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Source link: http://archive.mises.org/11113/from-the-man-who-gave-us-economics-in-one-lesson/

From the Man Who Gave Us Economics in One Lesson

November 30, 2009 by

Marxism in One Minute

By Henry Hazlitt

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others.

Never under any circumstances admit that your own failure may be owing to your own weaknesses, or that the failure of anyone else may be due to his own defects — his laziness, incompetence, improvidence, or stupidity. Never believe in the honesty or disinterestedness of anyone who disagrees with you.

This basic hatred is the heart of Marxism. This is its animating force. You can throw away the dialectical materialism, the Hegelian framework, the technical jargon, the ‘scientific’ analysis, and millions of pretentious words, and you still have the core: the implacable hatred and envy that are the raison d’être for all the rest.

This article was originally published in the Freeman 1966, Vol. 16, No. 2, p. 9.Download PDF

{ 45 comments }

Enjoy Every Sandwich November 30, 2009 at 8:36 am

I’ve noticed that the lefties also like to attribute a person’s success to the collective, e.g. “you’d never accomplish that without the government–roads, law enforcement, etc.”. They use that as a basis to claim that the collective is entitled to take whatever property or wealth a person has, since in their minds the individual contributed nothing to its creation.

David Hanneman November 30, 2009 at 8:37 am

The ethic of hard work and contribution to the community is absolutely central to Marx’s philosophies.

He reused the phrase, popular within the socialist movement already, “from each according to ability, to each according to need”. This recognises that the works of humanity are a collective effort, and no man or woman has ever, ever done something big by their own hand alone.

The hatred, which I do acknowledge exists amongst the communists, is hatred for those whose wealth and influence exceeds the hard work that they have put in. The richest people in the world do not know what hard work means. The work put in by a poor couple to feed, clothe and educate their children is a million times what a Rothschild will ever know.

It is right that those people are hated, because they are vermin, living off the hard work of other people. They add nothing to society.

Yes, we do hate and we do envy, because we work as hard as anyone, but we do not receive all the benefits. We are just not prepared to tread on others to achieve wealth.

David Hanneman November 30, 2009 at 8:42 am

Enjoy Every Sandwich – yes, that is correct, but I think you are missing the point that the individuals make up the collective and are therefore entitled to their fair share. Communists are not all authoritarian or even statist. In fact, most communists see the abolition of the state, which I think is what you really mean by the ‘collective’.

The collective is not a entity separate from the individuals that make it up, like a government department or a legal corporate entity, like a company, even if it is democratically run. The collective is pure democracy, give or take a republican tweak here or there :-).

Syrin November 30, 2009 at 9:35 am

David, you could npt be more wrong if you tried. You claim that the rich do not know what hard work means, especially compared to the poor, and offer not evidence to back this claim. We are supposed to buy it at face value. Yet, study after study after study shows the opposite to be true, The rich put in the longest hours by FAR, and are indeed the hardest working members of society. In your clouded world view, you seem to think that the majority of the rich are like the Kennedys who pass on generational wealth. Again, study after study after study shows us that most millionaires did it through the sweat of their brow, managing to succeed in spite of gov’t obstacles to achieve that success. You champion the collective over the individual meaning that 51% of the pop’l should be allowed to impose its will upon the remaining 49%. Lets just pray that that 51% are above human wants which you naively seem to assume. Exactly what protects the minority in this scenario? The good will of the collective? Are you not a student of history? How about modern day states? Have you not watched what happened to Zimbawe when the “lucky” white farmers were demonized by the majority? Their wealth property, and some times their very lives were taken away for the “collective good”. Seems so simple to run a farm, right? Anyone could do it, right? It took no skill, no ability, and no work ethic to run a farm, at least according to the collective. So let’s examine how the collective has done after driving away the evil successful farmers. Mass starvation, unparralled inflation, human rights abuse (just as has occurred under ALL previous “collective” state systems), mass poverty. The bread basket of Africa is now the dust bin of Africa. Ironically, the total collapse has allowed the emergence of a free market that is starting to re-build what the collective undid.

Funny how this “collective” that you champion has throughout history never been a benevolent force, rather quite the opposite. It’s been justification for some of the greatest atrocities in history, led to the decimation of its citizens, and impovershed virtually every nation that went that route.

No, the individual needs to be championed above all else. Again, objective analysis of history and basic understanding of human wants and faults lets us understand that the “collective” is little more than a ruse to take away the welath, property and rights from what ever group it deems unworthy. Pray they deem YOU worthy, for the decisions are usually not as rational as you seem to believe.

Syrin November 30, 2009 at 9:43 am

BTW, Enjoy Every Sandwich is absolutely correct. Perhaps this is being taught in academia throughout the land, because it’s a collective hive mentality amongst the liberals. The rich are rich only because the state allowed them to get rich according the the liberals. If the poor members of cociety had access to the same roads, police protection, or whatever the excuse du jour is, they too would have achieved the same results. Again, NO evidence to back this insane flawed argument that can be completely dismantled by any analysis of the actual facts. No, the collective would have us all belive that every individual was cast from the same mold. Yet for some reason, not all humans can run a 4.3 second 40 yard dash, not all humans are 7 feet tall and play in the NBA. Intellectually and work ethic wise, however, we are all completely equal should you listen to the collective. Of course, the collective ignores the entore concept of risk vs. reward, who takes the big risks vs who is unwilling, but that’s another topic entirely, isn’t it? Odd how the collective is wrong on so many levels.

Syrin November 30, 2009 at 9:52 am

Dave, you, by the way, also exhibit the same hatred that Hazlitt tells us is the core of Marxism. Do you not see the irony? You tell us that the rich are “vermin” and contribute nothing to society, yet that the gun toting inner city gang banger who is the father of 4 illegitimate kids at age 18 is somehow contributing to society. Care to compare societal contributions from Bill Gates versus all inner city gang members COMBINED? Hazlitt, yet again, proven correct by YOUR posts. Typical liberal who can’t see the irony even when it’s as thick as health care bill.

