Article review: We've gone so far we don't even recognize capitalism.

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Business Insider's article Alexandria Ocasio-Cortez's tweet about workers being paid 'less than the value they create' is essentially a restatement of Marx's Labour Theory of Value — here's why that's interesting is so far wrong that it's fascinating:

Twitter post by Alexandria Ocasio-Cortez

Hers is a restatement of Adam Smith, not Marx. Marx said labor created *all* value, denying that saving or management or resources were part of the process; Smith wanted labor (and other factors of production) to be paid the value they create, what AOC says.

We've gone so far to the right we don't even recognize capitalism. If workers were paid fairly for the value of what they created, while savers created productive capital and it got paid fairly, that's capitalism.

And if we were capitalists under Eisenhower, then we are no longer. Savings no longer turn to competitive capital (eg productive factories) but financialized assets, savings become more expensive land-values under houses that earn rent, savings become tools to buy back stocks — pieces of paper not factories. This creates returns without product: no other explanation for how much of our economy is Wall Street staring at it's own bellybutton, uber-profitably, instead of creating jobs that create new wealth.

Now even Business Insider can't tell the difference between a functioning free market and Marxism, because we've left capitalism so far into cronyism, rent-seeking, monopolies and financialization that we've forgotten what free markets (kept free and fair by a functioning government, or they collude to prevent competition, as Smith said long before Marx) that we've forgotten how to advocate for competitive free markets.


I write about framing: it's important to remind people that the words used by Roosevelt and Stalin are not the words we use anymore: Socialism and free-market capitalism have gone through odd convolutions. Many people who want to "make America great again" are nostalgic for the years from Roosevelt through Eisenhower, when idealized capitalism included trust-busting, fair markets, and trying to give everyone a job with dignity and a job that provided a living wage. Even Sanders and Alexandria Ocasio-Cortez are near the center for those years. Watch the way capitalism and free markets and socialism are framed!

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