Like all historical thinkers making claims in economics, sociology and history Marx was wrong about a lot of things. So was Smith, Ricardo and countless others. However that doesn't settle the question if there is an updated version of some descriptive or normative claims traceable back to Marx, Smith or Ricardo that is well supported today. Agree?
"wealth would concentrate more over time", which it in fact did and keeps doing, on some measures such as the absolute GINI.
> Suppose you become politically radicalized and become a Marxist. You get convinced that the labor theory of value is correct.
> The number of people in the general population who will know enough about the history and philosophy of economics to give you a clear account of why Marxism and the labor theory of value is incorrect,
He's correct most people don't know about labor theory of value. Which is why it's easy for him to categorize those who believe it as "radicalized" and "Marxist" versus the minority of calm, rational, objective people who can discount it.
Marx did follow the labor theory of value - as did virtually every major economist (or as they put it probably better back then, student of political economy) before Marx, who also believed it. Marx credits another revolutionary for discovering the labor theory of value - Benjamin Franklin. There were a few proto-papers on subjective theory of value, but an alternative theory of value did not even really exist before Capital was published.
Labor theory of value was the theory of Benjamin Franklin, John Locke, Adam Smith, David Ricardo, and all the major economists before Marx. And Marx accepted what they accepted.
Alternative theories of value were not really fleshed out until after Marx published Capital.
So consider all of this when he categorizes the idea of the labor theory of value as extremist, radical, Marxist etc.
According to this article, believing that a carpenter banging wood and nails into a table creates value is an extremist belief. Even though pretty much every major economist before Marx believed the same thing.
Ps. This was told to you by myself - from one the 1% of people who know this stuff
Pps. If you didn't read the article, you would not know I am referring to myself as part of an elite 1% of knowledge sarcastically
The important issue to focus on isn't that long ago people had a model that was not a good model of reality. The issue is that now we have better models and the person who claims they have an educated opinion should know it. Blindly holding to a model that has been shown to be inferior is what makes it an extremist belief.
The geocentric model was thought to be true for literally thousands of years by every astronomer and scientist. Today if someone claimed the geocentric model was true, we would consider it an extremist belief - even though pretty much every major astronomer believed it for thousands of years.
Yes, we should compare the best currently available descriptive models and normative systems. But Masley's claims in the text can then be critiqued for disregarding that there are contemporary thinkers in the marxian tradition who either hold an updated and modified labor theory of value informed by contemporary evidence or hold a marxian view that does not rely on any labor theory of value at all.
I am with the author on how people get radicalized, but he could not have picked a worse example that Marxism as an example of extremist idea.
Equating Marxism to labor theory of value is akin to maybe equating economics to a supply/demand curve.
There are unequivocally true parts of Marxism, such as surplus value of labor, and the fundamental incentive conflict between a capital owner and laborer (which Marx deems exploitation)
The labor theory of value is also I think misinterpreted by modern economists as a price-setting mechanism, which it isn't. It's a mechanism to show that there is a certain floor on value of an economic good, which is raised every time constructive labor is applied to a product.
> It's a mechanism to show that there is a certain floor on value of an economic good, which is raised every time constructive labor is applied to a product.
The problem is that this argument is circular: whether the labor is "constructive" gets judged by whether it succeeded in adding value.
Yes, I was considering making the same point, but in fairness to him, the vast majority of the millenial marxists and beyond don't know this either, nor that marxism doesn't mean "no profits or reinvestment or insurances, all value goes to workers".
Sorry, but this completely misrepresents what LVT actually is, as well as suggesting considerably more agreement between Marx and e.g. Smith than they actually had; it's also wrong about the chronology of alternative theories, or at least the main one that came to dominate (and which is still considered mainstream).
Smith can be forgiven for giving an unsatisfactory answer to his own water-diamond paradox, as he preceded Marx by almost a century. But the originators of the formal theory of marginalism (Jevons, Menger and Walras — you likely know the first for his paradox) were roughly contemporary with Marx; they published their work only a few years after the first volume of Das Kapital, and well before Engels could publish the rest. The roots of the theory can be traced to Italian mercantilists contemporary with Smith, and even a bit further to Bernoulli (yes, the mathematician, the actually-turns-out-to-be-wrong explanation of wing lift guy).
More importantly, "believing that a carpenter banging wood and nails into a table creates value" is a strawman version of LVT that none of the people you mentioned would actually espouse, including Marx; and it is extremist, as it pays no heed to issues of either quality or utility, never mind market demand.
> Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
This is like when Trump said that foreign countries pay tariffs. Like Byron Donalds in the article you linked, he’s just wrong.
Foreign countries don’t pay tariffs. Domestic producers have always paid the statutory toll, and most of the time the economic incidence too. No textbook has argued argued otherwise, because this is just the standard.
It’s not that Trump is advocating a different policy when he says foreign countries pay tariffs, it’s just that he (like a lot of other MAGA Republicans) so grossly misunderstand economics and their own party positions, that they end up advocating for a different thing. In this case, Byron Donalds is even going as far to advocate the pejorative version of his own side.
Now if you’re saying that trickle-down has become so widespread that even supply-side supporters have become fooled into thinking that it’s their side, I’d happily grant you that. But what I mean when I say that trickle-down has never been “seriously” advocated is that it’s never been in textbooks. There are no policy appropriations made by legislators to support the goals of trickle-down economics.
Similar to how Republicans nowadays accuse Democrats of trying to bring in illegal immigrants to bolster their voter base (a pervasive lie), to try and “debunk” such a policy would be intellectually dishonest, since the Democrats have never advocated such a thing.
