The Great Fallacy of Marxism

[emprworm]

"In order for one to be rich, someone else must be poor"

the Great Fallacy of Marxism.

wealth can be created.

[GUNWOUNDS]

i never thought of that ... refreshing idea.

[emprworm]

all you need is a bit of logic and rational thought to tear down a monumentus socio-economical farse invented by a god-hating greed induced maniac (Karl Marx).

what this largely stupid uneducated world needs is a dose of logic and rational thought.  THAT would go sooooooooooo much further than anything else. 

but people dont think with their minds.  they only think with their passions and emotions.  they see rich people...they see poor people...they FEEL for poor people...they have PASSION for the poor people...they look  back at the rich people...they look at themselves...."WAIT!  I'm poor too!" they say...then their anger starts boiling...emotions start churning....hatred starts brewing...envy begins to swell....greed ("whats yours is mine" and "you have no right to that wealth) attitudes start to form....leading inexorably to....communism starts flowing....

at no point in this process did they ever stop to think rationally

[GUNWOUNDS]

heh... nice sig pic

[Wolf]

In economics, we would say that early humanity has expanded its production possibilities frontier, or PPF, to achieve these things. The PPF, or, society's full potential of output and production, can be expanded when ersources that were previously unknown to the economic system are discovered, workers become more productive, and new technologies are created. Combinations and repetitions of these events has caused what you call the human creation of wealth.

[emprworm]

the resources were always known.  what was not known was the simple knowledge of how to use them.  the same resources that we use to make airplanes were used by the Myceneans to make swords.  they lacked knowledge...not resources.

wealth is created.  just because one is wealthy does not automatically suppose another is poor.

[GUNWOUNDS]

wealth is created.

[GhostHunter]

the resources were always known.

[GUNWOUNDS]

tapping new oil fields, new gold mines, silver mines, diamond mines, etc is considered creating new wealth correct?

[Dante]

No, it is merely moving matter from one place to another. Things like gold and diamonds are only worth something in a currency because we say they are.

Nevertheless, it is indeed possible to create wealth. However the after effects are so deadly that it is not a viable suggestion. Just look at Germany after World War One. Huge debts to other countries, massive holes in the economy, they needed money and fast. So what happened? They printed money, creating wealth just like that.

As a result the value of the Deutchmark dropped to a tiny fraction of what it had been. A loaf of bread could cost anything up to a billion DM and beyond. There was nothing to back up the value of the money as there would be if we were alchemists creating gold out of lead. It was chronic hyperinflation.

Creating wealth therefore is possible but useless. The value of the wealth drops to almost nothing, and where's the point in that?

[GUNWOUNDS]

No, it is merely moving matter from one place to another. Things like gold and diamonds are only worth something in a currency because we say they are.

Nevertheless, it is indeed possible to create wealth. However the after effects are so deadly that it is not a viable suggestion. Just look at Germany after World War One. Huge debts to other countries, massive holes in the economy, they needed money and fast. So what happened? They printed money, creating wealth just like that.

As a result the value of the Deutchmark dropped to a tiny fraction of what it had been. A loaf of bread could cost anything up to a billion DM and beyond. There was nothing to back up the value of the money as there would be if we were alchemists creating gold out of lead. It was chronic hyperinflation.

Creating wealth therefore is possible but useless. The value of the wealth drops to almost nothing, and where's the point in that?

I think there is a difference between "cash" and "wealth".  Creating cash and creating wealth are two different things. 

Cash has to be backed up by something.  Gold does not.  Gold has many unique properties (doesnt rust ... etc) and is well known as a precious metal.

If cash didnt exist gold is something you could barter with.

Also i am no economic whiz... but I believe a country is better off when their cash is based on the gold standard

If Germany had discovered a vast gold mine and minted gold coins with it  instead of printing worthless cash then things might have been different.

Finding NEW precious metals,gems, or petro and distributing it is MORE than just moving matter from one place to another.  If it was an old bar of gold being passed around then yes it is old wealth.  But if gold is mined and a new gold bar is pressed today then that will be something new added to the circulation.... thus new wealth.