Cosmin November 30, 2009 at 10:21 am

Syrin,
Don’t canonize the rich.
You say: “Yet, study after study after study shows the opposite to be true, The rich put in the longest hours by FAR, and are indeed the hardest working members of society.”
First of all, contrary to David’s assertion, hard work doesn’t entitle you to wealth.
I could work hard for months at planting corn by hand and some other guy rents a tractor and does the same in half a day.
But, I can also work hard at profiting from a state-granted privilege like patents or mandatory health insurance laws. The fact that it took a lot of effort to successfully game the system doesn’t legitimize my method of wealth acquisition.

yvy yvz November 30, 2009 at 10:25 am

In response to David’s statement: This recognises that the works of humanity are a collective effort, and no man or woman has ever, ever done something big by their own hand alone.

The opposite of this statement is true. Most of our best human endeavors, including important paradigm shifts, inventions, the move forward of human progress can be traced back to individuals, who, by their sweat and work, dared to think and act out of accordance with the norm. True, we need a collective work force in order to run factories, build skyscrapers, etc. But what is the value of cleaning the toilets vs discovering an idea? Would both be entitled to the same? Remember that a doctor, while currently doing less hard labor than a coal miner, is paid not for the amount of sweat that leaves his body, but for the knowledge and skill that he’s acquired.

Jon. O November 30, 2009 at 11:33 am

It’s obvious why the lower classes support a system that institutionalizes theft from their betters. The interesting thing is why Marxism-Communism-Socialism-Egalitarianism is supported, sometimes paradoxically, by the powerful: not because of envy and hatred of their natural betters but because it serves them.

Wealth can’t always lead to power, but power can always lead to wealth; in other words the political means(stealing) > the economic means(production).

“If the natural tendency of power is to grow, and if it can extend its authority and increase its resources only at the expense of the notables, it follows that its ally for all time is the common people. The passion for absolutism is, inevitably, in conspiracy with the passion for equality.

History is one continuous proof of this… So independent of the Doge were the Venetian nobility that Michel Steno could insult the Doge’s wife and escape with a punishment which was so derisory as to double the insult. Indeed, so far above the people’s heads was this nobility that Bertuccio Ixarello, a plebeian, was unable, in spite of his naval exploits, to obtain satisfaction for a box on the ear given him by Giovanni Dandalo. According to the accepted story, Bertuccio came to the Doge and showed him the wound in his cheek from the patrician’s ring; shaming the Doge out of his inactivity, he said to him: “Let us join forces to destroy this aristocratic authority which thus perpetuates the abasement of my people and limits narrowly your power.” The annihilation of the nobility would give to each what he wanted – to the common people equality, to Power absolutism. The attempt of Marino Falieri failed and he was put to death.”
- On Power, De Jouvenel pp. 177-178

fundamentalist November 30, 2009 at 11:34 am

According to Dr Tom Stanley, 85% of the wealthiest Americans earned their wealth by growing a business. They didn’t start out rich, but typically were middle class. Some were poor to begin with.

What does hard work have to do with anything? The wealth of the West is not due to hard work at all. Neither is the wealth of the wealthiest. It is due to capital accumulation. Capital accumulation makes workers more productive and reduces costs, thereby making everyone wealthier. Socialists resent the fact that wealth comes from the use of capital and not from hard labor.

A rickshaw driver in India works far harder than any airline pilot, especially since most pilots use their autopilot a lot. What does that mean? Nothing, except that the rickshaw driver needs more capital so he can work less while producing more.

The key to wealth is working less to produce more, not worker more to produce less.

redshirt November 30, 2009 at 11:50 am

I don’t see syrin “canonizing the rich”. It’s a valid point on average. MOST people we consider rich have achieved wealth through normal legitimate means and much hard work. There is no reason to detract from that point. Nor does it make someone “evil” to benefit from a government regulation … especially those you simply cannot avoid in the act of performing your work. (Now to advocate for a regulation that benefits you at the expense of others is in my mind wrong.)

Another point to be made is that even those who inherit their wealth are fully entitled to the benefits of that wealth. Inheritance does not a bad person make. Moreover, wealthy people are interested in maintaining that wealth, which means, putting savings to work in investments, which fuels the economy for everyone.

Hazlitt rocks!

David Hanneman November 30, 2009 at 12:13 pm

Taking things in order:

Self-made millionaires are indeed, extremely hard workers. They are certainly more entitled to their wealth than a Rothschild – perhaps that was a bad example, but then the article was talking about hatred of rich people, not just self-made millionaires.

Sorry for the length!
I am not someone who has a rigid ideal of everyone getting the same, regardless of input. People who make more effort should get more, but there is no equation of poor people with gun-toting gangs members. The difference in quality of life between a normal single-mum and a self-made millionaire cannot be taken account of by how much effort they put in. Both jobs are 24/7 slogs. You put your heart and soul into it, or you fail.

Your uncaring, liberal attitude in this regard is antithesis to communism.

Onto Zimbabwe: just because Pres. Mugabe believes in land redistribution, that does not mean he is a Marxist. _Mugabe is in NO WAY and Marxist_. He is a nationalistic despot and more like early American presidents than any communist.

Although I am in favour of land redistribution, and have a lot of sympathy with the fact that the white-owned farms in Zimbabwe were originally gotten through the most criminal of means, Mugabe’s methods and aims are totally crazy. Again, this man is NOT a communist.

Similarly throughout Africa, there have been no communist regimes there – none. The dreadful havok wrought there has been done by the departing colonists of the European empires, leaving behind the most appalling elements of liberal conservatism – the very foundation of Western capitalism: the mighty individual, financial power, the international market.

