Bonnie Weinstein Doesn't Understand Economics (and neither does the New York Times)

 

Cartoon posted by Zohran Mamdani in 2020

This post is about the lead article in Socialist Viewpoint by Bonnie Weinstein entitled Guns vs. Butter—It’s Our Choice. But before I get there I need to quickly explain the nine-month gap since my last blog post. 

[The short answer is cancer. The good news is that I am now completely cancer-free. I'm no longer getting chemo or immunotherapy or radiation. It's been a long road to get here, involving surgery, chemo, occupational- and physical- therapy. Because of the cancer I have lost the use of my thumb and two fingers on my right hand, meaning that I am no longer the fast touch typist that I used to be. Thanks to all that therapy I have recovered enough that I can type at about half speed. And that's fast enough--though when it comes to typing I'm no match for any of my Trotskyist friends except--perhaps--Jack Barnes.]

Whether measured by typing speed or quality writing, Comrade Weinstein is in every respect my equal or better. But she knows nothing about economics--and apparently neither does the New York Times. She writes:

A March 2, 2026, New York Times article by Katie Benner and Steven Rich, titled, “Five Takeaways on America’s Boom in Billionaires” included these facts:

• "Supercharged by Trump-era tax cuts and other policies that favor the rich, America’s wealthy minority has more power over the country than at any time in the last century.
• The richest Americans saw their net worth soar by 120 percent from 2017 to 2025
• The top one percent of American households, which have a minimum net worth of $11.1 million, now collectively own about $25.6 trillion worth of stocks and mutual funds, the same amount as the remaining 99 percent of the country, according to the Federal Reserve.
• Of the $25.6 trillion worth of stock owned by the one percent, more than half is in the hands of the top 0.1 percent.”
• And as for corporations, “Typically, fewer than one percent of corporations now account for more than 90 percent of corporate profits.”

I don't argue with her data, and unlike her fellow Trotskyists she actually cites her sources!

Ms. Weinstein's third bullet tells us that the top 1% own roughly half of all stocks and mutual funds. Most of the other half is owned by the upper middle class--or approximately the top 20%. They can be loosely defined as households that have a net worth of more than $1 million in assets, not including their primary residence. These are mostly people either retired or near retirement, who have spent their working lives paying into their 401K accounts. Some are younger who have well-paying jobs, while fewer are people of all ages who live very frugally and save most of what they earn, regardless of income.

Comrade Bonnie's statement--that the top 1% own half of all publicly traded assets in this country--is true. What she fails to point out is that the vast majority of assets are not publicly traded, ie, don't show up on any stock exchange. Walk down any busy street in Manhattan, and almost all of the restaurants you see are small businesses--where Mom does the cooking and Pop manages the front of the house. Yes, busy places hire employees--Mom & Pop can't do all the work themselves--but they're a long way from being listed on Nasdaq.

Only a small fraction of US companies are traded on exchanges. According to ChatGPT (for this and all subsequent data) the total market capitalization of publicly traded corporations in 2025 was between $60 - 65 trillion--of which half is owned by the top 1%. The price/earnings ratio for all public companies is about 21, meaning that companies are typically valued at 21 times earnings. That corresponds to about a 5% return on investment.

GDP is the measure of how much a society consumes in one year--ie, it is the total profit for the entire economy--which was about $31 trillion in 2025. Using the same PE ratio as for publicly traded companies, then the total capitalization of the economy as a whole will be 21 x $31 trillion, or $651 trillion! The fraction of that owned by the top 1% is ($25.6 trillion/$651 trillion) equals a bit under 4%. 

That's certainly a low estimate since the top 1% own many assets that aren't publicly traded, such as their homes and vacation homes, private jets, private businesses (such as, until very recently, SpaceX), etc. So increase the proportion to perhaps 10% or 15% of the economy that is owned by the top 1%. 

Being a Marxist, Ms. Weinstein is likely under the illusion that GDP measures total production in a given year. This is not correct: GDP is a measure of total consumption in a given year. Only final sales to the consumer count--eg, when a consumer buys a new car, that adds to GDP, but the sale of auto parts to the assembly plant does not contribute to GDP. When the cash register rings for the final sale to the individual customer is GDP incremented.

In addition to consumption, investment also adds to GDP. Investment refers to the building or purchasing of new plant and equipment--and should not be confused with the common use of the word, as in investing in the stock market. The latter involves no new plant or equipment, but is merely trading assets with other people. Marx accurately termed money saved in the stock market as fictitious capital, ie, it does not imply any real increase in production.

So it is surely weird that Comrade Bonnie measures the wealth of the billionaire class by citing the value of their fictitious wealth. And the term fits, since Elon Musk's net worth can fluctuate by billions of dollars per day depending on how the stock market does--it's hard to get more fictitious than that. So claiming that Elon is obscenely wealthy due to his huge stash of fictitious money seems ill-placed.

