Wednesday, July 14, 2004

Bad economics and socialism and dictatorship

What all of the ideologies that help catapult dictators to power have in common is a gross misunderstanding of economic reality. The same themes are played again and again, but with some different styles as is expected. This is not only true of the usual suspects of the Twentieth century, Marxism and the Nazis. Most revolutionaries that have seized control of the various countries have adopted similar ideas and methods. One defining event in world history is Marxism, but it has been a source of inspiration for most revolutionaries since it is deceptively clever in letting the reader believe that the superficial impressions that most of us feel at one time or another, is the whole truth, and nothing else.

The labor theory of value

Although Marxism is not the main point in this discussion, it is worthwhile to dwell on of his main fallacy, the labor theory of value that he takes to the extreme. But there are many more.

The ideas of Marxism, and other socialistic ideologies do only focus on what is easy to see and understand. In the labor theory of value, the value of a good is a subject of the human labor that created it. Most people, including me, accept that this is indeed important. Gold owes much of its value due to the labor in discovering new mines, creating useful tools and machines to extract it as well as the labor needed to extract it from the ground and transporting it around the world. This is easy for everyone to understand. However, it takes a little more imagination to see the value of the businessman that unlocks value by facilitating deals between landowners, business and government. Same goes for the accountants and administrative staff, that are essential in all complex ventures. The engineers create value by making sure that everything works smoothly in the mines, and coming up with clever solutions every now and then.

People understand the value created by the man with the shovel and hammer quite easily, he burst boulders with his sledge or digs an important channel with his shovel, of course all sweaty under the burning sun. Surely he must be creating some value. Strangely (or not) people sometimes have trouble in understanding the value of the stockbroker or the actuary, to name a few. Even today many question the value of money when it creates more money, especially when someone actually risks his money to gain more, thus the moneyman is just a profiteer. Simple things as education is also easily looked past, and politicians today lament that doctors have high wages but forget that to become a doctor one needs to spend a decade or so with no or sporadic wages.

How to exploit the injustice that is so evident

Genially shallow people like Marx seem to really have looked past all of the value that merely takes a tint of imagination to visualize. This, despite having worked in accounting and having all the time in the world to do real research to discover the truth (real, meaning mingling and exploring the real world outside the British Museum). The people that have adopted the ideas of Marx, or similar quack ideas, may or may not see past them. Their neural pathways may run in parallel with the likes of Marx, thus making the slightest creative thought and open-mindedness all but impossible, and thus, they swallowed the theories whole. But some of them probably did see the faults of those ideas, and this is likely, since the total stupidity of these works literally can bring tears to the sensible reader (out of compassion for someone harboring this degree of spite and shallowness in his mind).

The reason for the popularity of these ideas is that they are easy to use to gain popularity. It is so much more easy to say something about the damn profiteers that exploit the working people, especially if they are foreigners, than talk about the value of free trade or like. The popularist has also created a problem that is not difficult to remedy. If some one has taken that is not his (the surplus value, stolen land, or whatever it is called), it is only natural to take it back. For them it is not only natural, but also just and justifiable to do so.

What is said here above does not only apply to the Socialists. This is true, the Socialists, all of their innumerable fractions (Communists, Marxists, Fidelists, Trotskyists, Socialsits...), used this combination of economic mis-understanding and popularism to gain support of the masses. This is also the case with the Nazis, not a great surprise for a party called the National Socialist German Workers Party. The ideological mingling of the Nazis and the Marxists is well documented:

The Nazis adopted Marx’s view of capitalism and they accepted the socialist belief that the Jews were the personification of capitalism. Add to their anti-Semitism and socialism the ingredient of nationalism and you have the essence of the Nazi movement. Hitler’s nationalism was a response to the burdensome and unfair mandates imposed on Germany by the Versailles Treaty. With Germany being intentionally humiliated by the Allies the German people were ready for a nationalist movement. But Hitler’s secret of success was that he built his nationalism on a foundation of Marxist economics and socialist anti-Semitism both of which were widely accepted by the German people. The Marxist Origins of Hitlerian Hate. Jim Peron.

This is something that the world history has brought us time and time again. Popularistic movement, with some questionable characters leading the way, adopts ideology that incorporates some kind of proof that there are evil-doers that are exploiting the common people. The enemy can be whoever, landlords, traders, Jews, capitalists, or as we see in the middle east, the evil west. The ideology can be whatever, Communism, Nazism, Fidelism (also called Castroism, until 'the man' adopted Marxism), these profound ideologies pop up at an astonishing speed it seems.

How long does it take to copy and paste some Marxist-like ideology, regionalize it, and then start a revolution?

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