Do not confuse the idea of someone ‘knowing’ what is best for the people (France at best… America, Britain, … Zimbabwe), and the essence of communism, which is that people know what is best for themselves and should collectivise democratically on that basis.

Now, your risk vs. reward argument is very compelling. The most dangerous jobs in Britain are (to my knowledge), being a soldier or in some areas, police, or being an oil-rig worker. Someone has to do these jobs, but the risk alone is enough to put many people off. Sure, these people should be paid more.

But what other risk are you talking about? Financial risk? That is the greatest lie ever perpetrated, with the possible exception of nationalism. Human success is based on economy and logistics, not finance. It always has and always will be. Financial power is a relatively new invention – a fad. It will pass.

Human development is not based upon money. Money does not in itself improve conditions, nor does it connect us, or allow faster travel, or higher buildings. It does not take us to space, or eliminate hunger. Money is only a handy storage unit of value.

The man who trades his coinage wisely can quickly go from £100 to £1000 and from there to £10k, £100k, £1m. But has he produced anything for the advancement of the human race? No. He has only advanced himself, to the detriment of others, because that money has come from someone else – ultimately from someone whose expertise lies in engineering, or administration, or parenting and not in the heady world of money-management.

Lastly Syrin, I have already stated that I do hate those people. Perhaps I begrudge most of them more than hate – they are people too and will have to be reintegrated come the revolution. Your histrionics mean nothing, because you are insulting me with something I believe to be of the highest moral virtue.

For the record, both Bill Gates and the gang-bangers are vermin. Bill Gates is a one-time hero of mine, and I still have a great respect for the man, because he has drive and ambition. But for all that, a tiny proportion of his needless and sickening wealth would sort out the majority of the gang-bangers the rest of their lives, and if you brought him down and them up, as communism proposes, their combined economic worth would be greater than it is now. And the gang-bangers would be happier as workers in decent housing, with a genuine democratic say in their lives, than any amount of Bill Gate’s happiness can add to the world.

yvy yvz, to some extent, what you say is true. Some individuals have, let’s say, a disproportionate effect on society. Again, I do not say that everyone should be remunerated equally, but that the difference in remuneration should be in some kind of sensible proportion to that person’s value. I acknowledge that this apportionment of wealth is to some degree arbitrary, but it could be so much less so. If an office administrator is paid £25,000 a year and a brain surgeon is paid £80,000, I would say you just about justify that. But you cannot justify the admin being on £14,000 (the breadline as designated by a right-wing British think-tank in 2007), and the doctor being on £130,000 a year. The difference is just too massive.

In Britain, the usual stated figure is that earners over £100,000 are in the top 2% of earners. This only takes into account people on salaries. It does not include shareholdings, and sales of commodities, currencies, bonds and the like. The ‘earnings’ of non-salaried people can be much, much higher. So for the self-made millionaire who puts 80% of his £100,000 earnings per year into a (interest-free) bank account for 20 years, yeah, he’s made his money legitimately, but for the one who has made a £100 million by investment, or shareholding, well, they deserve nothing but prison. They have contributed nothing and have taken everything.

David Hanneman November 30, 2009 at 12:22 pm

redshirt
Another point to be made is that even those who inherit their wealth are fully entitled to the benefits of that wealth. Inheritance does not a bad person make. Moreover, wealthy people are interested in maintaining that wealth, which means, putting savings to work in investments, which fuels the economy for everyone.

Seriously? Inheritance does make bad people. If you want wealth you should have to work for it, because wealth means power over others. You should have to work your fingers to the bone for those rights. Hereditary rich people _usually_ know nothing of hard work. They live opulent lives in large houses and have others to do work for them. They are filth, even if they cannot comprehend that themselves.

Investment can only make the economy better under capitalism. Even then, the vast majority of the returned wealth goes to the investor, who has produced nothing but more wealth. Even *then*, investment screws up with fair regularity, and causes untold problems for everyone else.

It’s not about capital movement, it’s about production, production, production!

Ohhh Henry November 30, 2009 at 12:25 pm

Also, the belief that confiscating the fruits of another’s labor does not discourage him from further production.

Cosmin November 30, 2009 at 12:37 pm

David, what you don’t understand is that the guy whose expertise lies in engineering doesn’t necessarily have the money to invest in the tools that allow him to make use of his expertise.
So, if someone else contributes to the advancement the engineer brings to society by investing his money into this venture, it’s perfectly reasonable to be compensated for that.

Where I don’t agree with redshirt is that I believe this investor does indeed become evil if he makes use of the government regulation in patents to disallow the engineer to use his expertise to start a new, competing company in the same market.

Sean A November 30, 2009 at 12:56 pm

Yes, envy clearly plays a role for many Marxists. However, pointing out this is a bit of a shift in the argument. We must stick to the task of attacking the underlying theorems argued by Marxists.

as someone above said “The ethic of hard work and contribution to the community is absolutely central to Marx’s philosophies.”
There is then the claim that Communism is not authoritarian.
–These two claims are incompatible. If we’re to direct labor to a single goal for all, there must be coercion. With no profit motive, there is little incentive to provide for the consumer’s needs. Labor must simply be aimed at a few planners value judgments and man must then be made into a homogeneous unit. If you think workers who voluntarily enter into a labor contract are exploited, just imagine those being forced into a communal system who must evenly divide the fruits of their labor. There is not incentive for the more skilled to utilize their innate advantages if they do not receive any reward for it. If doctors and janitors received equal compensation for their work, how many would go through the extra seven + years to become a doctor?