Since GDP is based on consumption, a much better comparison is to measure the Musk family's consumption compared to the rest of ours. And by that measure as well, Mr. Musk is wealthy, but nowhere near as obscenely so as his fictitious wealth might suggest. 

He likely doesn't eat any more than other citizens, though perhaps he consumes more expensive ingredients. Let's hypothetically double his food budget.

Mr. Musk lives in a mighty fine house--for which a top-of-line model sells for about $25 million. Perhaps he owns 2 or 3 or 10 such houses, but he can only live in one at a time. Let's say he has a primary residence and also a vacation home, for a total value of $50 million--the remainder are best described as a store of savings. The imputed rent for real estate of that value is about $2.5 million annually. Likewise for vehicles--he may own a whole warehouse full of expensive cars, but he can only drive one at a time. Suppose he buys one $500,000 car every year for his own use. More, he travels on his own private jet, but most of this travel is a business expense. Nevertheless, suppose he splurges on vacations to the tune of $2 million annually. Etc.

No matter how you slice or dice it, it is impossible to imagine Mr. Musk spends more than $50 million annually on personal consumption--ie, his share of annual GDP. If the median family consumes roughly $62,000/annually, then Elon consumes about 800x more than the average American family. That's his drain on the American economy. The remainder of his wealth--fictitious or otherwise--is used to build products for other consumers.

So yes, Mr. Musk is a rich man, though he doesn't look at all like the rich guy in the cartoon. He doesn't behave like the cartoon guy either. The point is that Comrade Bonnie has absolutely no clue how American capitalism actually works.

Further Reading:

• Cosmetics, Cuba & Mary-Alice Waters
• "Primacy of the Working Class"
• Working on the Railroad

The SWP (and this blog) Goes AWOL

 

Intramuros, Manila, Philippines
(Source)

OK. I give up. On June 28th (my last post on this blog) I wrote--in entirety--as follows:

The Militant (published by the Socialist Workers Party) printed a brief summary of the annual Oberlin Conference held June 12th--14th. Billed as an "International Conference," the agenda reads more like a convention, including a "political report" presented by Jack Barnes.

I assume a longer account of the proceedings is forthcoming--I certainly hope so since the banner looks more interesting than usual. I will get to it, but I'm going to be in the Philippines for the next two weeks so there may be a delay. 

I did go to the Philippines (rather idealized stock photo above). I got back from the Philippines. I had a whole slew of medical appointments (that in the end determined that my cancer is now in remission! Hope it stays that way). I've endured treatments for non-cancer ailments that will accompany me on my slow march toward oblivion. I've read every copy of The Militant since, along with checking Left Voice almost daily, along with visits to other blogs on my beat. 

Jack Barnes at the podium

For all that, no "longer account of the proceedings" has come forth. It appears that Terry Evans and Steve Clark--even with indispensable aid from the ever-reliable John Studer--can manage in over two months to write a couple thousand words describing their "international conference." I'm tired of waiting.

They're either a bunch of lazy, incompetent bums, or something else is going on, or some combination of the above. Lazy and/or incompetent could arise from the advanced age of said authors. Comrade Clark could easily be incapacitated--he hasn't looked healthy in recent photos. I don't know how old Comrades Evans and Studer are, but they're surely both over 70. If I'm gonna blame health on my failure to produce a blog post, then surely the same problems must afflict those who are even older.

More consequential would be Comrade Barnes' decrepitude. Here Kremlinology skills come in handy--unfortunately mine don't rise to the challenge. But if Jack is sick, then the future of the whole enterprise is called into question. Jack has been "national secretary" (don't you just love the Stalinist terminology!) since 1972, or 53 years. I think that's at least 43 years too long.

"The graveyards are full of indispensable men" is what some French politician allegedly said, suggesting that nobody is indispensable. But for a small Party with a leadership so entrenched and dependent on the wisdom of one guy, then perhaps said Party can't survive the illness of its leader?

Alternative explanations are possible. Perhaps the Party never intended to write anything more. Why? On the one hand they teasingly claim that "2025 is not 2024!", yet on the other their brief recap is boringly predictable. They make three points:

1. Capitalist rulers are building up their militaries.
2. "Jew hatred and deepening imperialist rivalries."
3. “Why the Fight for Women’s Emancipation Is Inseparable from the Class Struggle.”

It's what they don't mention that is noteworthy. Last year the talk of the town was the latest book, entitled The low point of labor resistance is behind us (my review here). It appears that the "low point" is making a comeback. The book is not mentioned at all in the short article.

The second unmentionable was the expression "women's emancipation," which did not occur in last year's report. Yes, they did mention women, but an explicit connection with the so-called "class struggle" was not made. The Party's position on women's issues has changed over the past few years, and it remains very unclear (see, eg, here and here). Perhaps some clarity is forthcoming?

Regards capitalists and their militaries, the brief account is ever so slightly more specific than last year, writing that "[c]apitalist rulers in the U.S. and elsewhere are building up their militaries and looking for allies as they fight to defend and expand their economic and political reach, pushing inexorably toward World War III." So what else is new? Capitalist and non-capitalist countries are always rebuilding their militaries. The Militant's observation is a truism, and does not auger World War III.

The current issue of The Militant sheds rather little light on the matter, except that the paper is declaring yet another week-long holiday next week, presumably to let our comrades recover from their laziness/incompetence and get their heads in gear long enough to produce an article. Or perhaps Comrade Jack is writing a new book!? Who knows.

Otherwise the issue is just boilerplate all over again:

• The lead headline is about the 3-day long Air Canada strike. Here today and gone tomorrow.
• The second headline is the evergreen ‘As crisis of capitalism grows, workers need to take power’. This is the hopelessly unrealistic demand that The Militant has put forth since its founding in 1928--in almost every issue.
• The "Book of the Month" is a piece from the long forgotten leader of the Burkina Faso "revolution" (1983 - 1987) commemorating Che Guevara. Che--a murderous psychopath--had the good sense to get himself killed while he was still handsome enough to decorate dorm rooms. Both revolutions (Burkina Faso's and Cuba's) are/were miserable failures, with the Cubans now mostly living without electricity.
• They still support open borders, championing a mass demonstration back in 2006.

They continue to get some things right. They understand that Hamas wants to kill all the Jews, in an article entitled Support Israel’s fight to stop a new Holocaust! Hamas must be defeated. Far from being "pro-Palestinian," Hamas is just pro-murder.

There's nothing new here. If 2025 really is different from 2024, then The Militant produces no evidence.

Further Reading:

• The Fading Fumes of Trotskyism
• Cosmetics, Cuba & Mary-Alice Waters
• Oberlin, 2024

Oberlin Summary, 2025

 

(Militant/Hilda Cuzco)

The Militant (published by the Socialist Workers Party) printed a brief summary of the annual Oberlin Conference held June 12th--14th. Billed as an "International Conference," the agenda reads more like a convention, including a "political report" presented by Jack Barnes, pictured above.

I assume a longer account of the proceedings is forthcoming--I certainly hope so since the banner looks more interesting than usual. I will get to it, but I'm going to be in the Philippines for the next two weeks so there may be a delay.

Further Reading:

• Oberlin, 2024
• Socialism, 2024
• The Professors' Congress: The International Situation

Iran & Hamas

Pro Hamas demonstration in Berlin
(Source)

Two Left Voice posts about the recently concluded Iran War:

Author Juan Chingo writes a reasonable summary of the US/Iran/Israel conflict as of about 24 hours ago. Of course it is already out of date. The piece is entitled Trump’s Attack on Iran Resonates Beyond the Middle East.

While generally fair-minded, his post has an antisemitic, pro-Islamist slant. Not least, he insists on the Islamist framing of the Gaza war as "genocide"--a lie that reveals his true sympathies.

Mr. Chingo's lede paragraph (links in original):

Donald Trump has taken the riskiest and most potentially devastating step of his second term: a full-scale air strike against Iran’s major nuclear facilities, described by his advisors as “limited and contained.” The White House is seeking to sell the operation as a surgical strike aimed at neutralizing a growing threat, not launching an all-out war in the Middle East.

The attack — which hit the Fordow, Natanz, and Isfahan sites — constitutes a high-stakes gamble on Trump’s part.

He's right about the risk! The TACO (Trump Always Chickens Out) moniker never fit the man--in both business and politics he was never afraid of risks. Usually he wins; sometimes he loses.

As has become apparent over the past 24 hours, Trump has likely won the gamble with his Iran bombing. As Mr. Chingo puts it,

Tehran is perhaps most likely to go a third way: a calibrated, symbolic but noisy retaliation that allows it to save face without crossing Washington’s red lines.

The other two possibilities Mr. Chingo lists are a literal surrender, or a reprisal intended to draw the US into an all-out war. As Mr. Chingo predicted, the purely performative "attack" on a US base in Qatar was, in fact, this third way. So all the panicking about the US being drawn into another endless conflict as happened in Iraq and Afghanistan seems moot.

A prolonged war is not very likely, no matter what happens. There is no chance the US will launch a ground invasion of Iran, and for one very good reason--we'd lose! Iran, a country with 90 million people, sits on a high plateau surrounded by mountains. Any invasion will require hundreds of thousands of troops and be fought on terrain that heavily favors the defenders. Unlike Iraq, Iran is a coherent polity that has existed for centuries, and unlike Afghanistan, it has a strong central government. In short, Iran could and would put up a fight.

