Topic: Economics
Spreading the Wealth, National Banks, and the Communist Family Obama's plan to "spread the wealth" must destroy wealth and Europe's plan to nationalize banks will wreck the wealth of nations. These are things any good student of Marxism understands plainly.by Paul Benedict
(libertarian)
Sunday, October 19, 2008
Spreading the wealth around is an idea at least as old as Karl Marx's Critique of the Gotha Program in which he wrote: "From each according to his ability to each according to his need." To Marx this notion was a transitional principle leading to the workers' paradise. It was part of the "dictatorship of the working class." Ultimately, Marx desired that there would be no wealth to spread around. He desired the abolition of capital. That is, Marx envisioned the abolition of the means to relate to others in terms of employer and wage earner. It was an idea that never worked very well. Why? Have you noticed the flaw in Marxist logic? If there is no capital, there can be no wage earners, or in other words, no jobs. Therefore, Marxism leads to the absence of wealth! If you study Obama's tax plan you can see that he desires the abolition of capital also. Even if jobs cannot be generated, even if the United States is in the middle of a recession where jobs are getting scarcer every day, Obama is sticking to Marxist transitional principles.
Although some five star generals might not like to hear it, illogical notions don't work in the real world. Because of the failure of these Marxist ideas in practice, as well as on the drawing board, one almost suspects the motivation of anyone in any government who proposes them. On one level the motivation seems plain. The appeal of Marxism can be outwardly pleasant. When we humans don't get what they want, it feels very unfair to us. It is easy to demand fairness instead of responsibility, and it is even easier to promise to make things fair by taking some one else's property and making a gift of it to those who desire "fairness." As a parent my response to the fairness argument has always been, "You bet life's not fair, and a good thing it's not! We live in America and other's don't. What's fair about that?" Well life may be getting fair for those who live in Red China. We're not far behind. In fact, capital seems to prefer Beijing.
By the way, some wonder whether the United States bank bailout plans will work. Interestingly, here is the fifth of the ten Marxist preconditions for a workers paradise first outlined in the Communist Manifesto: "Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly." Pope Paulson I, by the way, is conservative compared to the Europeans. They are completely behind Warren Buffet's notion of buying up bank stocks to "recapitalize" them into borrowing, but Henry Paulson had to be dragged kicking and screaming to this table. Even now, he only wants to use a quarter of the cool trillion dollars printed by the congress for nationalizing banks. Will such bailout plans work? It depends on what one means by "work." If one knows history and knows the failure of Marxist theory, one can be certain that the bail out plan will not produce wealth. However if one hates the United States because of its international prestige, its great abundance, and its liberties, and, as a student of Marxism, has been awaiting a crisis of capital to forward the communist agenda for the express purpose of ruining the wealth of nations, this bail out will work perfectly.
By the way Marx had some interesting notions about marriage as well. The Manifesto reads: "Bourgeois (an employer's or rich person's) marriage is (because of rampant infidelity), in reality, a system of wives in common and thus, at the most, what the Communists might possibly be reproached with is that they desire to introduce, in substitution for a hypocritically concealed (system of free love), an openly legalized system of free love. Yes, any force that disrupts the marriage one's marriage was part of the plan for a worker's paradise. Likewise, the nuclear family appeared to be a threat to the communist theorist. Again the manifesto reads: "Abolition of the family! Even the most radical flare up at this infamous proposal of the Communists" Although, outside of the revolutionary party's "community of women" the destruction of the nuclear family would occur without intervention except for public schools. Once capital had been destroyed, of nature the workers paradise would feature no mothers and no fathers. Although Marx claimed that "the bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation into a mere money relation," he was wrong about that as well. No it would be a hundred and fifty years before the Supreme Court of California did this. Even if you don't like McCain or Obama, Californians should get themselves to the polls and vote "Yes" on Proposition 8.
A careful read of the Communist Manifesto will reveal its ambitious aims to amass the power of the state in the hands of the few. This, not a workers' paradise, is what it has always achieved for those who have used its perverse arguments to their advantage. If you wonder why America has struggled since the late fifties, consider some of the other preconditions for Marxist communism that he first set out in 1847. Precondition #2: A heavy progressive or graduated income tax. Precondition #3: Abolition of all rights of inheritance. Precondition #10: Free education for all children in public schools.
