Saturday, July 19, 2014

Piketty's Capital, the Tea Party, and Overcoming Ignorance

There's a fresh new economics book on the scene, and it's ruffling more than just a few feathers. Written by French economist Thomas Piketty, the book is Capital in the Twenty-First Century,” and it presents a radical new proposal for wealth redistribution, asking us to reconsider how we think about the profits, income, and the wealth of corporations. Piketty was interviewed on The Colbert Report last month, which was a pretty hilarious interview in my opinion. The book is extremely progressive by American standards. Piketty argues in favor of a massive wealth redistribution and high taxes on the rich. I personally tend to lean more in the Classical Liberal or Anarcho-Capitalist direction (at least economically – socially I tend to be pretty progressive), so the kind of proposals Piketty advocates are something I have sincere doubts about, but I do try to give all sides a fair shot to present their argument. The book is actually brand new, just released this year (the English version, anyway – the original French version came out last year), and it's really upsetting a lot of Conservatives, especially among the far-right members of the Tea Party, which made me want to read the book all the more, as I'm really not a particularly huge fan of the Tea Party.

Now some people may ask why I dislike the Tea Party if I believe in free market capitalism. Well, that's kind of a long story. A few years ago, I made a decision that I wanted to understand Socialism. And I didn't want to have just a passing and shallow understanding, but a deep, thorough, and complete understanding. I wanted to understand Socialism in its entirety. I had to know absolutely everything, in totality.

Back in 2011 I didn't even have any conception about what the word “Socialist” even meant, except that nearly everyone in conservative media was saying Obama was one, and they all seemed to agree that it was a bad thing. Though given the wide variety of government policies to which the word was being applied, it seemed to me that the word “Socialist” had literally no meaning whatsoever, and was just a negative byword that people could use as an empty vessel to describe any and all political policies they disliked. But to me, that attitude just created more confusion than clarity, and served only to shut down discussion, rather than to build a constructive conversation about the proper role of government in society.

This is one of the major issues I have with the Tea Party, and is why I don't support them, even though they do have a legitimate concern about certain things, such as the economy and national debt. Among the members of the Tea Party, the word “Socialist” simply seems to mean “Non-Republican,” which isn't helpful. The economic crisis is certainly a very big problem, but calling every single Democrat a Socialist only splits the country in half and turns the people against each other, which just creates and exacerbates problems, rather than solving them. Besides, such an approach is also a gross oversimplification not only of Socialist theory, but of political theory in general. If we were to define “Communism” as simply any and all government involvement and interference in the economy, then we would find that there has never been a Non-Communist government in the entire history of human civilization. So clearly a more narrow definition is needed. But the Tea Party doesn't seem to want to engage in that sort of complex and intricate exploration of socioeconomic political theory, and instead just wants to beat down their opponents with an ideological club and plaster the label of “Socialist” across anyone who dares disagree with them. Is that the path to freedom? I think not. Quite the contrary, it seems more to echo a warning contained in Proverbs:
“How long, ye simple ones, will ye love simplicity? and the scorners delight in their scorning, and fools hate knowledge?”
— Proverbs 1:22
On top of that, another disturbing trend I've noticed among the Tea Party is that they almost universally oppose Civil Rights, especially equal rights for the LGBT community, which is something I'm a big supporter of. I have even seen some Tea Party candidates go so far as to openly proclaim that they want to repeal the Civil Rights Act of 1964, saying that business owners should have the right to discriminate against their customers and employees, which makes me question whether any of them secretly have ties to white supremacist groups, like the two police officers in Florida who recently lost their jobs when it was discovered that they were secretly members of the Ku Klux Klan. Now I'm not saying saying that the Tea Party is a front group for white supremacy, but the extreme opposition to Civil Rights which is exhibited by large swaths of the party is enough to make me nervous. Apparently they believe that property rights take precedence over human rights. They value brick and mortar above flesh and blood. Maybe not all the individual members of the Tea Party feel that way, but the leadership sure seems to, and ultimately it would be the leadership that would determine what sort of policies got implemented if they ever gained political power. The Tea Party claims to be supporters of freedom, but their particular brand of freedom isn't my cup of tea.

As for Piketty, I'm only into the second chapter of the book so far, and he spends most of the first chapter simply defining his terminology (I find it fascinating that a book can present ideas so complex that an entire chapter is needed just to explain the terminology). Basically the main premise of his argument is what he calls the disparity between labor and capital. Called by Piketty the Fundamental Force for Divergence, and represented by the equation r > g, the question asked by the book is when a company or corporation turns a profit, how much of the profit should be paid as wages to the employees, and how much of it should be paid as a return on investment to the investor(s) who took the personal risk and made the initial investment in the company? In short, what is the most fair way to divide profits between employees and investors? That is the question which lies at the heart of Piketty's book.

Many conservatives are upset by Piketty's book, since to many people it almost feels like a revival of Marxism (a perception which is not helped by Piketty's choice of title). Piketty does also grapple with the Labor Theory of Value, which today is most commonly associated with Communist and Socialist economics. But it must be remembered that although Marxist theory does indeed use the Labor Theory of Value as its foundation, Karl Marx did not invent the theory, and it actually has its origins much earlier in the writings of Adam Smith, who is considered the father of Capitalism.
“The value of any commodity, ... to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.”
— Adam Smith, “Wealth of Nations,” Book 1, chapter V
It seems to me as though we've entered an age where it is not possible to have any serious intellectual discussion about political or economic theory without wandering into realms which some would perceive as “Marxist. Personally, I believe this is simply the lingering effect of Cold War paranoia which is still entrenched in the minds of the older generation. Unfortunately, given the incredible girth of material that was written by Marx over the course of his lifetime, there is scarcely any economic territory left where he has not set foot and given at least a cursory opinion. As a result, a situation has been created in which literally every and any economist and politician could potentially be labeled a Marxist simply for having an opinion which coincided with something Marx had said at one point or another. But by that standard, even Adam Smith could be labeled a Marxist, which is obviously ridiculous. A few months back, a video began circulating on right-wing forums in which some politicians from Oregon were debating the issue of gun control in what looked like a courtroom, and a man in the audience, who claimed to be a refuge from Cuba, got emotional and shouted “This is Marxism!” The video became extremely popular among conservative circles, getting wide distribution and circulating widely. But there's just one problem. Karl Marx actually opposed gun control.
“The workers must be armed and organized…under no pretext should arms and ammunition be surrendered. Any attempt to disarm the workers must be frustrated, by force if necessary.”
— Karl Marx
Now I don't mean any disrespect to the Cuban refuge in the above video, as I'm sure he went through quite an enormous ordeal in fleeing Cuba. However, I think it's important to make a clear distinction between the policies of Communist dictators like Fidel Castro and the actual writings and theories of Karl Marx. This is the sort of ignorance that I intend to overcome, at least on a personal level. I want to know what Marxism actually is, not what the Tea Party says it is. I will not allow myself to be deceived by propaganda, nor by the misconceptions of the uninformed, however passionate they may be.

As I said above, it has become nearly impossible to seriously debate political and economic theory without wandering into territory which some people might, whether correctly or not, perceive as Marxist. Yet if we are to discover the true nature of economics, and lift ourselves up out of the darkness of ignorance, we must wander into these territories. We might not come out clean, but we'll come out with the truth, and our understanding will be enhanced. In the words of Oscar Wilde, “The truth is rarely pure and never simple.”

I don't know about you, but I intend to find the truth.

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