It's with Mr. Chingo's further analysis that some problems emerge. He writes

It’s further proof that Tel Aviv is no longer acting simply as an ally of Washington, but as an actor seeking to manipulate its protector. This represents a dangerous reversal of the traditional division of roles between the imperialist center and its client states, with unpredictable consequences in the various global geopolitical scenarios, where the United States intended to delegate its former role as global policeman.

This is correct--Israel is not (and never was) a mere puppet of the US. Disagreements began in 1956 with the Suez Crisis when Israel, allied with France & the UK, invaded Egypt upon Nasser's nationalization of the Suez Canal. President Eisenhower strongly objected, and eventually forced the invaders to withdraw. There have been other incidents since, eg here.

Mr. Chingo's weasel word is "imperialist," perhaps the most meaningless word in the English language. "Imperialist" suggests that there is some spiritual authority above both the US and Israeli governments that mysteriously guides the policies of the two nations. Such a mythical enterprise does not exist. For a guide to policy it's best to take Trump and Netanyahu at their words.

For example, Trump clearly is not interested in regime change: "I don’t want it. I’d like to see everything calm down as quickly as possible... Regime change takes chaos, and ideally, we don’t want to see so much chaos, so we’ll see how it does.” Conversely, Netanyahu was all-in on assassinating Ayatollah Khamenei: "It's not going to escalate the conflict, it's going to end the conflict."

This represents a fundamental disagreement between the two allies--and not even the all-powerful "imperialists" can remove it. The security interests of the US and Israel diverge on this point. By strength of arms, the US won the argument.

Mr. Chingo says something funny.

The bombing of Iran not only marks a turning point for Trump’s presidency, but could redefine the global security architecture for decades to come. The message it leaves is brutal in its clarity: deterrence is no longer based on treaties or negotiations, but on the ability to strike first and strike hard.

Deterrence was never based on treaties or negotiations. Those peaceful processes were never more than the velvet glove covering the fist. At the end of the day, global politics is about force--it has always been thus and always will be so. I'm surprised that Mr. Chingo--a so-called materialist--doesn't see this.

The second article that offends, by Left Voice author Nathaniel Flakin, is entitled Berlin’s Biggest-Ever March for Palestine. He claims that "50,000 people protested against the genocide in Gaza."

First, he claims that a "genocide" is happening in Gaza, which is obviously false--and reflects a hidden agenda.

Second, he conflates "pro-Palestinian" with "pro-Hamas." I have no problem with somebody being pro-Palestinian--Palestinians are human beings too, and deserve all the human rights the rest of us have. But Hamas is definitely not pro-Palestinian! What have they ever done that's benefitted the Palestinians? Indeed, Hamas needlessly started a war that has reduced their compatriots to abject poverty.

No. Hamas isn't "pro-Palestinian." Instead it's pro-Iranian. The Ayatollahs have been chanting Death to Israel for over 50 years now--and they mean it quite literally. It's that agenda, the whole Death to Israel thing, that Hamas has signed up for. It's not at all about the Palestinians--it's about exterminating all the Jews. That's all it's about. Free Palestine means nothing less than a Judenrein Palestine.

It is surely obscene that a demonstration should be held in Berlin demanding a final solution to the Jewish question. Have the Germans learned nothing? Though I take some comfort in hoping that there weren't too many Germans in the crowd. Instead it was likely populated by recent immigrants from the Middle East who have brought their age-old hatreds with them to Germany.

Germany has laws (which I oppose on free speech grounds) that prohibit dissemination of Nazi propaganda. Yet for some reason the Germans are now tolerating a fascist sect that openly advocates for the extermination of all Jews.

Though I guess we can be thankful for one thing. It's Hamas' attack on October 7th that set in motion the chain of events that led to the collapse of Iran as a regional power. Hamas' sugar daddy isn't gonna be helping them anymore--and perhaps the war in Gaza will end sooner than anyone thinks.

Further Reading:

• Sam Karlin Makes a Mess of the Middle East
• Left Voice and the Intifada
• Nazis

Left Voice Antisemites Speak Out

 

(Source: Hunger Strike for Palestine Launched at CUNY)

Professor James Dennis Hoff, on the English faculty at CUNY and a prominent contributor to Left Voice, champions the slogan Free Palestine. Hamas, the murderous death cult responsible for the current war in Gaza, also proclaims Free Palestine. Elias Rodriguez--the person arrested for murdering a recently engaged, young Israeli couple while attending an event in DC--outdid them both, yelling Free Free Palestine upon completing the deed.

Free Palestine is a very thinly disguised exhortation to kill all the Jews living in Israel. Another of Hamas' favorite slogans is Globalize the Intifada, which can only be read as demanding the extermination of all Jews worldwide. Mr. Rodriguez took the slogans literally and got a head start on said extermination--he murdered two Jews in cold blood.

