Arguments from Ignorants

If there is one thing that annoys me when seeing arguments against Communism is persistent ignorance. We’re not talking about simple ignorance where someone is not aware of a fact, but the kind of stubborn insintense on false ideas even when one has explicitly been told that they have it wrong. At this point we’re not simply talking about someone who has it wrong but about someone who is unwilling to learn.

Witness now this obtuse argument from BadTux who tries to explain why Communism is doomed to failure with arguments even a cursory look at an introductory text to Marxism should have put to rest.

He flies right off the bat by separating the political aspect of Communism from the economic, not obviously undertanding that this is impossible. Communism is not simply an economic system but a complete one, ecompassing social, political and economic aspects. You cannot disconnect the economic aspect of Communism from the social simply because it requires a specific type of society to work.

Communism is about having a classless, stateless society. It’s that simple. If you have a state or separation of classes, whether in the form of government bureaucrats or simple capitalists, you cannot claim to be in Communism. In any sense. It’s that simple. So by taking the economic aspect of the Soviet Union and calling it “Economic Communism”, you are using a flawed system as an example.

Next, we have the argument of how people would not join communes by themselves and they would have to be forced. Something which is of course totally away from any historical reality. If BadTux had bothered to actually read the History of the Russian Revolution he would have seen how “few” people were willing to to form soviets. The reality was that people were joining Soviets by the thousands, both the proletariat in the cities and the peasants in the armies. They were very much the majority and did not have to use any force.

He at least tries later to improve the validity of his article by talking about “modern communism” not realizing that there is nothing “modern” about it but rather that the original idea was about industrial societies. The idea for Communism was that it always required an industrialized society before it could take hold. This was the original idea from the time of Marx. The lack of a big proletariat in Russia and China was a large, if not the largest reason why the revolutions failed. A feudal peasant population is incompatible with Communism.

Then we’re treated to the impossibility of handling the modern production under communism simply by bringing up all the elements required for a product. But that’s just it. There’s no explanation of why this makes it impossible other than the inability of the author to think about it.

And with these arguments we are then told “So this, then, explains why communism as an economic system has failed every time it has been tried” and then goes on to bring the Soviet Union as an example. So he has failed to grasp what Communism even is, and then brought up State Capitalist society as proof. Incredible!

We then continue with the “other aspect” of Communism which is the political which apparently has been shown to fail…in a capitalistic society. What BadTux does not realize is that Communism does not work on an per-nation basis. Communism has to be achieved internationally so as to not have the need for standing armies or a state apparatus.  Even Lenin recognised the need for International movements for Communism and this is what he was counting on. He knew that if that did not happen, the Russian Revolution was in a really tight spot.

It is no worth looking at individual communes in a Capitalist society as they are not the point or an example of socialism. Their struggle to survive in a Capitalist society is what creates contradictions among the people within. This “problem of power” that BadTux keeps referring to does not exist in a society where people can easily leave a syndic they do not like and immediately join another or form their own.

And indeed. there is no better example for this than the Free Software movement. Therein you have groups of people clustered around any specific application and you have a benevolent dictator at the top. This “leader” or group of leaders that BadTux claims would always cause problems and dissolving the group. However not only does this work our, but it works admirably. When the leaders are indeed benevolent, the group prospers and keeps them in their place due to their abilities. If the leaders misbehave enough however, the dissatisfied people simply fork the project and start a new group. What “problem of power”?

This is why such arguments from ignorants are so annoying. You end up having to refute arguments which have nothing to do with Communism at all. This is not productive at all to the Communist who does not learn anything new but rather has to waste time pointing out strawmen left and right. Argue why the Labour Theory of Value is wrong. Argue how exploitation of the worker does not exist. Argue, in short, for things that Marxism actually explains and proposes, not whatever half-truths you gathered from school and popular news sources.

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Objective and Subjective Value

The two main forms of Value theory that are in existence right now is the Labour Theory of Value (LTV) and the Marginalist Theory of Value (MTV). Usually the proponents of one, do not recognise the validity of the other in defining the value of an object. I wish to show that these two are not mutually exclusive but that rather, we have a dualistic system of value where both play a role.

First of all, I consider that each item has an Objective utility which is the intrinsic use-value it has for the vast majority of humans. For example, a potato has an amount of kcal and it can always nourish. A car has the capability to move with a number of km per hour etc. These define a utility that remains constant no matter the subjective view on them by any human.

The only way to get this objective utility ((When it does not already exist in nature)) is to create it and the only thing that creates items is human labour. Labour can be counted in hours and thus we can find out how many hour of labour ((Socially necessary labour hours to be exact but I don’t want to get into such details now)) are necessary to create a specific objective utility in the form of a product. We can call this the objective value of the product.

It is this kind of value that the LTV attempts to define.

Now each item also has a Subjective utility which is the use-value any specific human individual assigns to it. This utility is almost never the same for any two individuals and further fluctuates for the same individual based on marginal utility. So I value a single potato when I have nothing to eat much more than a single potato when I have another 1000 of them in the warehouse. And I value a car when I have to drive 10 km every day to work, much more than a neighbour who works in the same building he lives in.

This subjective utility can only be abstracted based on the average demand for any type of objective utility. There is no other way to quantify it as each human simply thinks in a matter of priorities. For the starving, the potato is more “valuable” than a car. We can call this averaged demand the subjective value of the product.

But how do these two merge? The objective value lets us know how much work a product requires. This work needs to be repaid with an equal amount of work (in the form of another product) if one is to part with it. Thus it defines the minimum exchange value of a product. The subjective value lets us know on average how much people value a product. As a person values another product more than what they produce themselves (due to marginal utility), the subjective value tends to be higher than the objective value. Thus it defines the maximum exchange value of a product.

If there is a demand for the product then we can assume that the subjective value is higher than the objective. The higher the demand, the higher the subjective value. We can consider this difference between the number of labour hours a product requires to make and the number of labour hours we can get in exchange for it, as an objective measure of the subjective value.

In case the subjective value is below the objective value, then it means that this product will not be made as nobody will wish to make even the necessary minimum exchange for it at the objective value.

So what does this all mean? I’m not certain yet. For me, it is an obvious fact that the LTV is true but that also the MTV is also true. Neoclassical economics have used the Subjective Theories of Value as an unbeatable boogeyman to prove that Marxist theories were inherently flawed. But the Labour Theory of Value is still a very real important aspect of the value of a product as it is the only thing that can be used as a basis for the price. Certainly, Subjective Theories of Value play an important part but it is a much lesser role which only helps to show why exchanges happen and why prices fluxuate. It can in no case be considered the only way to define value.

