What Louis Kelso Knew
The ancient Greek poet Archilochus observed: “The fox knows many things, but the hedgehog knows one big thing.” Although the meaning of this enigmatic fragment has been lost in time, the late British philosopher Isaiah Berlin, in a celebrated essay,1 made the fox and the hedgehog symbols of a deep temperamental divide between thinkers and writers, and perhaps human beings in general.
Berlin thought that a great chasm exists between “those, on one side, who relate everything to a single central vision, one system … a single, universal organizing principle … and, on the other side, those who pursue many ends, often unrelated and even contradictory, connected, if at all, only in some de facto way … related by no moral or aesthetic principle.”
The hedgehog, then, is holistic, the fox pragmatic. In Berlin’s taxonomy, Plato is a hedgehog, Aristotle a fox, and Tolstoi a fox who wants to be a hedgehog. As the author of an important biography of Karl Marx, an arch-hedgehog if ever there was one, Berlin might well have extended his analysis to economists. Their thinking reflects the same temperamental split.
Louis Kelso was a hedgehog. As a political economist and visionary social thinker, he knew one big thing — an overarchingly momentous thing that illuminates the social landscape like flashes of summer lightning, a transformational big thing that generations of economists, with one possible exception, Jean Baptiste Say, had inexplicably overlooked. He knew that capital is an input factor on the production side of the free market equation, and thus performs work and earns income just as human labor does. And he knew the momentous social implications of this revolutionary discovery.