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Warren Buffet, Class Warfare, and the Exploitation Theory
The first part of this very short book is a critique of the views expressed by the multi-billionaire Warren Buffett on the subjects of class warfare, taxation, and The Giving Pledge. The second part, which is a section of my book Capitalism: A Treatise on Economics, goes deeper and seeks to overturn the foundations of Buffett's and most other people's ideas concerning the relationship between profits and wages.
At least since the time of Adam Smith, it has been believed that profits, interest, and all other income that is not wages (or salaries) is a deduction from what is naturally and, by implication, rightfully, wages. This view is the starting point of the Marxian exploitation theory, which seeks to explain what determines the extent of this alleged deduction and finds the answer in a distorted version of the classical economists' labor theory of value. But this same view is no less the starting point of the most important critic of the Marxian exploitation theory, namely, the great Austrian economist Böhm-Bawerk, who differs from Marx in concluding that, because of time preference, profits (interest) are a justified deduction from what is originally all wages.
In opposition to Smith, Marx, Böhm-Bawerk, and all who share their ideas, the theory that I propound is that the original, primary form of income is not wages but, however ironically, profits. Developing the implications of this major finding and anticipating and answering the questions that come to mind in connection with it occupies a substantial portion of both parts of this book. The most important of these implications is the demonstration of a harmony of the self-interests of wage earners and capitalists. This, in turn, has enormous implications for the way people view such major economic issues as capitalism versus socialism, economic freedom versus government controls, income and inheritance taxation, and labor and social legislation.
This little book offers an unprecedentedly powerful defense of capitalism and economic freedom in the space of a comparatively few pages. It is offered as an introduction to the author's major work Capitalism: A Treatise on Economics, which is a state of the art defense of capitalism and economic freedom in virtually all of their aspects.
At least since the time of Adam Smith, it has been believed that profits, interest, and all other income that is not wages (or salaries) is a deduction from what is naturally and, by implication, rightfully, wages. This view is the starting point of the Marxian exploitation theory, which seeks to explain what determines the extent of this alleged deduction and finds the answer in a distorted version of the classical economists' labor theory of value. But this same view is no less the starting point of the most important critic of the Marxian exploitation theory, namely, the great Austrian economist Böhm-Bawerk, who differs from Marx in concluding that, because of time preference, profits (interest) are a justified deduction from what is originally all wages.
In opposition to Smith, Marx, Böhm-Bawerk, and all who share their ideas, the theory that I propound is that the original, primary form of income is not wages but, however ironically, profits. Developing the implications of this major finding and anticipating and answering the questions that come to mind in connection with it occupies a substantial portion of both parts of this book. The most important of these implications is the demonstration of a harmony of the self-interests of wage earners and capitalists. This, in turn, has enormous implications for the way people view such major economic issues as capitalism versus socialism, economic freedom versus government controls, income and inheritance taxation, and labor and social legislation.
This little book offers an unprecedentedly powerful defense of capitalism and economic freedom in the space of a comparatively few pages. It is offered as an introduction to the author's major work Capitalism: A Treatise on Economics, which is a state of the art defense of capitalism and economic freedom in virtually all of their aspects.
59 pages, Kindle Edition
First published August 6, 2012
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About the author
George Reisman
36 books40 followersGeorge Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics, and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996; Kindle Edition, 2012), The Government Against the Economy; Warren Buffett, Class Warfare, and the Exploitation Theory; The Benevolent Nature of Capitalism and Other Essays; Labor Unions, Thugs, and Strom Troopers; and, most recently, Piketty's Capital: Wrong Theory/Destructive Program. His website is capitalism.net. His blog is georgereismansblog.blogspot.com. See his Amazon.com author's page and follow him on Twitter @GGReisman.
Dr. Reisman is married to Edith Packer, J.D., Ph.D., a clinical psychologist, with whom he lives in Laguna Hills, California.
He was personally a student of Ludwig von Mises, whose NYU seminar he attended for eight years and under whom he obtained his doctorate in economics in 1963. He is the translator of von Mises's Epistemological Problems of Economics (New York: D. Van Nostrand, 1960). From1957 until her death in 1982, he was an associate of Ayn Rand.
Dr. Reisman is married to Edith Packer, J.D., Ph.D., a clinical psychologist, with whom he lives in Laguna Hills, California.
He was personally a student of Ludwig von Mises, whose NYU seminar he attended for eight years and under whom he obtained his doctorate in economics in 1963. He is the translator of von Mises's Epistemological Problems of Economics (New York: D. Van Nostrand, 1960). From1957 until her death in 1982, he was an associate of Ayn Rand.
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July 17, 2016
The Real Question
Fleishman gives a great defence of classical capitalistic economics (although it is a bit tough for a lay person to go through). The question remains as to WHY these billionaires (like Buffet) still ascribe to class warfare. These are not dumb people, so there must be an underlying motive other than a "guilty conscience."
Fleishman gives a great defence of classical capitalistic economics (although it is a bit tough for a lay person to go through). The question remains as to WHY these billionaires (like Buffet) still ascribe to class warfare. These are not dumb people, so there must be an underlying motive other than a "guilty conscience."
Displaying 1 of 1 review