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The Lesser Evil

Medieval illustration of Hell in the Hortus de...
Image via Wikipedia

It seems that the Debate Link has recently been criticizing the Barefoot Bum for promoting revolutionary communism instead of simply supporting Democrats as the lesser evil of the US political system. I’ve written before how supporting bipartisanism is harming to society and this the latest post prompted me to throw me 2 cents in the ring.

Debate Link’s David seems to find the suggestion that one should not support a party which goes against everything you believe in, is wrong. He argues that it is mistaken not to give my vote to someone who will use this power to do harm because if I do not do so, the other guy will do even worse than that. He argues that I become morally condemnable for supporting movements who have a chance to do real good because I may allow the really bad guys to do more harm.

But this is simply caving in to a threat. It is not much different than paying caving in to a captor’s demands. The Captor threatens that I should give him what he wants or else the hostage will be harmed. In our situation, the captor is the “lesser evil” party. People like David threaten that we become morally responsible for whatever happens to the hostage (the USA and the world) if we do not give the Democratic party whatever they want, even though we know that caving in will simply give them the incentive to take hostages again. Hell, very often we know that the hostage is going to get it whatever we do.

Further to that, when TBB says that it is worse to keep voting the “Palliative” it is not because we are not curing the disease, it’s because we are making it worse. Dave argues that taking the Palliative is better than letting the disease hurt as much as it would because in the real world, not taking the “Palliative” (ie voting Democrats) means more people would die. But what David fails to see in this example, is that in the long run, taking the “Palliative” will have even worse results than not. Specifically, the patient will die as a whole. In the real world that translates to much more people dying because a Democrat rule did not allow the necessary revolutionary cure to take place when there was still time.

Continuing to vote Democrats instead of struggling for revolutionary communism means that eventually it might be too late for even that. And the suffering people will have then will be bigger than whatever bad shit a revolution would require.

In all of this, it seems that David is desperately trying to spread the blame to everyone regardless of the choices they made. He is not interested in whether Communism is indeed the right choice to take but claims that even if it is, simply because people consider it a fringe ideology, striving for it makes us as much culpable for any deaths as is doing the deed ourselves. In essence a failed attempt to do the right thing should be considered as bad as doing the wrong thing altogether. The only correct action for David is compromise. Do just a little of the bad even though you always have to increase how much bad you do progressively anyway.

And this compromisistic mentality of our society is why we’re heading down the crapper. Because people don’t finally get Mad as Hell and refuse to take it anymore. Because as long as it doesn’t affect them, people will compromise and vote for leaders who will betray them the moment they are given the power and screw everyone else.

And for David, if you’re not a compromiser, you’re as bad as the opposition.

But what me and TBB is for people to stop compromising. To stop caving in to the “captors” demands. We want to charge the captor and free the hostages and we want the hostages to bite and kick to help us. Certainly some of us and some of the hostages may suffer in the process, but it will certainly be less than the number of hostages who would suffer in the future if captors figured out that taking hostages is a risk-free proposition for getting what they want.

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The "Risk" in Capitalism is nothing more than a scare tactic

Loosing money
Image by Pulpolux !!! via Flickr

The most common argument I hear when arguing for the exploitation theory with Anarcho-Capitalists is the concept of Risk which supports the idea that the Capitalist deserves a share of the profits, even though he is not putting any labour in, himself. The argument usually goes somehow like this.

  • Me: ‘The Worker is being exploited because he’s not receiving the full results of his labour’
  • AnCap: ‘The Capitalist deserves part of the profit because he took the risk with his capital to start the company. If the company fails, the Capitalist has lost his money.If the company does well, he deserves to be rewarded for taking such a risk’

As I have to deal with this a lot, I think it might be worth writing my objections to the concept and how it does not counter the exploitation theory.

Risk does not exist once the Return of Investment has been made

We start on the situation where the Capitalist has wealth but not yet bought any means of production. He decides on a venture that he assumes will be able to make a profit and builds a factory to produce the product. At this point, we assume that his risk is that he might have judged wrongly and there might actually not be any margin for profit so he will end up not making up his investment on the factory.

Lets assume however that he was right and the new company does make a profit. This profit of course comes from taking part of the surplus value created by the workers and our Capitalist would claim that this is warranted since he deserves to make back his investment.

But the Capitalist will not stop there. When ROI has been made, and all his investment has been returned to him in the form of profit over time, the capitalist will continue to exploit the workers in order to continue making more money, over his initial investment. At this point, this exploitation cannot be claimed to be justified because of the risk, as there is no more “risk” to speak of. Even if the company were to go under, the Capitalist will leave with as much wealth as he came in.

You may claim that the Capitalist is worse off because he has not grown any richer from this venture and because present wealth is of more value than future wealth, then he has come out at a loss. Fine, I say, how much money does the capitalist deserves before the factory passes over to the workers? Two times his investment? Five? Ten? Of course for the Capitalist, the answer is that it is never enough. Any wealth the company makes is deserved because of the initial “risk”.

But any worker can see how absurd this is. The profit the capitalist has taken over the years from all the workers of the factory has paid the initial investment many times over, but the worker still does not own anything. Even though the workers have done all the work to make this company productive, they do not deserve to own it at any point simply because the capitalist was the one who had the money at the start.

The worker is taking a risk as well

Apologists of risk like to point out that the worker is not taking any risk at all, and this is why his wage is reduced. If the company fails, only the capitalist has lost any money (which as I pointed out above, will not be true after a while) while the worker can simply go out and find another job, keeping all the money he made from wages.

But how true is that? Does the worker really not take any risk? Of course he does. First of all, the worker is usually paid at the end of the month for the work he put during. If a company is facing financial troubles then it’s quite probable that wages might be pushed back one or more months during which the workers must use their savings to survive. They will be pressured to do this “for the good of the company”.If the company ends up failing after all, the workers have now lost their wage(s). That is a risk. The AnCap will claim that this is illegal and so on but the worker will not get paid either if the capitalist goes to jail. This very real and practical risk of the worker is never rewarded like the risk the Capitalist takes.

But that’s not the only loss the worker has. He might have moved areas simply because he wanted to get this job. He might have left a more secure job in favour of the new one which failed, and any number of other risk factors. None of these are worth reward by AnCap thiking however, as the only thing that counts is the chance of the capitalist losing his investment.

The reward is big, the risk is low.

The AnCap will claim that the Capitalist deserves huge rewards simply because he’s the one taking the huge risks. But if these risks are so large why doesn’t the capitalist share them in order to avoid stressing himself? Why does he not allow the workers to share the risk (which they already do anyway). The answer of course is because the rewards are much much higher than the risk which is generally low. We’re not talking about gambling here where you have, say, 1 in 36 chances to make 36 times your money. We’re talking about a situation where “market research” allows you to foresee where the ball will go to (and you have something like 1 in 10 chance to judge that incorrectly) and where the reward has no upper limit.

