Communism 101 (with refutations)???

Economics Economics Questions
1

I am going to be engaged in casual conversation with some Marxists. Not Democrats who believe in social programs, but real Lenin worshipping, Das Kapital-reading, Che Guevara-Tee shirt wearing, Red flag-waving Communists.

They are also 1) very nice people and 2) very evangelical communists and 3) very intelligent (and educated).

The last time we talked, I kept pushing the conversation away from communism. We ended up mostly talking about the war in Iraq, and the Bush administration. The reason I kept pushing the conversation away from communism is: I realized that, I don’t really know that much about communism.

I have listened to the Robert Lefevre commentaries from the media sections here, and I love Yuri Maltsev, but I could use some pointers. Basically, I would like to know how to (politely) argue with communists.

I have started reading a few communist blogs and websites to get a feel for what these people think, but it really led to more questions than answers. What I would like to hear (or read) is a debate (or a debate transcript) between a communist and a capitalist OR a book by or interview with a former communist turned capitalist.

The question I have is, can someone here explain communism in very basic terms, and provide refutations – although, that last part might not be necessary. In reading communist blogs, the refutations popped into my head with nearly every sentence I read.

2

Read the “Translator’s Preface” in Eugen Bohm-Bawerk’s Capital and Interest, which is freely available to read here: ( http://mises.org/books/capitalandinterest.pdf )

Not an expert on communism/Marxism, but I know enough to know this will be very helpful to you.

Reading this will illuminate for you GREATLY the surprisingly thorny issue of understanding why capital generates a return, “interest”, to the capitalist without him/her having to lift a finger. Turns out, there are many serious and incorrect explanations proffered by economists as to the origin of interest.

Marx conceived it as “surplus value” that is stolen by capital from labor. There is a passage in the Preface which directly refutes Marxism, and the logic of this refutation is EXCELLENT. And a few additional remarks about Marxism are peppered into the Preface.

If you understand the logic of the Marxist theory of exploitation of labor by capital, and are able to soundly refute it, you will do your friends and yourself a good service. If you read the above and absorb it, you will understand Marx’s theory of exploitation better than your friends do. I would venture to guess MUCH better.

EDIT: There’s more to communism/Marxism than the “surplus theory of labor” or whatever they call it, but it’s one of their CENTRAL tenets. Indeed, I’m quite sure it’s their central economic tenet. If they don’t have the surplus theory, I’m pretty sure they don’t have much.

3

David Gordon’s Resurrecting Marx does deal with some of the more modern Marxist writings, and then there’s the book Requiem for Marx available on the Mises store.

4

I’d also recommend that you look up the economic calculation problem and the transformation problem. The links I gave point at articles from Wikipedia.

5

Hah, I checked some of their replies to the mainstream on the transformation problem. Really, really weak.

6

I’m sorry, what was the question? I was looking at your avatar.

7

First, you might want to hit them with the absurdity of Marx’s labor theory of value/surplus value. Economic value is defined subjectively, so there is no objective theory of value like LTV (most Marxists won’t argue there is an objective theory anyways). Surplus value is also a myth, because everyone, including those who seem not to “work” for their money, provide a vital function to the economy. Take, for example, hedge fund managers and the like who end up paying minimal taxes (only capital gains) and seem to be doing nothing but “moving money around” (a very common critique). Imagine if those hedge fund managers didn’t exist now. Imagine all of the businesses that would have never existed, never produced anything, never hired anyone, never gave anyone retirement money, etc. Same with shareholders and the like. Everything they do is vital to the economy, all the money they earn is exactly their marginal input into the production process. Even filthy rich CEOs make their marginal input, they’re filthy rich precisely because the services they provide to the company are extremely valuable.

Second, you might want to point out the need for money. Many diehard Marxists often attack the very existence of money. This Marxist position completely ignores the vital role of money. It is simply a universal means of exchange. If I have corn that you don’t want but you have apples that I want, how would we go about exchanging? The easiest way would be for me to sell my corn and then buy your apples. Not only does money make it easier to exchange goods, but it is also more convenient. No longer do you have to carry around a bucketful of eggs to barter with.

Third, use the economic calculation problem. Point out that without private property, the needs and valuations of many individuals cannot be calculated. This argument works well against both statist and anarchist leftists. People, whether they be of central planning boards or of communes, cannot know how much to produce of what without the private ownership of property dictating accurate prices.

