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Anyone who has ever debated the economy with conservatives knows that it's a tough slog. Anyone who argues with them online has heard all the usual silly conservative retorts: "You're just jealous!" "Get a job!" "Get out into the real world!!"

What I find so amazing in all of this is their constant assertion that only they, only conservatives, really understand the economy, when it's absolutely clear that they don't. Not in the slightest. Especially in the most essential sense of how capital formation happens, where it happens, and what that means.

To the conservative, there are actually two economies, the public and the private. The first one is not real, and it's where our tax dollars go to die. They apparently disappear off the face of the earth, and no capital formation happens. In the other, the real economy, money is magically transformed into something that multiplies itself, so that everyone wins, no one loses, and capital formation can happen without it actually coming from somewhere else. It's never "other people's money" to begin with in the private sector. Only in the public. Wizards are everywhere. Harry Potter wannabes unite!!

This belief drives their hatred of government. At least the part of government that spends money to help others not already stupid rich. To them, government wastes money that the private sector would not waste, and it can't create "wealth" or jobs or anything else. It's a separate eco-system, with no ties to the real eco-system, the private sector.

Of course, capital formation occurs essentially in the same way in both realms, because there aren't two economies -- there is only one. In the public sector, individual taxpayers send money to DC, and it's organized and used to provide goods and services in turn. The private sector does the same, exact thing. Businesses accumulate capital from various sources, including banks, investors, consumers, and the government, in order to provide goods and services. The vast majority of money comes from the same exact place: individual American citizens. It comes from somewhere else!! And that always entails a transfer of dollars from here to there, a loss and a gain from here to there.

The public sector accumulates capital to provide goods and services without seeking profit. The private sector accumulates capital to provide goods and services for a profit. The only real difference is the for-profit or non-profit part, and what goods and services are created. The money flows throughout the same economy, and it comes from the same place.

So, why is all of this important? Because as long as enough conservatives actually see government as a black hole, and the private sector as a land of magic and unicorns, we will never be able to reason with them and come close to an effective use of government on behalf of the people. We will continue to see the transfer of wealth from the bottom and the middle to the top, without cessation, and that will in turn make the top even more powerful and likely to accelerate the process.

The above is just a brief overview of a fundamental misunderstanding. There are a 1001 other things to discuss, like capitalism's inherent need to create inequality, its natural conflict with Nature, its internal contradictions that inevitably make it bounce from one crisis to the next, and its endless need for bailouts. But as long as the left can't even make the case for one economic ecosystem, we are unlikely to be able to move on to the real source of our troubles:

Capitalism itself.

Of course, there is a difference between conservatives who run the show, and those who follow the leader. I suspect that conservatives who run the show aren't blinded by their ideology enough to really believe we have two economies. Many of them, no doubt, became quite wealthy due to government contracts, R & D, loan guarantees, etc, and certainly must see how money flows throughout the system without stopping for a passport check.

One of the major features of capitalism, of course, is its disregard for national or internal boundaries. Labor doesn't have the same advantages, hence the growing gap.

A good article on the subject of corporate power totally disregarding national boundaries is this recent bit from Noam Chomsky:

The Great Charter

1:02 PM PT: Wanted to add: The above is why conservatives think cutting government spending is such a good thing, and won't hurt the economy. They actually believe a government cut means a private sector gain. Of course, given the fact that the private sector is sitting on trillions already, without putting it to productive use, no such gain is going to occur. A cut in government spending is a cut in total spending, for the entire economy, public and private.

Spending is spending. What matters in a capitalist economy is capital formation in the service of productive use. With trillions idle, government spending is not taking anything away from productive use created in the private sector. And with so much sitting idle, government must spend far more than it is now to make up for that. It's one economy and one team. Thinking of it as opposing teams is killing us.

Originally posted to diomedes77 on Tue Jul 31, 2012 at 12:02 PM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  this is pretty lucid (19+ / 0-)

    I'm amazed at the so-called conservative small biz people I meet on the intertubz, oblivious to the capital investments govt made to allow them to start, stay and grow their biz.  I love Rmoney's "you didn't build that" tour with all the companies getting contracts from the govt!

    bonzo goes to bitburg should be required listening...

    by decitect on Tue Jul 31, 2012 at 12:28:23 PM PDT

    •  You didn't build that. (20+ / 0-)

      It's also amazing that they don't get how business has always lobbied government hard for infrastructure, because they knew that it greatly enhanced commerce, helped their own ability to expand and profit, and removed big costs from their own budgets.

      "Externalization" has always been a key for business. They don't want to have to build their own roads, bridges, airports, Internet, etc. etc. They want taxpayers to pitch in and share the expense so that business can prosper.

      In recent years, however, a new breed of conservative has taken the stage, one that believes far too much in their own press clippings. Even though they used the ladder we all paid for, once at the top of the heap, they see no reason for that ladder anymore and want to kick it away. And too many of their followers believe the same thing, even those who still need that ladder.

      The only thing we really need to kick away is the idea that there is a wall between public and private, and the one that says only the private sector is real. Expose the myth and we can reverse the damage the right has done when it comes to killing the idea of social democracy. Get back what we've lost and expand upon previous gains.

      In short, the public sector is not a four letter word.

      •  PUBLICLY... (1+ / 0-)
        Recommended by:
        No one gets out alive











        THAN OTHERS."


        by theChild on Tue Jul 31, 2012 at 09:51:02 PM PDT

        [ Parent ]


          OF ORLY TATZ,








          by theChild on Tue Jul 31, 2012 at 09:53:08 PM PDT

          [ Parent ]

        •  but understood, (0+ / 0-)

          past a certain point, talking about THE NUMBERS of the amount of money in play in all this, simply goes past the everyday public.

          their eyes glaze over, as if they PERSONALLY HAVE that money, and what would they do with it - no more work, vacations whereever they want to go, beachfront houses...


          as much as they can skim without being noticed, is gravy. and still probably enough to buy a beachhouse, eventually. in some semi-quasi-legal financial-political entity as a SUPERpac - "shit what the hell is a SUPERpac?" many would still ask. they just don't fucking know. your average everyday person.

          but regardless, getting your average everyday (potentially "home-schooled") citizen to understand and contemplate the scale of monies involved, WITHOUT THINKING ABOUT THEIR OWN GODDAMNED SELF-INTEREST, CONSIDERING THE SCALES REALISITICALLY WITHOUT RE-WEIGHING THE ARGUMENT SELFISHLY TO THE ALREADY SELF-CENTERED AND SELFISH REPUBLICAN SIDE...



          by theChild on Tue Jul 31, 2012 at 10:01:43 PM PDT

          [ Parent ]

  •  Well, that was enlightening. (8+ / 0-)

    I have never thought about the economy in those terms, but it fits with the idea of driving the economy over a cliff (a currently favored euphemism). If the front of the bus goes over, the back goes, too.