It is no wonder then that the Capitalist takes “risks” and doesn’t want to share those “risks” with anyone. If I am in a casino and I have 1 in 10 chance to not make 10 times my bet, then we’re not talking about risk anymore, especially not when I can simply put 10 different bets and assure that whatever happens, I’ll get out much 90 times wealthier.

Of course, the real risk in this situation does not fall on the capitalist, it falls on the system as a whole. Because when such a chance opens, every capitalist jumps onto the table and bets. And since only 1 in 10 can ever lose money, the casino soon runs out of money and goes bust. Replace “casino” with economy and you basically have the reality of a capitalist crisis.

“If the risk was low, then the workers would take it themselves.”

The AnCap of course will counter my above point as such: ‘Well, if the risk is so low, why don’t you take it yourself then? The fact that the workers don’t band together to pool the resources and take the risk is proof that they do not want it and that it’s not as low as you claim.’

The reason why workers do not take the risk themselves is that the capital that is required to have such a low risk is far beyond their capabilities to save. The known low risk investments have already been claimed and the Capitalist who owns them will request far more than the workers can ever accumulate through labour. The not so well known investments require money to simply discover them. Without this market research, your chances in the capitalist roulette are not 10 in 1 anymore but 1 in 10, and unlike the capitalist, you only ever have one chance to bet.

The only chance the worker or a cooperative then is left with, is to stumble upon an opportunity which has not been tapped already and thus the cost to enter it is low enough. This is how almost all recent self-made capitalists achieved it, from Bill Gates, to Steve Jobs to Larry Page. But this is about as practical for the majority of workers as is playing the lottery.

To get back to our casino example. Imagine a casino where the minimum chip costs as much as a well-off worker can make in a lifetime. Not only that, but if you have enough money, you may be able to bribe the croupier to tell you where the ball will land. When you win, you get paid with the money of people who are not playing. A well-off worker would be hard pressed to simply afford the minimum bet and even then he will still not have enough to bribe the croupier.

Epilogue

I hope I have provided you some arguments on why the candy of “risk” that the Capitalist will use at every opportunity is flawed. For me, this does not even begin to defeat the theory of exploitation as the the risks of capitalism are negatively proportional to the Capital one has.

I will leave you finally, with one quote from the Barefoot Bum who helped me round out this piece

If risk is all-important, why can’t the people get together and spread out the risk, instead of concentrating the risk in some capitalists, and allowing them to have tremendous power as a reward for taking risks?

That’s basically what socialism does: Take all of these differentials — risk, surplus value, political power, etc. — and spread them out to all the people, instead of concentrating them.

If it was a good thing to take political power concentrated in the king or the oligarchy and spread it out among the people in a democracy, why shouldn’t it be a good thing to take economic power concentrated in the capitalist oligarchy and spread it out to the people?

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The oasis of free slaves

The Chebika oasis
Image by Bartek Kuzia via Flickr

Mr Jones was lucky enough to have acquired his little estate and farm before the nuclear war ravaged the world’s ecosystem and made the surrounding area into a brutal desert. His land managed to survive due to his luck, being on top of an undergound river and far from any major cities.
Mr Jones and his family was however left to fend on their own. They couldn’t toil the whole farm of course but they could certainly feed themselves and raise some animals.

With civilization destroyed as we know it, along with the major productive capabilities, slavery once again become the norm. Slavers quickly rounded up people who could not defend themselves and gave them away in exchange for food and other products. Eventually some dared the desert in a caravan, losing a few slaves in the process and reached his farm. Mr Jones became the proud owner of slaves.

He didn’t have to do much to maintain them. He simply made them build a shack for themselves and every day he would send them out to the fields to work the land, tend the animals or build new items in the workshop that he could sell to the slavers. He and his family would supervise them to avoid them making weapons to attack them or conspiring with each other.

This situation was very profitable to Mr Jones and soon his little farm had become an oasis of civilization. “The last bastion” he liked to call it. He became very wealthy through trading with caravans who came to his land for food which now he had ample due to his new productive force. He got more slaves and even got some slaves who got extra benefits and policed the others. All was going perfectly.

But Mr. Jones was still distraught. Before the war, the concept of slavery was abhorent to all but now he was the owner of all these people. But what could he do? If he didn’t buy them, the slavers would have simply let them die in the desert to cut their losses. And since he bought them with wealth he produced with the sweat of his back, shouldn’t they make up for his loss? And anyway, he wasn’t a cruel master at all. Almost no whipping.

But he still did not like it, something was gnawing his conscience when the thought of slavery enterred his mind. It was at this point that he bought an old book from one of the caravans which explained a lot of nice concepts. Liberty, justice, human rights. It was written by some Von Mises person.

All of this struck a chord with Mr. Jones. This was the solution he was looking to his moral issues with slavery. He knew in his gut that liberty was a unalienable human right that he shouldn’t have taken away from those people. How could he have been so blind? If he didn’t make up for this, he wouldn’t be able to live with himself.

So the very next day, he gathered all his slaves and made an announcement. ‘I grant you all your freedom’ he proclaimed after a short rhetoric introduction. ‘I have looked into my heart and discovered that it is not fair that I take away your human right to liberty through force. From now on, you are free to leave at any point you wish. If you do wish to remain here, you’re welcome as I will need some workers to take the place of those who leave.’ Now it was time to show how magnanimus he had become. ‘I will first of all give all of you some extra money to repay for the time as slaves, We can use bottlecaps for that since noone can make new ones anymore. If you decide to work for me, I will pay you all 100bc per month.’

And so, Mr Jones freed his slaves and his conscience. Finally he could rest certain he was not denying anyone’s right. He of course had to make them pay rent to stay on his land and he thought that 50bc per person was a good enough price. He also made his food quite affordable to them, it came to just about 40bc per month per person which even left people 10bc to save and sometime buy one of the products of his workshop.

He know he made the right decision almost immediately. Everyone decided to stay and work for him voluntarily! Nobody decided to dare the desert and that just proves how good an offer he had made to them. He could now not worry about supervising them at all and he could simply sit in his home and enjoy life. The products and well deserved profits were coming on their own now.

Everyone was free and doing what they chose to. The free market had thriumphed at last.

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Exploitation cannot be obscured in time

Hans-Hermann Hoppe tries to prove that Marxian exploitation is impossible because of the concept of time preference. This is a refutation.

