Richard Ebeling: How Karl Marx Brought Ruin to the World

Splendid article from Austrian economist and Northwood University professor Dr. Richard M. Ebeling on the horrific consequences from the bad ideas of Karl Max. (hat tip EPJ)

Karl Marx was born on May 5, 1818 in the German Rhineland town of Trier, and died on March 14, 1883 in London.It is worth recalling, also, that there was a time when Marx was an anti-communist.

It is said that by its fruit you will know the tree. The last one hundred years is a clear testament to the consequences of Marx’s influence on modern history.

Accepting the “classical” labor theory of value, he concluded the workers were “exploited” by the “capitalists.” Marx claimed that “profit” was a portion of the workers’ output extracted by the property owners as the “price” the workers had to pay to have access to the privately owned physical means of production, without which they could not produce and survive.

The Austrian economist, Eugen von Boehm-Bawerk, in Capital and Interest (1884) and Karl Marx and the Close of His System (1896), demonstrated that Marx had confused “”profit” with “interest.” In a competitive market, profit is a temporary discrepancy between selling price and costs-prices, eventually competed away by businesses bidding up wages for workers (and other resource prices) to work for them, and those same businesses then competing for consumers to buy their output by offering their wares at better selling prices than their rivals.

What Marx had failed to fully understand was that production takes time, and that if workers would not or could not wait until the product was finished and sold to consumers to receive their wages, then someone had to “advance” those wages to them over the production period.

That, Boehm-Bawerk showed, is what the employers did, so that what workers received while working was the discounted value of their marginal product. The “gain” received by employers over their costs of production, even in long-run equilibrium, was the implicit interest for having ‘waited” for the product to be finished and sold, when they might have done other things with the “savings” they had advanced to those workers during the period of production.

If it is recognized that “time” has value, and, therefore, an intertemporal price, the notion that workers were or could be “exploited” in open, competitive markets for resources and finished goods was fundamentally wrong.

On this foundation of sand, Marx constructed his theory of the “injustice” of capitalism that has, in various forms, continued to plague the ideas and policies of countries around the world.

In the 20th century, it inspired the communist revolutions that led to the deaths of tens of millions of innocent men, women, and children. For those not aware of the magnitude of this human catastrophe, I recommend, The Black Book of Communism (1997), written by former French socialists and “fellow-travelers, that tells the horrific tale of “socialism-in-practice,” wherever those guided by Marx’s ideas came to power.

Or Paul Hollander’s edited volume, From the Gulag to the Killing Fields (2007), that brings together excerpts from the personal accounts of those who lived through the “building” of the brave new worker’s paradise, with all their tragic details about the fate of those considered “enemies of the people,” or merely expendable cogs in the wheel of socialist central planning.

Pls read the rest here

Here are the ten planks of the communist manifesto (Wikipedia.org)

About four them are prominent features in today’s supposed market economies; particularly progressive taxation, central banking, centralization of communications and transport (this is more indirect for more open economies and direct for authoritarian states) and public school.

One would wonder how the mainstream supposedly loathes communism as to embrace some of its principles, and how communist principles have been adorned as “capitalism”.

George Orwell in 1984 would call such opaqueness and blatant contradiction as Blackwhite newspeak: (bold original)

...this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink.