Aquinas, Smith, Jefferson, Malthus, Marx, Keynes

Books by Wilson Jeremiah Moses

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Aquinas, Smith, Jefferson, Malthus, Marx, Keynes
By Wilson J. Moses
October 19, 2008

With capitalist political economists currently under a cloud I'm a little dismayed Wilson J. Moses [in "Joe the Plumber and Adam Smith"] feels it is necessary to throw dirt on Marxists. . . . The housing mortgage crisis, in my opinion, is mischaracterized by Wilson as the essence of the Wall St. debacle. It is only part of the problem, as the recent disclosure of the derivatives abuses clearly indicates.—Damu

Of course, I recognize the usefulness of concepts developed by Marx, such as opposition of class interests, labor theory of value, and surplus value. Furthermore, I am capable of a Marxian moral outrage. I see Marx relating to Smith as Newton related to Galileo. Newton and Marx stood on the shoulders of giants, as all progressive thinkers inevitably stand on the shoulders of their predecessors. Smith rescued Thomas Aquinas' labor theory of value along with its ethical implications from the French physiocrats and their slippery American disciple Thomas Jefferson, who tried to kill it. Thus Jefferson came to belittle Smith, because Jefferson was uncomfortable with Smith's labor theory of value. And Jefferson held artisans, craftsmen, and workmen, like Joe the Plumber, in profoundest contempt.

Adam Smith, along with Malthus, Ricardo, Marx, and Keynes, has been rejected by Bush, Paulson, Bernanke and McCain. Obama is not much better, although he sometimes makes some feeble noises that sound something like Marxist or sometimes Keynsean ideas. Keynesean inspired projects such as the New Deal's WPA derive, of course, from the proposals of Malthus for public works projects.

Damu makes an obvious and undeniable point regarding the trading of securitized mortgages and derivatives and he might have added credit default swaps.   Of course the problem has much to do with the trading of these exotic instruments. That is obvious! Everyone knows that, and nobody denies it. But this fact does not exclude the reality that Paulson and Bernanke are committed to reinflating the price of housing.   This reinflationary policy, according to Soros, Buffett, Stiglitz, and Michael Kinsley, will have its consequences down the road in terms of making housing less affordable and destroying the savings of pensioners.

Neither Joe the Plumber nor the U.S. government wants to accept the fact that if you continue to borrow and spend, you will inevitably push up prices to fantastic levels.   This process is called a bubble. The average American is living beyond their means and is represented by a government that is living beyond its means. That is why the American people and their representatives are committed to nurturing one bubble after another.   But when will all these bubbles burst?

Adam Smith and John Maynard Keynes both understood the necessity of taxation.   Both understood, as did Marx, that the interests of capital and labor are non-identical. These facts are studiously avoided by current politicians who have neither the courage to follow Smith and let the bubble burst, nor the courage to follow Keynes and raise taxes to pay for it. This increases the dire possibility of some perversion of Marxism, such as National-Socialism. Paulson and Bernanke have already taken the first steps, with the advice and consent of Congress.

Americans and their elected representatives operate completely without ideology, and Joe the Plumber continues to believe that he can realize the "American dream" by perpetually increasing both his personal debt, and that of the Federal government.

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posted 19 October 2008