In my recent travels in the Anarchist reddit, more and more I stumble on Anarcho-Capitalists who insist on pointing to articles in their classic haven, Mises.org. Apparently, the place to be is you’re a progressive capitalist. Due to the quantity of such links I obviously cannot read all of them (indeed I still have quite a lot of Marxist material to go through) but now and then I’m pointed to an article that just challenges.

So I have decided to start a little series which will contain all the refutations I write on mises.org articles. I hope to eventually have a nice collection of posts I can instantly post as counters to such links.

Today I was pointed to a rebutal from some guy called Hans-Hermann Hoppe on why the Marxian concept of exploitation is wrong and how the consequences of movements based on marxism are also wrong and disastrous. I will not attempt to refute the whole analysis but rather I will try to attack the central small core concept it is all based.

After a few paragraphs providing a short introduction of “the hard-core of the Marxist belief system”, and then a brief explanation of the Marxian exploitation theory, Hoppe finally goes to the offensive

Now what is wrong with this analysis? The answer becomes obvious once it is asked why the laborer would possibly agree to such a deal. He agrees because his wage-payment represents present goods, while his own labor services represent only future goods, and he values present goods more highly. After all, he could also decide not to sell his labor services to the capitalist and then reap the full value of his output himself. But this would of course imply that he would have to wait longer for any consumption goods to become available to him. In selling his labor services, he demonstrates that he prefers a smaller amount of consumption goods now, over a possibly larger one at some future date.

On the other hand, why would the capitalist want to strike a deal with the laborer? Why would he want to advance present goods — that is, present money — to the laborer in exchange for services that bear fruit only later? Obviously he would not want to pay out for instance $100 now, if he were to receive the same amount in one year’s time. In that case, why not simply hold on to it one year, and receive the extra benefit of having actual command over it during the entire time? Instead, he must expect to receive a larger sum than $100 in the future, in order to give up $100 now in the form of wages paid to the laborer. He must expect to be able to earn a profit — or more correctly, an interest return.

Now this immediately falls afoul of an assumption: That the worker does indeed value present goods more than future goods. This however is begging the question: “Why is the worker valuing present goods more?”. The answer is of course need. The only reason a person would prefer to have less money now rather than more later (and that “later” can be as short as 1 hour from now) is because they have an urgent need that they cannot ignore until later. That urgent need can only ever be food or shelter.

If the worker has the capability to feed and shelter himself until he could reap the future value of his product, he would certainly do so. Indeed, when people have enough money to survive, very often they invest their money as well or start their own business. The problem however is that not everyone has this luxury. The vast majority of humans can never leave the working class and move to the capitalist or petty-bourgeois because they start at the condition where their basic needs are not fulfilled and because they do not own any means of production.

This is not an voluntary choice. This is a choice based on passive coercion. It is beneficial for the Capitalist who can select a low wage for the starving worker, but it is not beneficial for the worker who might only get a present value enough to simply sustain himself until the next day.

But lets look at this another way. Hoppe claims that a worker benefits because he receives present goods which he values more, in return to losing future value goods. There is another function in society which does the same however: Credit.

With credit, I can receive current goods in return of losing goods in the future. The difference of goods I lose is not too large usually but is enough to put me back a bit, making me poorer in the long run. True, I only get credit when I have such a need where current goods are more valuable in utility.

Now consider a hypothetical human who enters adulthood without any wealth. The only way for him to survive to the next day is to take 10$ credit for the food he will eat and the place he will live. That does not give him any real value other than his continued existence to the next day, where he will be actively poorer by the 2$ interest he was charged. So once again he has to get 10$ credit for the next day and so on, yet becoming more indebted as his debt increases by about 2$ per day.

Notice that I said, that this is the only way he can survive as well. That means that he has no choice but to fall more and more in debt daily until eventually it’s time to pay the piper. This situation should immediately strike us as wrong. Is it fair that our sample human’s only choice is to put himself more and more into debt without a way out? Of course not.

Lets take this example and apply to a worker’s position. The worker comes out to the society and has no other way to survive but to get a job from a Capitalist. The capitalist will, as Hoppe claims, provide him with 10$ upfront in order to create for him a widget he sells for 12$. The worker uses his money to survive until the next day, where he again has to make another widget, enriching the capitalist by another 2$, and so on.

What is the difference between our hypothetical human and the worker? In both cases, they only get to survive from day to day, while the creditor or capitalists becomes richer, without doing anything, by 2$ per day. The only difference between them is that the workers settles his debt daily by producing a 12$ widget and giving it to the capitalist, while the hypothetical human accumulates debt. But the end result is the same. At the end of 10 days, the human will have to come up with 20$ (the creditor does not care how. Perhaps sell his organs) to pay back. The end result is a 20$ richer debtor/capitalist.

But like the situation we put our hypothetical human was unfair, so is the situation we are putting workers every day. The scenarios were simple but the basic premises remain no matter the wage. Time-shifted or not, Capitalism is exploiting the worker by putting them in the unfair situation where they have to take the “credit” or starve. This “mutually beneficial” relationship assures that the worker will always remain poor while the Capitalist will enrich himself without doing anything. Indeed, this continued exploitation, will only ensure the Capitalist will be able to put more future workers in the same exploitative situation by taking control of the means of production so that they have no choice but to work for him.

Hoppe also asks why would the Capitalist borrow his money to the worker if he’s not going to become richer in a year? Why indeed. By himself the capitalist would not become any wealthier than his original 100$ and  as time passed, if he did not labour himself, his 100$ would decrease as he fed and sheltered himself. But the capitalist is not content to work like everyone else, he wants to become richer and not work at all, a societal parasite. He will look towards the immoral way of exploitation.

The “clean capitalist” who is mentioned in the article, does not escape this moral stigma simply because he didn’t get to inherit his fortune like most capitalists. Once you have capital, you always have 3 options.

  • Do nothing. Use the money that you saved to retire or have a luxurious life
  • Become a capitalist and exploit workers.
  • Bring other workers to your business without exploitation. As long as they work with you, they own what they make and they get an equal share of the surplus value. This is the only mutually beneficial way.

Hoppe continues:

Now what is wrong with Marx’s theory of exploitation, then, is that he does not understand the phenomenon of time-preference as a universal category of human action. That the laborer does not receive his “full worth”, so to speak, has nothing to do with exploitation, but merely reflects the fact that it impossible for man to exchange future goods against present ones except at a discount.

And this is simply untrue. First of all, the capitalist does not give the worker present goods. How many times have you been paid on your first day of work for what you’re going to do in the coming month? Never of course. The wage always comes at the end of the working period where the surplus value has already been created, even many times over. But yet, you do not gain the full value of your work even though you gave the capitalist “present goods” each day in the previous month in exchange for “future goods” at the end of the month.