    If one believes the conservative narative, one should also believe that one can drive half of a car from New York to Seattle, and the other half from Boston to London. At the same time.

    Thanks for the new way of looking at this.

    Trickle-down theory; the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows. - J.K. Galbraith

    by Eric Twocents on Tue Jul 31, 2012 at 12:34:57 PM PDT

  •  Economic Ecosystem (7+ / 0-)
    Recommended by:
    diomedes77, fumie, LNK, bnasley, Siri, annan, DBunn

    I like it, lets spread it around a bit!

    Reach for the sky, Touch the sky, Revive a hope, For Mankind!

    by Greatwyrm on Tue Jul 31, 2012 at 01:02:00 PM PDT

  •  There is a disconnect (4+ / 0-)
    Recommended by:
    diomedes77, Siri, Egalitare, ColoTim

    on the right when discussing government and business. Business failures are never contemplated. Government is the only problem.

    The right wing followers close their eyes to the symbiotic relationship between government and business.

    If peace is to prevail we all have to become foes of violence.

    by spacejam on Tue Jul 31, 2012 at 01:32:20 PM PDT

  •  Wish I had time to read the diary fully (8+ / 0-)

    A brief abstract would help.

    I'd love to be able to quote it at dinner tonight!

    Having worked in finance I wouldn't say that Conservatives misunderstood the economy; rather, they deliberately confuse the public by painting government as evil, money-grubbing, wasteful, shameless, extortionist while painting business as good.

    They have been doing this for a good hundred years and they really picked up speed in reaction to The New Deal (which was FDR's way to rebalance what Jefferson and the Founding Fathers started for us).

    For a really good time:

    Google search terms: "friendly giants" "silver chains" will get you to Google Books, "PR!: A Social History of Spin" By Stuart Ewen

    My first reaction after skimming the diary is this:  the huge imbalance between private corporate capital and power and what their (sponsored) creatures in Congress have managed to reduce the public's power to.

    For example, one of the reasons that big financial institutions aren't being pursued for their alleged wrongdoing is that the SEC has been severely underfunded and cannot hope to win against the well-funded legal teams the corporations have.

    Big business can stretch things out for decades......

    •  We're getting close to the point . . . (12+ / 0-)

      where government regulators will be more than just underfunded. They will all be chosen by corporations to turn a blind eye at least. Payback for campaign donations. Political appointees already do this. But career civil servants tend to balk at that sort of thing and some blow the whistle. The goal of business is to weed out the career folks, and replace them with appointees or appointee-hires over time.

      Then the transformation will be complete.

      Thing is, capitalism itself may not survive all of this Machiavellian maneuvering. If Bush and Obama had not put together the bailout packages, capitalism would have fallen. Which makes all of the screams about Obama being a socialist more than absurd. I wish he were. But he's not.

      You mentioned FDR. He also saved capitalism from itself. But the danger today is greater for humanity, IMO. Because if capitalism had fallen in the 30s, there was a very strong left that was ready to respond in a positive way. Now? It's the right that holds power.

      . . . .

      At the very least, we need to make it clear that there is no division between public and private, and that they are not on opposing sides. Republicans and the right want everyone to think they are, because that suits the 1% to a T. It's a shame Obama hasn't fought that narrative, because the window for changing it is almost gone.

  •  OT, ask Conservatives: "What's in your pocket?" (8+ / 0-)

    MONEY! Printed money and coins! Brought to you by the Federal Government.

    •  What makes a currency legitimate? (1+ / 0-)
      Recommended by:
      Killer of Sacred Cows

      Even conservatives will agree that money is essential to any economy more advanced than bartering among peasants.

      That being the case, here's a fair question to ask our conservative friends: what makes money valuable? Specifically, why is a particular currency such as the US dollar used instead of something else, like maybe tokens and credit slips from Ed's Dubloon and Towing Service.

      And the answer is (drum roll... ) because the US dollar is the only currency that we can use to pay our taxes. We all need to accumulate US dollars, so we can all pay our unavoidable US taxes. That's why US dollars are always valuable to everyone, and it becomes not just law, but also common sense for the US dollar to be the universal currency within the US.

      If we want an advanced economy, we need a stable, universally accepted currency. For that we need taxes, and for that we need government. A tax-and-spend government, to be exact.

  •  But their view results from indoctrination (13+ / 0-)

    in a false reality, and it is not done by accident.

    Republican political messaging is based on portraying non-Republican views negatively to create a powerful and emotional memory - even if it is completely false.

    The goal is to make Republican views - especially views that simply defy logic, math and science - to appear as a reasonable solution. What is not evil must be good.

    It is also slight of hand - Republican warning about Liberal indoctrination distracts attention from the indoctrination that they have been doing for some time.

    The Republican view of the economy is very flawed, as Lui and Hanauer showed in "Gardens of Democracy".

    Republicans view the economy as a machine, that if you give more money to rich people (the so called 'job creators') in the form of tax cuts and loopholes, the economy grows and jobs are created. The problem is that while that may have been how the economy worked in the 19th century, it is not how the economy works today. That's why the tax cuts in 2001 and 2003 never generated the 5 million jobs as planned and only increased incomes for corporations and the wealthy.

    Today's economy is more of an ecosystem, with feedback loops between middle class workers/consumers and business owners. If workers have more money, they spend more which creates demand. More demand increases profits but also requires more jobs to meet demand. But if only business owners have more money while workers have less, the feedback loop is broken. That's why we have sluggish job growth while businesses have $2 trillion in profits sitting on their books and the top 1% have ever increasing incomes. This is something that Henry Ford realized 100 years ago: workers have to be able to afford to buy what you are selling.

