An Opinion Piece on Socialism and the Sad Responses

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The Washington Post published an opinion piece on socialism today. It was written by Marian L. Tupy, a senior fellow at the Cato Institute and it's titled, "Socialists think wealth is stolen. They’re wrong."

America’s socialists don’t like billionaires. This week, Sen. Bernie Sanders (I-Vermont) posted online, “Billionaires get richer while working families struggle.” New York Mayor Zohran Mamdani (D) campaigned last year on getting rid of them: “I don’t think we should have billionaires.” This spring, Rep. Alexandria Ocasio-Cortez (D-New York) told a podcaster, “You can’t earn a billion dollars.”...
But the idea that wealth is taken from others rather than created is an idea economists rebutted 155 years ago.
Early economists, such as James Mill and David Ricardo, theorized that the physical labor exerted to create a good is the real measure of its value. Karl Marx took the concept to its extreme: If labor creates all value, then profit must require unpaid labor, making every employer an expropriator and every fortune a crime.
Then, beginning in 1871, economists countered the labor theory of value. Carl Menger, William Stanley Jevons and Léon Walras demonstrated independently that value resides not in hours of toil but in the judgments of consumers. Writing a 500-page novel takes the same amount of physical labor as typing out 500 pages of the word “banana” repeatedly. Only the novel commands a price. Value is created whenever someone rearranges the world into a shape that others want. It is measured by the buyer, not the worker.

All of this strikes me as an obvious and undeniable response to people like Sanders and AOC who still seem to believe that profit is theft of someone else's labor, even if they don't carry a copy of the Communist Manifesto everywhere they go.

The article goes on to make the point that billionaires aren't rich because they collected so much income, but because they created companies that are worth a lot of money. Their wealth isn't sitting in a bank somewhere, it's built on the continued operation of a company which other people have agreed is valuable.

In my own experience talking to socialists, I find it's the free part of the free market that they often overlook. Is Jeff Bezos a billionaire because people are forced to buy things on Amazon? Obviously not. He's a billionaire because people buy things on Amazon of their own free will. Why? Because it's terribly convenient and saves a lot of time. Regular people appreciate that convenience and value that time so they give their money to Amazon rather than driving to a drug store or a book store or a hardware store.

You can, of course, argue that Amazon harms all of those other businesses and has negative impacts on them. That's certainly true in many cases. But, again, the key point is that no one is making anyone buy from Amazon. No one is making anyone use Uber or subscribe to Netflix or buy an iPhone instead of an Android or subscribe to Starlink. All off these choices are made by consumers who are willing to trade their money for the goods and services on offer that they prefer.

And if enough people choose your company over the competitor, that company becomes valuable and the founder and creator of that company becomes a billionaire. No one stole anything from anyone. People handed over their money willingly and employees took jobs working for those companies willingly.

Very little of this seems to register with the people leaving comments on this article. Here's the top comment.

It's good to have billions. Among other things, you can hire shills to write op-ed pieces to justify the current division of wealth.
These essays are generally disguised version of the Divine Right of Kings principle, seeking to make the status quo so sacred that you can't touch it. This one has many of the usual fallacies. Save your brain cells for Garfield on the comics page.

Sadly, 158 other people thought this was clever and insightful. In fact, it's absolutely vapid and the author makes no effort to describe or critique the "usual fallacies" he claims are present.

The problem with the divine right of kings is that you can't argue with it on any other grounds. The people are essentially stuck with whatever ruler they get because that person is presumed to be the one put in place by God. The essential problem is a lack of choice.

But as I've just suggested above, free markets work on a very different principle. You absolutely are not required to buy books on Amazon. You can instead drive to a bookstore or buy them online somewhere else, perhaps an independent store or a large chain like Barnes and Noble. There is no divine right of anything in the marketplace. People have a choice.

Also, the suggestion that the status quo is "sacred" in the free market is especially dumb. Amazon has only been around since 1994. Google since 1998 and Tesla since 2003. Facebook got going in 2004. The idea that these billion dollar brands are the "status quo" seems to overlook the fact that none of them existed 35 years ago and several are just over 20 years old.

We're likely to see a bunch more billionaires as more AI companies go public in the next year. Those companies haven't even been around for five years yet.

Let's look at a couple more responses.

The anarcho‑libertarian policy universe didn’t emerge organically. It was engineered over decades through its network of ideological factories - partisan think tanks like Cato, where the author of this piece is a Senior Fellow.
Billionaire donors funded university programs, saturated media (which they increasingly owned - thanks Jeff!) with their messaging and used groups like ALEC to write boilerplate legislation that would fix gains into law.
The takeover of the once‑respected Post and its conversion into a billionaire mouthpiece is part of a long project to normalize radical libertarian and neoliberal ideas, which accelerated dramatically under Reagan. Consider that between 1980 and 1988, the top marginal tax rate collapsed from 70% to 28%, and the corporate rate fell from 46% to 34%. Numerous other reforms disproportionately benefited the wealthy, shifting the tax burden from capital to labor. Which of course fueled a rapid rise in inequality and the ability to concentrate obscene wealth.

The left has billionaires and think tanks as well but their input is rarely considered a conspiracy by people on the left. The left has far more control of the media than the right, despite the arrival of Fox News. The Post was, until very recently, an overwhelmingly left-leaning newspaper. The owner (Jeff Bezos) reduced staff and made changes to the opinion section of the paper because it was losing tens of millions of dollars per year.

The idea that forming companies and making money without coercing anyone is "radical libertarianism" says more about the author than the idea. And yes, top tax rates used to be much higher but also the economy was a wreck when Reagan came to office after the stagflation years of Jimmy Carter. The drop in tax rates in 1981 (from 70% to 50%) and the subsequent drop in 1986 (from 50% to 28%) helped spur higher GDP and lower unemployment. Did that benefit the wealthy? Yes. Did it benefit nearly everyone else. Also yes. The standard of living for the bottom 20% has increased in America since 1981. On to the next one.

This article defies the reality we live in, in which the political system is controlled by the wealthy through bribes of campaign funding, and who use their power to give themselves and their businesses advantages in the form of tax breaks, easy credit, the use of land and natural resources, and free reign to pollute the environment.

The wealthy have always had more control of politics than the poor. George Washington and Thomas Jefferson were very rich and successful in their day (though Jefferson died broke and in debt). Do the rich have it easier? They certainly do, but the idea that that wealth is all based on "easy credit" and despoiling the environment is false.

This goes on an on. I didn't read all the comments but none of the top ones seem to take on the central point of the article, which is that punishing success through wealth taxes is going to be bad for everyone. The commenters all seem to be DSA members convinced that soaking the rich will solve everyone's problems. If these people get their way we'll be back to the economy of the late 70s.

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