But this has nothing to do with present of future goods nonsense. It’s all about who controls the means of production and who is starving. The only reason the worker cannot make surplus value for himself is because the Capitalist controls the way to make it and will not let him use it unless he agrees to be exploited. And the more people that are exploited, the wealthier the Capitalist becomes and the more means of production he gets to control, turning yet more people to exploitation and concentrating the wealth to the few.

I will not bother to counter the rest of the speech as it basically rests on the assumption that it has demolished Marx’s theory of exploitation. I hope I have adequately shown you how it has simply tried to obscure exploitation behind concepts of time and avoid the hard moral questions that undermine capitalism.

I’m not an economist expert or even a Marxist scholar so it’s quite possible that I am missing some fine point or argument from either side. However if this is indeed the only argument they have to declare Marx’s theories obsolete, then it’s no surprise that their system sounds so hollow.

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What would socialism look like?

A very interesting video about a company using distinctly socialistic methods to improve worker production and morale.

Many people have a vision of Soviet Russia when thinking of Socialism. if not that, probably then propagandistic visions of Cuba or somesuch. But what would Socialism probavly look like? Well, I just found out something close enough to give you an idea

[youtube]gG3HPX0D2mU[/youtube]

UPDATE: I don’t know what’s wrong with the embedding here. If you can’t see it, try the direct link. It worked for me.

If you thinking right now. “Who wouldn’t want to work there”, I say: Exactly!

All that is left to do to take this to the socialist level is to make sure that all the workers of this company get an equal share of the profits (instead of a simple wage) and that they have a democratic say in the company’s path.Reblog this post [with Zemanta]

A Libertarian tries to argue against Egalitarianism…and fails miserably.

Oh dear. Murray Rothbard, the father of American “Libertarianism” tries to refute egalitarianism and manages to stick his foot firmly in his mouth.

This image of a young :en:Murray Rothbard, ori...
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I was recently pointed by some Libertarians to the article of one of their intellectuals who tries to argue that Egalitarianism is a Revolt Against Nature. Subscribers will have probably noticed that I am a big supporter of egalitarianism so obviously I went there expecting some new arguments, some challenge. But my expectations dropped almost immediately.

The article starts with some promotion from the book and then moves to the main subject a few hundred words down (!). The first thing that is mentioned is how egalitarianism has been the common ideal of the left. How it has always been promoted as the ideal we should be striving for and how the right never bothered to argue against the ideal.

Soon (that is, a few hundred words later again), we move to the actual critique of egalitarianism itself. Good, I think, finally something tangible.

Let us proceed, then, to a critique of the egalitarian ideal itself — should equality be granted its current status as an unquestioned ethical ideal? In the first place, we must challenge the very idea of a radical separation between something that is “true in theory” but “not valid in practice.” If a theory is correct, then it does work in practice; if it does not work in practice, then it is a bad theory. The common separation between theory and practice is an artificial and fallacious one. But this is true in ethics as well as anything else. If an ethical ideal is inherently “impractical,” that is, if it cannot work in practice, then it is a poor ideal and should be discarded forthwith. To put it more precisely, if an ethical goal violates the nature of man and/or the universe and, therefore, cannot work in practice, then it is a bad ideal and should be dismissed as a goal. If the goal itself violates the nature of man, then it is also a poor idea to work in the direction of that goal.

(Emphasis mine)
Err right, ok. I can already see where this is going. He’s going to try to argue that Egalitarianism goes against the fundamental nature of man. This is a common challenge from Capitalists, arguing that anything other than this system cannot work because this is the only thing that can work with Human Nature. I have already written on this topic so at this point I’m curious to see how he will backup such a claim. Will he fall once again on the classic example of the USSR as the only possible result?

Suppose, for example, that it has come to be adopted as a universal ethical goal that all men be able to fly by flapping their arms. Let us assume that “proflappers” have been generally conceded the beauty and goodness of their goal, but have been criticized as “impractical.” But the result is unending social misery as society tries continually to move in the direction of arm flying, and the preachers of arm flapping make everyone’s lives miserable for being either lax or sinful enough not to live up to the common ideal. The proper critique here is to challenge the “ideal” goal itself; to point out that the goal itself is impossible in view of the physical nature of man and the universe; and, therefore, to free mankind from its enslavement to an inherently impossible and, hence, evil goal.

Can I has realistic example? I  mean WTF!? “men be able to fly by flapping their arms.”?? This is an example which’s practicality can be proven in no time from simple controlled experiments. Proving the feasibility of egalitarianism is not as simple. In small isolated environments (ie. communes), the feasibility of egalitarianism has been proven time and again, the problem is proving the practicality of achieving egalitarianism in the whole world, something that is not really easy to test.

This example also assumes that not only the lack of feasibility of egalitarianism has been proven (for obviously people cannot fly by flapping) but that people are still arguing for the benefits of this impossible theory. Well, I can only think of one kind of people who continue arguing for the benefits of their beliefs in the face of conflicting evidence. Theists. But I digress.

What, in fact, is “equality”? The term has been much invoked but little analyzed. A and B are “equal” if they are identical to each other with respect to a given attribute. Thus, if Smith and Jones are both exactly six feet in height, then they may be said to be “equal” in height. If two sticks are identical in length, then their lengths are “equal,” etc. There is one and only one way, then, in which any two people can really be “equal” in the fullest sense: they must be identical in all of their attributes. This means, of course, that equality of all men — the egalitarian ideal — can only be achieved if all men are precisely uniform, precisely identical with respect to all of their attributes. The egalitarian world would necessarily be a world of horror fiction — a world of faceless and identical creatures, devoid of all individuality, variety, or special creativity.

UBER FACEPALM!

Equality is what?! Sweet titty-fucking Jeebus, we have already gone into total disconnection from reality. If you can’t get even this right, I’m scared to see how the rest of the article will continue. Here let me give you a hint of what most people mean by “Egalitarianism”:

Egalitarianism (derived from the French word égal, meaning equal) is a political doctrine that holds that all people should be treated as equals and have the same political, economic, social, and civil rights. Generally it applies to being held equal under the law and society at large. In actual practice, one may be considered an egalitarian in most areas listed above, even if not subscribing to equality in every possible area of individual difference. – Wikipedia

To attempt to equate egalitarianism with uniformity goes beyond a simple equivocation. It becomes intellectually dishonest. Egalitarianism under no possible world means that people should be identical and I have never heard one person who expects such a thing. The most simple explanation would be that under Egalitarianism people are equal in social status. It does not require people to be equal in intelligence, strength or anything else but rather that such difference does not equate to difference in status.

