Sunday, March 13, 2005

Talking Shop

Sitting in our College canteen the other day (never a good idea, but on a tight budget you have few options) I had a great left vs right (or top-left vs top-right according to this diagram) argument with a Sri Lankan friend of mine on Life, the Universe and Everything.

The meat of our argument was on Marx's Labour Theory of Value. Basically this theory states that the value of a commodity is equal to the amount of labour put into it. This is by no means the entire theory, understanding that would require you to read the reams of literature that Marx, Ricardo and other commie Economists spewed forth on it. Of course, I wouldn't stand for such rubbish. Marx, obviously had got it wrong (how much more proof do you reds need of that?)

By now, the discerning reader has pretty much figured out where my loyalties lie on this subject. My friend, Chandana stood in the other corner. His strength was that, actually having read Marx, he knew what he was talking about, while I had got most of my information from blogs and encyclopaedias. My strength was the fact that I was right.

We were talking about his dialectical political philosophy, and our discussion followed the usual lines such discussions take (him talking over my head, me staring into space). Then he said something about (I paraphrase) consumerism (he used the Marxist term "commodity fetishism") being the root of all evil. What?! Consumerism is good, I said. It is the incentive that makes the Economy run, it is the lubricant that makes the world go round. No one will be satisfisfied with consuming just enough to sustain life. Even in Communist countries, people were encouraged to work harder by the promise of increased comforts. You're right, he said, thats why I don't believe in Communism.

I was shocked and apalled! Looking with grudging admiration at this deviously brilliant tactical retreat, I realised why left wingers (top lefters by Nolan's reckoning) win so often even though they are completely wrong. What an amazing debating technique! Totally took the wind out of my sails.

Taking advantage of my momentary weakness, he said something to the effect that since workers create all the value anyway, why should the bourgeoisie(his word)/enterpreneurial class(my word) enjoy all the material benefits anyway? This I could not leave unchallenged. Who says labour creates all value anyway? Don't other factors of production matter, I asked? In the modern economy, isn't it possible that a lot of welath is created by human capital (or enterprise, to distiguish it from labour)? I then illustrated my argument by borrowing an example from Warren Meyer, which you can read here. Basically Meyer says that if a group of labourers are offered as much money as they need, and an unlimited amount of crude raw materials such as silicon, steel, land, etc, they still can't build you a computer. They need someone to tell them how to. That's enterprise, and it's the most important factor of all, and thus deserves the greatest remuneration. Of course he could think of no counter to this (immediately at least, I'm sure a week later he'll have an amazing argument that'll make me look like a complete idiot), and tried to confuse me with rhetoric and dogma. But I stood firm, and held the day for my beliefs. Go Libertarianism!

Note: Many of the terms, concepts and references here are hard-core Economics. You need to have studied Economics for at least three years to even begin to understand them. If you think you understand them anyway, you are wrong. If you are reeling from all this Economics talk, read this article. If you think reading this article gives you an insight into Economic theory, read the comments to that article.


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