    What Republicans have proposed for the last two decades and are still proposing for the next two decades is based on a 19th century economic policy with $4+ trillion in new tax cuts for businesses and top earners that will raise taxes on the workers and consumers and reduce social safety nets. While they believe funneling more money into the economic machine will create jobs and economic growth, it actually further breaks the feedback loop, weakens demand and increases income inequality. Extra income for top incomes will not lead to hiring without a corresponding increase in demand, and the top incomes cannot create sufficient demand to make up for the loss of worker/consumer spending.

    •  but it does lead to (3+ / 0-)

      let them eat cake moments.

    •  Great post, but it's (5+ / 0-)

      crucially important to articulate why 19th century economics doesn't work now.  The answer is finance capital.  The vast majority of investment isn't in jobs and production, but in finance and things like rents where money is made by investing in "money".  Where there was a real trickle down effect in industry, there isn't in this form of investment.  The new form of capital is things like rent, loans, debts, etc.  These investments produce little or no gain for anyone outside the elite.  

      We need a way to clearly and concisely express this point to the American people, because the idea that if we cut taxes big businesses will be able to invest more in in jobs sounds so intuitive to people.  There are a couple problems here that people don't understand.  First, there's there problem of finance capital I just mentioned.  Second, people don't understand that businesses are only taxed on their profits.  Cutting taxes on big business actually disincentivizes investment in jobs because where that money is going to be taxed less there's no reason to shelter it by investing it back in the business.  Finally, third, it's always important to remind people that it is not businesses that create jobs so much as consumers.  It's not as if businesses just magically create jobs.  No, there has to be a need for them to invest in jobs because there's a demand for their products.  If you take money out of the pockets of the working and middle class, then they can't buy products.  If they can't buy products there isn't the demand to create more jobs.  Fiscal conservatives are cutting off the branch on which they're sitting on (one of the internal contradictions of capitalism this diary mentions).

      I commend the content of what this diary is saying, but don't feel terms like "capital formation" and economic-speak in general are helpful to our political goals.  These things need to be expressed in ways even the dullest American can understand.


    ... unless you talk about cutting the defense budget 10%, then it's "whoa hold on a second, that's going to kill jobs!"

  •  Not my thing (1+ / 0-)
    Recommended by:
    Kaiser Soeze

    Nah, I don't attempt to "debate about the economy with conservatives."

    I don't pet rocks. I don't flap my arms and try to fly. I don't talk to ducks.

  •  I don't think the conservative leadership (3+ / 0-)

    believes what they say.  For them alot of it is coded speach since poverty breeds dependancy.

    and their contempt for the Latin schools was applauded by Theodoric himself, who gratified their prejudices, or his own, by declaring that the child who had trembled at a rod would never dare to look upon a sword.

    by ban48 on Wed Aug 01, 2012 at 04:14:53 AM PDT

    •  Attacks on government (0+ / 0-)

      by conservatives are never really about fiscal health, but are always about racism imo.  They're not complaining about government spending on roads and government loans, but money going to brown people.

      •  It is about money. Their message is: Give us (0+ / 0-)

        (millionaires) money in tax cuts, abatements, whatever, and by "the magic of the free market" you will do well and also get money.  So it is money for them, magic for everyone else.  If they believed their own speil, they would settle for "money for everyone else" and "magic of the free market" for themselves.  But, last time I checked that was not an option.

        Racism to them is just part of the game.  

        and their contempt for the Latin schools was applauded by Theodoric himself, who gratified their prejudices, or his own, by declaring that the child who had trembled at a rod would never dare to look upon a sword.

        by ban48 on Wed Aug 01, 2012 at 08:24:54 AM PDT

        [ Parent ]

  •  The Politics of Greed (2+ / 0-)

    performed by the Rethuglycants is truly amazing.
    Reducing the size of Government is the Holy Grail.

    Mention Tax subsidies to the Oil Companies and the Bloated
    Pentagon budget and the Conversation changes instantly.
    Then Government spending is an Absolute Necessity.

    How to Pay for Everything ?  Certainly NOT by taxing the Wealthy.
    They are Protected. Just like the Pentagon and the Oil Companies.

    Rethuglycants and those they support are just Parasites. They
    feed off the rest of the population with NO regard for the health
    of the Host.

    The Parasites will Never stop until they are Forced to do so.
    I Pray that we can do that before the Host Dies.

    On Giving Advice: Smart People Don't Need It and Stupid People Don't Listen

    by Brian76239 on Wed Aug 01, 2012 at 04:50:40 AM PDT

    •  Parasites. Exactly! (1+ / 0-)
      Recommended by:

      Real wealth is created by people doing useful work.

      The wealthy have rigged the game where they only skim off some of the work of others - their 'work' doesn't create anything real.

      When do we take the medicine?

      I damn sure won't be laying down to die!

      The Fail will continue until actual torches and pitchforks are set in motion. -

      by No one gets out alive on Wed Aug 01, 2012 at 05:31:41 AM PDT

      [ Parent ]

  •  Everything I need to know abot capitalism (9+ / 0-)

    I learned from Parker Brothers. Monopoly was quite popular during my childhood, and after learning the game we played it in different ways. My parents were both teachers, and seized on this as an excellent teaching tool.
    We played without a starting bank (made it much harder to come out on top).
    We tried different interest rates on borrowing (this was during the 70s, so interest was high in the real world too)
    The kicker; we each got a turn where we started with a lot more money than the other players. What I remember best was the rich player always won. always.

    I have been extremely distrustful of capitalism ever since.

    Mitt Romney is not running a campaign; he's making a hostile takeover bid.

    by kamarvt on Wed Aug 01, 2012 at 05:07:41 AM PDT

  •  Well said. It's interesting that their (1+ / 0-)
    Recommended by:

    hatred of government doesn't extend to government funds, like student loans that are funneled into Wall Street through for-profit colleges. Or government contracts which privatize government functions, costing taxpayers much more than if it were done by government workers. Think $100-a-bag laundry for soldiers in Iraq paid to contractors. Or showers that were no longer put up by Army engineers, but by substandard contractors where soldiers were occasionally accidentally electrocuted due to faulty wiring.

    They hate paying taxes but love the benefits of ours.

