The Answer to Marxism

With Obama saying "I want to grow the economy from the bottom up" and "I want to increase taxes in order to spread the wealth around" he is advocating and says he intends to carry out the Marxist principle, namely the Labor Theory of Value. (See Karl Marx's book: Das Kapital.) It is crucial for all of us - especially those at the lowest rungs of the economic ladder - that this be answered.

Thanks to Ayn Rand, it has already been answered. I quote her from Atlas Shrugged delivered by the character, John Galt, who stopped the motor of the world.

"Look beyond the range of the moment, you who cry that you fear to compete with men of superior intelligence, that their mind is a threat to your livelihood, that the strong leave no chance to the weak in a market of voluntary trade. What determines the material value of your work? Nothing but the productive effort of your mind - if you lived on a desert island. The less efficient the thinking of your brain, the less your physical labor would bring you - and you could spend your life on a single routine, collecting a precarious harvest or hunting with bow and arrows, unable to think any further. But when you live in a rational society, where men are free to trade, you receive an incalculable bonus: the material value of your work is determined not only by your effort, but by the effort of the best productive minds who exist in the world around you.

"When you work in a modern factory, you are paid, not only for your labor, but for all the productive genius which has made that factory possible: for the work of the industrialist who built it, for the work of the investor who saved the money to risk on the untried and the new, for the work of the engineer who designed the machines of which you are pushing the levers, for the work of the inventor who created the product which you spend your time on making, for the work of the scientist who discovered the laws that went into the making of that product, for the work of the philosopher who taught men how to think and whom you spend your time denouncing.

"The machine, the frozen form of a living intelligence, is the power that expands the potential of your life by raising the productivity of your time. If you worked as a blacksmith in the mystics' Middle Ages, the whole of your earning capacity would consist of an iron bar produced by your hands in days and days of effort. How many tons of rail do you produce per day if you work for Hank Rearden? (Hank Rearden was the premier steel producer in novel.)

"Every man is free to rise as far as he's able or willing, but it's only the degree to which he thinks that determines the degree to which he'll rise. Physical labor as such can extend no further than the range of the moment. The man who does no more than physical labor, consumes the material value-equivalent of his own contribution to the process of production, and leaves no further value, neither for himself nor others. But the man who produces an idea in any field of rational endeavor - the man who discovers new knowledge - is the permanent benefactor of humanity. Material products can't be shared, they belong to some ultimate consumer; it is only the value of an idea that can be shared with unlimited numbers of men, making all sharers richer at no one's sacrifice or loss, raising the productive capacity of whatever labor they perform. It is the value of his own time that the strong of the intellect transfers to the weak, letting them work on the jobs he discovered, while devoting his time to further discoveries. This is mutual trade to mutual advantage; the interests of the mind are one, no matter what the degree of intelligence, among men who desire to work and don't seek or expect the unearned.

"In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns. But the man who works as a janitor in the factory producing that invention, receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men between, on all levels of ambition and ability. The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus all of all their brains. Such is the nature of the 'competition' between the strong and the weak of the intellect. Such is the pattern of 'exploitation' for which you have damned the strong.

"Such was the service we had given you and were glad and willing to give. What did we ask in return? Nothing but freedom. We required that you leave us free to function - free to think and to work as we choose - free to take our own risks and to bear our own losses - free to earn our own profits and to make our own fortunes - free to gamble on your rationality, to submit our products to your judgment for the purpose of a voluntary trade, to rely on the objective value of our work and on your mind's ability to see it - free to count on your intelligence and honesty, and to deal with nothing but your mind. Such was the price we asked, which you chose to reject as too high. You decided to call it unfair that we, who had dragged you out of your hovels and provided you with modern apartments, with radios, movies and cars, should own our palaces and yachts - you decided that you had a right to your wages, but we had no right to our profits, that you did not want us to deal with your mind, but to deal, instead, with your gun. Our answer to that, was: 'May you be damned!' Our answer came true. You are."

She also penned an answer to socialism, Marx's dream society based on his Labor Theory of Value and view of political economy. (See Marx & Engels' The Communist Manifesto. This is based on the pernicious idea that history is fundamentally the struggle of economic classes against each other and that the good society would get rid of all the means of one man getting ahead of another. Capitalism, on the other hand, demonstrates that there is no actual class struggle because each man participates in society at the level he chooses. Thus we have numerous stories about people who rose from the lowest of circumstances to the upper reaches of society and those at the top descending to the bottom.)

You can read her answer here. A former employee of the now ruined Twentieth Century Motor Company tells what the community became organized according to Marx's vision.