01
Retrain workers
Help people move into the new jobs technology creates.
Income comes from
Wages
Kelso’s concern: It works while new jobs keep pace, but the gains from automation still flow to the owners.
Kelso and the age of AI
In 2026, AI companies and lawmakers across the political spectrum began calling for public wealth funds and “universal basic capital”: ways to give people a stake in AI instead of a check. Louis Kelso designed the tools for exactly that starting in 1956, so that people without savings could buy capital and pay for it out of what it earns.
What the evidence says now
AI is already changing who works, and who earns.
60%
of jobs in advanced economies are exposed to AI. The IMF expects AI to “likely worsen overall inequality” in most scenarios, and to raise returns to capital.
60 in 100 jobs exposed to AILess exposed
92 million
jobs are expected to be displaced worldwide by 2030, while 170 million are created. 41% of employers plan to shrink their workforce as AI automates tasks.
Jobs displaced by 203092 million
Jobs created by 2030170 million
Under 25
is where the hiring slowdown is showing up. In the most AI-exposed U.S. sectors, employment fell 1% since late 2022 while total employment rose 2.5%, with declines concentrated among young workers.
Most AI-exposed sectors−1%
All U.S. employment+2.5%
FellRose
The question is not only how many jobs AI changes. It is who owns the systems that do the work, and so who receives the income they produce.
What Kelso saw
Two factors produce wealth: people and capital.
Kelso’s insight was that technology rarely makes people more productive. It makes tools, machines and processes more productive. So as technology advances, a growing share of what the economy produces is earned by capital, and paid to whoever owns it.
If most people own only their labor, every leap in technology widens the gap. AI is that leap, arriving faster and reaching further into skilled work than any before it.
Written in 1958
“Capitalism gives maximum encouragement to technological improvements that progressively make the production of wealth more efficient and at the same time transfer more and more of the burden of it from men to machines.”
Louis O. Kelso and Mortimer J. Adler, The Capitalist Manifesto
“Americans are a nation of industrial sharecroppers who work for somebody else and have no other source of income.”
Louis O. Kelso, as quoted on CBS 60 Minutes, 1975
See the difference
Who receives what the machines earn?
Earns income from the machinesWages only
When a few people own the machines, the income the machines earn goes to those few. Everyone else depends on wages alone, even as machines take on more of the work.
Kelso’s answer
Three ways to respond to automation, and why Kelso chose ownership.
02
Redistribute income
Tax the gains of automation and transfer income, for example through a universal basic income.
Income comes from
Government transfers
Kelso’s concern: It leaves people dependent on transfers that must be won politically every year, rather than making them owners.
03
Kelso’s answer
Broaden ownership
Help people acquire a stake in productive capital and pay for it from its own future earnings.
Income comes from
Wages plus capital income
This is Kelso’s answer. It can work alongside the other two, and the ESOP has already proven it at scale.
How does Kelso’s idea compare to UBI, socialism and public wealth funds? See the comparison
How Kelso’s idea works
Ownership that pays for itself.
Most of today’s proposals fund ownership by taxing AI companies or taking a share of them. Kelso’s way creates new owners without taking anything from anyone: borrow to buy productive capital, then let its earnings pay off the loan. An ESOP does it in four steps, and the calculator below shows the math.
Step 1
A trust borrows.
A trust set up for the employees borrows money, backed by the company.
Step 2
It buys shares.
The loan buys company stock, held in the trust for the employees. Workers put in none of their own money.
Step 3
Earnings repay the loan.
Each year the company pays down the loan out of its earnings, and shares move into employees’ accounts.
Step 4
Workers own it.
Once the loan is repaid, the shares are theirs: a second income alongside their wages.
See every step of an ESOP in an interactive diagram
Try the numbers
$30,000
A worker with no savings borrows to buy this much stock in the company.15%
Kelso proposed that companies pay out most of their earnings to their owners.5%
What it costs to borrow the money for the shares.Loan paid off in8.5 years
Then, every year$4,500
Year 1Year 13
Earnings repaying the loan Income to the new owner
The worker puts in nothing. The shares pay for themselves out of what the business earns, and then the income is theirs, on top of their wages.
A simplified illustration of Kelso’s financing idea, not investment advice. Real ESOPs borrow through a company trust and carry tax advantages this leaves out.
What broad ownership of AI could look like
Kelso’s tools, applied to the machines of this century.
Illustrations of Kelso’s financing tools, not policy proposals.
ESOP
Employees
Workers at companies that adopt AI own a stake in those companies, so productivity gains raise their income instead of replacing it.
CSOP
Customers
The people who rely on a service, such as a regional data center or power supply, own a share of it and receive its dividends.
GSOP and PUBCOP
Citizens
Residents hold a stake in large shared infrastructure, so the public shares directly in what it produces.
Help bring Kelso’s answer into the AI debate.
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