COMMON RUIN

“Ars longa, vita brevis”

John Galt’s Modest Proposal

Bourgeois ideologue, Harry Binswanger, thinks it's time for the 99% to start paying tribute to their overlords in the 1%

Bourgeois ideologue, Harry Binswanger, thinks it’s about time the hoi polloi start paying tribute to their superiors in the 1%

While sitting in traffic the other day I happened to glance over at a nearby luxury vehicle’s bumper and noticed a single sticker placed prominently thereon. “Who is John Galt?” it read. Suffice it to say, revulsion instantly overcame me. (Unfortunately it was not the first I encountered the catchphrase in public.)

With the rise of the Tea Party and release of the two-part Atlas Shrugged motion picture, it certainly seems as though Ayn Rand’s Objectivist pseudo-philosophy is experiencing something of a revival. The reason is easy enough to deduce, given the persistence of the economic crisis and the demographic currently enamored with Rand’s sociopathic novels. The petite bourgeoisie has a history of being drawn to extreme philosophies when the vicissitudes of the market threaten their class position and the government attempts to tax their wealth in order to subsidize the increasing demands placed upon it for public assistance; so it is no surprise that the wealthier segments of that class are the impetus behind the sudden surge of Objectivist and “Libertarian” activism. The public acclaim being bestowed unto Silicon Valley entrepreneurs as of late is also endowing that segment of the population with an undue sense of superiority and entitlement, which Ayn Rand’s philosophy speaks to.

But despite the originality her devotees ascribe to her, Rand’s message was essentially little more than an elaboration and defense of what the American proletarian press in 1850 dubbed “the new spirit of the age”—succinctly described by the maxim “gain wealth, forgetting all but self.”[1] It conforms perfectly with the morality of the market, i.e., firms producing goods and services for which there is a demand gain profit, the capitalists who own said firms receive exorbitant incomes based exclusively upon that ownership, and the few workers fortunate enough to possess uncommon skills are rewarded with scarcity rents. Redistributive taxation imposed by the state, on the other hand, appears as an alien force interrupting this seemingly natural order. Worse, it can cause the individuals near the bottom of the system’s hierarchy to question the very justice of this particular economic arrangement. The latter phenomenon is precisely why ideologues such as Ayn Rand, Friedrich von Hayek, Ludwig von Mises, and Milton Friedman have been necessary throughout the ages. All class societies require a group of people skilled in the art of deceiving the toiling masses into believing their oppression is virtuous. Harry Binswanger, an exponent of Objectivism and frequent contributor to the atrocious rag that is Forbes magazine, is an exemplar of this ignoble tradition.

Coincidentally, the very evening of the aforementioned traffic incident, I received an e-mail containing a link to Binswanger’s latest column, entitled “Give Back? Yes, It’s Time for the 99% to Give Back to the 1%”[2] And lest you think the title is just a bit of hyperbole intended to catch readers’ attention, a cursory glimpse through the article’s content will reveal that Binswanger’s thesis is just as appallingly elitist and inhumane as the title suggests. It turns out that the individuals partaking in the occupation of Zuccotti Park in the Autumn of 2011 and their sympathizers across the country were correct to be disgusted with the status quo, but their outrage was misdirected, if not utterly backwards. “Collectivism” is the real unjust blight on our culture, says Binswanger. Moreover, to remedy the maltreatment the bourgeoisie has had to endure at the hands of the state—acting on behalf of the inferior specimens that constitute the ranks of the proletariat and unemployed, according to this narrative—he advances the following “modest” proposal: “Anyone who earns a million dollars or more should be exempt from all income taxes.”

Binswanger faults Marxism for this scourge of collectivism, which society—itself a dubious concept to Randians—all too readily accepts, and the adherence of which will prevent his “modest proposal” from being adopted. Why? Because Marxism is allegedly premised upon the notion that “wealth is accumulated by ‘exploiting’ people, not by creating value.” Unbeknownst to Binswanger, what Karl Marx actually asserted, building off of the labor theory of value initially introduced to the study of political economy by Adam Smith and David Ricardo, was that the socially necessary labor time required to reproduce a commodity is the prime source of that commodity’s exchange value. (Incidentally, the labor theory of value has been logically[3] and empirically[4] validated in recent years by a number of radical economists.) It should be noted that this is a positive claim. Some Marxists additionally argue that the practice of wage labor, which capitalists utilize to accrue profit, is exploitative[5] and proceed to condemn it on normative grounds. Binswanger, however, contends that exploitation is illusory because “Voluntary trade, without force or fraud, is the exchange of value for value, to mutual benefit.” “There is nothing to give back,” he goes on, “because there was nothing taken away.” But Binswanger is clearly engaging in obscurantism. Apologists for the system have been regurgitating defenses of wage labor on the basis of its supposed “voluntary” nature from time immemorial. What many of the individuals who accept this asinine rationale neglect to realize, however, is that voluntarily selling oneself into slavery due to dire circumstances can be justified on the same exact basis.[6] Needless to say, the preponderance of humanity rejects the idea that all voluntary trades are impervious to criticism, and rightly so.