Fourth, point out that free market capitalism is more economically just than communism, socialism, etc. In a free market, when entrepreneurs produce a good that is wanted, then they enrich all of society. In fact, in a free market, there cannot be a growth in inequality because everyone becomes richer due to economic growth. This balance is upset when government creates inflation, subsidies, regulations, taxes, etc. that inherently favor big, inefficient businesses like agribusiness and the like. Also point out that unemployment and the like are the cause of labor regulations, like minimum wages and union support.

8

Well whatever happened to good old character assasination? You say they are nice people so just digg up the chauvinistic ramblings of Marx and Engels on Slavs, Balkanites, Irish, Chineese and others.

9

You could also point out that huge profits are less likely to occur in a free market out of thin air. There are no more monopoly conditions created by state and other such factors. Even Marx saw that profit tends to average out. And look what Rothbard says here:

It is clear that there is no sense whatever in talking of a going rate of profit. There is no such rate beyond the ephemeral and momentary. For any realized profit tends to disappear be­cause of the entrepreneurial actions it generates. The basic rate, then, is the rate of interest, which does not disappear. If we start with a dynamic economy, and if we postulate given value scales and given original factors and technical knowledge throughout, the result will be a wiping out of profits to reach an ERE with a pure interest rate. Continual changes in tastes and resources, however, constantly shift the final equilibrium goal and estab­lish a new goal toward which entrepreneurial action is directed—and again the final tendency in the ERE will be the dis­appearance of profits. For the ERE means the disappearance of uncertainty, and profit is the outgrowth of uncertainty.

10

Am i missing the thorniness? sometimes people want money now instead of in the future. they’re willing to pay an extra fee to have the money now. the fee is the incentive for the lender to take thre risk.

lending always exists as long as various actors have differeing time-preferences with regards to capital.

I don’t see how this issue could be more complex than this.

11

It really does not matter how much you know about Communism. What is more important is how much you know about Austrian economics. If you know enough about Austrian economics, then you should not have a problem. For example, Communists believe the “workers” should be the owners. Well what exactly do they think sole proprietorships, partnerships, and publicly traded companies are?

However, if you have a fellow Austrian economist that can join you, you will probably do a lot better at talking with them. I just find it helps to have two people around who understand things.

12

If you want to see a debate between a communist and a capitalist. Look into the Hayek/Keynes debates

13

if they are the leninst/statist variety, then just wave “mutual aid” in front of their face and thell run away like vampires run from a cross. seriously, i reccomend refuting their logic with murray boochkin-style BS.

in new york, the daily worker (run by socialist international) always sets up their posts at crowded corners in manhatten or brooklyn. then they snow soc-dem sheeple (mostly working class west indians) as they pass by. one time i messed with the one guy and told him that im a “decentralized-socialist” then bs with him for a while. its fun, you should try it sometimes.

long live the marx engels stalin mao line !!!

14

this is awesome.

15

Is this a contest?

Point is, both interest on loans and interest on capital historically have been widely misunderstood by even the brightest minds. I dare say you yourself wouldn’t understand it had Menger, Bohm-Bawerk, et al. not already worked it out for you. So, keep it in your pants, nobody asked you - and it’s not big enough to make any use of besides.

16

“Second, you might want to point out the need for money. Many diehard Marxists often attack the very existence of money. This Marxist position completely ignores the vital role of money. It is simply a universal means of exchange. If I have corn that you don’t want but you have apples that I want, how would we go about exchanging? The easiest way would be for me to sell my corn and then buy your apples. Not only does money make it easier to exchange goods, but it is also more convenient. No longer do you have to carry around a bucketful of eggs to barter with.”

your missing the point. marx story of creation of money parralels that of locke. money enabled the “usurpers of the commons” to secure their goods. before money you couldnt horde goods, so class disparity was still under control. with money, people could easily store money instead of perishable goods. for marx, money is evil because it enables property, not because of its legal tender or exanche property. as a matter of fact, many marxists advocate vouchers of some sorts or merit badges.

17

no need to get colicky austroglide. what aspect of capital earning a return does my explanation not cover?

18

You continue to miss the point.

Nowhere in this thread has the topic been introduced as to whether or not the fact of capital earning a return is or is not a “thorny issue”. You are the only one intent on debating this question.

19

it also surprises me. how could free marketeers like proudon, tucker and warren not see the dealio with interest. there is a great article on mises about socialists’ static worldview and time preference. without TP, interest and profts ARE usury, so really i dont blame them.

20

Sounds interesting. Do you have a link?