Professor Hoff obviously agrees with both Hamas and Mr. Rodriguez--the only good Jew is a dead Jew. In his article entitled Don’t Blame the Palestine Movement or the Left for the Jewish Museum Shooting, he justifies Mr. Rodriguez's act in two ways:

Professor Hoff calls this "genocide"
(https://www.anera.org/how-big-is-gaza/)

First, he claims that because "more than 60,000 people were murdered by Israel in Gaza," Mr. Rodriguez had some cause for exacting revenge. The only people murdered in the Gaza war were the 1200 Israelis slaughtered during the surprise attack on October 7th. All other victims are war casualties--the number of which Hamas certainly exaggerates. Israel is not trying to kill civilians, but it is working hard (and successfully) to wipe out Hamas.

War is terrible and all deaths are tragic. But there is a world of difference between war casualties and gratuitous murder. There is also a big difference between war casualties and genocide. There is no genocide taking place in Gaza--Professor Hoff and his comrades are just lying about that.

Second, he claims any sympathy for the DC victims is just hypocrisy, exaggerated by media outlets such as the New York Times. The goal of the media is "to actively propagate the lie that the movement for Palestine is a violent and antisemitic threat to domestic peace."

Really!? Is Professor Hoff claiming that Hamas is nonviolent, and that Oct. 7th was just a peaceful walk in the park? He apparently also believes that purposely killing Jews isn't antisemitic! His justification is silly (links omitted).

The New York Times, for instance, has repeatedly stated, without evidence, that the shooting was an act of antisemitism, despite the fact that both of the victims were employed by the Israeli state, and that reports suggest Rodriguez chose his targets deliberately. Furthermore, as his manifesto makes plain, his actions were clearly driven by his outrage at the ongoing genocide in Gaza and had nothing to do with hatred of any ethnic or racial group. Such knee-jerk conflations of anti-zionism and antisemitism have by now become standard practice for most of the U.S. media.

Cruelly murdering two Jews only because they're Israeli seems obviously antisemitic--what other evidence do you need? Mr. Hoff says the murderer wasn't really killing Jews, but rather only "Zionists." Among Israelis this is a distinction without a difference. For Hamas (and for anybody else who uses Hamas slogans) there is no daylight between antisemitism and anti-Zionism. Does our professor really believe that Zionists in the United States should just be gunned down for no other reason? Apparently Yes, he does.

Because the murderer is connected to the communist Party for Socialism and Liberation grouplet, his act is seen as a black mark against all socialists. Professor Hoff complains

Such obvious red-baiting clearly has nothing to do with protecting Jewish people or stopping real antisemitism of the kind promoted by people like Elon Musk and the Far Right. Instead it is designed to encourage more repression and violence against those who support the movement for Palestine and the entire Left.

Except demanding the extermination of all Jews in Palestine (and worldwide) as Hamas and its followers do--is definitionally antisemitic! I don't know what comments Elon Musk has made that cause the professor to think he's an antisemite, but unlike Hamas and Professor Hoff, Mr. Musk has never, ever called for the murder of all Jews (whether or not they're Zionists).

Professor Hoff is a raving antisemite, and American antisemitism is today a disease of the Left-- including many in the Democratic Party. The professor has a right to free speech, despite the fact that what he says is vile. But nobody who advocates for and defends the slaughter of Jews should be employed as a professor at a public university.

While Professor Hoff's piece reveals the deeply illiberal and murderous intentions of Left Voice, the other article we consider today better belongs as an SNL skit. These antisemites (depicted above) are nothing if not a self-parody.

The lede paragraph reporting on their hijinks reads,

As the Israeli genocide of Gaza intensifies and a famine is declared, a group of eight faculty, students, and staff from across the City University of New York (CUNY) have launched an indefinite hunger strike outside the Graduate Center in Manhattan. They will be at this location from 12 to 6 pm every day and are demanding that, “Chancellor Félix Matos Rodríguez and the CUNY Board of Trustees immediately divest from the zionist state and from all weapons and technology manufacturers equipping the israeli-US genocide in Palestine.” The hunger strikers are launching a fundraiser to support families in Gaza and hosting political education, art, and mutual aid events for the local community in New York.

I'm not sure what the point of a hunger strike is. Are they trying to prove how stupid they are? Do they want us to feel sorry for them? Is it an act of virtue-signaling directed at fellow antisemites? I suspect the latter--you and me are not part of their intended audience.

Though one has to wonder how serious this is. They're in public from noon to 6pm--and for all I know afterwards they go to McDonalds for a good dinner.

Their demands are as kooky as the project itself. They want 1) CUNY to divest from Israel, and 2) to divest from all "weapons and technology manufacturers" equipping the "genocide." These are impossible.

Israel is fully integrated into the global economy, and "divesting" from Israel means sticking all your money under a mattress. This won't happen. Similarly divesting from specific industries is equally impossible--Israel produces much of the software that is built into Silicon Valley technology.