–And as for work being rewarded based on effort: someone can tirelessly slave day and night digging a hole and filling it back up, but it produces nothing for society. As those familiar with Mises know, in the market society the individual is rewarded with profit based on his ability to serve the consumers. Yes there are people who do not deserve their riches, most of whom gain unfair advantage through the government apparatus–e.g. bankers who pressure the government for favors. But profit is the ultimate fair re-distributor. If a rich child undeservedly inherits a fortune, it will not be sustained so long as he cannot continue to serve the public.

Bruce Koerber November 30, 2009 at 1:52 pm

Karl Marx Was Full Of Hatred And Envy.

The hatred and envy underlying Marxism does fit very well with the personality of Marx: manifested at first in his youth as a idealist whose ideal was to destroy, and more specifically to vainly attempt to destroy God – classic Marxian hate and envy.

That psychosis never left him and it was his motivation for all of his perverse ‘contributions’ to political literature.

Syrin November 30, 2009 at 2:02 pm

My time is limited today, but I perused it briefly and can see a well put together thoughtful reply that deserves my full attenttion. I’ll get back to this later. Thanks for the reply, looking forward to reading it.

Brian Drake November 30, 2009 at 2:16 pm

Everyone here needs to be wary of the traps of collectivist thinking. There is no such thing as “rich people” or “the rich”. There are individuals who are rich and they are…individuals. Some of them are thieves (either directly, or indirectly through lobbying for government intervention that benefits them). Some of them are heroes, wealthy because of their superior trading skills. And others are simply “lucky” in that they inherited their wealth from previous generations of heroes. Stolen wealth cannot be legitimately inherited, so those who are the heirs of the thieves are not necessarily evil, but their current status as “rich” is simply a result of the imperfect justice system the State supposedly provides as a service.

The point is, it is logically fallacious to paint with a broad brush. The Communist who villianizes “the rich” is in error, but so is the “Capitalist” (or whatever) who glorifies “the rich”. Everyone’s wealth, or lack of it, is an individual situation.

However, a generally accepted judicial provision (which may be arbitrary, but that is for another discussion) is that the burden of proof is on the accuser. So if you allege that certain people obtained their wealth through aggression, it’s up to you to provide evidence to support that charge (even in the “court” of opinion). Baseless allegations and collectivist assumptions of guilt really demonstrate the envy Hazlitt identifies.

Brian Drake November 30, 2009 at 2:41 pm

David,

Your valuations of what people “deserve” are arbitrary.

Example:
“If an office administrator is paid £25,000 a year and a brain surgeon is paid £80,000, I would say you just about justify that.”

“you cannot justify the admin being on £14,000…and the doctor being on £130,000 a year. The difference is just too massive.”

Why is a £55,000/year disparity just and a £116,000/year disparity unjust? There is no logical reason, it is completely arbitrary.

Because they are not derived from concrete logical principles, arbitrary value systems must be imposed by authoritarian coercion. You may be blind to it, but your posts have a central theme: I, David Hanneman, am the one to decide.

A quick example:
“which is that people know what is best for themselves and should collectivise democratically on that basis.”

Don’t you see how the word “should” completely negates your premise? Contrast that to “people who know what is best for themselves WILL do whatever THEY think is best for themselves”.

While you may pronounce yourself a Communist, your words betray that you are actually a (wannabe) Dictator. People should do, should be paid, should have their property distributed, etc… not according to any objective, moral or logical guidelines, but by what YOU decide.

If not you personally, then by some other dictator. That is the only way these arbitrary values can be imposed.

And they must be imposed, because the true alternative is the market, where people act on THEIR subjective values (not YOURs) in voluntary trade with others. Sans aggressive-intervention, the market reflects the only true “democracy”, where people “vote” many times a day on billions of issues and their “votes” are only binding on them. If enough people value a doctor at 3000 or more times the value of a janitor, there is no dictator to tell them otherwise. They simply pay for what they value.

If you really value people, you must accept that their values are their values, not yours. The voluntary market is the only “system” that respects that.

Your “communism” not only inevitably leads to the iron law of oligarchy (as all “collectivist” systems do), but your defense of it practically declares from the rooftops your true intention of authoritarianism.

bob November 30, 2009 at 3:07 pm

DH,

“Human development is not based upon money. Money does not in itself improve conditions, nor does it connect us, or allow faster travel, or higher buildings. It does not take us to space, or eliminate hunger. Money is only a handy storage unit of value.” (emphasis mine)

And now I can completely discredit everything you’ve said. Nothing works in and of itself (except the rational individual seeking to serve his own desires). The whole study of economy is to determine how these independent pieces are best arranged to satisfy human desire. If you think finance, money, and markets have nothing to do with this, and that they can be replaced by the whimsical nature of direct democracy and collectivized property, I must simply laugh.

WHERE DO YOU GET THIS STUFF? Can you cite one economic system throughout all of human history that fits your ideology? I doubt you can, because those that have come the closest have failed miserably. Ironically, the ideology ends up producing totalitarian statism. Rather than redistributing power more equally, it concentrates it more firmly. Your ideology has no practical implementation. It is like saying that society would be better off without crime. Well, duh. What’s the plan? What systems can be created today that can generate such results tomorrow? In the case of anarcho-communism, the answer is none. Only totalitarian government can destroy private property. I guess 1 out of 2 isn’t bad…

Anarcho-communism is a baseless ideology. How does one earn his vote to earn a share of control over capital property? How does one cast such a vote? Who administrates the voting process? How often can votes be cast? What constitutes a quorum?

This is a complete destruction of the concept of property and law. Anyone at any time may claim control of any resource, claiming a backing by majority in some vote.

Example: I just held a vote for proper control of your computer. The results were 1 – 0 in favor of banning you from posting any more of your thoughts to the internet.

Thankfully, anarcho-communism is impossible. It goes so against economics and human nature that it can never truly exist. When the voters find a majority to redistribute the rich man’s land, the rich man will hire simpletons to defend it within a market framework. Of course voters will favor redistribution from the rich to themselves when votes are costless. Will they risk their lives to enforce their decisions? Maybe, but not nearly as willingly as the mercenaries hired to defend the property.

