Friday, August 31, 2012

Karl Marx Was a Goblin....

Frederic Bastiat called socialism "legalized plunder".  My friend Sophia, apparently an admirer of Karl Marx, disagrees.  She says this: 

  • Capital already exists and is already owned. Where did it come from?  It came from labour. All capital is the product of labour, therefore labour has a claim on all capital. It is not abstract means of production that the workers should control but the means which already exist.
The idea that all capital comes from labor seems to swim against the direction that money actually flows.  Capital (or profit) as far as I can see originates when consumers pay for goods and services.  The company uses that income to pay workers.  So if anything, capital comes from consumers and is passed to labor by capitalists.  The fact that labor is also a consumer doesn't change that. AND Management (those greedy old capitalists) are also consumers.

It's like the water cycle. Water evaporates all over the place, collects in clouds which rain on the land watering the fields.  The excess runs off into streams and from there to rivers and on to the ocean where it evaporates again and makes clouds. Money works like that.

Sophia and Karl would have you believe that the economy (the financial water cycle if you will) actually runs  counter to its natural direction. Capital is, they say, stolen from the workers to enrich the wealthy capitalists. Odd that they conveniently leave out consumers in this model, inserting them later when they want to look like populists. Classless society advocates would have you believe we can create a society where consumers deposit money directly into the pockets of labor.  Of course, the pockets of labor are on the other side of the same pair of pants.  When you need some consumer cash again, the worker must transfer money over to their consumer pockets, from whence they transfer the cash back to their labor pockets and so on, ad infinitum.  Of course, this all happens AFTER they've cut out the evil capitalists and eliminated them as large scale consumers and reduced them to pocket-swapping labor and monumentally screws up the economy.

Which confuses me, because they also believe there is an elite group of smart people who by virtue or their great brains, their pure hearts and their unbounded courage can centrally plan all our lives for us and create a utopian society where everybody is the same, no rich, no poor, no war, no religion.  The whole thing is either a John Lennon song or a Wizard of Oz sequel they're going for, I'm not sure which.
The Marxian model seems a classic double bind where two opposing beliefs exist in one man's head and it locks him up so he cannot move forward.  It could explain why liberals seem to be crazy. 

I had the same problem with the goblins of J.K. Rowlings Harry Potter books. The goblins, if you remember, are the bankers of the wizarding world.  They run Gringott's, the wizard's bank. The problem with the goblins is this. They make their living by taking gold from humans and making things for the humans.  They, however, believe that anything they make should revert to the ownership of goblins once the person who holds the object dies.  This makes perfect sense to them.  They made it, so it's theirs.

So what do they do for a living?  The goblins run wizard banks where the wealth and precious objects, many of goblin make, of generations of wizards are stored in highly secure vaults. These vaults, by the goblins own policy, are held to be inviolate, no matter that they believe that much of the treasure that they are protecting is of goblin make and therefore actually belongs to them.  It is a point of pride (and good business policy) that nothing is ever stolen from a Gringott's vault.

They may believe that everything they make still belongs to them in theory, but in practice they know that if they actually took back the things they believed were theirs, their banking and jewelry/weapon-making businesses would shut down. Customers would not keep their things where goblins would take them back so the bank would close. Customers would not order goblin-made items because paying for something wildly expensive that you could not even pass on to your heirs would not make sense to anyone but goblins.  Therefore goblin business rumbles along with a set of beliefs that contradict what they have to do in actual practice in order to keep making a profit off the wizarding world.

It's little wonder that the goblins of Harry Potter are devious, irritable little creatures. There is a conflict between belief and practice within the whole goblin economy that plants the seeds of insanity.  Goblins believe that wealth comes from goblins while in actual practice, goblin wealth, as they well know, comes from gold paid them for goods and services by wizard customers. If humans believed as goblins did, then, since the money collected by goblins, actually comes from humans, humans ought to have a perfect right to take back any money they have paid a goblin for a service or product from them when the goblin dies, since the gold originally came from humans. Goblins would have a real problem with this were wizards to actually try to put such an idea into practice.

Karl Marx had the same problem as the goblins. His philosophy hinges on the belief capital comes from the labor of the working class. At the same time it is obvious that unless the consumer buys those goods and services, labor would receive no capital for its labors.  The accumulation of capital in the hands of a few is supposedly evil.  So how does Marx propose we solve that problem?  By taking all that capital from the hands of those "few" capitalists who accumulated it and giving it to the government "few" to redistribute to labor.  So instead of rich people having control over all the capital, we give it all to bureaucrats.

Goblins if you will.

I could also point to Douglass Adams' Vogons to illustrate the hazards of handing power and money to bureaucrats, but I think the point is made.

Karl Marx is a goblin.  Perhaps that's why he looks devious and cranky in all of his pictures.

Just one man's opinion,

Tom King

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