Our antisemitic comrades are all pro-poverty. Their best solution for Palestinians between the River & the Sea is to completely destroy the Israeli economy, driving all residents of whatever nationality into dire poverty. It's worse than absurd. These people are just a joke.

Further Reading:

• Professor Hoff & Harvard
• Iranian-American Demands Death to Israel
• Whiners & Complainers

Marxist Economics

 

Source

Michael Roberts, a formidable Marxist economist, is interviewed by Left Voice's Jason Koslowski in a post entitled Is a Major Slump on the Way? He is asked some basic questions about the tenets of Marxist economics, which makes for a useful read.

The first question asks about the labor theory of value, and why it is important today. Mr. Roberts responds:

Mainstream theories deny that the value/price of commodities is due to human labour.  Instead, some argue that the value or price of a commodity depends on the individual demand for it, its degree of utility. You might pay $1 for an ice cream but somebody else might pay $2, depending on the ‘marginal utility’ of an ice cream to each person. So the price is dependent on the desire of each individual, averaged in some way.  

This is nonsense; first, because how can you add up each individual’s desire for an ice cream to reach its average value?  Second, the question that is not answered is: why does an ice cream cost only $1-2 while a motor vehicle is priced at $30,000?  What decides that is the cost of producing each in terms of the labour time involved, not the individual demand for cars over ice creams.

You can count me among the "mainstream economists" here, who believe that it's consumers who assign values to products. A consumer will spend $30,000 on a car only if a car is worth that much money to her--and preferable to spending the same money on a fancy vacation or for the down payment on a house. Her calculation of value has nothing to do with what the workers think their time is worth.

Mr. Roberts asks how the capitalist can determine that "average value" for an ice cream cone? He can't, of course, but what he can do is find the revenue maximizing price. If the price is higher than that, then too few people will buy ice cream. If the price is lower, then he's just leaving money sitting on the table. There is a price--known as the market price--that maximizes revenue. In theory that happens to be where the red and green curves in the above diagram intersect. Prices convey information about how much consumers want a given product. It is consumers who set prices--not the capitalist or the workers.

Though Mr. Roberts isn't entirely wrong--he asks why a car can't be sold of one or two dollars, like an ice cream cone. This is, of course, because the cost of production--including labor--is much higher to produce a car than it is to produce an ice cream cone. So the price of a car must be higher than the cost of production, including labor. If consumers aren't willing to pay at least that much, then no cars will be produced. Neither capitalists nor workers will be willing to manufacture cars that can only fetch a couple bucks in the marketplace. Or, put another way, the price has to clear the market.

Of course some consumers are willing to pay much more than the market price. Only cheap cars will sell for $30K--these days one can easily find cars that are priced well over $100K! It seems that enough people are willing to spend that kind of money on a car. The production costs to make expensive cars are not that much higher than for the cheap, commodity cars, and so the luxury brands are very profitable for the capitalist. Not because the workers are exploited, but only because some consumers value brand, fashion, fancy electronics and leather seats more than most. In other words, automakers discriminate and they find customers who are willing to pay well above the market price for their cars.

It's the same with airline tickets. Basic economy tickets are a commodity product and are sold as cheaply as the cost of production allows. I use the word commodity here in the narrow sense, meaning products that compete primarily on price. But business class and first class seats sell for a lot more, and substantially add to the airline's profit margin. Unlike what Mr. Roberts implicitly claims, branded and/or luxury products are not commodities and are sold at (often substantially) higher prices. This is only because consumers are willing to pay for them, even if the additional labor cost is negligible.

Quoting again from Mr. Roberts:

Value in things and services produced as commodities for sale by capitalists has a dual basis: 1) it must be useful to somebody so that it will be bought, i.e. it has a “use-value”; but 2) it must be sold for money, i.e. it has exchange value. The great discovery by Marx was to show that the value or wages paid to workers for their labour time is less than the value of the goods or services sold by the capitalist.  The worker works eight hours in a day but gets paid the equivalent of just four hours labour time.  The capitalist appropriates the remaining four hours on the sale of the product. This is “surplus value” free to the capitalist.

What he calls "use-value" is, in fact, the value that the consumer puts on the product. Some consumers are willing to pay more and others less. Capitalists try to get consumers to pay more by upselling them to, say, business class. Consumers try to pay less by shopping around for sales and/or discounts. At the end of the day, the so-called "exchange value," aka price, is the result of bargaining between the consumer and the capitalist. This negotiation has nothing to do with the cost of labor.

Mr. Roberts posits yet a third value--determined by neither what the consumer wants nor by what the negotiated price eventually is. It is instead a spiritual quantity that Mr. Roberts calls "surplus value." I call it spiritual because there is no way this quantity can be measured--Mr. Roberts' offers the imaginary approximation that it accounts for 50% of the "exchange value" price. It is this spiritual, "surplus value" that is supposedly being stolen from the worker and pocketed by the capitalist as profit.

