Monday, March 01, 2010
So, Alfred University is teaching thrift for all the left reasons:
HONR 167 Tightwaddery, or the Good Life on a Dollar a Day :
The basic idea underlying much of contemporary life and culture is: spend money and you’ll be happy. This is a lie perpetrated by capitalists in order to sell their products. The current recession, while undoubtedly causing hardship for many, also offers an opportunity for us to critically examine the assumptions and values of our consumer society. This seminar will do this both in theory and in practice. At bottom, though, the course is less concerned with cutting coupons than with the question Socrates asked long ago: What is the good life for a human being?
Of course, real capitalists -- people who believe that capital, rather than labor is the root of wealth -- save money to accumulate more capital so that they can create more wealth. A point of view that Alfred University students probably won't hear in their "Tightwaddery" lectures.
I learned about cognitive dissonance listening to my father -- in practice an capitalist extraordinaire -- defend political principles that hampered everything he tried to accomplish.
It's illuminating that one of his favorite sayings was "do what I say, not what I do".
And it's even further illuminating to witness how he's handling his accumulated wealth... how he's "distributing" it among those who followed his advice.
I love my Daddy... beyond measure. But that doesn't mean he always makes sense.
John, capital certainly can be a "storage device for labor." It serves that function in part for everybody, and almost entirely for most people. But it does not have to.
My maternal grandmother was the only economics major in the class of 1922 at Vassar College (and, yes, born in to a family with a lot of advantages, so lucky as well). She had a number of useful aphorisms, but the one that influenced me the most came when as a little kid I proposed spending a nickel on a candy bar. Her response was priceless and I did not understand it for some years afterward: "A nickel is all a dollar can earn in a year." In one sense, that sentence captures the essence of capitalism, which is that capital creates wealth. Most people, if they think at all when they spend money, calculate how long they have to work to earn the money they are spending. Since I understood what my grandmother meant, I calculate how much capital I have to have to earn what I am spending. Start thinking that way early in life and you will have a powerful motivation to, well, accumulate capital.
Every time I bring up the subject of "Creeping Socialism" with acquaintances on the left they roll their eyes and act like I just got leprosy. Yet we live in a country now where University professors teach the Marxist line as if it had not been discredited, repeatedly, for generations. I have had intelligent, educated people complain to me about "profit centered health care" as it was a bad thing. My father, the doctor, was right decades ago when he told me there were people in this country who were working to destroy our way of life.
A) Neanderthal Economics
"Profit" means you got back more than you had to put in. We're collectively better off for it. You get to keep your profit as a "credit." You can spend your credit or invest it. Your call.
If you invest it, it's capital. "Capital" means you have "skin in the game." You're at risk for success or failure. Having "skin in the game" concentrates efforts on (1) managing old, routine things well and/or (2) trying out new things with potential.
Capital allocation is done best when it's decentralized and fluid. Even IBM couldn't foresee the PC -- if it did, IBM would have strangled it in the cradle. Even the Chinese communists have come to understand this, sort of.
Taxes are necessary to support "commonwealth" and nothing else.
B) Obamanomic Theory
"Profit" is a direct measure of exploitation. You should have paid your workers more -- unless they're an investment banker.
Good things need subsidies ... e.g., GM, Fannie and Freddie, weather-stripping houses in Detroit.
Capital allocation decisions should be written in the stone of statute and regulation, and overseen by an omniscient political class at no personal risk for the outcome.
All government spending is "investment." It's even better if there's no measurable payback period.
Taxes should spread the wealth around, else it's "static" and wasted.
C) 21st Century American Reality
High taxes will kill investment and initiative -- we'll soon see expropriative rates introduced on the higher brackets. "Higher brackets" may be as low as $100,000 or even $70,000. Our kulaks will stash their excess grain away, rather than sow it in the light of day. Expect continued high private sector employment.
Go to school to get credentialed, Ivy League connections a plus. But for God's sake don't work hard at anything serious. E.g., anyone in medical school or in residency should slit their wrists now and just get it over with.
The truly rich will actually be better off -- it's all relative. The IRS is much better at taxing high earners than it is at taxing wealth. Among high earners, some corporate executives still get capital gain treatment for what's really compensation.
Van Jones is the model for the new entrepreneur.
What is implicit in this course description (which sounds like it was written by an undergrad, not the university) is that people can be brainwashed into doing something they really don't want to do ("This is a lie perpetrated by" etc.). If you accept that, I think it follows that you would also believe that governments can engineer the desired behavior in people with the proper indoctrination programs.