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Wed Aug 01, 2012 at 05:45:10 AM PDT

  •  Very well put (2+ / 0-)
    Recommended by:
    NYmama, diomedes77

    Understanding the conservative idea of what the economy is is the first step to being able to discredit their fantasies.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Wed Aug 01, 2012 at 06:03:13 AM PDT

  •  Is it a matter of balance? (2+ / 0-)
    Recommended by:
    NYmama, diomedes77

    Obviously, they're just going to answer you with some retort like, "Well why doesn't the government just make everything, then!?"

    Thom Hartmann has a good response to this.  

    He says he doesn't want the government making shoes or cars, but goods that are in the commons are important enough that they can't be held hostage by "market forces."

    •  Tony Judt wrote an excellent book on that idea (1+ / 0-)
      Recommended by:

      Ill Fares the Land. It's a very cogent and rational defense of Social Democracy and an excellent analysis of what has gone wrong in America and around the world since the rise of neoliberalism.

      I would go further than Social Democracy, and democratize the entire economy. Every citizen would have full emancipatory rights and access to the Commons, and the Commons would be everywhere except for one's home. A true democracy. No political parties. Just truly equal access, equal rights, human rights, social justice, etc. etc.

      But it would be great if we could at least have a Scandinavian style Social Democracy. We're moving in the opposite direction, into a Randian Udopia.

  •  Just one thing (0+ / 0-)

    "money" is not synonymous with "capital." This is pretty much Econ 101 for anybody. Capital is surplus value stored up from some sort of production, or enterprise, or asset. Money is a universal denominator of such value. Government does not produce capital; it taxes the economic production of those subject to it and then uses that money for its own purposes. Except in comparatively small and/or incidental ways, it expends what might be capital in other hands; it does not form it. Government isn't merely a "black hole," but the essay seems to proceed from as fundamental a misunderstanding as any that it complains about.

    •  Sorry, but you're mistaken. (0+ / 0-)

      Government does form capital. It pools dollars together from disparate sources, scattered across the country, just like a private sector business. It also borrows, just like a private company -- though at a much lower rate.

      (Currently, less than zero)

      And, of course, it prints dollars and creates our coins, sets the value, establishes trade with the rest of the world, defends the currency, etc. etc.

      Money begins with government, not the private sector. Take away government, and currency has no set value.

      And, since workers create value, and workers exist in both the public and private sector, one is incorrect in asserting that only the private sector can "create wealth", blah blah blah.

      Labor creates wealth, and labor doesn't care if an endeavor is for-profit or non-profit, private sector or public.

      And if we really get down to brass tacs, the public sector is far more efficient, if it's left alone by private business. If it doesn't have to worry about privatization and private business skimming off the top, it is more efficient and can give end users more bang for the buck. The private sector can't compete with it on value, because of its much higher overhead.

      But that's a subject for another diary.  

      •  But no, it your error (0+ / 0-)

        Pooling dollars is NOT forming capital, and no economist has ever, that I have seen, used the term in this fashion. But perhaps you could cite some sources for your view.

        And again, money does not begin with government. Were this true, there would be no need or rationale for taxation—government would simply print pieces of paper and stamp out coins and that would be it: value created, Q.E.D.
        BTW—take away the government and people will exchange gold, diamonds and other valuables just as has always been the case in the absence of government. Odd, isn't it?

        And again: workers only create value if they produce something over and above the worth of their labor. Certainly workers for governments do things that are necessary and worthwhile, but unless their employer realizes some profit above and beyond the cost of their employment, no wealth gets created. Labor sells its output and does not care whether it for a non-profit or for-profit enterprise, as you say. Which is as good an illustration as you could hope for of the fact that workers don't create value. The only thing that could create value is someone, the employer, in some way selling on the result of the labor.

        And so far as efficiency goes, you must surely be  joking. I live in New York City, were the skimming of public funds by public employees and political insiders is the daily fare of our newspapers. You live in a country where one department alone, the GSA, apparently so sloshes with cash that it can shell out several hundreds of millions of dollars annually to put on lavish conventions, that can have 4 full-time employees who supposedly plan such shindigs, yet also hire a "consultant" for another $750K to plan the same things the staff planners were hired for. Or perhaps you live in California, where this week the the leader of those wondrous civil servants in the "non-profit" SEIU is indicted for appropriating hundreds of thousands of dollars (not to mention the half million or so his wife sucked out). Ah, efficiency!

        •  "Creating wealth." What a moronic phrase. (0+ / 0-)

          Capitalists don't create wealth. They extract it -- from workers, consumers and the earth.

          And this is really twisted:

          And again: workers only create value if they produce something over and above the worth of their labor. Certainly workers for governments do things that are necessary and worthwhile, but unless their employer realizes some profit above and beyond the cost of their employment, no wealth gets created
          You have the dynamic backwards. Workers create value. Workers create the total value of goods and services for the company. They make the goods on the shop floor. They account for it. They support it. They sell it. Their labor creates the value of the good or service in question. Without their labor, there is nothing.

          Ownership? They take the lion's share of the value created by their workforce. They derive virtually all of their compensation through the drastic short-changing of their workforce for the value it creates. Ownership pays itself by radically underpaying its workforce. It takes the difference between the value they create and radically suppressed wages it pays. The more ownership wants for itself, the less it can pay to the workforce that creates value. And since 1973, it has suppressed wages for the rank and file like never before.

          Take away workers, and you have nothing. Take away the owner, and as long as workers manage themselves, democratically, the product or service will still be created. Ownership and executive management are expendable elements in the game. Workers are not.

          And thanks for showing your true colors with your bogus claims about the SEIU and the GAO.

          Yes, there is corruption. But who does the corrupting? That's why I said that if the public sector were left alone, if the private sector got out of its way, if it stopped endlessly lobbying the government, endlessly trying to bribe it, we'd be golden. It is the private sector that corrupts and destroys good government. It is their mission to do so, as it has the dual effect of increasing returns for business and destroying the public's trust in its only potential agent in this system.  

          Oh, and the reason our government doesn't just hang on to the money it alone prints and coins? We have a capitalist economy and the government works for capitalists. The public sector could easily do without the private, if we evolved as a people to see the logic in it. And the logic is inescapable, as only a fraction of the population (business interests) controls the economic destiny of the majority in our system. The majority should rule instead.


          •  Extraction (0+ / 0-)

            Capitalist don't create...they extract
            They take the lion's share...
            Short-changing...underpaying...suppressed wages
            Etc., etc.

