Tuesday, January 21, 2014

Hipster Communism

by Gerard Emershaw


George Santayana famously said: “Those who cannot remember the past are condemned to repeat it.” In a similar vein, Peter Allen sang: “Everything old is new again.” Trends have proven to be cyclical. Tight jeans are in fashion for a while, then baggy jeans, and then tight jeans again. Skinny ties are hip for a while, then wide ties, and then skinny ties again. Even bell bottoms came back in fashion for a time in the 1990s. Perhaps one day leisure suits will be the “it” look again. There are certain things which each generation discovers anew—Catcher in the Rye, Atlas Shrugged, Star Wars, The Godfather, etc. In a sense each generation must discover and learn certain things for itself. This seemingly includes the lesson that communism does not work. The fact that communism has been a failure in each and every place where it was tried is not hidden. Communism’s death toll of roughly 100 million is not an obscure fact tucked away in a footnote in a dusty old tome in some far off foreign library. It is well documented. So why do college students still sport Che t-shirts? More importantly, why is Rolling Stone publishing the inane and insane ramblings of a young communist?

On January 3, 2014, Rolling Stone published “Five Economic Reforms Millennials Should Be Fighting For” by Jesse A. Myerson. In a sense, the article can be seen as The Communist Manifesto if it were written for Pajama Boy and his pals. It is Marx for the ADHD-addled and hipper than thou. Myerson acts as if his ideas are new and as if communism had not died a miserable death and dragged down 100 million people with it.

The five economic reforms that Myerson cajoles millennials to embrace and support are nothing but Marxist ideas repackaged and given a Starbucks hipster coating. Each proposed reform is wrongheaded and what is even more worrisome is the implied powers that the state must be allowed to possess in order to enact such reforms. Young radical idealists rarely notice such dangers.


1. Guaranteed Work for Everybody


Myerson claims: “The easiest and most direct solution is for the government to guarantee that everyone who wants to contribute productively to society is able to earn a decent living in the public sector.” These guaranteed jobs would pay a “living wage.” According to Myerson, “would anchor prices, drive up conditions for workers at megacorporations like Walmart and McDonald's, and target employment for the poor and long-term unemployed.” He considers the possibility of running such a job guarantee program through the non-profit sector. Presumably such a program would resemble the New Deal’s Works Progress Administration (WPA), Public Works Administration (PWA), and Civilian Conservation Corps (CCC) on steroids. These New Deal programs were largely ineffective and filled with corruption. They did not help bring about the end of the Great Depression, but only made it worse. The Great Depression dragged on longer in the United States than in other countries.

The United States federal government currently has a debt of $17 trillion. How would the government find the money to pay for this massive jobs program? The first thing to consider is just how expensive this program might be. How many American workers are in need of jobs? Using government statistics to determine this would be wrongheaded. The federal government has a bad habit of claiming that workers have “left the workforce” when in fact these workers have simply become discouraged and given up looking. Unless an unemployed worker is actually collecting unemployment benefits, the government assumes that this person is either employed or that he or she does not exist. While the government claims that the unemployment rate is 6.7%, the true percentage of workers who are unemployed or underemployed is probably closer to 23%. The number of working age Americans who are not in the labor force has grown to 91.8 million. To be conservative, let us assume that a bit under half of these individuals will require work under Myerson’s job guarantee program—45 million. What is a living wage? This would, of course, depend on where one was living. A living wage—one that would allow a worker to provide those things necessary to sustain his or her existence along with those of dependents—is context dependent. It would be much higher in Manhattan than it would be in West Monroe, Louisiana. Let us again be conservative and set it at an average of $12 an hour. At 40 hours a week and 52 weeks, this would be a cost of $24,960 per worker. And this does not include the costs of health care and other benefits. Obamacare and Medicaid are disasters whose discussion are far beyond the scope of this post. The cost for one year of this program would be $1.123 trillion. Oddly, this figure is roughly the size of the 2014 federal budget in its entirety. Where will the government find the money to pay for this? It cannot balance a budget as it is.