As it happens, there are very persuasive analytical reasons for designating wage labor an exploitative practice, and Nicholas Vrousalis has elucidated them in a recent paper on the subject.[7] To summarize his argument, Vrousalis claims that bourgeois social relations are characterized by individuals (i.e., workers) in a position of relative vulnerability to other individuals (i.e., capitalists) being dominated by the latter for reasons of self-enrichment. This is precisely what the Binswangers of the world try so desperately to conceal: the bourgeoisie are able to instrumentalize the proletariat’s relative vulnerability due to their possessing hegemony in wage-for-labor-time contract negotiations by virtue of their ownership of the means of production, which enables capitalists to then extract surplus labor-time from their workforce and therewith appropriate the fruit of those workers’ labor. Thus, regardless of how voluntary wage labor may appear, the bourgeoisie are materially benefiting at the proletariat’s expense.[8] Binswanger’s remarks do not even begin to discredit exploitation so defined, nor has any other reactionary ideologue that I am aware of. And if domination for self-enrichment is held to be unjust (which I suspect most people would, upon reflection, agree with), and society is genuinely committed to the principle of equality, a project which aims to transform the prevailing bourgeois organization of production is in order.

Unlike communists of Vrousalis’ disposition, Karl Marx was somewhat skeptical of such deontological criticisms of capitalism[9] and instead favored a more Aristotelian method of evaluating modes of production. But rather than categorize Marx as a virtue ethicist, Richard W. Miller believes it would be more accurate to refer to Marx’s Weltanschauung as exhibiting a certain (non-utilitarian) consequentialism reminiscent of Aristotle’s:

Marx, like Aristotle, judges societies by the kinds of human lives they create. Sometimes, he directly describes the life mankind should ultimately promote, life in communist society. Usually, though, he describes the best life indirectly, by presenting the main features of its opposite, a life of alienated labor, in which workers’ labour power is put under the control of another.[10]

Marx refrained from casting moral judgement on historical class societies because he believed that, for many of them, “valuable activities, above all, cultural goods, could only be sustained through a social division of labor that oppress[ed] the vast majority, and [cut] them off from the enjoyment of those activities.”[11] In fact, he was only prepared to condemn capitalism because he believed “on empirical grounds, that socialism, in his time, had become a [feasible alternative to capitalism],” unlike during its nascent stage, when “important ultimate goods depended on human misery.”[12] Such is why Terry Eagleton refers to Marx’s theory of history as being intrinsically tragic:

Marxism is not generally seen as a tragic vision of the world. Its final act—communism—appears too upbeat for that. But not to appreciate its tragic strain is to miss much of its complex depth. The Marxist narrative is not tragic in the sense of ending badly. But a narrative does not have to end badly to be tragic. Even if men and women find some fulfillment in the end, it is tragic that their ancestors had to be hauled through hell in order for them to do so. And there will be many who fall by the wayside, unfulfilled and unremembered. Short of some literal resurrection, we can never make recompense to these vanquished millions. Marx’s theory of history is tragic in just this respect.[13]

Also like Aristotle, Karl Marx espoused a notion of eudaimonia, as I have mentioned elsewhere. (In short, it consists of mankind overcoming the alienation wrought by capitalism, cultivating his potential in ways the current system stifles, and finally achieving self-realization in labor.)[14]

Returning to the matter of value and Marx’s conception thereof, Binswanger is not uncovering an inherent weakness in scientific socialism by stating that, absent Henry Ford, the Ford automobile company and the assembly line would not have come into existence, and without Steve Jobs we would not be blessed with Apple products. Marx made a clear distinction between what he termed ‘exchange value’ and ‘use value’ throughout his writings. Again, it was only his contention that under the capitalist mode of production labor was the source of the former. Use values—the creation of goods and services to fulfill human needs and desires—however, are the product of the general intellect (i.e., the sum total of human knowledge), nature, and labor.[15] Marx intentionally omitted capital from this triad because private ownership of means of production and the institution of wage labor are unnecessary for the production and distribution of goods and services, centuries of bourgeois mythology notwithstanding.[16] Gar Alperovitz has done a considerable amount of research on this subject[17] and has found that, of the three, knowledge appears to be the most crucial to economic development:

A half-century ago, in 1957, economist Robert Solow showed that nearly 90 percent of productivity growth in the first half of the 20th century alone, from 1909 to 1949, could only be attributed to technical change in the broadest sense. The supply of labor and capital—what workers and employers contribute—appeared almost incidental to this massive technological ‘residual.’ Another leading economist, William Baumol, calculated that ‘nearly 90 percent. . . . of current GDP was contributed by innovation carried out since 1870.’[18]

