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Sunday, June 2, 2019

Socialism: The More It Changes...

Socialists are immune to arguments about moral principles and human suffering. They are so deeply convinced that their ideology is better for us all, that they will ignore every piece of reality we throw at them. What does work, though, is to dissect their theory before their very eyes. To school them, plainly, using their own textbook.


...the more it stays the same. The so-called new left, showing itself disguised as identity politics and enviro-fascism, is now coming full circle. In a broad onslaught leading up to the 2020 elections they are firing with both barrels - banned of course under strict gun laws - trying to sell Marxist economic mythology to a new crop of voters born on the threshold of this century.

We have seen it already on the Democrat presidential campaign trail, with the 20-lost-count-something hopefuls clawing each other's eyes out over who is selling the biggest barrel of snake oil to voters. Thinly hidden behind recycled labels saying "Medicaid for All", "Universal Basic Income", "Free College" and "Paid Family Leave", the same old government-takes-all message is being peddled on a daily basis now by the Mayor Buttigiegs, the Veep Bidens, the Chief Warrens and the Francis O'Rourkes of the outer left rim. 

Now more and more socialist pundits are beginning to churn out the same old Marxist litany that we were bored to death with - and millions were put to death by - back in the 20th century. The rants range from strange to deranged, with an increasing amount of contributions clustering at both ends of the scale. Interestingly, there is a growing effort from self-portrayed intellectuals, whose writing is lengthy and filled with seemingly intelligent references and purported analysis. This is a sign that the movement is gaining self confidence, but it is also a sign that they - once again - are making the same mistake as back in the last century: that they, unlike the totalitarians before them, can make socialism work.

Intellectual arrogance is a staple of the left, and basically synonymous with "socialist". One of the latest examples appeared in the June 2019 issue of Harper's Magazine and is penned (diatribically) by novelist Marilynne Robinson. Her essay is titled Is Poverty Necessary? and claims what ill-educated socialists always do: to have found the magic wand that will make socialism work.

Robinson's story line is a bit hard to pin down, but once you weed through the abundant verbal vegetation and its tangential points about the Windscale/Sellafield nuclear disaster in England, the predictable racist "whites destroy Earth" comments and jabs at America for allegedly being as corrupt as Russia, you find that she has read Karl Marx and Henry George and seen the light. Socialism will save the planet, and it will do so if we stop paying people based on the quality of their work effort, their productivity and what people are willing to pay for it. Instead, we are supposed to follow the modified Marxist political economy of Henry George.*

The path to socialism, which is supposed to eradicate poverty, runs - as always - through the eradication of wealth. As all socialists do, Robinson concludes without any quantitative substance that poverty exists because that is the only way to create wealth. 

She could have cut down the essay from nine pages to one, stating her argument in a few short paragraphs. Instead, to make her case that people get rich because others are poor, she draws the oh-so-predictable line that socialists love: from the iron law of wages to poverty in modern-day America. 

I discuss this argument at length in my upcoming book Faith and Freedom: The Moral Case for America, but in order not to keep the audience waiting, let us walk through this core-socialist mythology in a way that fits the format of a blog article.

Socialists love the iron law of wages because it appears to suggest that poverty is somehow morally desirable. Their favorite historic reference to this law is always to Malthus, whose work lends itself - unintentionally - to the criticism that when people are paid more than subsistence, they just overpopulate the world and are hurled back into poverty again. 

The actual inventor of the theory we know as the iron law of wages is not Thomas Malthus, but David Ricardo. In a nutshell, he explained the economic relationship between population growth and labor productivity. He predicted that workers would remain in subsistence living because higher earnings led to a more successful reproduction of the population (with fewer kids dying due to lack of good sanitary and health conditions). 

Ricardo did not laud this as something desirable. He simply pointed to what he saw as a problem in early capitalist economies. History has proven Ricardo wrong - a point we will return to in a moment - but before that happened the Malthusian interpretation had set root among those who decried capitalism as inherently evil. Among those were Karl Marx, who completely, and purposely, misrepresented Ricardo's work. Where Ricardo reasoned about a natural wage for subsistence living and a market wage for what people actually earn, Marx talked about a subsistence wage and the wage that workers deserve based on the labor theory of value.