Wages are also the result of market competition. The capitalist needs to pay enough to convince the employee to come to work--and also not to work for another firm. The worker wants not only more money, but also benefits and leisure time. None of this has anything to do with what consumers are willing to pay.

Finally, Mr. Roberts completely misunderstands the role of "profit." There are two ways to measure profit: one as a fraction of all operating expenses, ie, operating profit. This is the measure that Marxists use (though they have a very weird and completely impractical way of estimating it). They posit a "law of economics" that global operating profits are declining. There is no empirical way to test this result.

While it is true that the operating profit has to be positive in order for there to be any profit of any kind, it doesn't have to be big. Walmart, for example, sets its operating profit to be 3%--if it's higher they lower prices; if it's lower, they eventually close the store. While low operating profits may be bad for the capitalist, the trend is excellent for consumers, since it means lower prices overall. Thus what Marxists interpret as being bad for the economy is actually good--assuming the trend of declining profits exists at all.

The way capitalists calculate "profit" is completely different: they calculate it as earnings per share, usually expressed in reciprocal form as the price/earnings ratio (PE ratio). Thus the relevant measure doesn't depend on operating profit at all (as long as it's positive), but instead as a percent of the total market capitalization of the company. By this measure there can never be any systematic decline in profits, since if operating profits go down, then share prices will go down in proportion.

The successful capitalist combines various resources--labor, capital, natural resources, expertise--into a company that creates something new that is of greater value to consumers than the constituent parts. Creating value for consumers is known as creating social utility, ie, making us all richer. Modern America is vastly richer than 18th Century Britain because capitalists, by imaginative recombinations of resources have been able to generate huge amounts of social utility.

The Marxists have economics all wrong--but if you want a concise and clear exposition of Marxist economics, then Michael Roberts is a good place to start.

Further Reading:

• Left Voice Demands 5 Things of UAW's Shawn Fain
• Three Militant Articles on the Economy
• Workers' Voice Doesn't Understand Deficits or Taxes

The Fading Fumes of Trotskyism

 

Jack Barnes

Jeff Mackler

Jack Barnes' biography has yet to be written, and I am certainly not the one to write it. I've never met the man apart from being in the audience at a few of his Oberlin presentations. All I know is what I've heard through the grapevine (and from Wikipedia). Along with his life-long companion, Mary-Alice Waters, he attended Carleton College, and in 1960 joined the Fair Play for Cuba Committee. That brought him and Ms. Waters into contact with the Socialist Workers Party (SWP)--in those days an avowedly Trotskyist Party in fraternal solidarity with the Trotskyist Fourth International. In 1972 he became National Secretary (top leader) of the Party, a post he has held ever since. Comrade Mary-Alice followed him on to the Political Committee, a status she continues to hold.

So support for the Cuban "Revolution" is in the core DNA of the Party, even today. Almost every issue of The Militant contains articles about Cuba, this week's being no exception. This is noteworthy because the Party has evolved its opinions on many other topics, eg,

• They no longer refer to themselves as "Trotskyist," and have broken ties with the Fourth International.
• They have distanced themselves from Wokeism, and no longer associate with the petty-bourgeois, identity movements so common elsewhere on the Left.
• They support Israel against Hamas, which they regard (correctly) as a fascist death cult.

Today the Party consists of about 100 comrades (with perhaps 200 sympathizers), down from around 2000 in the early 70s. It's an aging crowd--the median age is likely over 70 by now. They'll survive Jack Barnes (who turns 85 this year), but I doubt they'll make it too much longer than that.

I think the end of the SWP and the end of the Cuban "Revolution" are likely to occur simultaneously. When Cuba is no longer "revolutionary," then the Party's very raison d'etre is gone. Without their allegiance to the Cuban Commies the SWP simply becomes a rather weird group of Trump supporters.

So people have been predicting the imminent demise of the "Revolution" for many decades now--and such predictions have so far come to naught. I think that's because the soothsayers have misunderstood the fate of Cuba: the "Revolution" isn't going out with a bang, but instead with a whimper. Rather than a cataclysmic end to the regime, it will instead just gradually and literally die away and fade into the dustbin of history.

In this, the "Revolution" is like the SWP. The Party won't end by Jack Barnes turning off the lights at the National Office. Instead there will be a gradual aging and shrinking until there is effectively nothing left. The historical analogy is the Socialist Labor Party, a once vital movement that faded into a website that ended when the last keeper of the flame passed away. It's gonna take another 20 years, but this is also how the Socialist Workers Party will end.

And so it is with Cuba. There will likely never be a counter-revolution in Cuba, but instead the country will cease to be a civilized, cohesive society. It's already close to that--most of the island is without electricity for most or all of the day, and transport is today mostly by oxcart and donkey.