            My apologies. I hadn't realized that you were merely spouting Marxist rubbish, not economics. I should not have bothered.

            As for the bogus claims about the SEIU, here you go:

            Solidarity forever through the selfless efforts of our union leaders. But ya know, there's a difference between supporting the right to unionize and burying your head in sand. Do look up sometime.

            •  It is extraction. Not rubish. Extraction. (0+ / 0-)

              Calling something "Marxist" isn't an argument. It's just a confused attempt to denigrate a factual analysis with what you think is a slam.

              It's not a slam. It's a compliment. Marx was the most brilliant critic of capitalism in our history, and those who follow him have added to his insights, broadened their sweep, and improved even more on his already excellent diagnoses.

              Yes, it is a fact that business owners have suppressed rank and file wages since 1973. From 1947-1973, they actually grew at a rate that exceeded those at the top -- the only time that has happened (year to year) in the history of capitalism.

              That's not even debatable.

              Yes, it is a fact that workers produce total value for a business and ownership derives its income from the underpayment of wages. The more they make, the more they've underpaid their employees. If it paid fair wages for the value created by that workforce, minus all of its own input, it could never make 400 times as much as its employees. Larry Ellison, for instance, made well over 10,000 times his own rank and file last year (one billion in compensation). Ownership would struggle earning even 10 to 1, George Orwell's favored ratio.

              You want to talk about union leadership stealing from the rank and file? Ownership has done that since the beginning of capitalist enterprise, and never moreso than today.

              As for that union boss. You think one corrupt union boss indicts SEIU and all unions? Sorry. It doesn't. And if you applied the same standard to capitalist ventures, you would have pronounced capitalism beyond redemption as soon as you were able to think and reason for yourself.

              •  Hi! (0+ / 0-)

                What's your name?
                What do you do?
                I create value.
                I move things from place to place?
                How does that create value?
                Because I get paid.
                Who pays you?
                The boss.
                Why does he pay you?
                So that I will move things.
                Any things?
                No, just the things he wants moved.
                Moved anywhere?
                No, just where he tells me to move them.
                How does this create value?
                Because he pays me.
                But only for moving specific things to specific places?
                So, the value comes not from the moving, but from knowing which things to move where?
                I guess so.
                Then the value comes primarily from the knowing, not the moving?
                I guess so.

                Thanks, Labor. Nice talking to you.

                •  Are you joking? Or just a typical conservative? (0+ / 0-)

                  You think Labor just "moves things"?

                  They build the products consumers purchase. That creates "value." All of it. They service those products. They support those products. They go to your house to fix and repair and install goods and services.

                  They make the products with their own hands on the shop room floor. They support and account for and sell those products.

                  Ownership doesn't.

                  Labor does.

                  Labor creates value. There is no value without Labor. Ownership just extracts their compensation from the value created by Labor. They drastically underpay Labor for the value Labor creates to derive ownership's obscene compensation.

                  Seriously. You don't have a clue about how the economy works.

                  •  Clueless (0+ / 0-)

                    How did labor decide what to build? Who designed it? Who will take it from labors hands and, as they say, monetize it (i.e., make it actually, not potentially, valuable). Who will provide a place to work and pay wages until such monetization occurs. That will be the work of the entrepreneur, the guy whi knows what to do and what to do with it. You, too, my friend, could use a clue—and a very, very basic economics text.

                    •  You're just another cultist. (0+ / 0-)

                      Lost in the cult of the "job creator".

                      Anyone can decide what to build. The public should decide, based upon need and environmental sustainability. But in our system, private business interests decide. Which is why we have so much waste and our landfills keep growing exponentially. Which is why all of our stores send back mountains of unsold goods every year. It's also why we lead the developed world in inequality. Because virtually everything in America is privatized. Which means it's instantly far less efficient, more wasteful and a train wreck for the planet.

                      So, yeah, I'll give you that. In our system, a business owner decides. So? The results of those decisions aren't much to brag about.

                      Next: Very few business owners do the designing. That's extremely rare. Chalk that one up for Labor, too. Labor also sells the products and services them once they leave Labor's (manufacturing) hands.

                      Chalk another one up for Labor. Yes, ownership sets the price, with input from his or her workforce . . . accountants, market research, sales, etc.

                      As for the place of work. Typically, business owners borrow the money for that. And/or they take on investors. Once the business is up and running, they depend primarily on consumer revenue, which doesn't happen if Labor doesn't create the value consumers buy. Ownership also rents that workspace to Labor, overcharging them for that space through a reduction in their wages. Overcharging them for that rent well beyond the point where the space is paid for many times over.

                      And thanks for following the usual conservative pattern. When you can't get anywhere with your argument, you resort to silly nonsense about intro to economics textbooks.

                      I'm decades past an intro to economics, bud. Along with reading my share of Marxist economists, I also read Krugman, Stiglitz, Dean Baker, Robert Kuttner, John Quiggin and the folks at Naked Capitalism, etc. etc. Judging from your own incoherent statements here, I doubt you've spent any time studying economics at all, opting instead for Ayn Rand, a third-rate mind and a fourth-rate writer.

                      Unfortunately, her followers are even worse.

                      •  3rd Rate Minds (0+ / 0-)

                        No, I think I'll leave that designation to you and yours. Frankly, anyone who thinks Marx and his brain-dead epigoni make for intelligible economic theory long ago checked his brains at the library door. Your descriptions here of production, markets, efficiencies and value are entirely laughable. Happily, that part of the world which has survived the depredations inflicted in the name of Marxism (as they now curse his name), will daily leave that bad joke in the dust. Ciao.

                        •  You've already lost the debate when . . . (0+ / 0-)

                          you dismiss Marxism because of the revolutions that took his name but never applied his theories. It tells me you've never read him, nor have you read those who built upon his works.

                          Three mainstream Marxists you should read, before you put your foot in your mouth again:

                          David Harvey,

                          Richard Wolff

                          and Terry Eagleton.