Example 2 – Will you uphold the results of my vote and refuse to use your computer in such a manner? If you don’t, do I have lawful authority to violently prevent you from doing so? Can I detain you? Can I try you? In my own court? What even is lawful or not? All I see is whimsical, costless voting that may or may not (most likely not) result in any actual enforcement method.

Russ November 30, 2009 at 3:20 pm

David Hanneman wrote:

“Inheritance does make bad people. If you want wealth you should have to work for it, because wealth means power over others. You should have to work your fingers to the bone for those rights.”

Why is that? Yes, labor is necessary, with current technology at any rate, but so what? What is so holy about it? I know plenty of people who are laborers who are not good people; they are boorish, at best.

Besides, you’re forgetting that somebody had to forego current pleasure in order to save up to build the capital structure that benefits the laborer. For the laborer to not want to forego his pleasure, and still get as much as the man who did, is not right.

David Hanneman November 30, 2009 at 3:39 pm

Brian, you are of course right in that my use of those figures is arbitrary. Sure.

But the whole point is that my will is not the law. You have completely missed the point – that all these decisions and judgements should be taken by a mass federal democracy.

Your ludicrous hippy nit-picking on what my use of the word ‘should’ means for my politics is just that.

You say that the market involves all these billions of ‘votes’, but the market is heavily unbalanced in favour of those who: a) know and understand market mechanisms, b) already have a lot of money.

Communists argue for a mass planned economy. Some unfortunates see this a state-planned action, but libertarian communists see this as the democratic enconomic convergence of 6b+ people, under the protection of communist law. In this respect, it is no different to libertarian market capitalists, who see similar things, with the law protecting the institution of private property instead of the institution of public property.

That is objectivity.

fundamentalist November 30, 2009 at 4:02 pm

David Hanneman: “But for all that, a tiny proportion of his needless and sickening wealth would sort out the majority of the gang-bangers the rest of their lives, and if you brought him down and them up, as communism proposes, their combined economic worth would be greater than it is now.”

That’s just plain stupid. Socialists cling to the myth that if the world’s wealth was evenly distributed we would all be rich. But every socialist country in history has proven just the opposite. The few komrads at the top retain extreme wealth while everyone else verges on starvation.

David Hanneman: “I acknowledge that this apportionment of wealth is to some degree arbitrary, but it could be so much less so.”

It’s not arbitrary in a free market, where distribution is based on productivity. However, in socialism the distribution is totally arbitrary and based on the whims of the party leaders.

David Hanneman: “If you want wealth you should have to work for it, because wealth means power over others. You should have to work your fingers to the bone for those rights.”

That’s even more stupid!

David Hanneman: “Even then, the vast majority of the returned wealth goes to the investor, who has produced nothing but more wealth.”

The total benefits of most investment are split between the investor’s profits, increased wages for workers, and lower prices for consumers. The history of the West’s increasing standards of living for all is proof.

David Hanneman: “You say that the market involves all these billions of ‘votes’, but the market is heavily unbalanced in favour of those who: a) know and understand market mechanisms, b) already have a lot of money.”

Yeah, the Dollar Store and WalMart sell a lot to the wealthy. Someone has nominated WalMart for a Nobel Prize for doing more to help the poor than any state program.

Everything you have written is pure 1950′s Stalinism. Have you been awake at all since the collapse of communism in the former USSR, Eastern Europe and China? Go preach this nonsense to the former communists and get their opinion of it. You’ll be lucky if they don’t lynch you.

Sean A November 30, 2009 at 4:06 pm

“The man who trades his coinage wisely can quickly go from £100 to £1000 and from there to £10k, £100k, £1m. But has he produced anything for the advancement of the human race? No. He has only advanced himself, to the detriment of others, because that money has come from someone else – ultimately from someone whose expertise lies in engineering, or administration, or parenting and not in the heady world of money-management.”

Ahh, the zero-sum argument which capitalism and classical economists so thoroughly exploded centuries ago. Again, profit comes through the service to the public in their consumption. The mere fact that people cooperate and coordinate labor towards tasks explodes the zero sum notion. Only arbitrary redistribution can be zero sum. If both the trader and engineer are able to serve the preferences of consumers, then neither takes from the other. It is vain and dangerous to assert that the consumers want the wrong thing–this can be nothing more than an individual’s or group’s opinion about other individuals.

As for money: Broad generalizations such as “money is not everything” serve little purpose in logical arguments. Rather, you should go back and review the true purpose of money. Money is the intermediary connecting each individuals valuations of scarce materials. It attaches an objective cardinal number to each individual’s subjective valuation of the mutually desired scarce goods.

This concept of intermediaries is essential to social life. For example, like money serves as an intermediary in exchange of scarce goods, language serves as an intermediary in thought. People cannot directly enjoin thoughts with one another; they must act through the intermediary–language–to transfer and share ideas.

DH seems to apply a Rawlsian perspective–there can be some discrepancies, but not too much. Brian Drake’s point is the refutation of this fallacy: such valuations can be nothing more than arbitrary. Whereas the unhampered market attaches the valuations based on profit as determined by consumer demand.

Brian Drake November 30, 2009 at 4:44 pm

“You say that the market involves all these billions of ‘votes’, but the market is heavily unbalanced in favour of those who: a) know and understand market mechanisms, b) already have a lot of money.”

What does “the market” mean to you?

When I use the term, I am referring to an abstract aggregation of the voluntary interactions between people. By definition, State and ‘private’ criminal action is not a part of this and serves only to distort it.

