Diary

Karl Marx is NOT the Father of Capitalism

This morning I read an excellent column written by Wynton Hall at TownHall. The title of this column is Karl Marx is not the Father of Capitalism
This article has this opening line –

Sen. Barack Obama won for a simple reason: historical amnesia.



I encourage everyone to read the entire article. After reading it I was inspired to write this blog with the words of Adam Smith, Karl Marx, and Ronald Reagan.

Adam Smith

To enhance the wealth of a nation, every man, consistent with the law, should be free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of … other … men. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. The individual is driven by private gain but is led by an invisible hand to promote the public good, which was no part of his intention.

Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must in that particular situation, depend upon … the productive powers of labour.

In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposite to that of the great body of the people. As it is the interest of the freemen of a corporation to hinder the rest of the inhabitants from employing any workmen but themselves, so it is the interest of the merchants and manufacturers of every country to secure to themselves the monopoly of the home market.

A dwellinghouse, as such, contributes nothing to the revenue of its inhabitant; and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him, which, however, makes a part of his expense, and not of his revenue. If it is to be let to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue which he derives either from labour, or stock, or land. Though a house, therefore, may yield a revenue to its proprietor, and thereby serve in the function of a capital to him, it cannot yield any to the public, nor serve in the function of a capital to it, and the revenue of the whole body of the people can never be in the smallest degree increased by it.



Karl Marx

In the absence of government intervention, the self-interest, the profit motive–the unbridled greed–of businessmen and capitalists would serve to drive wage rates to minimum subsistence while it extended the hours of work to the maximum humanly endurable, imposed horrifying working conditions, and drove small children to work in factories and mines.

The profits and interest of businessmen and capitalists are unearned, undeserved gains, wrung from wage earners–the alleged true producers–by the equivalent of physical force, and hence the wage earners are virtual slaves (wage slaves) and the capitalist exploiters are virtual slave owners. Taxing the businessmen and capitalists and using the proceeds for the benefit of wage earners, in such forms as social security, socialized medicine, public education, and public housing, is a policy that serves merely to return to the wage earners some portion of the loot allegedly stolen from them in the process of exploitation.

The capitalists expropriate all of the wage earner’s production above what is necessary for minimum subsistence. The government’s intervention harms no one but the immoral businessmen and capitalists, never the wage earners. Thus not only the taxes to pay for social programs but also the higher wages imposed by pro-union and minimum-wage legislation simply come out of profits, with no negative effect whatsoever on wage earners, such as unemployment.

Capitalism is an anarchy of production, in which the businessmen and capitalists run about like chickens without heads. Rationality, order, and planning emanate from the government, not from the participants in the market.

Capitalism and economic freedom are a formula for injustice and chaos, while government is the voice and agent of justice and rationality in economic affairs.



the disciples of Karl Marx
Karl Marx’s viewpoint is the intellectual framework of the great majority of today’s professors and of several generations of their predecessors. It is equally the intellectual framework of their students, who have dutifully absorbed their misguided teachings and some of whom have gone on to become the reporters and editors of such publications as The New York Times, The Washington Post, Newsweek, Time, and the overwhelming majority of all other newspapers and news magazines. It is the intellectual framework of their students who are now the commentators and editors of practically all of the major television networks, such as CBS, NBC, ABC, and CNN. And it is this intellectual framework within which the media now attempts to understand and report on our financial crisis.

The educational system and the media do not favor any kind of forcible overthrow of the United States government or are necessarily even advocates of socialism. They are Marxists insofar as they accept Marx’s views concerning the nature and operation of capitalism.

Ronald Reagan. a disciple of Adam Smith

Who pays the business tax anyway? We do! You can’t tax business. Business doesn’t pay taxes. It collects taxes. And if they can’t be passed on to the customer in the price of the product as a cost of operation, business goes out of business. Now what they’re going to do is make it easier for demagogic politicians–and you’ve got plenty of them in the state legislature–to say to the people, look, we need money for this worthwhile project but we’re not going to tax you, we’re going to tax business, now that we can do it by a one vote margin. So they’ll tax business and the price of the product will go up and the people will blame the storekeeper for the rise in the price of the product, not recognizing that all he’s doing is passing on to them a hidden sales tax.

If people need any more concrete explanation of this, start with the staff of life, a loaf of bread. The simplest thing; the poorest man must have it. Well, there are 151 taxes now in the price of a loaf of bread–it accounts for more than half the of a loaf of bread. It begins with the first tax, on the farmer that raised the wheat. Any simpleton can understand that if that farmer cannot get enough money for his wheat, to pay the property tax on his farm, he can’t be a farmer. He loses his farm. And so it is with the fellow who pays a driver’s license and a gasoline tax to drive the truckload of wheat to the mill, the miller who has to pay everything from social security tax, business license, everything else. He has to make his living over and above those costs. So they all wind up in that loaf of bread. Now an egg isn’t far behind and nobody had to make that. There’s a hundred taxes in an egg by the time it gets to market and you know the chicken didn’t put them there!



Ronald Reagan said those words in July 1975, a full five years before winning the White House. Put simply, Reagan stayed on message for years and didn’t relent.

Reagan understood that you have to teach voters why Leftist policies are wrongheaded. He also understood that you have to pound home a message before it will stick.

Rebuilding the conservative message will demand that the next generation of conservative leaders do the same.