Needless to say that already by expectations of a good argument were loosing water fast. The author went on to equate egalitarianism to a horror novels and nightmare scenarios in order, obviously, to appeal to emotion rather than reason. Simply pathetic and not even worth a refutation as it is based on the previous horribly wrong definition.

The horror we all instinctively feel at these stories is the intuitive recognition that men are not uniform, that the species, mankind, is uniquely characterized by a high degree of variety, diversity, differentiation — in short, inequality. An egalitarian society can only hope to achieve its goals by totalitarian methods of coercion; and, even here, we all believe and hope the human spirit of individual man will rise up and thwart any such attempts to achieve an ant-heap world. In short, the portrayal of an egalitarian society is horror fiction because, when the implications of such a world are fully spelled out, we recognize that such a world and such attempts are profoundly antihuman; being antihuman in the deepest sense, the egalitarian goal is, therefore, evil and any attempts in the direction of such a goal must be considered evil as well.

This is the brilliant Libertarian intellectualism that most people point to? If that is it, it’s depressing. It’s like me equating the liberty that Libertarianism requires with fucking eating human babies. I then point out that baby-eating is obviously something taken out of a horror movie and any sensible person can see that. We recognise then that liberty is evil and any attempts to such a goal must be considered evil as well.
What drivel.

The great fact of individual difference and variability (that is, inequality) is evident from the long record of human experience; hence, the general recognition of the antihuman nature of a world of coerced uniformity. Socially and economically, this variability manifests itself in the universal division of labor, and in the “Iron Law of Oligarchy” — the insight that, in every organization or activity, a few (generally the most able and/or the most interested) will end up as leaders, with the mass of the membership filling the ranks of the followers. In both cases, the same phenomenon is at work — outstanding success or leadership in any given activity is attained by what Jefferson called a “natural aristocracy” — those who are best attuned to that activity.

Uh no. Inequality is not evident from “the long record of human experience”, unless you equate human experience to that which happened only after civilization, that is the last 10k years. Barbaric and Savage tribes show indeed equality within their ranks. They have leaders but those leaders are easily removed and do not have dictatorial powers. The people in such tribes did not follow their leaders all the time, but simply the leaders expressed the desires of the tribe (or else they were removed).

The kind of leadership the author is talking about is indeed the norm once humans moved to civilization but not because this is some kind of human nature and the best rise to the top. This is simply classic libertarian assumptions. Indeed the human history is full of horrible leaders, idiot kings and pathetic rulers. I mean, just look a G.W. Bush ferchristsake. This natural aristocracy is a fantasy to tell to the lower classes in order to convince them not to argue with their position.

The age-old record of inequality seems to indicate that this variability and diversity is rooted in the biological nature of man. But it is precisely such a conclusion about biology and human nature that is the most galling of all possible irritants to our egalitarians. Even egalitarians would be hard put to deny the historical record, but their answer is that “culture” has been to blame; and since they obviously hold that culture is a pure act of the will, then the goal of changing the culture and inculcating society with equality seems to be attainable. In this area, the egalitarians slough off any pretense to scientific caution; they are scarcely content with acknowledging biology and culture as mutually interacting influences. Biology must be read out of court quickly and totally.

Notice how our author jumps from a weak correlation to an actual conclusion? This is the kind of intellectual laziness that passes for arguments from this camp I’m afraid. “Seems to indicate” indeed. I’m certain that this Economist who obviously has not taken a deeper look into human history other than a cursory glance at the general history of civilization can find a lot of things that “seem to be indicated”.

But such “seeming indications” do not equal anything tangible other than a possible connection. To jump from there and claim that this is a deep set biological imperative of human nature and that egalitarians are trying to ignore the real biological enemy within our own goddamn mind (or something), is nothing more than a assertion without evidence with an attempt to sprinkle it with scientific talk. Much like neoclassical economics really.

More unrealistic examples follow which base themselves on conclusions such as the two above which I won’t waste your time analyzing. It basically takes an example that would be obvious for everyone and claims that the egalitarians would be incapable of seeing it.

Women are another recently discovered “oppressed class,” and the fact that political delegates have habitually been far more than 50 percent male is now held to be an evident sign of their oppression. Delegates to political conventions come from the ranks of party activists, and since women have not been nearly as politically active as men, their numbers have understandably been low. But, faced with this argument, the widening forces of “women’s liberation” in America again revert to the talismanic argument about “brainwashing” by our “culture.” For the women’s liberationists can hardly deny the fact that every culture and civilization in history, from the simplest to the most complex, has been dominated by males. (In desperation, the liberationists have lately been countering with fantasies about the mighty Amazonian empire.) Their reply, once again, is that from time immemorial a male-dominated culture has brainwashed oppressed females to confine themselves to nurture, home, and the domestic hearth. The task of the liberationists is to effect a revolution in the female condition by sheer will, by the “raising of consciousness.” If most women continue to cleave to domestic concerns, this only reveals the “false consciousness” that must be extirpated.

Hooooly shite!

We went from simple deluded and half-thought of conclusions to outright denial of feminine oppresion. The arguments toward that? That women are not repressented politically because they were simply not politically active. The author does not of course realize that he is begging the question of “why were women not politically active?”. Could it have been oppression? Naaaah.

He then goes to claim that every culture has been dominated by males. Well, once again he shows that he has not heard of any society beyond ones in civilization. Indeed most barbaric and savage societies, before farming was invented not only had no female oppression but women were very much in power as they were the only link that children had to their parents and thus their family bond.

But if you thought the author could not put his foot further in his mouth, this gets better:

Of course, one neglected reply is that if, indeed, men have succeeded in dominating every culture, then this in itself is a demonstration of male “superiority”; for if all genders are equal, how is it that male domination emerged in every case? But apart from this question, biology itself is being angrily denied and cast aside. The cry is that there are no, can be no, must be no biological differences between the sexes; all historical or current differences must be due to cultural brainwashing.

And there you have it ladies & gentlemen. Male domination of society is not because of oppression and male domination of the means of production. It is because men are better, biologically! Suck on that girls, You can’t argue with science! Booyah!

Really, I think I should just stop refuting this article at this point as the author does a percectly good job of shooting his own foot. Any minute now he’s going to claim that white domination of society is not because they were oppressing humans of other skin colour, or because they controlled the guns and the power, but because they were biologically superior…

But this should not surprise everyone. This is really classic Libertarian chewing gum. “If someone is in that position it’s because he deserves to be in that position” must be something like the basic tenet of Libertarianism and from which stem not only the absurdities you’ve seen above but also excuse by which the total disregard of human suffering can be achieved. Third world nation suffering? It’s their own fault. People impoverished? It’s their own fault. Women oppressed? It’s their own fault.

