We may have mentioned one or two dozen (or hundred) times how much we like it when people ask us questions we can answer and then use as a posting on this blog. What we like even better is when someone takes the bull between the teeth or the bit by the horns and writes the entire blog posting for us, with only a little bit of editing and formatting to make it fit our needs.
This week we have another posting from Guy “The Fulton Sheen Guy” Stevenson, a CESJ stalwart and motive force behind the Just Third Way edition of Abp. Fulton Sheen’s Freedom Under God, considered by some to be “the” definitive version of this “long-lost classic.” Guy’s guest posting this week is related to the material Sheen covered in Freedom Under God, but takes a different direction than one with most people familiar with “America’s Archbishop” are comfortable . . . thereby accounting for why Freedom Under God managed to become a lost classic . . .
The Blind Spot of Ownership in the Age of Innovation
Why Binary Economics Remains the Purloined Letter of Modern Economic Thought
Guy C. Stevenson
I would like to take the opportunity to critique the prevailing economic paradigm that celebrates innovation-driven growth while ignoring the foundational question of capital ownership. Drawing on the 2025 Nobel Prize in Economic Sciences and the theory of “creative destruction,” I argue that Louis Kelso’s Binary Economics offers the missing framework for inclusive prosperity. Without democratized ownership, innovation risks becoming a mechanism to concentrate wealth rather than uplift society.
This year’s Nobel Memorial Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their work on how innovation drives sustained economic growth. Their research affirms Joseph Schumpeter’s theory of “creative destruction,” wherein technological progress disrupts existing structures to create new opportunities.
Still, there is a fatal omission from the theory of innovation. That is the question of who owns the means of innovation. A discussion of the contribution Binary Economics can make to the validity of the theory remains conspicuously absent.
Joseph A. Schumpeter
Despite this omission, capital ownership as Kelso demonstrated remains the key to economic agency. Perhaps not surprisingly, the experts and policymakers ignore Binary Economics not for lack of merit. Rather, people avoid Binary Economics for its challenge to entrenched structures of power — those groups and individuals who have benefitted most from today’s distorted ownership patterns and limited access to the means of acquiring and possessing private property in capital.
Schumpeter’s insight — that innovation disrupts and renews — is now enshrined in Nobel-winning models. Aghion and Howitt’s work demonstrates how growth can persist even as firms collapse. Mokyr’s cultural analysis reveals how openness to ideas fuels progress.
Nevertheless, these frameworks treat ownership as a static backdrop rather than a dynamic variable. In a world where capital increasingly generates income apart from labor, the absence of ownership mechanisms ensures creative destruction becomes creative concentration. Consequently, economic activity becomes a cycle in which wealth and power accrue to the few to the detriment of the many. (Eshe Nelson, “Joel Mokyr, Philippe Aghion and Peter Howitt Share Nobel in Economics,” The New York Times, October 13, 2025.)
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| Mortimer J. Adler |
Binary Economics, as developed by Louis Kelso and Mortimer Adler, posits that capital ownership must be democratized to achieve inclusive prosperity. (Louis O. Kelso and Mortimer J. Adler, The Capitalist Manifesto, Random House, 1958.) It offers a framework in which technological progress is paired with expanded capital ownership mechanisms — such as Employee Stock Ownership Plans (ESOPs), community investment trusts, and credit-backed capital acquisition — which have the potential to allow every citizen to become a direct owner of capital. In this model, growth is not merely a function of innovation but of broad-based access to the means of acquiring and possessing productive assets. (Center for Economic and Social Justice (CESJ), “Binary Economics: The New Paradigm.”)
Further, the Nobel laureates’ models do not account for the radical imbalance emerging in the age of artificial intelligence. As AI systems replace labor and concentrate productive capacity at an accelerating rate, those who own the algorithms and platforms will dominate income flows. Without a universal ownership strategy — financed through future earnings and supported by just market institutions — this imbalance will become insurmountable by just, fair, and sustainable means. As a result, people will resort either to mass redistribution through government intervention (e.g., Universal Basic Income), or to mass dislocation through economic exclusion. (Dawn K. Brohawn, “Commentary on Nobel Prize and AI Ownership Imbalance,” CESJ Communications, October 14, 2025.) Neither option is just or sustainable, nor feasible in the long run.
Louis O. Kelso
In A Culture of Growth, Mokyr celebrates the Enlightenment’s embrace of intellectual pluralism and the “Republic of Letters.” (Joel Mokyr, A Culture of Growth: The Origins of the Modern Economy, Princeton University Press, 2016.) He describes a society where ideas flowed freely, and institutions adapted.
In contrast, gatekeeping governs today’s economic discourse. Binary Economics is excluded not because it lacks rigor, but because it threatens the status quo: concentrated ownership, centralized finance, and labor-dependent income models. Academia, like the guilds Mokyr critiques, resists ideas which could redistribute power.
If innovation is to serve humanity, it must be paired with expanded direct capital ownership. Binary Economics does not reject creative destruction. Rather, it redeems it. Kelso’s ideas optimize the possibility that the benefits of innovation are not hoarded but shared. They have the potential to transform growth from a technical achievement into a moral one. Binary Economics can restore the soul of economics through the empowerment of every person to shape their own personal futures.
Yes, the Nobel Prize affirms the mechanisms of growth. Binary Economics, however, asks: Who grows? Until economists and policymakers confront the ownership question, their models and applications will remain incomplete — technically brilliant, but morally hollow. The purloined letter remains on the desk, waiting to be noticed and read.
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