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“Class” Analysis: Marx’s Shell Game

Posted by M. C. on January 21, 2025

Unnecessary conflicts between different ill-defined “classes” of people benefit the state. Bastiat called the state “the great fiction” by which everyone tries to use the state to plunder everyone else. This simultaneously enriches and empowers the political caste and its beneficiaries and gets the people to conflict with each other rather than the political caste.

https://mises.org/mises-wire/class-analysis-marxs-shell-game

Mises WireJoshua Mawhorter

Though it is full of fallacies, so-called Marxian “class” analysis still pervades much popular and political discourse. This divisive worldview unnecessarily exacerbates conflicts between groups (so-called “classes”) and is a convenient worldview for the political state because it empowers it to treat all differences between groups as moral inequities and “problems” to be solved by treating groups unequally in the name of equity, justice, and fairness.

Previously, I have written about Marx’s “class analysis” and what I call the “ideological fallacy”—if all argumentation is necessarily biased special pleading on behalf of one’s “class,” then Marxism itself is admitting non-objectivity as just another class-biased ideology. In that case, Marxism cannot be an objective science; or, if it claims that objective truth and persuasion through argument is possible between “classes,” class consciousness and analysis are bogus.

Whenever someone claims, “All people are slaves of ideological bias,” then they have two options—either their statement does apply to them (and is not to be trusted as objective), or it does not apply to them (and the theory is not true). The consistent arguer of ideological bias and Marxist class warfare is inviting you not to believe him either way! Additionally, if the Marxist arguer of ideological bias and class conflict truly believes what they argue—that no one can be convinced against their class interest and no one can objectively stand outside their ideology, then the logical conclusion is clear, “Shut up!” This is the error of polylogism, that is, the self-defeating argument that different groups of people (“classes”) have fundamentally different different logics.

Marx’s Sleight of Hand: “Class”

This article attempts to expose another fallacy within Marx’s theory—his sleight of hand regarding class conflict. Marx engages in a form of the fallacy of equivocation, that is, he argues with one definition, but then switches the definition, or what it designates, in the conclusion. His shell game is subtle, especially because it actually begins with a statement that is largely true historically,

The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another…

So far, this is true. These were state-imposed legal castes. They involved the creation of legal categories imposed by the state. Ralph Raico distinguished, however, that “these opposed pairs turn out to be, either wholly or in part, not economic, but legal, categories.” In short, Marx borrowed the coherent libertarian class-caste analysis—that various groups attempt to use state power to privilege themselves and/or to restrict others. This was used to establish his point only to quickly smuggle in a voluntary-contractual relationship as if it was also obviously one of class-caste conflict: capitalists and workers.

Class versus Caste Analysis

“Marx obfuscated the problem by confusing the notion of caste and class.”—MisesTheory and History

Libertarianism has a rich tradition of class-caste analysis, in fact—focusing on the key distinction between political elites and state-connected cronies on the one side (the “few”), and the productive public on the other (the “many”)—caste analysis is key to libertarianism. Furthermore, Marx simply borrowed these concepts and wording from classical liberals (though he equivocated on the definition). Marx even admitted in an 1852 letter,

…no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists the economic anatomy of the classes.

But Marx took a voluntary-contractual, intertemporal exchange—that between the capitalist-entrepreneur and the wage-earner—and placed it into the category of exploitation with other exploitative relationships (land-owner/serf, slaveholder/slave, etc.), applying the slippery concept of “class conflict” to both. This is akin to creating two categories with accepted definitions—squares and triangles—followed by a list of square-shaped things only to include a triangle-shaped item in the square category.

Because of this confusion and ambiguity in the concept of “class,” we are now treated to a seemingly-endless, ever-growing list of neo-Marxist “classes” in conflict—race, sex, gender, religion, sexual orientation, etc. For example, see the Intersectionality Wheel of Privilege and Power. Virtually every perceived and actual difference between peoples puts them into some sort of intersectional “class.” These differences are patent evidence of injustice and require the political state elites—in actuality, the most privileged class!—to treat unequal peoples unequally in order to achieve “equity.”

“Class” Categories

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Government Spending Will Cause the Next Financial Crisis

Posted by M. C. on January 13, 2025

Keynesians always say that public debt does not matter because the government can issue all it needs and has unlimited taxation power. It is simply false.

Governments cannot issue all the debt they need to finance their deficit spending. They have three clear limits:

https://mises.org/mises-wire/government-spending-will-cause-next-financial-crisis

Mises WireDaniel Lacalle

Crises are never caused by building excessive exposure to high-risk assets. Crises can only happen when investors, government bodies, and households accumulate risk in assets where most believe there is little to no risk.

The 2008 crisis did not occur due to subprime mortgages. Those were the tips of the iceberg. Moreover, Freddie Mac and Fannie Mae, state-owned entities, guaranteed a sizable portion of the subprime mortgage packages, which prompted numerous investors and banks to invest in them. Nobody can anticipate a crisis stemming from the potential decline in the Nvidia share price or the value of Bitcoin. In fact, if the 2008 crisis had been created by subprime mortgages, it would have been absorbed and offset in less than two weeks.