This Intellectual bankruptcy of Libertarianism is blatantly obvious for everyone except themselves. Much of this can of course be traced back to Ayn Randian bullshit, which has been instilled in the ideologies of the last century and finally produced the Objectivism-lite in the form of Libertarianism. Both have the same rotten core but Libertarianism tries to be a bit less asshole-ish about it.

After that, the author goes on to quote mine some socialists, including Marx, Engels and Trotsky but I won’t waste time dwelling on these so I’ll jump straight to the last paragraph of this joke of an essay.

We began by considering the common view that the egalitarians, despite a modicum of impracticality, have ethics and moral idealism on their side. We end with the conclusion that egalitarians, however intelligent as individuals, deny the very basis of human intelligence and of human reason: the identification of the ontological structure of reality, of the laws of human nature, and the universe. In so doing, the egalitarians are acting as terribly spoiled children, denying the structure of reality on behalf of the rapid materialization of their own absurd fantasies. Not only spoiled but also highly dangerous; for the power of ideas is such that the egalitarians have a fair chance of destroying the very universe that they wish to deny and transcend, and to bring that universe crashing around all of our ears. Since their methodology and their goals deny the very structure of humanity and of the universe, the egalitarians are profoundly antihuman; and, therefore, their ideology and their activities may be set down as profoundly evil as well. Egalitarians do not have ethics on their side unless one can maintain that the destruction of civilization, and even of the human race itself, may be crowned with the laurel wreath of a high and laudable morality.

You read that people? Egalitarianism will destroy the fucking universe!!1!exclamationmark. You can’t make this shit up. Seriously. No seriously.

Let me tell you what I understood from this essay. We began by considering the common view that the egalitarians, despite a modicum of impracticality, have ethics and moral idealism on their side. We end with the conclusion that the author does not know even what egalitarianism is, he likes to assert a lot of stuff based on his lack of historical knowledge and wishful understanding of biology and as a bonus he’s also a sovinist pig.

But at least we have also got a nice dose of Libertarian thinking. Of the mental process which flawlessly merges correlation to causation on a regular basis when such a merge would support their preconceptions. At the introduction of the article we read the following:

Among some economists, this syndrome has been carried so far that they scorn any attention to politico-economic problems as a demeaning and unclean impurity, even when such attention is given by economists who have made their mark in the world of specialized technique. And even among those economists who do deal with political problems, any consideration devoted to such larger extra-economic matters as property rights, the nature of government, or the importance of justice is scorned as hopelessly “metaphysical” and beyond the pale.

If this essay is what economists manage to write when they dip their foot into “politico-economic problems”, then I honestly suggest they simply abstain from doing that, so that they can avoid embarassing themselves to this degree.

QED

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When 90% percent don't want Capitalism anymore, it has to go.

Pro-Capitalists claim that a social revolution should not happen unless everyone agrees to it. I point out the absurdity of such a proposition.

An Industrial Worker capitalist class critique
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I was recently sucked into a conversation with Libertarians which I found after they linked to me. I know I really shouldn’t have done that but some times I can’t resist. Unfortunately I can’t really continue commenting there because the comment form they have there is slow, ugly and buggy and it generally not good for having a comfortable conversation.

As is classic, the main argument that was raised there was that the “Free Markets are the best ev4r”. Anything wrong with the world is blamed on the government and everything good on the “Free” Markets. This is based on the idea that anything that moves towards deregulation does well but anything that moves away does bad. As an example for that, the US was proposed which apparently for the last 30 years has been moving towards socialism (I kid you not, the greatest push towards neoliberalism in the history of the US and the world was actually a move toward socialism).

Other than the usual strawmen like equating communism with USSR and failing to grasp how it does not require a state another argument was put forward:

So again, you do not care what the other 10% want, you will forcefully take from them what they have earned for yourself.  You are blaming them for your own failures.  I have no desire or need to exploit anyone else in order to get what I want out of life.  I wish to treat everyone as equals while knowing full well that we are not all equal.  Some people have more desire, more ambition, more knowledge, more energy, more perseverance, and more skill than others.  I know where my faults lie and I know what I am capable of doing and I know that I am not equal to everyone else and not better than them either.  I am my own man, with my own desires, and I want to fulfill those desires without the need to force other people to shares them with me.

Indeed, I do not care what the 10% want because what they want can only be achieved by exploiting the other 90%. When the majority of the world wants to move to an egalitarian system where nobody is exploited, nobody had to starve and nobody has to work where they do not want, why should we care that we don’t spoil the party of those 10% who are living the good life?

Apparently for the Libertarian, having the vast majority of the people in abject poverty is fine and dandy as long as some of them have theoretically the chance to rise to the top. He assumes that the majority of the wealthy have risen to the top from the lower classes but that’s just just untrue. The majority of the people are born into their position and there’s a small minority that manages to rise above their class. The later examples have more to do with luck than it has to do with skill. Yes the people who become wealthy from poverty, have to have skill, but there’s much more hard-working, skillful people who cannot rise,  not because they are worse, but because there’s simply not enough room at the top.

But for a Liberatian that’s alright. As long as those 10% of humanity have absolute freedom, he can simply assume that their position is deserved. And anyone who dares to disagree must be a lazy bum who is simply not hard-working, skilful or competitive enough to achieve it. This reminds me of the common U.S. American arrogance where they assume that their position as world power was deserved because of how hard-working and skilful as a whole they are.

So yeah, I have no qualms in taking the means of production from the 10% who owns them and forces the rest of humanity to wage-slavery. I have no qualms in wishing for a better society where everyone has a chance to happiness instead of the minority who just happened to be lucky. And yes, prosperity today has much more to do with where and from which you were born than with how hard-working or talented one is.

Making happiness and life-fulfillment a lottery is simply selling humanity short.

The thing that is telling about Libertarians is how little they understand the system they support. The “Free” market is equated with Capitalism and all together is provided as a panacea.

I answered for you because I knew you couldn’t. You proved it too. “Seizing the means of production” is that not force? You still fail to understand free markets. I do not support coercion by force of the state, that is not a free market and it is not capitalism. On the other hand you support the idea of force, workers forcefully taking over the means of production from the owners of that production.

The “Free” Markets you’re wishing for cannot work without a government force behind them. Otherwise there would be nothing to stop criminals or enforce contracts. It is this state force that the Capitalists who controls all the wealth and power will seize and increase, for their own interests. It is this state force that the Capitalist will use to bust unions who “illegally go on a strike”. The idea of Libertarianism is simply Government protection only for the rich (more than it is now that is). It is not a problem to force starving people in brutal “voluntary” contracts and then use the government to enforce them. That is the coercive force that the “Free” Markets use.