                          An important excerpt from that article:

                          The truth is that Marx was no more responsible for the monstrous oppression of the communist world than Jesus was responsible for the Inquisition. For one thing, Marx would have scorned the idea that socialism could take root in desperately impoverished, chronically backward societies like Russia and China. If it did, then the result would simply be what he called "generalized scarcity," by which he means that everyone would now be deprived, not just the poor. It would mean a recycling of "the old filthy business"—or, in less tasteful translation, "the same old crap." Marxism is a theory of how well-heeled capitalist nations might use their immense resources to achieve justice and prosperity for their people. It is not a program by which nations bereft of material resources, a flourishing civic culture, a democratic heritage, a well-evolved technology, enlightened liberal traditions, and a skilled, educated work force might catapult themselves into the modern age.
                          Two excellent websites for further reading:



                          •  Terrible misunderstandings (0+ / 0-)

                            Gee, does this also mean that Milton Friedman was in no way responsible for the undoubted misuse of his thought in, say, Chile?

                            I have read a great deal of Marx and of Marxists—I did my graduate work in political theory and teach it today. But it's interesting to know that Russia, China, Albania, N. Korea, Hungary, Poland, E. Germany, N. Vietnam, Romania, Czechoslovakia, Yugoslavia, Bulgaria, Yemen (etc.) all somehow arrived at the same misunderstandings, which (misguidedly, to be sure) necessitated tyranny, oppression, misery, and death for many millions. Myself, I might just begin to wonder what it was about Marxism that lent itself to such misunderstandings and results. You, I see, are eager to get started again. Me, not so much.

                            There is good news, however, Just yesterday I sold off my copy of Adorno's Negative Dialectics through Amazon. That creates room on the shelves for something worthwhile.

                          •  Again, are you joking? (0+ / 0-)

                            You list numerous countries that had no say in the matter, coming out of the divisions of WWII. They were taken over by the Soviet Union, against their will. Part of the world was essentially partitioned. Come on. You want to claim them as independently arriving at the decision on their own?

                            You can't be a teacher. You're just too ignorant when it comes to history, economics and political theory.

                            (BTW, your comment about Labor and its function is nothing short of laughable.)

                            Obviously, you haven't read Marx or those who have built upon his criticism in the last two centuries. If you had, you'd know that virtually nothing done in the Soviet Union, China or Cuba followed his ideas.

                            He was a humanitarian, a small d democrat, a liberationist and an emancipator. There was no democracy in any of those nations or satellites you mention above. The people never owned the means of production, as he stipulated they must. And, again, as Eagleton correctly notes, he never would have tried revolution in countries a century behind the rest, unable to create surpluses.

                            Ironic that some on the right think they're critiquing Marx when they complain that his ideas lead to the "sharing of misery." He said (himself) that this would happen if revolutions took place in countries that couldn't feed and clothe and house themselves prior to the revolution. If a nation was basically Feudal in effect, he said it wouldn't work.

                            So, again, right off the bat, they weren't following him. And they never implemented real socialism, much less communism -- which is the withering away of the state until its absence.

                            I think we've had other discussions, with you using another handle, right? You claimed you were a teacher in those as well, but everything you wrote indicated that you're nothing but another brainwashed righty, who likely reads fringe wingnuts like the Austrians, Rand and their followers.

                          •  Sadly (0+ / 0-)

                            I've read all too much Marx. And have had actual conversation with people like Eagleton—one of those people best characterized as a first-rate, second-rate mind. And will be teaching an intro political philosophy course starting in a few weeks—but no Marx: Artistotle's Politics, Machiavelli's Prince, Locke Letter on Toleration, Rousseau's Discourse on Inequality, and Mill On Liberty.

                            But I have never used any other name here, object to the insulting charge of brainwashing, admit to having read Rand (in high school, about 45 years ago) and admit further to reading all sorts of crap, including both Marx and Mies—it's quite literally part of my job description.

                            You have a naive, rose-colored view of Marx, his followers, and the fully-expected consequences of his doctrines. I leave you to it. Me, I'll return to Aristotle and trouble you no more.

                          •  You have yet to critique Marx. I'm waiting. (0+ / 0-)

                            All you have done is dismiss him out of hand based upon the severe bastardization of his ideas from those who later sought power through any means necessary.

                            You can't implicate Marx based on the obscene distortions of his works by others. If you've read a ton of him -- and we all know you haven't -- you would be able to rattle off what Marx specifically wrote that causes you to dismiss him out of hand. Be specific.

                            And, if you want to continue the blame game you play above, then you'd also condemn all capitalism based upon (at least) its first and largest foray into international trade:


                            Capitalism was built on slavery and genocide. It was built on the rape and plunder of indigenous peoples, and it didn't improve all that much from that point on, until democracies checked its runaway powers centuries later. They didn't check them enough, and those minor checks have eroded with the advent of neoliberalism (1970s to the present), but democracies at least reduced some of capitalism's natural destruction of workers' rights, civil rights, consumer safety and the planet. Unfortunately, now governments around the world are also working together to make sure capitalism (a form of cancer) spreads into every nook and cranny of the globe, without opposition. National borders are no longer a defense, as organizations like the World Bank and the WTO can obliterate them and force sovereign nations to open themselves up to corporate plunder.

                            But you go on dismissing Marx based upon the distortions some of his supposed followers put in place, while ignoring the horrific history of capitalism. Your hypocrisy is duly noted.

                          •  I know you don't read (0+ / 0-)

                            actual responses. My initial criticism of Marx is contained in what I wrote about the absurd conceptions of labor and value you put forward. I explained what I thought and why. You, however, have done little more than dismiss them with insults, not substance.

                            You put forward silly assertions, such as "capitalism was built on slavery and genocide," that you imagine are so glaringly obvious as to need neither definition nor defense. Sorry, but they do. You likewise toss about terms such as capitalism, slavery, genocide, neoliberalism, etc. as if everyone had already agreed on what these things refer to and that something called capitalism had caused them. Sorry—needs work. A lot of work.

                            In any case, I need not distort Marx in the slightest. He bases his convoluted theories on undemonstrated and undemonstrable declarations that property is merely expropriation and that the only source of value is labor (understood as an undifferentiated product). From this it must follow that even ordinary commerce is the trafficking in unjustly acquired goods made possible by the unjust exploitation of the labor of others. Since I reject the most fundamental of his assertions, I easily reject what follows from them.