If i dig in my backyard and find a huge gold boulder worth tons of money then that is new wealth created.  That is different than just printing cash because my wealth would be gold-backed.

i could be missing something feel free to point it out if i am .....

[Dante]

There is only so much gold in the world. You can't 'create wealth' whenever you want it with cash and you can't do it with gold simply because gold will not spring from the ground whenever you want it. For practical purposes it really can't be used just to create wealth.

[Cyborg]

"Cash" is based on gold, yes.

The more cash you make, the less each piece of money would be worth.

[nemafakei]

"In order for one to be rich, someone else must be poor"

Is false in absolute terms.

But

"In order for one to be rich, someone else must be poor"

Is true in terms relative to humaniry's total wealth.

One pound represents a tiny fraction of the resources and service capacity available to humanity.

If I made large amounts of money from a small contribution to society, then I have profited from society, and I have taken more than I have given. Hence, society has lost out. Even if that means that more pound coins are in existance, the net wealth goes down. In capitalism, people who do well for themselves without contributing much for society increase the number of pound coins, and so decrease the effective value of each coin.

[DukeLeto]

wealth can be created.  CREATED.

And therein lies a fallcy.

Indeed, while you may print all the money you want, the more of it there is, the less it is worth.  The same goes for all natural and artificial resources.  Your statement is thusly destroyed by one of your own founding principles: Supply and demand.

[SurlyPIG]

^Ditto to these two^

On top of that, wealth is best defined as tenderable commodities of value to a large enough number of people.  Gold, silver, cash, iron, money in the bank, air miles etc. are only wealth if they are considered valuable to someone else and thus wealth is a concept and not an objective thing that exists.  Therefore to "create" wealth one must create, in others, the desire for a commodity they don't have or satisfy a pre-existing desire.  There was no "wealth" when life first emerged because there was no intelligent society to value anything, though I guess you could say a gorilla with a lot of bananas is wealthy.

[Dunenewt]

If you found a massive chunk of gold in your backgarden would it be yours or your country's?

[Cyborg]

Not unless it was stolen property.

Everything on your lot is rightfully yours.

[Edric O]

OF COURSE wealth is created, fool! Once again, your argument is nothing more than one giant STRAWMAN, born as a result of the fact that you don't have a single damn clue about Marxism... or basic economics, for that matter.

Wealth is created, but value (money) is not. Let's say there's a small mining village, and the village people own 50 gold nuggets between them. In order to trade these nuggets, there are 100 dollars in circulation. So each nugget is worth $2. There are 21 people in the village. One of them is filthy rich and has $60. The others are poor and have $2 each. Then one day, wealth is created and 50 more nuggets are found. Each nugget is now worth $1. Does that change the rich/poor relationship? Not one bit. The poor can afford 2 nuggets now (as opposed to 1 before), while the rich man can afford 60 nuggets (as opposed to 30 before). The poor are still poor, the rich are still rich.

You see, value is not fixed. Money represents a certain fraction of the total wealth of the world. When wealth is created, the value of money - ALL money - increases by the same amount. The poor get a little richer, and the rich get A LOT richer. The difference between rich and poor is preserved.

Or, to put it another way: "Rich" and "poor" are RELATIVE terms. If someone is "rich", that means he has more wealth than average. If someone is poor, that means he has less wealth than average.

In order for someone to have more than average, others must have less than average.

Didn't you ever learn basic math, Emprworm?

[Edric O]

Oh, and by the way, I'd like to point out that despite Emprworm's pompous blatherings, the issue discussed in this topic is nothing of vital importance. It is, in fact, only a small part of an IM that I've sent to Emprworm, trying to explain in brief the Marxist view on the rich and powerful. Rather than replying to my IM, it seems he thought it better to take one sentence out of it and start ranting about it on the forums.

This is a reasonably important issue to Marxism, of course, but there are other, much more important ones (see this topic).

And as a side note, isn't it ironic how Emprworm - the crowned king of sentimental rants and emotional propaganda - always tries to describe his enemies in emotional terms? He seems more concerned with what leftists/socialists/marxists/whatever feel than with their actual arguments. And he keeps moaning about the feelings of his opponents despite the fact that he is the one trying to use emotion instead of reason.