So you think the market is imbalanced, but a 6 billion person democracy is not? The voluntary interactions (which includes the option to not interact) of people are imbalanced, but the will of 3billion + 1 imposed on 3billion – 1 is not?

When you have a democratic vote, the majority wins and the minority loses.

When people voluntarily interact, BOTH win. Otherwise, they would not interact.

Please explain what a “libertarian communist” is. Especially emphasize the definition on the “libertarian” part, if you would please.

In your world-wide democracy, is everything communal and thus submitted to majority vote? If not everything, then who decides what is submitted to vote and what isn’t? If it is not the majority, then how is this group of deciders not an oligarchy?

Brian Drake November 30, 2009 at 4:55 pm

Continued….

In your “libertarian communism”, do people own themselves or are they all collective owners of everyone else? If they own themselves, but do not own the expenditure of their energy and mind, they cannot really be said to own themselves. So who does own them?

If everyone owns everyone, how is this manifested? How can there be a democracy if everyone owns everyone? If I am part owner in you and you a part owner in me, must not a majority of your owners (which includes you and me) approve any action you take, which would include your giving of approval in the actions of others?

If it is a third option, and only some people own everyone, how is this justified?

With 6b+ plus people, there will be more than 1 will on how to use every scarce resource (including the bodies, minds, energies of each person), so the issue of ownership must be addressed.

Russ November 30, 2009 at 7:35 pm

David Hanneman wrote:

“Communists argue for a mass planned economy. Some unfortunates see this a state-planned action, but libertarian communists see this as the democratic enconomic convergence of 6b+ people, under the protection of communist law.”

How will “libertarian communists” solve the problem of how to distribute goods? Will they use the free market’s pricing mechanism? Or will they use centrally engineered planning? If the latter, how would that be different than “a mass planned economy”.

Stephen Tiano November 30, 2009 at 11:42 pm

You know, I’m down with capitalism and individualism and rewards for the risk-takers. On the other hand, I think there’s something to be said for a fairer shake–even tho’ no one ever said life had to be fair–for folks who start out with the short end of the stick.

What I do object to is welfare for the wealthy, which is exactly what our tax structure is. Tax breaks for the wealthy … to encourage them to get wealthier? Give me a break. As if accumulating more wealth and its benefits isn’t incentive enough. What a bill of goods working people have been sold.

Someone please do a study about how many wealthy people inherited there fortunes or a serious nut with which to seed their fortunes.

And please tell sports franchise owners that a system that guarantees all franchises a profit is un-American. If they can’t earn their way onto the plus side of the ledger than they deserve to be out of business. But that’s more welfare for the wealthy. (And, no, I am not a Yankee fan.)

Old Mexican December 1, 2009 at 2:03 am

Re: David Hanneman,

The ethic of hard work and contribution to the community is absolutely central to Marx’s philosophies.

There is no evidence of that. Marx’s thesis rests on the labor theory on value to demonstrate exploitation of man’s labor by capital owners. There is no conceding from his part that capital holders actually work.

He reused the phrase, popular within the socialist movement already, “from each according to ability, to each according to need”. This recognises [sic] that the works of humanity are a collective effort, and no man or woman has ever, ever done something big by their own hand alone.

No, you read that wrong. He again relied on the Labor Theory on Value to indicate that people should receive rewards for their toil equivalent to the amount of labor applied. This was shown to be fallacious by Bohm-Bäwerk.

The hatred, which I do acknowledge exists amongst the communists, is hatred for those whose wealth and influence exceeds the hard work that they have put in.

So communists do envy. I thought you had a counterargument, not a confirmation, of the argument posited by Hazlitt.

The richest people in the world do not know what hard work means.

That’s your opinion only.

It is right that those people are hated, because they are vermin, living off the hard work of other people. They add nothing to society.

Notwithstanding the capital they bring in? Can those hard working people afford to buy the equipment needed to make, let us say, cement?

Yes, we do hate and we do envy, because we work as hard as anyone, but we do not receive all the benefits.

I am going out on a limb and say that you envy and hate because you are an unthinking, irrational, emotional brute. If you were a thinking, rational person, you would think a way to improve your situation instead of envying the situation of others.

Robert December 1, 2009 at 9:50 am

As a person who was born dirt poor and who worked his way up by his own effort, I don’t buy the idea that the collective is full of people who are smarter and work harder than the rich. The vast majority of the rich in our society did not start out with their parents’ money and had things handed to them. They are people who work hard, start businesses on an idea, develop the creativity and expertise needed to guide a business into profitability, must adjust and think clearly through every day and work harder and later than the poor. Resentment of the rich, an unwillingness to educate yourself, an unwillingness to work hard and think clearly is what makes a person poor. You forget that the rich also have children and must pay mortgages just like the poor. Yet they work themselves out of poverty every day by having a strong work ethic and applying themselves.

(8?» December 1, 2009 at 11:35 am

David Hanneman says

The ethic of hard work and contribution to the community is absolutely central to Marx’s philosophies.

He reused the phrase, popular within the socialist movement already, “from each according to ability, to each according to need”. This recognizes that the works of humanity are a collective effort, and no man or woman has ever, ever done something big by their own hand alone.

So, in other words, both David and Marx recognize the results society obtains collectively by individuals engaging in the productive system known as the division of labor. What they fail to recognize, is how individual freedom makes it all possible.

No matter what, it is only the individual who can think about, act on, suffer or benefit from collective efforts of all individuals in society. To deny any or all individuals the opportunity to freely pursue their lives in order to create a Utopian society fostered on the enslavement of one man under another is pure madness.

“Big things” are accomplished via individuals who choose to voluntarily cooperate with one another to their mutual benefit. While collectives provide the opportunity individuals to prosper, they do not provide the prosperity themselves. It is always the will of the individual that makes anything happen, including the formation of a collective, as it is always the individual who will be affected by the change.