                            And I haven't even yet gotten to the seriously wacky Hegel-on-his-head stuff with the inevitability of historical movement and, my very favorite, the reification of consciousness (I suspect yours may suffer from this dire malady). And, of course, we have those great moments of prescience, in which Karl foretold the steadily  lengthening working day (because of automation), the proletariat everywhere thrown into dire poverty, and, of course, the absolutely inevitable rising up and overthrowing of the capitalist exploiters.

                            That's a good top-of-my-head start. But please, wake me when the revolutionary vanguard gets to the gates—I'll want be there to help pass out the Adidas and iPads.

                          •  Yes, I've read your responses. (0+ / 0-)

                            And, no, you didn't critique Marx prior to this silly attempt.

                            Marx didn't say the workday would lengthen because of automation. He said automation would put people out of work. Thus increasing the army of surplus workers, which further erodes Labor power and wages. He witnessed the lengthening of the workday first hand, and was correct about that. Capitalists lengthened it in order to increase their surplus value. Instead of raising wages, they demanded Labor work longer hours at the same pay rate.

                            Today, they call that "increased productivity."

                            And, yes, the proletariat was thrown into dire poverty, and Marx was by no means alone in writing about this. Ever hear of a fellow named Charles Dickens? Or, maybe Upton Sinclair? Or, perhaps, John Steinback -- just to name three novelists.

                            Marx was actually quite mainstream in his analysis of a factual, existing tragedy. But, because he told the truth about people in power, he was demonized, and still is demonized, by those people in power. And those in power have a ton of resources at their disposal to make that demonization happen and, unfortunately, stick.

                            They can't actually defend their own system, so they've done all they can to bury those who are opposed to it. They can't argue with Marx and those who have built upon his legacy, toe to toe, idea for idea, so they make sure they're not even allowed into the conversation.

                            And you repeat their dirty work for them. You drank the plutocratic koolaid, and it's blinded you. Or, you know capitalism is a cancer, and you just don't care. You'd rather be on the winning side right now -- to hell with the losers.

                            I still don't think you're a teacher. And if you are, as I mentioned in that other thread, I pity your students.

                          •  Pity (0+ / 0-)

                            Mine is for your inability to distinguish between perfectly ordinary sorts of inequalities and injustices that are expected between rich and poor and between employer and employee, and the vast, vapid spinning of an imaginary web of historical inevitabilities, class consciousnesses, and what-all that is the Marxian 'analysis' and then revolutionary prescription. Instead, let me suggest a week with Aristotle's Politics and Rousseau's Discourse on Inequality. You will then know all you need to know about how the world works, and you will not need the clutter of Marx or Marxists.

                            And once again, you spout platitudes about capitalism and cancer and plutocratic kool-aid with the assurance of the True Believer who feels not the slightest necessity to prove his point. And rest assured, you haven't.

                            Nor have you understood Dickens, a man who saw life's injustices clearly—even those of the French Revolution. As for Upton Sinclair, I always thought that it said a great deal about how poorly he understood human nature that it puzzled him how he could aim his Jungle at the nation's head but only hit its stomach. There is also something perpetually entertaining about the Lanny Budd books—a Socialist zillionaire who zips from soirée to champagne soirée in his latest fast car, that champion of the of masses who could both have and eat his cake. I'm afraid I'm rather down on Steinbeck, ever since it was discovered that much of his Travels With Charlie was actually a fictional confection of imaginary conversations, with Steinbeck spending more nights in comfy hotels than in that trailer. Me, I suggest you rent Ninotchka again—more verisimilitude.

                            BTW, you ought to know your boy Karl a little better. Even I, whose copy of Capital has languished in the basement for probably 20 years, had little trouble finding this discussion of how mechanization undoubtedly will lengthen the work day. Ah, Marxian prescience!

                            Like every other increase in the productiveness of labour, machinery is intended to cheapen commodities, and, by shortening that portion of the working-day, in which the labourer works for himself, to lengthen the other portion that he gives, without an equivalent, to the capitalist. In short, it is a means for producing surplus-value....

                            When machinery is first introduced into an industry, new methods of reproducing it more cheaply follow blow upon blow, and so do improvements, that not only affect individual parts and details of the machine, but its entire build. It is, therefore, in the early days of the life of machinery that this special incentive to the prolongation of the working day makes itself felt most acutely.

                            Given the length of the working day, all other circumstances remaining the same, the exploitation of double the number of workmen demands, not only a doubling of that part of constant capital which is invested in machinery and buildings, but also of that part which is laid out in raw material and auxiliary substances. The lengthening of the working day, on the other hand, allows of production on an extended scale without any alteration in the amount of capital laid out on machinery and buildings. Not only is there, therefore, an increase of surplus-value, but the outlay necessary to obtain it diminishes. [italics added]

                            I'm tempted to say, just as you gratuitously call me a liar with regard to my employment, I should suspect that you've never actually read the Marx you proudly wave about. OTOH, who could really blame you for not wishing to read the unreadable.?

                          •  You are a very, very poor reader. (0+ / 0-)

                            Marx is clearly saying -- as he says elsewhere in his writings -- that a laborer will work a certain portion of his day to earn his wages, but the rest of the time he works to create surplus value for his employer. In the three sections you cite, that is what he is talking about.

                            And this is empirically true.

                            (That is what he means by the lengthening of the day)

                            For instance, a typical worker on an auto-parts assembly line earns his day's pay in his or her first hour. For the next seven hours, he or she works to increase profit for the boss.

                            Or, to put it another way: In order to match output with wage, that worker need only work an hour. The rest is pure gravy for his employer, none of which he shares.

                          •  Reading comprehension (0+ / 0-)

                            Let's try it in simple bits for those challenged by long sentences.
                            quote 1: machinery produces things for less money. Without it, much of what is paid for in labor goes into the value of the product. Lengthen the working day, however, and labor becomes a much lower percentage of the cost, creating so-called surplus value which goes to the capitalist, not the laborer.
                            quote 2: machinery, especially when first introduced, incentivizes a lengthening of  the working day
                            quote 3: mechanization results in a longer working day because longer hours for labor are a cheaper way of producing more stuff than putting in either new buildings or more machinery

                            In all cases, supposedly mechanization results in longer hours, QED. And that was the point I originally made. You really aren't capable of understanding this stuff, are you?

                            If you don't understand the role of historical inevitability in Marx, you've pretty much missed it all—it is the source of his claim to have stood Hegel on his head. The reason I know this, is because I have read Marx, not relied on secondary sources of the kind you apparently depend on.