And although it is seldom regarded as such, knowledge ought to be viewed as our common inheritance, for it is the product of a gradual evolutionary process of which individuals play but a minor role. Take, for instance, inventions. Are they not, as Peter Kropotin once wrote, “the resultant of innumerable inventions which have preceded [them]” thereby rendering each one a synthesis?[19] What is more, social institutions are the mechanism which preserve and transmit knowledge to each generation, and this gets to the crux of why, contra Binswanger, taxation is a legitimate practice. The alternative is to permit capitalists, or indeed workers (in the case of a hypothetical socialist commonwealth), to free ride off of society’s contribution to the joint product.

But Binswanger might require further justification for taxation. After all, much as one who misses the forest for the trees, he refuses to acknowledge society as a meaningful entity. So we can supplement our case with arguments found in luck egalitarian philosophy. Philosophers of this school of thought draw attention to the fact that, sans redistributive intervention, brute luck becomes the sole determinant of one’s lot in life. Obviously none of us have any control over the genetic endowment we inherit, nor the families or environments we are born into. Thus justice would seem to require that we compensate the victims of the cosmic lottery via redistributive taxation, while allowing individuals to gain only from those actions which are freely chosen (e.g., the intensity, relative conditions, and duration with which one chooses to labor). Unsurprisingly, only libertarian communism can achieve a state of affairs in which that ethic is upheld, which is why men like Binswanger restrict themselves from thinking in these terms.

In one of the more puerile sections of his column, Binswanger laments the fact that the memory of Mother Teresa is showered with more moral praise than Lloyd Blankfein receives, and he cannot comprehend why we live in a culture wherein Goldman Sachs is smeared as “a great vampire squid wrapped around the face of humanity.” Allow me to elucidate the reason, dear sir. It is not because the public has yet to be properly educated to realize Goldman Sachs has channeled savings “to their most productive uses,” as you seem to believe. It is rather because that lovely little investment bank received a $10 billion bailout in 2008, while ordinary working people have had to weather this crisis of capitalism with minimal public assistance for well over 5 years now—and as a self-professed ‘defender of laissez-faire capitalism’ you should at least sympathize with their criticism of corporate welfare.[20] People also find it absolutely repugnant that Goldman Sachs’ bonus pool alone in 2010 alone was larger than, say, the entire GDP of Haiti, because it violates their innate sense of fairness. Simply put, the masses do not relish living in a world in which the blind forces of the market determine one’s access to the social product.

Although things seem bleak now, we can at least drawn comfort in the knowledge that, eventually, purveyors of false consciousness like Binswanger will no longer be able to stem the tide of righteous indignation which will usher in the coming Gütergemeinschaft.

