So the folks at SFist have decided that we’re all commies over here because we think it’s okay to tax the rich and provide services for the homeless.
I thought we were all too intelligent in these circles to resort to stupid quips about the “proletariat,” and I’ve posted a response on SFist. But since I’ve had to have this fight since I was an economics major at Wesleyan way back in the dark ages, I have to make a point here:
The Soviet Union as we knew it in the post-War era was not built by Karl Marx. There were some guys named Lenin and Stalin who built a political system in the name of his economic theories. Neither of them had much use for democracy or freedom. One of them was a savage butcher.
That said, you have to admit that Marx was, and remains, one of the most important economists of the modern era. You can’t understand capitalism just by reading Adam Smith and John Maynard Keynes. The critique of capital that Marx put forward was brilliant; I never fully understood the role of labor in productivity and the way labor-price theory actually works until I studied Marx. So yeah, he should be on the reading list of anyone who wants to talk intelligently about economics.
I would add Robert Reich’s Supercapitalism to Steve’s reading list, too; I did an interview with him last week which will be posted on sfbg.com shortly.
The theory of money — how it’s created, what it is, how it effects the economy — is that stuff of dozens of textbooks and a thousand doctoral theses. But the bottom line is, money today is not a direct measure of labor productivity; it’s a far more artifical construct, as Steve points out. Money is created by the federal reserve and by private banks. At times, the government in effect prints more money at the mint to inject it into the economy. In practice, money — the dollar — is an internationally traded commodity, and the money supply in the United States is desperately hard to even track,much less manage or control.
Yes, taxes come from labor. But these days, a sane system would tax investment income and speculative income much higher than what we typically think of as labor. And a lot of the economy today is built on investment income and speculation that has nothing to do with productive labor.
Yeah, it’s all more complicated than that, but folks: If you can’t understand that money doesn’t directly equal labor, and that you can use Marx’s economic analysis without being a commie .. geez. I thought people in San Francisco were smarter than that.