My So-Called Marxism.

Just in time for Halloween, a little post on what seems to scare Americans (or at least, Palin’s brand of “Real Americans”) most: Socialism and Marxism.

*SHUDDER!*

No, really. Okay. A couple quick points.

• I haven’t read Das Kapital, but I have wanted to rather badly for the past six months. But I’d like to quote the author of Das Kapital: a Biography, Francis Wheen: “(A wall street banker to a friend of his): Oh, yes, we all read (Marx) on Wall Street.  No one understood Capitalism better.”
• Marx was deeply conflicted, in his work, because on one hand he was describing that Capitalism was more powerful than any other system in the world, and knew it wouldn’t go away completely, but his books seem to be his wishful thinking that it would. (i.e. even Marx found Marx to be a little over dramatic.)
• News Flash: Marx wasn’t a “Marxist” in the sense that most people mean it. From Russia to Albania, his work has been “reinterpreted” (i.e. totally ignored except for the revolution parts).
• Marx’s own motto was – hmm, similar to Buddha – “Question Everything.”
• Rand totally destroys socialism/Marxism in its purest form in a parable in Atlas Shrugged.  But AS is itself a parable about Capitalism in its purest form, and I could tear that down in five minutes.  Writing silly stories about PURE political systems is irrelevant, and I wonder why only the Repugs can get away with it — or at least, are the only ones who are taken seriously; when I hear some smelly guy with a duct tape wallet in a coffee shop ranting about Scary Capitalism, he makes me want to slap him, not attend his rallies…

Having more than a passing interest in Marx and/or Socialism is not a crime.  And frankly, someone who knows a lot about a system that – YES, in its purest form does not work – but is the diametric opposite of the the system that we are in, THAT IS COLLAPSING RIGHT NOW AS WE BLOG, would be a fan-freaking-tastic asset to have in our government, let alone in the White House.

All right, I’m gonna hit “Publish” now and wait for Michelle Bachman’s Anti-American Evil-Doer Finding Squad to come get me…

More on Marx here.

 

I would tell him to shrug

I’m re-reading one of my all-time favorite novels.  I’ve read Atlas Shrugged probably five or six times; more than any novel besides On The Road. 

Ayn Rand fans have a certain habit of being completely insufferable, but this book is still important to me. It makes me question a lot of my thoughts about free markets and government intervention. She wants people to use their minds and think. Well Ms. Rand, you’ve done it. Every time I read this book I find myself questioning a lot of assumptions I have about the free market.

I like the world she presents (except for all the decay, destruction and starvation, of course). The book shows human potential for both good and ill, and concludes that we are powerful creatures, capable of much.

I like that. Far too often we succumb to our own feelings of powerlessness. How often do you hear “Well, nothing’s gonna change anyway so why bother?” Ms. Rand’s answer to that is a screaming NO. Humans can remake the world with amazing efficiency, and one person can change the world. Henry Ford, FDR, Steve Jobs, John Lennon, Mao are just a few that come to mind.

Anyway, getting back to the book. On paper, I agree with almost everything she says. Religion is bad, capitalism is good, the mind is not impotent. Regarding capitalism, I find her arguments very persuasive. After all, isn’t in the best interest of a businessman to produce a good product and sell it at competitive prices? If you sell a defective product, consumers will not buy it in the future and you will be out of business. Just some basic Adam Smith at work.

My problem is that I see so little of that. If Smith and Rand are correct we wouldn’t have toxic toys, beef that kills people, cars that explode or operating systems that don’t work at all. If the free market was really free we wouldn’t see million dollar payouts to failed CEOs.

So why? Why all the market failures? I think the answer can be found with another economist. John Maynard Keynes famously said “In the long run we are all dead.” Meaning that government should try to cushion the shocks of the market to provide the greatest happiness for the greatest number of people. If we wait until all of the market failures to solve themselves (see housing crises), people will simply suffer needlessly. The government should intervene to assist.

This theory applies at both ends of the business cycle. Government should assist in the low points, and try to cool the market when it’s overheating. Basically, the same principle that the Federal Reserve operates under.

I think there is a dark side to this idea as well. Since we are all dead in the long run, humans have an incentive to maximize wealth in the short term, and the time value of money teaches us the shorter term the better. After all, who wouldn’t rather win the lotto today instead of working for 40 years?

Short term thinking seems to be an immutable part of the human condition.

That’s where my argument with Rand and other free market disciples begins and ends. There is a different between self-interest and enlightened self-interest. One of them works and one of them doesn’t. It requires us to see beyond the horizon of the immediate, which requires discipline. It’s not automatic, and that’s where Rand’s philosophy falls short.

It’s still a really good book. Read it.

Who is John Galt?