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I'm afraid your cursory reading of Marx is appalling! Even to quote from the "Manifesto" shows your limited exposure to his real ideas. This was a small, 60 page pamphlet written with his life-long (and bourgeoise) friend Freiderick Engels as a propaganda guide for the Communist ideas that they were fomenting. Everything in that pamphlet is abbreviated and summarized. To learn Marx's real ideas, you need to plod your way through the three tomes of "Das Kapital" which no one in their right mind could ever do. I have tried several times. It's even worse than reading through some of that stuff Republicae writes.
Marx's idea was not the ELIMINATION of capital, it was the elimination of the OWNERSHIP of capital so that it wouldn't be used to exploit workers. Obama has no such ideas, although the redistribution of income so that it is FAIRLY dispersed should be the goal of ANYONE who seeks the proper motivations in a society.
Would you say that we have the right incentives, for instance, in our economy when movie stars, professional athletes, lawyers, and CEO's are the highest compensated, and police officers, school teachers, and hospital workers are among the lowest? The incentives and distribution are all WRONG.
To say that REDISTRIBUTION is wrong while continuing our present system without corrections is right would mean that you want more HOCKEY PLAYERS and LAWYERS and fewer HOSPITAL WORKERS and TEACHERS. I'm afraid that I think you're NUTS if you do.
Like you, I don't like the high compensation of movie stars and athletes. It's ridiculous. However, my solution is not to limit their compensation. My own personal solution is to not watch sports and rarely watch movies. Today, I am clueless about who wins what championship or which team. I could care less about that industry. Therefore none of my money goes to pay them...not even word of mouth. Unfortunately, some of the tax payer's money go to building and maintaining sports arenas and stadiums. Then the private team uses the stadium for a small lease, gets all the money, pays hefty sums to the athletes, and we are all stuck with the expenses of maintaining the stadium and arenas. That is also wrong. If they make so much money, let them build their own damn stadium in their own private land.
I don't like high compensated lawyers either and so far I have been able to avoid them. However, their high salaries are a result of our corrupt court systems and their "union-like" bar examinations that does nothing more than limiting their own competitors and monopolize the supply of lawyers. Same as with physicians. If there was less regulation on the education and bar examinations on these professions, we would have more competent lawyers and physicians to chose from at different price ranges. Also, the lawyers use our tax-funded court system and get rich from it. In addition the court system can force us to serve as a juror against our will (that’s slavery). I would like to see less courts and less laws so that the resources are used on actual serious criminal cases instead of private lawsuits, traffic court or marijuana possession. The private lawsuits could be handled through private arbitration and use the court system as a last resort.
CEO’s salary is a different story. Some CEO’s deserve their wealth, some DO NOT and some of those should really be in jail for fraud and stealing or be forced to pay heavy retribution charges. Those who do not deserve the wealth are those that their companies are failing miserably and yet they receive money for nothing or get a severance when fired. Worst, when the government bails them out and they cash out. That is a horrible redistribution of wealth in the wrong side and both your candidate and his opponent voted in favor of that FISACO. On the other hand, if their compensation is dependent on the company’s strength, profits and stability, then let them reap the benefits of their labor like the Bill Gates and Warren Buffets of the World.
Cops, teachers and firemen are very well compensated. If they were not, we would have a shortage and they will be resigning or quiting their "low" paying jobs. I don’t see that happening. Most stick to those professions for a LONG time and they have their unions and seniority rulings. My aunt is a public school teacher who complaints about her $50k yearly salary even though she used to earn $24k/year before becoming a teacher. Of course, that figure varies from state to state and community to community. There may be other teachers out there whose salaries are way lower. However, when you account for about 10-weeks of the Summer off, 1 week of Spring Break, another in Winter Break, vacation, pensions, benefits and so many other holidays, $50k per year is really for less than 9 months of the year. It’s more than $5,500 per working month. If you are efficient with your time as a teacher you may even work for less than 40 hours per week. That does not sound that bad at all. If you need more money as a teacher, you have the option of working Summers and tutoring on the evenings and getting an additional $5k to $10k. Try getting that in a non-teaching position in the private sector with a degree in Pedagogy! If lucky you will get 10 vacation days off. I think some teachers are even overpaid.
Posted By: Paul Benedict
Date: 2008-10-20 16:38:37
Union negotiation of wages must be considered a part of the free market system; however, striking has significantly negative consequences on the final products produced. Major League Baseball is one example and education is perhaps another.I'm not sure that state owned capital is capital. That is, the authority to employ as directed by a government that has violence at its disposal is in a different category than the ability to employ others to produce wealth based on common interest and necessity.It is also plain from the Communist Manifesto that both Marx and Engels were deeply offended by the dynamics of the free enterprise system. They complain bitterly about the ever changing market place. Engels must have lost money on buggy whips.