The consequences of such a program must also be considered. A “living wage” of $12 will mean that those workers earning less than that will either demand a raise or will quit their jobs in order to get guaranteed government jobs at the $12 rate. Many small businesses will simply not be able to find workers and will have to increase wages. Many of these businesses will not be able to afford this. Even well moneyed big corporations like Walmart will likely lay off workers or at least hire fewer if they are forced to pay significantly higher wages. Therefore, the number of workers in this guaranteed jobs program will likely grow significantly at least over the first few years.

What will these workers be doing? If they are put to work doing tasks which compete with private sector employers or even existing public sector workers, then more workers will be put out of work and this program will have to increase even more in scope and cost. It is likely that most of these jobs will be unproductive and dehumanizing. Perhaps they will be digging holes and then filling them in again. Somewhere in Hell, Keynes is grinning.

In order to pay for this program, the federal government will need to raise taxes. This will likely increase the size and cost of the program even more. Ultimately, it will try to pay for the program by having the Federal Reserve “print” even more money. This will cause inflation to skyrocket. The cost of living will rise. The “living wage” will have to be increased. More workers will be forced into the program. The cost will increase even more. The Federal Reserve will “print” even more money. Inflation will skyrocket. Hello, Weimar Republic. Buy your wheelbarrows for your useless dollars before the cost rises to $100,000 in the brave new world of hyperinflation American style. One hopes that Obamacare will pay to treat cases of cipheritis.

2. Social Security for All

Myerson appears to recognize at least one problem with his first proposal. No, not the fact that the federal government cannot afford it. No, also not that attempting such a program would turn the United States into the Weimar Republic. Myerson recognizes that most of the jobs that are produced by his ridiculous jobs program will be dehumanizing. Marx and Engels put it thusly:

Owing to the extensive use of machinery and to division of labour, the work of the proletarians has lost all individual character, and consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for his maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labour, is equal to its cost of production. In proportion therefore, as the repulsiveness of the work increases, the wage decreases. Nay more, in proportion as the use of machinery and division of labour increases, in the same proportion the burden of toil also increases, whether by prolongation of the working hours, by increase of the work exacted in a given time or by increased speed of the machinery, etc.

The ever-eloquent Myerson puts it thusly: “Because as much as unemployment blows, so do jobs.” So, instead of paying the unemployed to work, he would have the government pay the unemployed not to work— “the government would just add a sum sufficient for subsistence to everyone's bank account every month.”

For many individuals, the rational thing to do will be to quit their jobs and just collect this “universal basic income.” Some will be able to collect it while supplementing their income under the table. Others will realize that they are unlikely to acquire the skills necessary to earn significantly more than this basic amount through work. Others may simply conclude that leisure is a greater good for them than any additional money that they may earn through working a job. Assuming that Myerson’s “universal basic income” is the same amount as a “living wage,” we can assume that an individual can earn nearly $25,000 for doing nothing. How much more would one have to earn in order to make it rational to spend an average of 40 hours a week toiling away? Many will realize this and quit their jobs. The size and cost of this program would be even greater than that of the guaranteed jobs program. Hello, economic collapse!

3. Take Back The Land

Like Marx and Engels before him, Myerson has no use for private landowners. Myerson, who appears to have an unnatural obsession with fellatio, asks:

Ever noticed how much landlords blow? They don't really do anything to earn their money. They just claim ownership of buildings and charge people who actually work for a living the majority of our incomes for the privilege of staying in boxes that these owners often didn't build and rarely if ever improve.