That's not serious advocacy as trickle-down economics isn't a policy that can be implemented. The policy associated with trickle-down economics is known as supply-side economics. Trickle-down economics is something created for a comedy bit to express, in a humorous way, why supply-side economics doesn't work. Even if you don't buy into the underlying message of the comedy routine and believe that supply-side economics does work, you still cannot implement that comedy routine as government policy. That... doesn't make any sense. Clearly that guy you refer to was performing his own comedy routine.
"Supply-side economics" is a technocratic rebranding of trickle-down economics, adding just enough nuance to force the draw rhetorically while advocating policy that is completely indefensible to anyone who has enough time to properly examine the nuance.
Again, "trickle-down economics" was created by Will Rogers. He was never a policy maker, just a comedian trying to tell funny stories. Nor did he accidentally create a policy in a 10 minutes of rambling standup routine. If you listen to the routine you will realize that he was talking about things that had already happened. He wasn't some kind of hidden political visionary.
We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics". That is abundantly clear. There has never been a policy known as "trickle-down economics".
No, no such thing, only a hundred spectacularly regressive tax, trade, and benefit decisions sold on promises of growth that would supposedly benefit everyone and then didn't. Totally different!
Since you clearly haven't finished listening to the full joke yet, I'll reveal the punchline: What you describe is what Rogers called "trickle up".
"Trickle-up economics" has never been formally used to refer to a policy either, but at least if you called it that we would understand what you are trying to say. "Trickle-down economics" doesn't even make sense beyond a device used to setup a joke. It is bizarre that you keep going there.
"Grow the pie" is the phrase used by proponents, because they understand that "trickle down" invites uncomfortable discussions about "are you sure this will actually help me" while the pie analogy cleverly makes this question difficult to talk about. But it's the same argument and everyone can see it.
Proponents of what? Growing the pie isn't going to convince anyone who has a small slice of anything. Maybe you've never seen a pie before, but no matter how much it grows by the angle of your slice remains the same. People don't care about how much absolute wealth they have. If they did they'd all be happy as even the peasants today are richer than the kings of yore. In reality, people are only concerned about having a smaller share of the total wealth than someone else. Those kings of yore, despite having less wealth, are still considered to have been better off as they held the large share of the pie.
No, cool tech does not make up for the ruinous cost of health care, housing, and education vs median wages. Maslow's Hierarchy still exists. A system that fails to deliver food and shelter for a reasonable number of worked hours at a reasonable and available job is still a failure no matter how cool the Big Screen TVs are.
> A system that fails to deliver food and shelter for a reasonable number of worked hours at a reasonable and available job is still a failure
If other jobs are not fruitful enough to provide food and shelter then the worker can simply go direct to producing food and shelter themselves. That baseline is always available.
At least it is as long as you have land. That is where relative wealth inequality can quickly come to bite you. That is why nobody gives a shit about the pie growing. They only care about the pie having equally divided slices.
These silly catchphrases you keep coming up with do nothing to change reality.
> We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics".
Reagan's people would disagree:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
The US Department of Labor measures wages, and adjusted for inflation the hourly wage is below what it was in 1973. It is even lower if you are only counting non-management roles then and now. Wages have not gotten better over the past half century they have gotten worse.
Workers now work more hours pee year to try to catch up to what they made back then, so working conditions are worse now as well.
This corresponds with the increasing share of the economy consumed by the government.
> the hourly wage
This is a misleading statistic. The actual statistic is "total employee compensation", which includes the benefits packages, the (so-called) employer contribution to SS, 401k employer contributions, etc.
> The US Department of Labor measures wages, and adjusted for inflation the hourly wage is below what it was in 1973. It is even lower if you are only counting non-management roles then and now. Wages have not gotten better over the past half century they have gotten worse.
This is a flat out lie. Comp/GDP is a side note that does not negate the fact that inflation adjusted wages are up.
The part of compensation includes healthcare, because we have no choice, it's a lock in - there's no marketplace to choose your healthcare, unless you go ACA which is a bad idea in many states - and as a lock-in the out of pocket costs have skyrocketed. To borrow your wording, google 'out of pocket healthcare costs annual trends.'
Then when we look at the $952 billion in interest, a good chunk of that is due to past military spending.
Plus even more - tens of billions of the military nuclear budget is done via the DoE, not the DoD in the budget line.
There's always a hand waving that previous debts accumulated like veteran's benefits and military related debt interest are not military spending, but they obviously are.
And what happened before then? Iran had a secular prime minister, Mossadegh, but the UK and US supported, among others, conservative clerics to overthrow that elected government to put in a dictatorship.
Then in the 1970s the CIA provided SAVAK with the names of secular left opposition to arrest and execute.
So spare me talk about foreigners supporting religious fanatics, the western establishment did so for decades.
I for one don't want my tax dollars used to bomb schools in Iran.
> So if we use Google as a case study for "progressive business", having mostly succeeded at giving the poorest people one Earth an equal product to the richest people on Earth, what is the takeaway?
How should the people of Gaza thank Google for Google's Project Nimbus etc. targeting them for blockade starvation and bombings?
As Anatole France said - they have to work before the laws' majestic equality, which forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.
Google refused to do contracts with the US military but was then fine doing them with Israel. Some of the original employees were pretty clear about their personal reasons for this.
* Economic crises (recessions, depressions) would continue, and becone worse over time (example: subprime crisis of 2008)
* profitability rates would go down over time
* wealth would concentrate more over time
* middle class would be slowly shrunk - say, doctor's losing their own offices and made to see people in 15 minute appointment blocks
* real hourly wages would fall
* proletariat will revolt and displace the bourgeoisie, in the manner the bourgeoisie overthrew the feudal order
These predictions are all falsifiable