17 Pages Posted: 15 Feb 2006
Date Written: December 31, 2005
Although, the ideas underlying binary economics were first published in 1958 (Kelso and Adler), the many books and papers that discuss the subject, with the exception of Kane (2000) and Kurland (2001), do not utilize conventional economics language. To facilitate the teaching of binary economics in beginning and intermediate college courses in economics and business, the paper explains some major microeconomic and macroeconomic fundamentals of binary economics by utilizing conventional neo-classical economic models. It then compares the theoretical results reached in a non-binary economic environment to those that may be reached in a binary one. The most important result from the comparison is that, as compared with the binary environment, in a non-binary environment, the economy would employ less than full potential capital and thus generate less than optimum output, consumption, saving and investment. The authors hope the article will help the reader to (a) understand the binary principles and (b) analyze the 'binary promise' of greater growth based on a broader distribution of capital ownership.
Keywords: binary economics, capital ownership, economic growth, automation, unutilized capacity, democracy, leisure, economic justice, private property, employee ownership, ESOPs, efficiency
JEL Classification: A00, A20, B00, B2, B3. E00, I3, K00, N00, O00, P1
Suggested Citation: Suggested Citation