There is a Just Third Way. Not just any third way. The problem is that Gates
or Buffett, other well-intentioned thinkers across the ideological spectrum,
including the UK advocates of a “third way,” have never taken it seriously.
The Just Third Way can be summed up in four words: "Own or Be Owned."
The underlying principles of economic justice were first articulated in The Capitalist Manifesto,
a 1958 best-selling book by Louis O. Kelso and the Aristotelian philosopher
Mortimer J. Adler.
In his Preface, Adler acknowledged
that Kelso had developed a new paradigm of political economy based on the logic
of a just market system now known as "Binary Economics." Milton
Friedman, a proponent of capitalist greed, in a June 29, 1970 article in Time magazine, tried to attack Kelso's
Just Third Way by declaring,
“[Binary economics is] a
crackpot theory. Instead of saying that labor is exploited, Kelso says that
capital is exploited. It’s Marx stood on
its head.” (The Man Who Would Make Everybody Richer,” Time: The Weekly Newsmagazine, June 29, 1970, Vol. 95, No. 26.)
To this incisive and in-depth
analysis, Kelso responded in an equally pithy manner but more to the point,
“Damn’ right — and what’s wrong with that?” (Ibid.)
This was, frankly, about as polite
as Friedman got toward anybody — or about as close as he got to saying
something substantive when denigrating them or their ideas. A few years earlier, in a conference
on the draft held at the University of Chicago, December 4-7, 1966, Norman G.
Kurland (now president of CESJ) sat next to Friedman at a lunch. Kurland, who had taken the same position as
Friedman on conscription, took the opportunity to ask Friedman about the “Kelso
ideas.” Friedman got up and left the
table without speaking.
A few months later Kurland sent Friedman a letter
challenging Friedman to a debate. In
response, Friedman reprised his performance four years earlier at the
University of Chicago by declaring,
“My considered judgment is that it is an unwise, unsound
plan that promises much and cannot conceivably achieve what it promises. It reflects a lack of understanding of the
operation of the economic system and of the effect of changes in it. If the proposed reforms and miracles could be
brought about through the governmental measures that Mr. Kelso proposes, they
would also be entirely feasible by private measures that he could undertake on
his own.
“I recognize that I am stating conclusions and not the
reasons for them, but I state them as dogmatically as I do to make it clear to
you that the issue is not one of avoiding or not avoiding an open debate on the
merits of Kelso’s idea; the issue is one of whether it is worth the time and
effort involved. My own answer is in the
negative, but needless to say that is my own personal opinion, and those who
feel otherwise should be encouraged to have the plan get as much attention as
it possibly can.” (Letter from Friedman to Kurland, January 26, 1971.)
Friedman, “needless to say,” never actually said what he
considered wrong with binary economics, or responded to Kurland’s follow-up
letter of February 1, 1971. Ironically,
within a few years, the initial enabling legislation for the ESOP was
enacted. The late Senator Russell Long
of Louisiana championed the effort. (Norman G. Kurland, “Dinner at the Madison:
Louis Kelso Meets Russell Long,” Owners
at Work, Winter, 1997-1998.) Today, more than 11 million workers in more than
10 thousand companies benefit from Kelso’s “unwise, unsound plan.”