                            Similarly, although I thank you for your patronizing "did you know this?" about Marx's background, you will be shocked to learn that I already knew this récherché information. Not only that, but I have read his thesis on ancient materialism, have read much of Aristotle—and Smith and Ricardo—and did my thesis on Rousseau. Frankly, although Marx claims a debt to Aristotle in Part I of Capital, I wouldn't have said that he knew Aristotle backwards and forwards—more like he misunderstood some key thoughts. Marx was very well educated. He was nevertheless severely handicapped by misunderstandings of all sorts of things, economics above all.

                            You should consider in future trying more assiduously to remain within your limits, narrow though they may be.
                            But now, you having grown perfectly tiresome, I will not be looking back in here. You have a pleasant evening.

                          •  You're a pompous, egotistical ass. (0+ / 0-)

                            And you haven't earned that error.

                            Judging from your Let Them Eat Cake attitude, I would imagine that you're an insufferable prig as well.

                            Again, if you are a teacher -- which I doubt all the more with each post from you -- I pity your students. I really pity them. They're going to have to deprogram themselves and burn away the WASPish, snotty bullshit you've dumped on their young heads.

                            Oh, and please keep your promise. Don't come back. And don't respond to me elsewhere. Two threads is two too many.

                          •  On "historical inevitabilities" (0+ / 0-)

                            If you think that was at the top of Marx's list, or anyone who built upon his legacy, then you truly don't understand Marxism at all.

                            Found a pretty good article on the topic from G. A. Cohen, one of best of recent Marxist scholars.

                            Historical Inevitability

                            BTW, Marx was a great scholar of Greek and Roman culture and history. He did his PHD thesis on Democritus and Epicurus. He knew his Aristotle backward and forward, as well as Rousseau and the philosophes. He built on the studies of Adam Smith and Ricardo as well. In fact, he was easily one of the most learned men of his century, and a voracious reader of the classics and his contemporaries. People forget that. They forget that he stood on the shoulders of giants, and was a giant for others in turn.

                          •  Also: About those "perfectly ordinary . . . " (0+ / 0-)
                            perfectly ordinary sorts of inequalities and injustices that are expected between rich and poor and between employer and employee

                            Care to elaborate? You sound like you're sitting in your plush chair in Versailles as you write the above.

                          •  Also, why no diaries? (0+ / 0-)

                            Why not put your own extended thoughts down for the folks here to chew on?

                            You say you're a teacher -- which I don't believe. Risk your own words as center of discussion.

  •  No, there is a difference (0+ / 0-)

    The US govt does not take in revenue and spend that. When it spends money, it just adds money to another's bank account (or, just writes a check). It does not need, nor even bother with, revenue. For instance, when you pay taxes, no one takes your money, and divvies it up amongst the countless govt agencies. Your bank account is reduced, that's it.

    Think of it this way - if you want to pay taxes, where does the money come from? Govt spending. No where else (well, there is counterfeiting I guess). Its the govt spending that puts money into peoples' hands in order to pay taxes.

    So its not a conservative problem in understanding the economy, its an American problem. But you are right, its an important issue.

    •  Money's source (0+ / 0-)

      " if you want to pay taxes, where does the money come from? Govt spending."

      a) that's still not capital

      b) Where did the gov't get the money? It got it from taxing those who created things of value, which taxes go to the General Fund which then precisely, divvies it up among countless gov't. agencies. You are confusing the power to mint currency with the creation of value—again, these are very different things.

  •  They don't understand the motivation to hire (4+ / 0-)

    Conservatives believe that companies aren't hiring because they are overtaxed and overregulated. Those are rarely or never top factors when it comes to hiring decisions.

    In reality, companies aren't hiring because they don't have the customers and  consumer demand isn't there. That and the fact that they can get away with making one employee do the work of three. To increase consumer demand, the middle class needs to have more discretionary income to spend and feel more secure in their own employment.

  •  Do conservatives understand anything? (3+ / 0-)

    Foreign policy? I mean other than bully and wanting to bomb anyone who will not give them whatever they want...and then some?

    Education? Saving cost by decreasing the education of people

    Environment? Do I really need to explain?

    Health? They want to make simple: you are on your own. You get sick? You die.

    Defense? They will not rest as long as anyone else has so much as a gun AND 90% of the US budget goes to defense.

    Tax: they want to pay none. Zero. Nada. Understood?

    Deficits: they only mater when a Democrat is in the White House.

    Employment: they want to go back to 1900, where workers only had the right to nothing but whatever the boss wanted to give them.

    Social security: again, you are on your own. You get old with little money, find a park bench.

    Name me only ONE item the understand that makes sense?

  •  Excellent diary! (2+ / 0-)

    I never thought of it this way until you point it out, and this explains so much of what we see today.

    One thing I would add is that demonizing government serves to distract the public's attention away from the wrongs that industry does.  This is pretty obviously how Fox works - even the foreclosure crisis is because of "too much regulation."

    In the Bush administration, this was elevated to the point of deliberately making government incompetent - which didn't work out too well for the people of New Orleans.

    Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

    by Boundegar on Wed Aug 01, 2012 at 10:06:04 AM PDT

    •  True. And government covers for business . . . (1+ / 0-)
      Recommended by:
      Killer of Sacred Cows

      and people take that for granted.

      Government covers up business failures.

      Business has failed to provide adequate wages. Government picks up the slack.

      We have Medicaid, Medicare and Social Security because Business doesn't pay high enough wages to cover health care, retirement, etc. Prior to Medicare, private insurance companies covered less than half of all seniors.

      We have unemployment benefits because Business is all too volatile and fires workers at the drop of a hat.

      Basically, government makes capitalism look a lot better than it really is, and most Americans miss this. They miss it because they often confuse capitalism with democracy and think that a lot of our benefits are derived from an economic system, rather than a political one.

      Also, a subject for another diary.

  •  I've said this several times... (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    Saying that the government is useless and should not participate in the economy is every bit as radical as saying the government should own everything.

    Good diary - tipped and recommended.

    Stop the War on the Olympics! Zeus is the reason for the season, put Zeus back into the Olympics!

    by RichM on Wed Aug 01, 2012 at 02:25:45 PM PDT

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