A new capitalism
Sir: In discussing Louis Kelso's theories, Nicholas Davenport (28 May) does not mention that they are now out of the ivory tower and romping away in the real world of the US. Since 1973 (when Senator Russell B. Long, chairman of the Senate Finance Committee, became involved) Two Factor theory has been embodied in six Acts and implemented in about one thousand company schemes. A large proportion of the companies are big ones and three weeks ago America's largest company in terms of number of shareholders and profits (the 'American Telephone and Telegraph Co) announced that it was adopting a Two Factor plan. It gives the company $87,000,000 to invest in capital expenditure, which it would not otherwise have had, and provides 927,000 employees with shares. Other large companies, such as Exxon, Standard Oil of California and Atlantic Richfield have acted similarly.
But these schemes are only the first stages of the potential in Two Factor theory for it not only provides a way of developing a market economy without provoking political attack, not only provides a way of putting the nationalised industries into the true ownership of the people, but is also capable of giving every member of the population (which includes the sick and the unemployed) an income from an independent capital holding. It should be noted that existing capital holdings are not touched; indeed, they benefit considerably.
Kelso's problem since 1958, when with Mortimer Adler he, published The Capitalist Manifesto, has been to encapsulate Two Factor theory in concise and readable form. This has now just been done by Wilf Proudfoot and Rodney Shakespeare in The Two Factor Nation or How to Make the People Rich published at £1.35, by Two Factor Companies at the address below. R.A. Shakespeare
9 Belvedere Place, Scarborough, Yorkshire
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