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Binary Economics - An Overview


Robert Ashford


Syracuse University - College of Law

2012


Abstract:     
Based on binary economic principles, this paper asserts that one widely overlooked way to empower economically poor and working people in market economy is to universalize the right to acquire capital with the earnings of capital. This right is presently largely concentrated, as a practical matter, in less than 5 % of the population. The concentration of the right to acquire capital with the earnings of capital helps to explain how people either remain poor or end up poor no matter how hard they work or are willing to work.

Binary Economics offers a conception of economics that is foundationally distinct from the economic theories presently employed by government, private enterprise, charitable institutions, and individuals to formulate and evaluate economic policy. Because it is foundationally distinct from classical, neoclassical, Keynesian, monetarist, and socialist economics, binary economics specifically offers a distinct explanation for the persistence of poverty, unutilized capacity, and suboptimal growth. First advanced by Louis Kelso, binary economics holds that (1) labor and capital are equally fundamental or "binary" factors of production, (2) technology makes capital much more productive than labor, (3) the more broadly capital is acquired with the earnings of capital the faster the economy will grow.

Most binary economists conclude that universal, individual participation in the right to acquire capital with the earnings of capital (the binary property right) is a necessary condition for sustainable growth, distributive justice, and a true democracy. Binary economic analssis reveals a voluntary market-based strategy for producing much greater and more broadly shared abundance without redistribution. Based on objective standards of (1) reasonable, workable assumptions, (2) internal consistency, and (3) plausible descriptions, predictions and prescriptions, binary economics should be taught wherever other economic approaches to growth, sustainability, development, investment, poverty, and economic justice are taught.

Number of Pages in PDF File: 17

Keywords: Binary, Economics, growth, poverty, distribution, capital, labor, capital credit, capital democratization, broader ownership, employee ownership, economic thought, development, macroeconomics, corporate finance, teaching finance, private property

JEL Classification: A00, B00, B29, E00, G32, K00, K22, M14, N00, O11

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Date posted: September 8, 2006 ; Last revised: April 3, 2012

Suggested Citation

Ashford, Robert, Binary Economics - An Overview (2012). Available at SSRN: http://ssrn.com/abstract=928752 or http://dx.doi.org/10.2139/ssrn.928752

Contact Information

Robert Ashford (Contact Author)
Syracuse University - College of Law ( email )
Syracuse, NY 13244-1030
United States
315-677-4680 (Phone)
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