When this force is rejected by the majority of the human wage-slaves, they will revolt and attempt to seize the means of production. The “non-coercive” Libertarians will immediately claim that they are assaulted, even though what is simply happening is the majority rejecting the minority’s rules, and will send the state to intervene. This, for the Libertarian is fair game for they are only protecting their “rightful property” after all.

This has been the history of revolution everywhere however. The oppressed majority rising up, without force and demanding equality, and the minority using the state machine to put them into their place. First it was the slaves, then it was the peasants, and now it’s the proletariat. And in every case, the minority was, in their own minds, in the right.

But when the vast majority wants to play a new game, there is not reason to keep playing the old one, simply because the ones who were winning already don’t like it. When there is a difference on what is “right” between the vast majority of the working class and the small minority of the bourgeoisie, I do not see why the small minority must have its way.

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How much are we all to blame for the situation in the 3rd world?

The developed nations are living the good life while billions are starving and homeless. This article explains why we share part of the blame.

Countries fall into three broad categories bas...
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Another day, another argument. This time a socialist from reddit is taking exception to my previous article where I explained how the developed nations have taken summarily the role of the bourgeoisie against the 3rd world which is becoming the world’s proletariat. Specifically his argument seems to be that workers do not share any of the blame for the situation in the world but that it’s rather only the fault of the Capitalists.

He then asks for proof to the contrary and this is what I hope to tackle today.

Because you are accusing me and millions upon millions of other workers of exploiting other workers. I think its quite understandable that you prove to me that a link exists between the poverty of the oppressed workers in the third world and the relative prosperity of those in the first.

Alrighty then. Here we go.

Historically

There is ample evidence today to know that the nations we call “the 3rd world” today, did not become so by themselves. If you look at any of those nations’s history, all of them have been at some point in their past colonized by an imperialistic nation. Those nations that engaged in Imperialism as the ones we call today “developed”. The cost of this “development” was the supreme exploitation of others through slavery, taxation and outright theft. This not only slowed down the development of these nations but it outright put them quite a bit back, paving the way for the miserable people living within to be used as cheap labour by our current breed of exploiters.

But what does this have to do with workers? I claim that any person who benefited immensely from the atrocities of his ancestors, shares a moral responsibility to make up for it. To deny this is to claim that the son or grandson of a brutal dictator who plundered his way to wealth, deserves all his inheritance.

Our standard of life is high because our ancestors ruthlessly plundered the wealth of whole nations for their own benefit. This wealth through inheritance and supply-side economics eventually enriched the whole society.

This is not to induce guilt. I see no point in feeling guilty for the sins of the fathers since there was nothing one could do to stop it, neither does guilt invoke action. However our moral responsibility remains and will remain as long as those nations remain woefully inferior to ours. I wish to dispel the unbased notions that the western nations deserve their superior standing because we’re somehow better than everyone else.

The exploitation trickles down

The Capitalists of today prefer to outsource their factories and other means of production to undeveloped nations so that they may get the biggest surplus value possible. This surplus value, created with the labour of the extremely exploited nations does not even have a chance to improve their own lives even a bit through supply-side economics, but rather it is transported across the world.

The developed world nations are thus getting all the surplus value created by the exploited nations and then use that extra material wealth to create yet more exploitation and wealth. The definition of a Capitalist. And summarily, that is what we are. Our western societies as a whole have the wealth (initially achieved through imperialism), which they invest in order to make more wealth for themselves.

The worker that lives in that society gets to enjoy to surplus value along with everyone else. He may still be exploited but in a much smaller degree than any other time in history. This is why the Capitalists can successfully argue how you can just get a better job, or get retrained to a more lucrative position and whatnot. In our society, Capitalism retains the impression of functionality only because it floats on the foam of the blood of everyone outside it.

So what does this have to do with the worker? The fact that we are participating in this scheme means that we are at least partly responsible. By consuming the products created by such exploitation we are endorsing the continuation of this tactic. The Capitalist would not make a profit when people refused to buy shoes made by 13 year old girls and thus such a practice would eventually stop. Same for horrible conditions, wages and whatnot.

This would have two possible results

First, the capitalist would increase the working conditions and payment of his workforce to a point comparable to us if he wanted to sell in this market, at which point it cannot be considered exploitation from a national scale. This would have the effect of course that the prices of those goods would not be able to remain as low for everyone. Is this a worthy price to pay for equality and a clean conscience?. I say yes, but our friend has a different opinion.

Why should workers suffer in any way, to let the boss profit? Should not the workers in the importing nation demand to the government that only products produced by unionized workers earning an acceptable wage be imported? Yes I say, and let the capitalists take the cost! Not the workers!

But such an action would have the same effect. The only difference in the second case is that you involve the government (with all it’s impotence and protectionism of the Capital) to do what you should and could have done yourself. The end result will be the same though. The prices will raise and the “workers will suffer”.

The second option would be that since the Capitalist cannot make a profit from transporting and selling the cheap products to the developed nations anymore, he would instead attempt to sell them to the local population. To be fair, this option would probably be a possible outcome of the first scenario since the cost of transportation would decrease the profit too much.

So what happens then? First of all, the wealth that this nation produces does not leave it. It means that, at least, the lives of those societies are enriched, in a similar way that a worker reaps the rewards of his own labour. Certainly, the money goes mostly to their capitalist bosses but, at the very least, supply-side economics guarantees that the wealth which is kept in that nation is at least spread around.

Then, it also means that local businesses for the developed nations will start popping up again. Since the profit margin drops when having to transport and the worker costs in the developed nations are as high as here, Capitalists will prefer to invest in local businesses. This will boost the production of each nation in turn (as opposed to the current system where all the factories are outside) and increase the proletariat.

And finally, the last effect will be, unfortunately, increased exploitation. Once Capitalists cannot buy cheap labour in China and sell it expensively in Germany, the natural course of Capitalism will assert itself. Exploitation will increase. Wages will drop. More working hours will be demanded etc. The standard stuff with which Capitalism undermines itself and raises the awareness of the working class.

With one difference from the current situation. It will be universal. The workers of the world will be exploited at an equal degree. No more will the Indian see the American earn 10 times as much by doing half the work. No more will the French consider his countrymen superior because they happen to have a much better lifestyle than the Egyptian and thus “must be doing something right”. The workers of the world will go through the same struggle and become for once, internationally, comrades.

And when that happens, Capitalists of the world beware!

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