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IPFS News Link • General Opinion

Marx and American Leftists Are Wrong About Inequality

• Jacob Hornberger-Future Freedom Foundation

Not surprisingly, the American left are among those in the world who are honoring the 200th birthday of Karl Marx, the author of the Communist Manifesto, given that Marx's socialist philosophy forms the bulwark of leftist economic thought.

Among the points that Marx made that American leftists celebrate is about economic inequality. Marx said that capitalism results in large disparities of wealth, which then causes conflict to occur between the classes. Therefore, he argued, a free market contains the seeds of its own demise.

Socialism, Marx argued, was needed to eliminate this economic inequality. Marx's ideal was that the state would own and operate everything and then dole out the same amount of money and wealth to everyone on an equal basis. Thus, socialism entailed what became known as "public ownership of the means of production." Under socialism, everyone would work for the state, and everyone would be equal economically.

That's mostly the way things work in North Korea and Cuba. The state owns most everything, and most everyone works for the state.

There are two important points to note about those two countries: One, most everyone really is equal in terms of income and wealth. And two, most everyone is on the verge of starvation.

That's what happens under socialism. Over time, it brings economic equality through equalized poverty.

Consider one of the most important founding principles of the United States: no taxation on income and no IRS to collect income taxes. From the founding of the country in the late 1700s through virtually all the 19th century and into the early part of the 20th century, the American people were free to keep everything they earned and decide for themselves what to do with it.

One result of this unusual economic system was great inequalities of wealth. Marx was right about that. There were people who were extremely poor, such as the penniless immigrants from Europe who were flooding American shores to come here to live. And there were many multi-millionaires, like Andrew Carnegie and John D. Rockefeller.

But here is the kicker: This unusual economic system lifted the standard of living of everyone, especially those at the bottom of the economic ladder. It also provided the means by which people could break the chains of poverty and become wealthy (which was why those penniless immigrants were coming here to live). In fact, there were many stories of poor people becoming rich people simply by providing goods and services that other people were willing to buy in this free-market way of life.

Suppose one is faced with the following choice: A society in which everyone earns $100 a month and has a net worth of $1,000 versus a society in which the poorest people earn $1,000 a month and have a net worth of $50,000 but in which there are also multi-millionaires.

Which society would be preferable?

I think it's safe to say that most American leftists would say the first society is preferable. To them, the thought that some have more while others have less is anathema. Notwithstanding the commandment "Thou shalt not covet thy neighbor's goods," American leftists are so consumed with envy and covetousness that they would rather see everyone on the verge of starvation than to see some people have more than other people even if the poor are significantly better off.


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