The only asset that can really create a crisis is the part of banks’ balance sheets that is considered “no risk” and, as such, requires no capital to finance their holdings: government bonds. When the price of sovereign bonds swiftly declines, the banks’ balance sheet rapidly shrinks. Even if central banks conduct quantitative easing, the spillover effect on other assets leads to the abrupt destruction of the money base and lending.

The collapse in the price of the allegedly safest asset, government bonds, comes when investors must sell their existing holdings and fail to purchase the new supply issued by the states. Persistent inflation consumes the real returns of previously purchased bonds, leading to the emergence of evident solvency problems.

In summary, a financial crisis serves as evidence of the state’s insolvency. When the lowest-risk asset abruptly loses value, the entire asset base of commercial banks dissolves and falls faster than the ability to issue shares or bank bonds. In fact, banks are unable to increase capital or add debt due to the declining demand for sovereign bonds, as banks are perceived as a leveraged bet on government debt.

Banks do not cause financial crises. What creates a crisis is regulation, which always considers lending to governments a “no-risk,” “no capital required” investment even when solvency ratios are poor. Because the currency and government debt are inextricably linked, the financial crisis first manifests in the currency, which loses its purchasing power and leads to elevated inflation, and then in sovereign bonds.

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The Real Reason Why Todays Music Is Starting To Sound The Same

Posted by M. C. on January 12, 2025

I find this particularly interesting 13:22 – The Loudness Wars

Compression is evil.

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Hail the New King

Posted by M. C. on January 11, 2025

We haven’t been angels either.

By Eric S. Margolis

This exciting week, the man who would be king of everything made his first pronouncements.  Greenland should be purchased by the United States.  Canada should sell itself to the US. The Gulf of Mexico should be renamed ‘Gulf of America.’

Trump has started a scramble of imperial rebranding. France wants the return of what was called the Louisiana Purchase. `We sold it too cheap in 1803 to the United States for only $15 million because we bankrupted ourselves financing the American revolution against the perfidious Brits. We want it back – with interest. We also want parts of Quebec seized by the US.  Vive la France!’

Not to be outdone, Spain and Mexico have joined in a class action suit to demand that the United States hand back the parts of northern Mexico and California it grabbed in the 1840’s.

Mexico was forced to give up over 55% of its land to the Americans.  The late French nationalist leader, Jean Marie Le Pen, whom I interviewed in the 1980’s, told me ‘you Americans stole California from Mexico. Now they are taking it back through immigration.’ A bon mot, as the French say.

Spain has laid claims to California, which it once ruled.  Spain also wants back the Philippines and Cuba.  Holland wants back Manhattan and the upper Hudson Valley.  I attended a fine Dutch school in New York City founded in 1635.

Germany wants back its former colonies of Samoa and the Marshall Islands. Russia demands China return the great naval base at Port Arthur (Lushun). Beijing also wants Moscow to return vast regions of Siberia occupied in the 19th century when China was weak.

India, Pakistan and China all have large counterclaims in the Karakorams and Himalayas. Trump could resolve these festering issues among nuclear-armed nations once he figures out where they are.

As for darkest Africa, don’t even ask. Trump has called these places ‘shit holes’ and he’s not far off the mark.

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A Sad Punctuation Mark on California’s Demise

Posted by M. C. on January 11, 2025

Surplus supplies sent to Ukraine, fire fighting budget slashed.

The Ron Paul Liberty Report

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The Fall of Syria Explained

Posted by M. C. on January 10, 2025

“But in the shell game of U.S. proxy war, HTS and its leader are Washington’s assets. From 2011, the Americans and their NATO partners used Al Qaeda, ISIS, Jabhat al Nusra Front (later HTS) with ratlines of weapons and fighters from Libya, Turkey and all over the world to descend on Syria to inflict horrors.

“Only last week before the final push on the Syria capital, Damascus, Al-Jawlani, the HTS commander, was given a primetime interview/platform by CNN, the U.S. news channel, to rehabilitate his image as a statesman-like leader instead of being a wanted terrorist. Al-Jawlani says the days when he and his organization were associates of ISIS and Al Qaeda are long gone. And CNN and other Western media do their best to make the claim sound plausible. Ah, such a happy ending!”

Paul Craig Roberts

I have complained about the difficulty of acquiring an understanding of Syria’s sudden disappearance.  Neither the Western nor Russian media provide a believable account. Recently I came across Finian Cunningham’s article,”Syria after 13 years of US State terrorism,” on the website of the Strategic Culture Foundation. https://strategic-culture.su/news/2024/12/10/syria-after-13-years-of-us-state-terrorism-what-do-you-expect/  This site is often difficult to access, because Washington stupidly regards it as Russian disinformation.

