Louis Kelso invents the Employee Stock Ownership Plan (ESOP) leveraged
buyout to enable employees of Peninsula Newspapers, Inc., of Palo Alto,
California, to buy the company from its founders.
Louis Kelso innovates the Consumer Stock Ownership Plan (CSOP) to enable
farmers in California's central valley to become owners of Valley Nitrogen
Producers, the fertilizer processing plant of which they are the principal
Louis Kelso goes public with his revolutionary new theory
of capitalism in The Capitalist Manifesto, co-authored by Mortimer
J. Adler, published by Random House.
The New Capitalists, also by Kelso and Adler, a financial footnote
to The Capitalist Manifesto, is published by Random House.
How to Turn 80 Million Workers Into Capitalists on Borrowed Money,
followed by paperback edition retitled Two-Factor Theory: The Economics
of Reality, co-authored by Louis O. Kelso and Patricia Hetter, published
by Random House.
Governor Luis A. Ferre of Puerto Rico introduces the Proprietary Fund
for the Progress of Puerto Rico, the first application of Louis Kelso's
proposed General Stock Ownership Plan (GSOP).
Historic meeting between Louis Kelso and Senator Russell B. Long, Chairman
of the Senate Finance Committee, at the Montpelier Room of the Madison
Hotel, Washington, D.C.
Congress legislatively defines the Employee Stock Ownership
Plan (ESOP) for the first time with passage of the Regional Rail Reorganization
The Employee Retirement Income Security Act
of 1974 (ERISA), also known as the Pension Reform Act, writes the ESOP
into the Internal Revenue Code for the first time.
The Trade Act of 1974 includes a provision which gives
preferences on government loans to corporations which use 25% of such
loans for ESOPs.
Minnesota becomes the first state to officially encourage
the use of ESOPs by passing special tax-benefit legislation under the
sponsorship of Senator George S. Pillsbury.
Louis Kelso and the ESOP are featured on "60 Minutes," with
Mike Wallace, broadcast over the CBS television network:
Mike Wallace: "For years, Kelso has been hopping
around the country like an itinerant preacher delivering his sermon.
He tells anyone who'll listen what he told the economic leaders assembled
by President Ford: that proposals for more tax cuts and more welfare
will never solve the economic mess we're in. They don't go to the
root of the problem.
"Americans," says Kelso, "are a nation
of industrial sharecroppers who work for somebody else and have no
other source of income. If a man owns something that will produce
a second income, says Kelso, he'll be a better customer for the things
that American industry produces. But the problem is how to get the
working man that second income."
The Tax Reduction Act of 1975 introduces the TRASOP or
Investment Tax Credit ESOP.
The Tax Reform Act of 1976 provides further tax incentives for the
The Joint Economic Committee of Congress holds hearings
on Employee Stock Ownership Plans at which Louis Kelso, among others,
The Joint Economic Committee of Congress endorses broadened
capital ownership as an economic goal for America in its 1976 Joint
"To provide a realistic opportunity for
more U.S. citizens to become owners of capital, and to provide an
expanded source of equity financing for corporations, it should be
made national policy to pursue the goal of broadened capital ownership.
Congress also should request from the Administration a quadrennial
report on the ownership of wealth in this country which would assist
in evaluating how successfully the base of wealth was being broadened
The Revenue Act of 1978 establishes the General Stock Ownership Corporation
(GSOC) in response to the initiative and leadership of Senator Mike
Gravel of Alaska.
The Deficit Reduction Act of 1984 provides further tax benefits for
Democracy and Economic Power: Extending the ESOP Revolution,
co-authored by Louis O. Kelso and Patricia Hetter Kelso, published by
Ballinger Publishing Company.
Louis Kelso interviewed by Bill Moyers on his "A World of Ideas"
program televised on the Public Broadcasting System.
Second edition of Democracy and Economic Power: Extending the ESOP
Revolution Through Binary Economics published by University Press
First Russian edition of Democracy and Economic Power published
by Znania Publishing Company, Moscow, Russia.
First Chinese edition of Democracy and Economic Power published
by Nanjing University Press, Nanjing, China.
Second Russian edition of Democracy and Economic
Power published by Phoenix Publishing House, Rostov-on-the-Don,