The way Unions are formed and are established are very far away from free market. When a union is formed, the majority of your co-workers voted in favor of joining a union and have your group represented by one. However, even if you voted not to join, if you want to keep your job you must join and abide by the mob (your co-workers). So even though you my be agaisnt it how can the mob ruling of your co-workers force you out of your initial agreement with your employer and still be considered free! Then if you decide to cross the picket line in the event of a strike to provide for your family, you could be subjected to violence form your so called union brothers.
If the joining of a Unions is completely voluntary and not forced by majority ruling (mob) or by violence then they would really be part of a free market. Actually you may even have several unions of the same skilled trades to collectively bargain with management of the same company. Then individuals will either joint one or the other or none. That would really be free market on Unions.
Posted By: Paul Benedict
Date: 2008-10-21 17:40:07
I agree with the largely undemocratic operation of the unions ...and democracy with checks and balances is the key to reducing the negative effect on production that unions have... I also think that there is an imbalance in laws that punish employers for price-fixing and collusion but allow workers to demand a set wage. Of course we have few laws discouraging companies from inquiring what various occupations pay their employees.
Still, unions are important in a genuine free market environment. Putting a gun to a man's head and saying "your money or your life" is an unfair contract. The wage earner as a solitary tradesman is in a similar disadvantage. The dynamics of employer and employee is a better way at getting at a "living wage" than governmentally set standards.
Has it been the unionization of the American car industry that has killed it, or has it been middle management. Why hasn’t Ford been able to take a Honda apart and copy one for pity sake? It’s been thirty years!
I see capitalism run amok as the main problem with the country today, so I really can't see how libertarians think that giving even more free reign to multinational mega-corporations is supposed to help anyone who isn't a CEO or stock-holder of said companies. They show no signs of loyalty to any country, and with further globalization of the economy and deregulation, these companies will simply run rough-shod all over the world, extracting wealth and leaving nothing but industrial waste. Get ready to chase them around, begging for the privilege to work for them and recieve your pittance of pay. Capitalism is inherently exploitative and extractive. As a rule, the employer pays the worker much less than the wealth produced as profit for their labor. The people raking in the dough are not "the ones who worked hardest" but the bloody fattest parasites. The truth seems to me that fat parasites are who the libertarian party represents - the filthy rich, or those greedy american dreamers who still hold out hopes of becoming filthy rich. Just like the followers of Marx, who claim there has never been a truly communist state, the libertarians claim that there has never been a free market economy, and both claim to have the solution! You use fears of Leninist or Maoist communism and golden visions of prosperity to steer people in your far right direction, but your solution is worse than the problem.
Posted By: Paul Benedict
Date: 2008-10-22 17:41:36
Hi Bean,I'm trying not to use "fear" but the illogic of the "Manifesto" itself and a series of history's verdicts. Sometimes, when talking about communism one must use the word "capitalism" because Marx does. However, trying to argue against "capitalism" is silly since it is a word defined by Marx himself!Despite the exploitation that is endemic to every era of history known to mankind, the engine of free enterprise, intellectual freedom, robust Christian living, and political autonomy in late Renaissance Europe and in the United States colonies produced a tremendous engine of change that brought material bounty to millions of people. I haven't summarized all of the historic and cultural elements of that period, but where similar elements exist people who find solutions stay motivated to apply and apply and apply them for the benefit of others. That is quite a different record that communism of any type.
The implications of income redistribution should become evident when we understand that there is a high cost associated with “helping” some while “taking” from others to accomplish such goals. Of course, looking at percentages on a proportional basis, of poverty levels, it becomes evident that instead of decreasing they have increased despite all the efforts of the government to combat such social maladies. Additionally, there is an ancillary cost for the government itself in its administration of such programs and systems. Estimates are that for every one dollar used to subsidize the poor it takes three dollars in government costs. This will become a very important consideration as government expenditures reach a point, not too distant future according to the GAO, that it can no longer sustain such systems.
Even if we assume that the cost of tax collection is at zero, which its not, then for all the redistribution of income through taxation there is actually more money being removed from the economy and productivity.