To raise the collective above the individual is both anti-human and anti-society.

scyg December 1, 2009 at 1:11 pm

I don’t have to read the whole lengthy discussion, but I do have two points to make (apologies if I’m repeating something that’s already been said):
1. The article was written in the 1960s, when it was more reasonable to view all Marxists as the scions of Soviet communism. Today that makes as much sense as making blanket statements about all rich people (i.e. not very much). Anyway, I’d say lefties have no monopoly on hatred.
2. Ignoring the concept of community or society is a dead end. You might as well ignore the concept of water, because in the end it’s just a collection of individual atoms. Doesn’t really get you anywhere if you’re trying to build a dam.

scyg December 1, 2009 at 1:13 pm

Sorry – I don’t have TIME to read the whole discussion. I didn’t mean to imply that I’m ignoring it on purpose.

Brian Drake December 1, 2009 at 1:32 pm

Scyg,

“2. Ignoring the concept of community or society is a dead end. You might as well ignore the concept of water, because in the end it’s just a collection of individual atoms. Doesn’t really get you anywhere if you’re trying to build a dam.”

This is exactly the problem with collectivist ideology. Human beings are NOT atoms. They are unique individuals with individual values and individual wills. The very fact that you and I disagree on ANYTHING is evidence to this fact.

If men were ants, then collectivism would make sense. But men are not hive creatures. Each of us has an independent mind, with our own goals and values.

Thomas Jefferson was wrong. Men are not created equal. And that’s a good thing. Uniqueness is what makes human interaction so exciting and enjoyable. It’s what makes the division of labor a powerful force for ever increasing living standards. Our inequalities are what makes us unique, and uniqueness is what makes us human.

It is a fact that men are not equal. It is my subjective value to consider that a good thing because I celebrate diversity and ever increasing human welfare. The collectivist/egalitarian mindset bemoans it and seeks to “rectify” it. So whether it’s good or bad depends on your values.

Since it is the natural state of man to be unique and therefore unequal, any efforts to change this are efforts to change the very nature of man. As Rothbard said, egalitarianism is a revolt against nature. Economics and history have shown us that this revolt is always destructive and ultimately utopian nonsense, since men cannot be fully converted into drones (close, but not completely).

But to the collectivist, the trail of corpses left behind and masses impoverished whenever their ideas are imposed are negligible, since humans are fungible and therefore expendable. Except for them of course.

YvyYvz December 1, 2009 at 5:03 pm

In response to Stephen Tiano’s comment:
What I do object to is welfare for the wealthy, which is exactly what our tax structure is. Tax breaks for the wealthy … to encourage them to get wealthier? Give me a break. As if accumulating more wealth and its benefits isn’t incentive enough. What a bill of goods working people have been sold.

A person works to achieve wealth and are punished for acquiring 6, 7, 8 digit salaries? That’s the basic premise of what you’re saying…those who earn more should pay more for having earned more…why is this? What claim or right does anyone have to my hard earned money? After putting myself through pilot training for years on end, I successfully achieved my goal and monetarily earned compensation, Who am I to share this with and again, I ask, for what reason? Think about the implications that this has for a competitive society. You say that accumulating wealth and its benefits are enough…It’s not enough. Your perspective is not only illogical but also contrary to all nature.

scyg December 1, 2009 at 9:18 pm

Brian,
“This is exactly the problem with collectivist ideology. Human beings are NOT atoms. They are unique individuals with individual values and individual wills. The very fact that you and I disagree on ANYTHING is evidence to this fact.”

“If men were ants, then collectivism would make sense. But men are not hive creatures. Each of us has an independent mind, with our own goals and values.”

It’s not a question of humans being sentient or not, but rather whether it’s sensible or not to speak of the actions of groups or only of their members.
When people start to interact with each other, willingly or not, they form societies. Humans are social animals, and this is one of the things that defines us. Not many of us choose to live in the woods all by ourselves, and a huge majority of us rely on society for sustenance (this includes free-market trade of goods, just to be clear). This interaction, whether we like it or not, produces dependencies and power structures that simply cannot be wished away.

This is not an argument for collectivism in the Marxist sense. However, Miesian/Libertarian insistence on unadulterated individualism is just as misleadingly simple-minded, and in my opinion plain wrong. Ignoring an aspect of human experience just because it doesn’t match this or that ideology is a road to nowhere.

Brian Drake December 1, 2009 at 11:59 pm

I’m not ignoring an aspect of human experience.

Voluntary co-operation between individuals is a wonderful thing. That is what allows the division of labor (otherwise, we’d have to all be self-sufficient).

But no matter how large the society, the fact remains, only individuals exist. There is no “group” or “nation” or even “corporation” in reality. There are only individuals.

So, for example, while a “mob” may loot a town during a riot, the fact remains that every single individual in that mob was acting as an individual and thus is individually responsible for whatever actions they individually take.

Speaking in collective abstractions (e.g., “group”, “corporation”, “nation”, “libertarians”, etc…) is simply a useful verbal construct. But when we start thinking these abstractions are anything other than verbal shortcuts, that groups of people really do have a collective “will” or “common good”, then we cease to think in line with reality. And that break with reality is very dangerous because like it or not, the group doesn’t really exist, but the people still do. Putting the group ahead of the individual is not only nonsense, it is historically shown to be tragic.

scyg December 2, 2009 at 1:10 am

Here we have to disagree. “Society” is not just a verbal construct, it’s a reality, despite not having a body or a will in the sense of an individual human being. The power relationships within social groups make people do things they would not otherwise do, even if they’re not overtly coercive (e.g. you want something from a group, so you conform to its rules, which may not have a single individual author). If something has the power to alter human behavior, as far as I’m concerned it’s real, even if I can’t poke it with my finger.