The country is in steep demographic decline. You can't trust the Cuban government numbers (echoed by the United Nations)--those are certified fake. The government still counts as residents people who left the island less than two years ago--which obviously inflates the population numbers. According to official numbers, in 2024 the population of the island was 9,748,532. As mentioned, this ignores the large out-migration that began in 2020. According to the Universidad de Navarra in an article by Agustina Rodríguez Granja (emphasis mine)

The Cuban government refuses to give concrete figures on the recent massive outflow of citizens, claiming that until they have been out of the country for two years, they are still considered residents. This forces researchers to collect data from the receiving countries and to draw their own models. The conclusion of Cuban demographer and economist Juan Carlos Albizu-Campos is that in reality only 8.62 million people reside on the island, pointing to an 18% decrease in population between 2022 and 2023. Thus, more than one million people would have left Cuba since 2021, a Issue that is in line with the number of Cubans registered in the United States and, to a lesser extent, in other countries.

She goes on to write,

Based on the number of Cubans who entered the United States and the count that on other occasions this direct migration to the U.S. has represented in the overall Cuban migration, Albizu-Campos extrapolates that the total number of Cubans who left the island between 2021 and 2024 is close to an estimated 1.79 million.

The people who are leaving are typically working age, and disproportionately female of childbearing age. The government is letting them leave likely because they don't want rebellion at home. But eventually the "Revolution" will be reduced to a bunch of old people without electricity, subsisting by growing food on whatever land they can get ahold of.

It's not just the fading fumes of Cuba. It's also the fading fumes of the Socialist Workers Party. 

Speaking of fading fast, I haven't read a biography of Jeff Mackler, either. I also have never met him, but I think his bio might actually be very short--perhaps only one word: pathetic.

Mr. Mackler is the "national secretary" of the nearly defunct Socialist Action organization. That grouplet, which fancies itself as the "vanguard party," likely consists of a couple dozen comrades. It's gotten so small and so devoid of talent that I've taken to referring to Mr. Mackler as Vanguard Man, ie, the very last, living leader of the coming American revolution. 

The last formal edition of their newspaper was published in June, 2022, and since then their webpage has struggled with content. As I predicted back in January, it appears that Mr. Mackler (who is in his 80s) is no longer capable of leadership. So Vanguard Man is fading out, and it's not clear whose gonna lead us into the next revolutionary era.

The most recent post in Socialist Action, dated April 30th, is entitled Socialist Action General Membership Meeting for Comrades and Friends. It reads in full (except for details of Zoom meeting that was held on May 4th),

Comrades and Friends,

Join us this coming Sunday, May 4 at 5 pm PST [7 PM Midwest and 8 pm EST] for our Socialist Action ZOOM general membership meeting.

Reply to David.huseth@tutanota.com, John Pottinger <jpottinger@earthlink.net>, Jeff Mackler <jmackler@lmi.net>

Proposed agenda:

Analysis of Democrat’s “Hands Off” and “50 50 1,” • Defense of Palestine • May May/Immigrant Rights • New SA Members •  Fourth International World Congress Assessment and SA’s termination of fraternal membership. • Other business.

Comradely.

David and John

I don't know David Huseth, but John Pottinger was a comrade of mine in Chicago back in the day. He's a perfectly fine, upstanding gentleman against whom I bear no grudge--but frankly, he is woefully unqualified to assume the role of Vanguard Man. At very least he lacks the editorial talent. Note that prior to this April 30th announcement, the last post to their webpage was on March 20th.

No word yet on the outcome of the general membership meeting. But honestly, along with Mr. Mackler, it appears that Socialist Action is passing from this mortal coil. Which is a bit surprising--I expected the SWP to go first. 

There's more, of course. One shouldn't forget Left Voice, a claque of petty bourgeois academics that suffer from an overdose of Wokeism, a hatred of Jews, and of all the ills that beset the modern academy (eg, among other things, the advent of AI). These people aren't serious.

There is the nearly forgotten Socialist Viewpoint, a bi-monthly magazine edited by an aging group of spinsters formerly associated with Nat Weinstein's grouplet. And I can't forget Workers' Voice, which is in part a split-off from Socialist Action, and which now claims to be a vanguard party all its own.

The most significant remnant of Trotskyism is Solidarity, which isn't really Trotskyist anymore (not that anybody else is), but has instead become an addendum to the Democratic Party.

Anyway, I find all of this increasingly meaningless and boring, which is why I'm uninspired to write. There's no point. I won't end this blog--something will come along that inspires--but it's probably gonna be less frequent than it has been.

Further Reading:

• Book Review: The Low Point of Labor Resistance is Behind Us
• American Brezhnevism Today
• Boring Jeff Mackler Runs for President Again