So, in one way or another, productive taxpayers have three dollars confiscated from then for every dollar that subsidizes lower income recipients, this is a major problem that few politicians will readily confront due to the sensitivity of the issue or, as in most cases, willful ignorance of the problem. Essentially, what is taking place is that while lower income people gain a dollar subsidy, those who administer such programs are either directly or indirectly subsidized two dollars. This, of course, is a great incentive for those who administer such programs to maintain such programs and to enhance such programs with extra spending. It is to their advantage to widen the scope of their roll in “assisting” those who are “under-privileged”.
Taxes, of course, tend to reduce the incentives to use resources in productive ways; causing them to save and even invest less than they normally would at lower rates of taxation. The burden on productivity is enormous and growing along with the rolls of those being subsidized. But the reduction in total output and therefore income is substantial. There are numerous other burdens that should be factored into the equations of income redistribution, some social, some political and some economic, but it should be evident that there are other costs associated with confiscatory redistribution such as enforcement costs, collections, litigation and perhaps more significant is the feeling in many people that there is a need to evade or avoid their taxation. Thus, with all things considered, private and government costs associated with such redistribution programs eat away at an estimated 65% of tax revenues, perhaps more when all is considered. The effects on the general economy are beyond calculation, but it should be evident that if you provide a subsidy that the rolls on those programs will naturally swell.
To think that any redistribution program will actually eliminate poverty instead of increasing it is yet another pie-in-the-sky fantasy promoted primarily by and for those within the political arena. The only thing that has ever worked to bring the largest degree of prosperity into a population was the freest market possible, the protection of real property and the principle of private contract. The effects of redistribution is, therefore just the opposite of what is needed to bring about a more equitable society; especially when we considered that during the periods of the greatest productivity the levels of poverty always decrease. Since the “War on Poverty” begin, the rolls of the poor has steadily increased, redistribution is a failure, not only on a practical level but on a fundamentally philosophical level.
Considering all the issues facing this government, its monetary system and the general economy built upon that system; I am not worried about Obama’s plans for an increased redistribution because the country, unable to afford such programs now will be even less able to provide them in the near future. According to GAO reports, there will be a drastic reduction in the ability of this government to not only provide such subsistence funding, but just about every other form of expenditures it currently accrues starting in the year 2010. At that point we will see a very different government, a very different country and a drastically different approach to every issue, including the military. The “empire” is approaching critical mass!
Posted By: Paul Benedict
Date: 2008-10-24 17:42:43
The lending will stop some day, but no one can tell when. Most foreign governments seem to like the "piggy bank" of American investment. American bonds are safe... On the other hand, if we default whose going to "make us" pay? We could always sell the Grand Canyon or sub let Yellowstone for condos...
Paul, I am inclined to think that both creditor and borrower will ultimately be in the same sad, sad boat together. At that point I don't think anyone will be thinking about who owes who what.
I see capitalism run amok as the main problem with the country today, so I really can't see how libertarians think that giving even more free reign to multinational mega-corporations is supposed to help anyone who isn't a CEO or stock-holder of said companies. They show no signs of loyalty to any country, and with further globalization of the economy and deregulation, these companies will simply run rough-shod all over the world, extracting wealth and leaving nothing but industrial waste. Get ready to chase them around, begging for the privilege to work for them and recieve your pittance of pay. Capitalism is inherently exploitative and extractive. As a rule, the employer pays the worker much less than the wealth produced as profit for their labor. The people raking in the dough are not "the ones who worked hardest" but the bloody fattest parasites. The truth seems to me that fat parasites are who the libertarian party represents - the filthy rich, or those greedy american dreamers who still hold out hopes of becoming filthy rich. Just like the followers of Marx, who claim there has never been a truly communist state, the libertarians claim that there has never been a free market economy, and both claim to have the solution! You use fears of Leninist or Maoist communism and golden visions of prosperity to steer people in your far right direction, but your solution is worse than the problem.
Woops, didn't mean to post that again. Anyway, I'm an anarchist, so I don't believe in a completely state-controlled redistribution of wealth, but as long as we have a state, and a mixed economy, there neesd to be some redistribution of wealth, because it's obviously not "trickling down." Why should anyone who is't a greedy business man want to give free reign to greedy businessmen? You say "leave me and my money alone"! "don't ask me to give anything back to the community!" but you say "save me! save me!" when it comes to protecting your private property from mob justice. Let me cheat and exploit and get rich at everyone else's expense, and then just keep the police and jails ready to protect me from "redistribution of wealth."
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