One note – recognizing the fact that humans are social animals in no way points towards a Soviet-style collectivism. People can recognize their dependence on society without submitting their entire will to it – and in fact that’s generally how things have been done since the beginning of history. Utopia, whether collectivist or individualist, is impossible by definition. I’m not sure if I’d like to see either realized, in any case.

newson December 2, 2009 at 1:19 am

“Society” is not just a verbal construct, it’s a reality…

since when has a crowd been charged with disorderly behaviour? man is a social animal, but “society” is just a verbal construct.

Brian Drake December 2, 2009 at 1:39 am

“If something has the power to alter human behavior, as far as I’m concerned it’s real, even if I can’t poke it with my finger.”

I have some sympathy to what you’re saying, but it’s a sympathy of understanding, not a sympathy of values.

Having read Butler Shaffer’s “Calculated Chaos”, I’ve been made aware of what he refers to the difference between an organization and an institution. To summarize roughly, organizations are when multiple people voluntarily associate because they share a common goal. It exists as long as the goals of the members are served. An institution is “born”, when the organization takes on goals irrespective of the goals of the individual members. In fact, most (or all) times, these institutional goals are achieved at the subjugation of the individual goals of the individuals.

At this point, I can see how the institution becomes a “real entity”. But it’s still just an abstraction, even if “it” wields power over the minds of men.

In all cases I’m aware of, institutions are destructive forces since they subjugate the individual to a non-existing entity’s will.

But in reality, though this institutional will may not have a single author, the authorship of this will is still from individuals. And this will must still be enforced by individuals. The Iron law of oligarchy rears its head. In coercive collectivism (institutions), there is really always an oligarchy.

“recognizing the fact that humans are social animals in no way points towards a Soviet-style collectivism”

Agreed. Admirers of the market, like myself, appreciate the social aspect of human nature.

But recognizing non-individual entities as anything other than useful verbal constructions does lead towards destructive collectivism.

scyg December 2, 2009 at 9:31 am

If society is a verbal construct, so is individuality, since very few of us are completely independent of others (and certainly nobody who uses the Internet or communicates with others is). Absolute individuality exists only as a mental construct, no more material than “society”.

If you push any ideology to its limits, it becomes dangerous – you have totalitarianism on one end and anarchy on the other. Neither absolute collectivism nor absolute individual liberty are possible to achieve. The question is what particular balance between the two is most beneficial. Denying the existence or importance of either collective or individual interests is not very productive.

BTW, your division into organizations and institutions also appears neat at first, but doesn’t reflect reality. As soon as people group together towards a common goal, power relationships appear between the group and its individual members. While a local glee club may not have the power that a government wields to discipline its members, it is only a difference of the degree of coercion each uses, not a substantive one in the way the relationship functions.

Brian Drake December 2, 2009 at 12:08 pm

scyg,

Individuality and independence/isolation are not the same thing. It is because you aren’t acknowledging this difference that we are talking around each other.

Absolute individual liberty is the recognition of each person’s self-ownership (and the resulting property rights he acquires through first appropriation or voluntary trade). It is absolutely possible to achieve because it is natural. It is only interrupted when aggression is introduced. Aggression is unjustified and unnecessary for human society. That it exists does not justify it, nor make it necessary. That is may always exist is also irrelevant to whether it is justified or necessary.

Do you not see the difference between voluntary associations (glee club) and aggressive coercion (government)? There is no aggressive violence used against me if I disobey the glee club rules (which were written, approved, and enforced by individuals). I simply lose my membership, which was voluntary to begin with.

But I’m getting off track (I somehow just love chasing tangents). My whole point is:

Only individuals act.

That is simply reality. Can you provide evidence to the contrary?

Any collective action you can propose, I assert can always be traced to the actions of individuals. To the exertion of individual wills. They may be acting in concert, but they are still individuals. And thus individually accountable for their actions.

Or could you please provide a counter-example where the collective actions of people cannot be simplified to individuals?

scyg December 2, 2009 at 3:14 pm

When you say that liberty is natural and aggression isn’t, what do you exactly base this on? I’d say if anything it’s just the opposite – there’s plenty of aggression in nature, while in the common sense meaning of the word liberty is based on the existence of free will, which if I recall you’re not willing to recognize in animals (ants, at least).

As with my glee club/government comparison, I still think it’s a question of degree and not substance. The glee club can discipline you if you don’t conform to its rules, as can the government. The coercion of the government, which is the resultant of power relationships within society, is obviously more powerful and not as easy to escape, but not impossible. To do so you would have to remove yourself from society, which few even hardened libertarians are willing to do.

As to your question about collective actions – I’m not arguing that they cannot be broken down into individual actions, but it doesn’t make sense to do so. If you’ve ever witnessed a frenzied mob, you’ll know what I mean. There’s no more individuality in those situations, regardless of legal liability, than in a stampeding herd of cattle.

whaha December 3, 2009 at 7:42 am

There is a difference in being the ‘same’ and in being ‘equal’.
Human beings are not the same, but they are equal.
We are the same in value, because we are all humans.
That’s why the saying is ‘all men are created equal’.

Every single human being is also unique.
Their difference (being not the same) does not make them unequal.
They are all humans and should be given their ‘birth values’.

People are different, but equal, because their all human.
People are different, thus unique.

In short:
A human being is unique.
Humans are equal.

Yeah, I know, you could consider ‘humans’ an abstract mental construct.
But hey, everybody want to be happy, right?

I have few questions as well:
Is there empirical evidence that shows us that greed is natural?
Like we are born with it, that it’s in our DNA?
How about our free will?
I heard that it’s also hard to (scientifically) prove that love is natural
/ in our DNA, but everyone agrees on that right?
OK, maybe not:
http://dailynietzsche.blogspot.com/2008/04/is-love-natural.html

Just saying ‘that’s natural’ is too easy, if you ask me.

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