Sounds technical, right? It would be, if all there was to it was a discussion of value theory, but it is not. Marx totally destroys the Ricardian theory by removing the market value from the equation: where the original theory says that workers are the natural wage when the economy is in a deep recession, Marx suggests that some people want workers to be paid the natural - or subsistence - wage. 

In other words, Marx, who claimed to understand and analyze the free-market economy, left its market forces out of the equation when he talked about wages and labor compensation. 

According to Marx, capitalists strive to suppress wages because it is the only way capitalists can become rich. This is also the thesis (well...) that Marilynne Robinson presents over her nine pages in Harper's Magazine:
I concluded from my reading of classical economics that the creation of poverty is as fully intentional as the creation of wealth, an explanation I would offer Henry George for the paradoxical link between progress and poverty. Progress is dynamic, self-generating, unpredictable. Poverty is static, effectively resourceless, subject to interests that are not its own, therefore valuable to those interests.
There are several major problems with this conclusion, but we can only get to one of them here. It has to do with the very definition of poverty itself. Robinson conveniently escapes the fact that poverty, as defined when the iron law of wages and Marx's perversion of it were written, was completely and utterly different from what we understand poverty to be today. Before the War on Poverty began, we used an absolute definition of poverty, which meant that you were poor when you literally were living a subsistence life. The actual application of this definition of poverty was not as strict, but the intention of policies for poverty relief was to provide a subsistence-living level of aid on taxpayers' tab.

With the War on Poverty we changed the definition to a relative concept: you were now poor if your standard of living stood in a certain proportion to the median standard of living. This can be exemplified with the eligibility thresholds for some entitlement programs, where the income threshold is updated based on the progress of household earnings in general. 

The practical meaning of this is that poverty can never be eradicated. By definition, it will always exist - unless we eradicate income differences. Never mind the fact that a life in poverty in America today exceeds substantially what the average household in many parts of the world consider a good way of life. Never mind the fact that a poor family in mid-19th century America would gasp in awe if they saw what it was like to live as a poor family in early-21st century America. 

There is no longer poverty in the classical sense in America, and the reason is the enormous economic progress our country has made over the past two centuries. Socialists ignore this, however, and the reason is that their political goal is not to eradicate poverty. It is to eradicate income differences. 

Yes. Their goal is no more complicated than that. According to their ideology, income differences are inherently wrong, and by defining poverty as the lower end of differences between incomes, they can eradicate it simply by eliminating those differences. 

Socialists believe that this is a noble goal that emerges from high-end discernment of complex theory. They also believe that it will make life better for everyone. In reality - where they do not dwell - it is a brutal end goal to impose on any country, any economy. Robinson makes several references to how this would be accomplished, all of which suggest that government should seize the wealth currently in private hands and then redistribute it to everyone else. 

Over the past hundred years, we have seen what this means in a long list of countries. The latest one is Venezuela.

Unfortunately, socialists like Marilynn Robinson do not consider real-life experiences important. Learning from history is a violation of socialist doctrine; there is a reason why Marxists aspire to reach the end of history - also known as the "classless society". If they learned from history they would see that practically every element of the theory that Marx laid out about capitalism has fallen flat to the ground. 

I would forgive the ignorant arrogance, the perbertility, of socialists like Marilynn Robinson if they just kept to themselves and imposed socialism on each other. That is, however, not what they do. Their refusal to understand reality, combined with their unrelenting desire to change what they refuse to understand, inevitably leads to one and the same end result. We, the people whom socialists want to make life better for, end up paying the price when they discover that reality does not conform to their theory. To press on with forcing us in under their theory, they always turn to totalitarianism. 

Once they get there - and they always do - we all pay the price. We lose access to health care when government promises to provide it; we lose the ability to advance our lives when government promises to do it for us; we end up starving when government promises to feed us.

We die because socialists demote us to instruments of their condescending ideology.
*) Robinson claims that Marx did not like the term "political economy" and therefore we are supposed to dislike it, too. Unlike Robinson, though, I stick to definitions that are not based on people's feelings but established scholarly traditions. In that context, "economics" is an academic discipline based primarily on the application of econometrics to micro- and macroeconomic problems, while "political economy" is the analysis of the interaction between economic theory, economic policy and political ideologies. In this sense, Marx is a bona fide political economist. So is Henry George. 

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