Rather than suggesting that the bourgeois landowners be rounded up and have their property seized, Myerson suggests a “simple land-value tax.” While such a tax—as part of an alternative to and not an addition to the federal income tax—is actually a good idea, the reasoning that Myerson uses is flawed. Landlords do not simply “claim ownership of buildings.” They either buy them or legally inherit them. Landlords often improve the buildings that they own. If they do not, their tenants may choose to live elsewhere. Certainly there are many “slum lords.” However, the only reason that they can attract tenants at all is because the economy is in such awful condition thanks to the Federal Reserve, regulations, and high taxes. Under the Tenth Amendment, states, cities, and other local governments are free to impose laws mandating habitability. Therefore, it is not the responsibility of the federal government to deal with this issue.


4. Make Everything Owned by Everybody


Comrade Myerson really has no use for the bourgeoisie. In his gorgeous prose: “Hoarders blow.” He laments that the top 10 percent “control 80 percent of all financial assets” and suggests an easy way “to collectivize wealth ownership.” Rather than stage an armed Marxist revolution—which would likely “blow” since it would be too much like work—he proposes that the federal government buy up private assets and form a sovereign wealth fund similar to the one run by the state of Alaska. Such a fund would “buy[ ] up assets from the private sector and pays dividends to all permanent U.S. residents in the form of a universal basic income.” At least the lad is considering where the money for the universal basic income would come from. But it would require yet more money be spent by the federal government. Money that it just does not have. So, the government would need to spend enough money to buy up enough assets which would produce a dividend that could pay tens of millions of Americans not to work. This would cost far more than the $1.123 trillion that the jobs guarantee program would cost for a year. The government is so good at making wise investments—Solyndra anyone?—so no doubt this scheme is foolproof. One wonders where Mr. Myerson learned this brand of unicorns and rainbows economics.

5. A Public Bank in Every State

The silver-tongued Myerson claims:

You know what else really blows? Wall Street. The whole point of a finance sector is supposed to be collecting the surplus that the whole economy has worked to produce, and channeling that surplus wealth toward its most socially valuable uses. It is difficult to overstate how completely awful our finance sector has been at accomplishing that basic goal. Let's try to change that by allowing state governments into the banking game.

It is not true that the finance sector has any responsibility to finance “socially valuable uses” of surplus capital. Instead, its fiduciary duty is to maximize economic profitability for shareholders or owners. Nevertheless, Myerson’s idea is surprisingly not terrible. The Constitution neither gives the federal government the power to form a bank—despite what the ridiculous reasoning of the Supreme Court in McCulloch v. Maryland—nor forbids state’s from doing it. Therefore, under the Tenth Amendment, states are free to experiment with banking in ways similar to what North Dakota does.

Strangely, Mr. Myerson does not mention the Federal Reserve. Such a proposal would not be likely to succeed unless the Federal Reserve were abolished. Does he know that the Federal Reserve is a private central bank? Does he know that the Federal Reserve is responsible for a reverse Robin Hood scheme by which money is stolen from everyone and given to the wealthy banks? Does he believe that the Federal Reserve “blows?”

Hipster Communism Blows

Do you know what really blows? Communism. Even if it is sitting in a Starbucks wearing a Che t-shirt. Myerson’s proposal would lead to a total economic collapse which could very well lead to fascism in the United States as it did in Germany following the economic collapse of the Weimar Republic. Fascism really blows. If somehow one could avoid the laws of economics and make Myerson’s proposals work, it would require a mighty federal government. This government would need to be even bigger and mightier than the Soviet Union at its height. In between not ever being elected president and falling down, President Gerald Ford said: “A government big enough to give you everything you want, is a government big enough to take away everything that you have.” This is quite true. A government that is strong enough to provide a “universal basic income” would also be strong enough to take away all natural rights. Such a paternalistic monster would be ready, willing, and able to dictate every aspect of everyone’s lives. No more free action. No more free speech. No more free thought. The best that can be expected is that the nation will be turned into a land filled with sedentary slaves who are living out a subsistence existence. If anything blows, that does. Totalitarianism, economic stagnation, oppression, and death. Those are the results of communism. So what if Myerson’s new communism would be drinking a Red Bull and wearing a hoodie? Totalitarianism is totalitarianism, dude! And yes, it blows.

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