy For Creating Income-Generating And Wealth-Building Productive Capital Assets https://substack.com/home/post/p-191411734
Why Is Broadening Ownership Crucial? https://substack.com/home/post/p-190039600
How Capital Wealth Accumulation Would Work https://substack.com/home/post/p-184162067
Treasury Secretary Scott Bessent And Lawmakers Make Announcement About Trump Accoun
https://substack.com/home/post/p-184044422
Thanks for sharing, Gary! I'm looking forward to reading.
You should follow me on Facebook.
Inspired by Mondragon (employee cooperative) and Buurtzorg (distributive management/nonprofit) we are ready to launch an in-home care agency in Alabama USA. But are finding that the startup capital is still majority owned by the capitalists.
And are met by way too many well meaning employee cooperative and change-maker pundits with the door closing advice "it's very hard to get startup funding for a cooperative".
How do we change the way of work in the US with no support for even a meager $200,000 loan? How do workers start something on their own, with no real assets of their own?