NOTES:
[1] Gary L. Olson, Empathy Imperiled: Capitalism, Culture, and the Brain (New York: Springer, 2013), p. 37.
[2] Harry Binswanger (2013, September 17), “Give Back? Yes, It’s Time for the 99% to Give Back to the 1%”, Forbes.com. Retrieved September 25, 2013, from http://www.forbes.com/sites/harrybinswanger/2013/09/17/give-back-yes-its-time-for-the-99-to-give-back-to-the-1/
[3] Andrew Kliman, Reclaiming Marx’s Capital: A Refutation of the Myth of Inconsistency (Lanham: Rowman & Littlefield, 2007).
[4] See, for example, David Zachariah, “Labour Value and Equalisation of Profit Rates: A Multi-Country Study,” Indian Development Review, Vol. 4, pp. 1-21 (2006); W. Paul Cockshott and Allin Cottrell, “The Scientific Status of the Labour Theory of Value,” IWGVT conference at the Eastern Economic Association meeting (April, 1997); and Anwar Shaikh, “The Empirical Strength of the Labor Theory of Value,” in R. Bellofiore (ed.), Conference Proceedings of Marxian Economics: A Centenary Approach (London: Macmillan, 1998), pp. 225–251.
[5] There is considerable debate among Marxist scholars as to whether or not Karl Marx considered capitalist exploitation to be ethically objectionable. See Norman Geras, “The Controversy about Marx and Justice,” in Alex Callinicos (ed.), Marxist Theory (New York: Oxford University Press, 1989), pp. 211-267 for an overview.
[6] Indeed, the propertarian economist Walter Block argued precisely that in “Libertarianism: A Reply to Peter Schwartz,” Reason Papers, Vol. 26, p. 58 (2003), by way of a thought-experiment wherein desperate parents sell their child into sex slavery in order to acquire the means by which to feed themselves and the child—which he further argued is ethically permissible on both “libertarian” and Objectivist grounds.
[7] Nicholas Vrousalis, “Exploitation, Vulnerability, and Social Domination,” Philosophy & Public Affairs, Vol. 41, No. 2, pp. 131-157 (Spring 2013).
[8] Except, of course, during instances in which profit is not realized. Nevertheless, the bourgeoisie maintain autocratic control in managerial affairs during periods of unprofitability due to their workers’ position of relative vulnerability, which is equally exploitative on this account.
[9] Particularly in the latter half of his career, as is evidenced in such texts as the Critique of the Gotha Programme (Rockville: Wildside Press, 2008). Justin Schwartz, in “What’s Wrong with Exploitation?,” Nous, Vol. 29, p. 183 (1995), suggests that one of the ways Marx avoids matters of justice altogether in his appraisal of capitalism is by acknowledging that “Freedom is a concern logically prior to and independent of justice.” Hence capitalism was only objectionable to Marx because of the three forms of “unfreedom” it perpetuates. These unfreedoms are: (1) “workers are forced to work and denied effective power to realize desires they may have,” (2) “they are made to work harder than they might like to benefit capitalists,” and (3) they are “used for capitalist purposes regardless of their own.”
[10] Richard W. Miller, “Marx and Aristotle: A Kind of Consequentialism,” Canadian Journal of Philosophy, Vol. 8, pp. 323-352 (1981).
[11] Ibid.
[12] Ibid.
[13] Terry Eagleton, Why Marx Was Right (New Haven: Yale University Press, 2011), p. 61.
[14] This is the theme of Michael Lebowitz’s The Socialist Alternative: Real Human Development (New York: Monthly Review Press, 2010).
[15] For example, in the Critique of the Gotha Programme (Rockville: Wildside Press, 2008), p. 18, Marx writes, “Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power. . . . The bourgeois have very good grounds for falsely ascribing supernatural creative power to labour; since from the fact that labour depends on nature it follows precisely that the man who possesses no other property than his labour power must, in all conditions of society and culture, be the slave of other men who have made themselves the owners of the material conditions of labour. He can only work with their permission, and hence live only with their permission.”
[16] The ideological foundation of bourgeois economics is, of course, that each of the three factors of production—land, labor, and capital—are compensated for their marginal contribution to production. But, as David Schweickart points out, “They [landlords and capitalists] merely grant permission for their land and capital to be used—in exchange for a healthy cut of the proceeds. But. . . . if the workers owned the land collectively, we wouldn’t say that part of their contribution to production is their labor, while another part is their granting permission to themselves to use the land. . . . So Marx’s question retains its bite. To produce material goods, we need human labor and we need nonhuman raw materials. But why do we need landlords? Why do we need capitalists?” After Capitalism (Lanham: Rowman & Littlefield, 2011), p. 34.
[17] See Gar Alperovitz and Lew Daly, Unjust Desserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back (New York: The New Press, 2009).
[18] Gar Alperovitz (2011, October 29), “How the 99 Percent Really Lost Out—in Far Greater Ways Than the Occupy Protesters Imagine,” Truthout. Retrieved September 25, 2013, from http://www.truth-out.org/opinion/item/4253:how-the-99-percent-really-lost-out–in-far-greater-ways-than-the-occupy-protesters-imagine
[19] Peter Kropotkin, The Conquest of Bread and Other Writings (Cambridge: Cambridge University Press, 1995) p. 16.
[20] The mutualist anarchist Kevin Carson describes the double standards frequently displayed by proponents of laissez-faire, like Harry Binswanger, as follows: “Vulgar libertarian apologists for capitalism use the term ‘free market’ in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate by the Adam Smith Institute arguing that the rich can’t get rich at the expense of the poor, because ‘that’s not how the free market works’—implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of ‘free market principles.’” Studies in Mutualist Political Economy (Charleston: BookSurge Publishing, 2007), p. 116.

Single Post Navigation

3 thoughts on “John Galt’s Modest Proposal

  1. Pingback: Today’s Business has few replacement Middle Class Jobs. Let’s Create our own! « Building Worker Owned Businesses

  2. Dear Michael,
    Isn’t knowledge itself a product of intellectual or mental labour ? Is labour only physical ? We should broaden the concept of labour.

  3. Greetings, Swastyaneek. Thanks for commenting.

    I certainly agree that knowledge can be viewed as the product of mental labor. However, the reason I decided to separate knowledge from labor in this particular post is because I was discussing the issue of exchange value, and the LTV, as I’m sure you’re aware, is premised upon the notion of manual labor creating said value. In other words, the socially necessary number of hours required for workers to reproduce a widget ultimately determines its price on the market, not the months or years an inventor spent bringing that widget into existence. But the inventor is nevertheless absolutely crucial to the creation of that commodity’s use value. That’s all I was trying to convey with the distinction.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: