Customer Reviews

Democracy and Economic Power

5 star:		(1)
4 star:		(0)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

This final book by Lou Kelso and Patricia Hetter Kelso explains the first ESOP Lou created, in 1956, and how that experience can carry over to:

MUSOP (Mutual Stock Ownership Plan, a trust owning several small
businesses for the benefit of all their employees.) The costs of creating and administering an ESOP are usually far too great for smaller corporate business. The MUSOP would allow multiple businesses to share the costs.

CSOP (Consumer Stock Ownership Plan, a trust owning a business for the benefit of its customers.) Lou says that, after he created the first and only CSOP, for Valley Nitrogen Producers in 1963, its competitors lobbied Congress to prevent the creation of any more.

GSOP (General Stock Ownership Plan, for ownership of a business by all the citizens within a related geographic area.) Lou worked to have Congress pass the General Stock Ownership Corporation law of 1978. The Alaska state constitution had been amended in 1977 to have 25% of all the state's mineral rents and royalties placed in a permanent fund. Unlike the trust form of his other plans; the Alaska GSOP was to be a corporation which issued one share for each of its citizens. After a five-year escrow period, the shares would be owned directly by the individuals. However, Alaska chose to use a trust, managed by trustees appointed by its governor (www.apfc.org/fundlaw/ConstAndLaw.cfm.) That trust is one of the examples used for Peter Barnes proposal in his 2006 book, Capitalism 3.0: A Guide to Reclaiming the Commons. A 1972 effort for a similar fund in Puerto Rico had lost out in political battles.

ICOP (Individual Capital Ownership Plan, a trust through which individuals could borrow money to buy securities issued by small businesses.) The securities would be rated and the loans to purchase them would be insured to cover failure by the businesses.

COMCOP (Commercial Capital Ownership Plan, a trust to hold commercial real estate for the benefit of individual investors.)

PUBCOP (Public Capital Ownership Plan would provide insured loans to buy securities in corporations which owned privatized public facilities, like streets, schools, prisons, airports and transit systems.)

RECOP (Residential Capital Ownership Plan, which would combine insurance on home mortgage loans, to lower the interest rate, with tax deductions. The combination would reduce the amount necessary for loan payments.)

All of these purchases would be funded entirely by loans. Repayment of the
loans, except for home mortgage loans, would come from interest and dividends on the securities purchased. There would be insurance against the risk that this would not be enough to make the loan payments. This commercial insurance would be reinsured by the Capital Diffusion Reinsurance Corporation, to be established by the federal government. When the loans had been paid, by interest and dividend income from the purchased business, the individuals would get the right to vote their shares and receive the income directly.

The balance of this final book explains some of the theories behind Lou's programs and describes a changed role for labor unions in converting their members to capital owners.