by Thomas Brewton
Without the accumulation of capital (i.e., savings), there is no capitalistic system. Liberal-progressive-socialism will have triumphed.
Liberal-progressive-socialism, adamantly opposed to the Judeo-Christian ethic of individual responsibility, focuses upon confiscating capital (savings) and redistributing it in order to control consumption.
In liberal-progressive-socialism’s Keynesian economic bible, consumption is the be-all and end-all of government economic policy. As we saw in the housing bubble that imploded in 2007 – 2008, government’s resources promoted going into debt to spend more than was being saved. Keynes, in fact, preached that saving causes economic recessions.
Until the administrations of Woodrow Wilson (1913 – 1921) and Franklin Roosevelt (1933 – 1945), when the liberal-progressive-socialist python began wrapping its strangling economic coils around American society, the prevailing ethic extolled personal hard work, thrift, and saving as the path to a better life. Empirical support for that ethos was readily at hand: the 19th century capitalist industrial revolutions in England and the United States had produced history’s greatest improvement, in the shortest time, of people’s standard of living.
Max Weber described the transition in his famous study, The Protestant Ethic and the Spirit of Capitalism (1905). The Protestant Reformation in northern Europe and Great Britain had emphasized personal responsibility in religious faith. Protestants who worked hard and succeeded in accumulating wealth were seen as conforming to God’s Will.
The real moral objection is to relaxation in the security of possession, the enjoyment of wealth for the consequences of idleness and the temptations of the flesh, above all of distraction from the pursuit of righteous life…
Not leisure and enjoyment, but only activity serves to increase the glory of God, according to the manifestations of His will… St. Paul’s ‘He who will not work shall not eat’ holds unconditionally for everyone. Unwillingness to work is symptomatic of lack of Grace… And even more important: the religious valuation of restless, continuous, systematic work in a worldly calling, as the highest means of asceticism, and at the same time the surest and most evident proof of rebirth and genuine faith, must have been the most powerful conceivable lever for the expansion of that attitude toward life which we have here called the spirit of capitalism.
When the limitation of consumption is combined with the release of acquisitive activity, the inevitable practical result is obvious: accumulation of capital through ascetic compulsion to save…
In mid-19th century, however, Karl Marx called for an end of capitalism. Marx’s labor theory of value postulates that physical and managerial labor hours are the only source of real value (what people wanted to buy, in his thesis, was a ‘commodity fetish’ having nothing to do with value). Hence liberal-progressive-socialists’ adulation for labor unions and their corresponding hostility to private business.
Marx characterized business profits as ‘surplus value’ that really belongs to the laborer; savings is thus another term for exploitation of labor. The proper role of government is to wrest profits from private business and redistribute the proceeds to laborers. This by definition rules out savings by business and emphasizes consumption, which is today the policy of the Obama government.
In Marx’s analysis, capitalists unjustly acquired the means of production, and their property rights were protected by government. Thus, to stop capitalists’ exploitation of labor, government must step in (by revolution or gradual legislation) to remove capitalists’ control of the means of production. This can be done either by government seizing ownership, or by gaining regulatory control of the means of production.
President Obama’s proposals faithfully adhere to this Marxian doctrine. Obama, for example, has called for restricting the amount of savings that high-earning individuals will be allowed to accumulate; he has overseen a de factotake-over of the banking system; in his ‘rescue’ of the automobile business, Obama ignored established bankruptcy property rights and gave bondholders’ capital to labor unions; ObamaCare is a massive scheme to redistribute wealth in proportions that liberal-progressive academicians deem appropriate for achieving the liberal nirvana of ‘social justice.’
The complimentary aspect of liberal-progressive-socialist antipathy toward savings is the desire to control consumption. Having stripped as much savings from businesses and individuals as political exigencies will allow, Obama aims to force us to expand ‘investment’ in green energy technology and to subsidize inefficient electric automobiles. Liberals like New York’s former mayor Bloomberg want to legislate control of what we eat. In any case, the aim is to curb saving and to make consumption as equal as possible in all sectors of society.
Unfortunately, as post-World War II history in the UK reminds us, that is a policy orientation designed to make us all equally poorer.
[Editor’s note: This article was originally published in The View From 1776 blog.]