On the surface Syria’s sudden collapse looks like Syria’s allies, Russia and Iran, might have sold out Syria.  This perception could prevail to the disadvantage of Russia and Iran as reliable allies, but the real explanation is that the years of economic and trade sanctions the West enforced on Syria, the years of Washington’s proxy war against Syria, the foreign occupation of Syria’s oil and wheat provinces by American and Turkish military forces, thus depriving the government of revenues, hollowed out the Syrian economy and left the Syrian military poorly paid for its services. Syria, Cunningham wrote, fell to “a 13-year war of attrition” on which all the victims on both sides were Arabs. The Syrian people, starved of food, medicines and fuel, with over half the population displaced, suffered high inflation and a destroyed currency, and ran out of ability to resist.

I contacted Finian, an international journalist whom I have known for years and learned much that permits me to provide an explanation of Syria’s destruction.

I begin by withdrawing my suspicions of Russian and Iranian perfidy in Syria’s collapse that I expressed in recent columns and interview on Dialogue Works with Nima https://www.youtube.com/live/NfxD_4DhxFo .  Cunningham agrees that Russia and Iran’s fateful strategic blunder was, having repelled the American proxy forces, halting the conflict before decisively defeating Washington’s terrorist proxies and forcing the few American troops controlling the oil fields out of Syria.  Cunningham has convinced me that Russia and Iran were genuinely blindsided by the sudden collapse of Syria, indicating perhaps intelligence failure and unpreparedness, but not perfidy.

Thirteen years of US and European sanctions and proxy war together with US and Turkish occupation of Syria’s oil and wheat provinces deprived the state of export revenues, leaving the people with blackouts and hyperinflation and the soldiers impoverished and demoralized.  The halt in the conflict prior to the total defeat of the American proxies and eviction of Turkey and Washington from Syria meant that the exhausting multi-year struggle had no payoff for Syria.  For their own reasons Putin and Iran wanted the fighting to stop, and it stopped before Syria achieved any benefit from the success in repelling Washington’s proxy army.  The oil and wheat provinces remained in enemy hands. So the war stopped too soon and the victory was hollow.  

Assad’s ability to govern was crippled by normal Arab corruption and a self-serving bureaucracy. Additionally, Assad was lured by Saudis and oil sheikdoms with false promises of normalizing relations of the Alawite  Syrians with Sunni Arabs.

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TGIF: Efficient Bureaucracy?

Posted by M. C. on January 10, 2025

The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses.

https://libertarianinstitute.org/articles/tgif-efficient-bureaucracy/

by Sheldon Richman

bureaucracy

With all the talk about government efficiency, it would be useful to remind ourselves why bureaucracies differ radically from for-profit businesses. Ludwig von Mises devoted a short but enlightening volume to this subject in 1944, Bureaucracy. Elon Musk and Vivek Ramaswamy, who will co-chair the nongovernmental Department of Government Efficiency, should do some homework by reading that book.

Mises, as an advocate of limited government, did not argue that bureaucracy has no place in a free society. In contrast to anarcho-capitalists, he thought government and therefore some bureaucracy was necessary to protect what he valued most: peaceful social cooperation through the division of labor—that is, the market economy. Violence against persons and property was clearly antithetical to the continuing welfare-enhancing collaboration we call the market process. But Mises did not want bureaucracies trying to do what free, private, and competitive enterprises could do better. Moreover, if the government went beyond its mere peacekeeping duties, it would undermine the market process and make us all less well off despite any good intentions.

Mises began by reminding readers (or perhaps teaching them from scratch) what the free market is and what it accomplishes. It’s a great primer for those who lack the time to read his longer works. He wrote:

Capitalism or market economy is that system of social cooperation and division of labor that is based on private ownership of the means of production. The material factors of production are owned by individual citizens, the capitalists and the landowners. The plants and the farms are operated by the entrepreneurs and the farmers, that is, by individuals or associations of individuals who either themselves own the capital and the soil or have borrowed or rented them from the owners. Free enterprise is the characteristic feature of capitalism. The objective of every enterpriser—whether businessman or farmer—is to make profit.

The uninitiated might ask who runs things. He replied: “The capitalists, the enterprisers, and the farmers are instrumental in the conduct of economic affairs. They are at the helm and steer the ship.”

However, let’s not jump to conclusions about who really runs things, Mises advsed:

But [the capitalists, etc.] are not free to shape [the ship’s] course. They are not supreme, they are steersmen only, bound to obey unconditionally the captain’s orders. The captain is the consumer.

Neither the capitalists nor the entrepreneurs nor the farmers determine what has to be produced. The consumers do that. The producers do not produce for their own consumption but for the market. They are intent on selling their products. If the consumers do not buy the goods offered to them, the businessman cannot recover the outlays made. He loses his money. If he fails to adjust his procedure to the wishes of the consumers, he will very soon be removed from his eminent position at the helm. Other men who did better in satisfying the demand of the consumers replace him.

All the conventional controversy about bosses and workers overlooks the critical point:

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My Top 5 Favourite Books

Posted by M. C. on January 9, 2025

sbrebrown

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INSANE New York Speech Crackdown Shields ISRAEL ONLY

Posted by M. C. on January 8, 2025

Glenn Greenwald

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