On the Road Back to Marx

Bernie Sanders, the lone socialist in the American senate:


Alan Greenspan, chairman of the federal reserve from 1987 to 2006 and part of Ayn Rand's inner circle while she was writing Atlas Shrugged:



Alan Greenspan's response to Bernie Sanders in the first video is contradictory. First he says that the incomes and purchasing power of American workers/employees are more important than what they make, and then he says that the job of monetary policy/the federal reserve is to create a climate that is favorable to capital investment and entrepreneurship. This is contradictory; you can't have a full-fledged support of capital investment/innovation and have high wages at the same time in a world labor market where the supply of labor exceeds the demand for its services. The world has 6 billion people, of which only a small percentage have capital. This means that the current wages and salaries that people in North America, Europe, and Japan enjoy, which are largely the result of laws favorable to labor, unionization, and a limited number of workers, enjoy would be driven down dramatically. If labor strikes in one country, demanding high wages, corporations have the option of simply moving to a poorer country. Therefore, national governments must support some sort of non-market mechanism that guarantees that factories will stay in their country and that wages will stay high. In the past, the mechanism that did this was communism - the fear of revolution kept wages high - but now that communism has all but collapsed, the average world-wide wage could be driven down closer to what the average Chinese household makes: an average of 500 dollars in disposable income per year after basic expenses.

Hooray for Alan Greenspan! He knows wages are important, but knowingly supports a policy that drives down the average wage! This, folks, is what is called "sophistry". He is a libertarian ideologue that's too cowardly to just come out and say that he doesn't care how much of the pie workers receive.

Before I touch upon the second video, I would like to say that Greenspan is correct for supporting innovation and entrepreneurship, but wrong in using them as an excuse for poverty. Innovation is useless if 60% of the population can't afford it.

Okay, onto the second video. Greenspan starts the video by saying "that's going to be a terrible situation" when the people of the world realize that there are not enough resources to meet everyone's demands. And he's right! At least from his Randian, libertarian perspective. The world he fears is not the world of poverty; he doesn't give a shit about that world. The world that Greenspan fears is the world where Marxian politics returns, or in his view, the return of "collectivism". And this is where a contradiction develops: Mr. Greenspan is for capitalism, acknowledges that collectivism is irrational, yet is consciously moving the country toward an economic and political climate where collectivism could take over again. But there is no contradiction, because Mr. Greenspan reduces the complexity known as homo sapient to "status seeker", a creature only happy when it is high up on the "pecking order". In other words, people don't care how comfortable they are materially, as long as they have status. This viewpoint is, of course, absurd; there are as many ways to be happy as there are people. Status is obviously important to making a person happy, but it is not the only way, nor even the primary way. Therefore, Mr. Greenspan's "low wage paradise", where the people care more about their status than incomes is a fantasy land.

Any skilled laborers reading this paragraph, including engineers and professionals, should be very afraid of Greenspan. He is in favor of allowing an indiscriminate number of skilled laborers from others countries to enter the country to "drive down salaries" so that "the income inequality will be reduced". Mr. Greenspan's answer to inequality is to make everyone poor!

While it is true, as Greenspan said, that the inequality between wage earners and salary earners would be reduced if foreign skilled labor is allowed to enter the country in large numbers, he fails to mention that this would create a corresponding increase in inequality between salary earners and the rich and wage earners and the rich, hence increasing the income inequality that counts.

What Greenspan is really doing is defending the rich. He doesn't really care about income inequality. Driving down the salaries of salary earners would definitely have an effect: It would further stabilize the political system, at least in the short-term, because then the wage and salary earners would have less to fight about in terms of material status. This is the Korean model. Many white collar workers here in Korea don't make much more than the unionized workers do.

Alan Greenspan is out of touch with the real world. Bernie Sanders is right. He thinks that jealousy is the primary threat to capitalism, when a large proportion the population living in poverty is obviously more important. If jealousy were really so important to the survival of capitalism, the system would have already collapsed, because there are millions of people who make more money than the average person. Instead, high wages have allowed capitalism to survive and stay robust through 150 years of revolutionary politics. Take away the high wages and the system teeters.

So why does Greenspan want to allow large numbers of unskilled and skilled labor to enter the country to drive down wages and salaries? Because he really doesn't care about the stability of the system. Police state, communist dictatorship, *shrug*, he just doesn't care. It doesn't matter to him. He is too entrenched in his ideology to step back and analyze the objective causes of the last 90 years of fascist and totalitarian governments: poverty and greed. Mr. Greenspan has therefore learnt nothing from recent history, which is why I say "We are on the road back to Marx". Driving down wages is that road..