[GUNWOUNDS]

And he keeps moaning about the feelings of his opponents despite the fact that he is the one trying to use emotion instead of reason.

Are you saying poor people dont have atleast one drop of envy or jealousy or anger?

the emotion arguements do hold some water.

[Wolf]

Only when it becomes clear that the emotions overtake reason. I don't think I've seen too much of that here... (well, some people excluded -- I won't name names ;) )

[zamboe]

Wealth is created, but value (money) is not. Let's say there's a small mining village, and the village people own 50 gold nuggets between them. In order to trade these nuggets, there are 100 dollars in circulation. So each nugget is worth $2. There are 21 people in the village. One of them is filthy rich and has $60. The others are poor and have $2 each. Then one day, wealth is created and 50 more nuggets are found. Each nugget is now worth $1. Does that change the rich/poor relationship? Not one bit. The poor can afford 2 nuggets now (as opposed to 1 before), while the rich man can afford 60 nuggets (as opposed to 30 before). The poor are still poor, the rich are still rich.

You see, value is not fixed. Money represents a certain fraction of the total wealth of the world. When wealth is created, the value of money - ALL money - increases by the same amount. The poor get a little richer, and the rich get A LOT richer. The difference between rich and poor is preserved.

Or, to put it another way: "Rich" and "poor" are RELATIVE terms. If someone is "rich", that means he has more wealth than average. If someone is poor, that means he has less wealth than average.

In order for someone to have more than average, others must have less than average.

Didn't you ever learn basic math, Emprworm?

"wealth is created, ,but value (money) is not".

When I read statments like this, I just can't help to feel insulted by Edric0.

Can you tell difference (do you know) between wealth, value and money?

Do you really know that some of them are just qualitative concepts and other quantitative concepts?

Haven't you been told that you can't compare apples to oranges?

Your example is one of many examples out there that intends to confuse people. I will now answer with another twisted example like yours (in fact your example is not even valid in a closed economy case), I will answer with facts:

In the past 10-15 years countries such as South Korea, Irland, Finland have created more wealth than in their previous 50 years, and their buying power - MONEY - have increased significantly for their population.

I pressume you will answer with a statment indicating that some other people in the world have lost money because of them...... then feel free to go and accuse them for the poverty in Africa. LOL.

Get your facts straigh before posting things like that, you might confuse other people.

[Wolf]

Well, I think that Edric's example leaves out a key component of the whole "creation of wealth" notion. What about new technologies?

Let us say in your village example that, instead of there being more gold nuggets, the villagers discover how to mine Wolfwizonium. Wolfwizonium is just the hottest stuff since sliced gold nuggets, and now, with this new material, people learn how to construct new devices, new appliances, and how to improve on past inventions. Does all of society benefit from this discovery? And, what if the man who discovered said metal (Wiz, Fourth Earl of Wolf) was not among the "rich"? Would he prosper, and then join the class of the rich?

It would seem to me, that, in a capitalist system, if the new technologies created by this metal had to be bought and sold for anyone to make any sort of profit, the standards of living of all the people would improve, because the expensive cost of the Wolfwizonium replaces the costs of older, more cumbersome, and unreliable gold-nugget-powered technology, and everyone would purchase it. Is this a correct analogy, or did I miss a key step somewhere?

[Edric O]

Are you saying poor people dont have atleast one drop of envy or jealousy or anger?

Perhaps they do, just like rich people might have more than a drop of greed, selfishness, elitism, self-righteousness, contempt for the suffering of others ... need I continue?

The point is that emotions are irrelevant. If someone is greedy or selfish, that has no bearing on whether he is right or wrong. If someone is envious or jealous or angry, that has no bearing on whether he is right or wrong.

If I am envious or jealous of the ill-gotten wealth of a crime lord, does that make me wrong? If I am burning with anger and hatred against a man who murdered my wife, does that make me wrong?

Emotions don't make you wrong, and they don't make you right. They are irrelevant. Any serious political argument must be backed by logic and reason.