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Happy Labor Theory of Value Day

By Tom Luongo

Gold Goats 'n Guns

September 7, 2023

Y’all know how much I dislike commies.  Labor Day, in particular, is one of my biggest pet peeves.  It’s literally my least favorite holiday, right up there with Presidents’ Day.

By contrast, I’m a huge supporter of Thanksgiving.  We should spend our days of rest being thankful for what we’ve achieved and not feeling entitled to something we didn’t earn.  That’s the essence of Labor Day, a day designed to reinforce the cultural divide between the entrepreneur and the people he employs.

Labor Day is rooted in Karl Marx’s misbegotten Labor Theory of Value, which holds that Labor is the most important part of the production cycle and therefore should get the lion’s share of the profit from sales.

Of course this idea is nonsense because it deprecates the imagination and risk-taking of the entrepreneur to zero while elevating the laborer’s contribution far above its contribution.  At its heart is an unquenchable envy of those who don’t dream, organize and risk anything, to expropriate the rewards of those who do.

It’s nothing more than that.  Those that feel exploited ultimately have to look at the person in the mirror and decide to stop being a victim and change their state of being.

That said, these ideas flourish in an environment where the money is corrupt, ensuring that the entrepreneurs are offered the choice to become rent-seekers and steal unearned wealth from those that toil for them.

The problem today is that we have allowed both the rent-seekers and their proletariat water-carriers to join forces to squeeze out the middle class.  The fundamental problem of today’s leftists is that they cannot see this basic fact; that they have helped create the very economic divide they rail against by treating the local shop owner they work for who can barely make payroll every two weeks with the CEO of Raytheon.

Things have gotten so bad on the wealth inequality meter that we’re finally beginning to see proles understand that the bourgeoisie as victims as well.  This is why you’re seeing lip service given to bromides like buying local, farm-to-table, and fair-trade among the Millennials.

The problem with all of that is that, like it or not, Amazon’s economies of scale, for example, can bring you fair-trade coffee from plantation owners in Colombia cheaper than your local supermarket can.

Starbucks will happily sell you that latte made with almond milk to stick it to the ‘dairy mafia’ or whatever PETA’s talking point is du jour.  But they will conveniently ignore that those almonds likely came from expropriating water from the Colorado River to feed farms in California, at century-old rental fees.

So, fair trade for whom?

None of this virtue signaling helps workers.  None of this empowers small businesses.  It’s just more colonial wealth extraction abroad and ruinous generational wealth destroying taxation at home.

It’s all just feeding the same system because the underlying cause of the wealth transfer, ever-debased money, is never addressed.

The Bitcoin Maxis are just Millennial Gold Bugs with better manscaping.

But, again, I’m encouraged that we’re beginning to get through the haze and see things more clearly than ever in human history the mechanisms by which tyrants manipulate the lower economic strata into perpetual war over an economic pie they purposefully shrunk and took for themselves.

I don’t even blame Marx for seeing things the way he did.  In the time period of his analysis, backed by British aristocratic globalists according to Richard Poe, the switch from an agrarian to an industrial economy was so swift that the surplus of labor was shocking and the transition heart-breaking.

But, remember, as well, that it would have been far worse had there also not been the international gold standard at the same time.  The late 18th through early 20th century was a period of immense wealth generation for the lower and middle classes.

Wealth, particularly in the US, was compounding at a rate the oligarchs of old couldn’t set up toll booths fast enough to extract and slow back down to just above subsistence.

You could almost smell the real source of the envy during this period as gold democratized wealth in a way that had to gall the ‘kings of old.’

These “inevitable” clashes between labor and management that resulted in the Sherman Anti-Trust and Wagner Acts here in the US were premised on the Labor Theory of Value and unprovable economic theories of natural monopolies. The irony is that the only one that actually exists is government itself. And they have led to ‘labor’ becoming just another off-balance sheet line item for the military-industrial-banking complex.

The truth is that technology is always pushing labor’s skills down the depreciation curve, just like everything else. It doesn’t mean we have to be inhumane about this, but the law should be neutral and allow things to work themselves out, because people eventually will respond to proper incentives.

I have more than 20 years of experience in analytic techniques obviated by literally one invention… the ICP-MS atomic emission spectrometer.

And I knew it almost immediately. Once the prices on ICP-MS’s dropped to within the grasp of the mid-tier regional labs, atomic absorption guys like me (not that I couldn’t run an ICP or ICP-MS) would no longer be in demand.  Why?

First it did with one instrument what a lab used to need half a dozen pieces of equipment to do. And it would do it better, faster and more accurately with better limits of detection for nearly every metal in the nastiest solutions.

But the most important reason was that you could train a smart high school graduate to operate the thing and the degree-holding QC officer could just validate the data run.   No need for a guy like me who could do it all unless I wanted to be the QC officer.

It’s why I moved away from home in 2005 and went to work at a startup where all of my skills came to bear, while being applied to something I knew nothing about — electrochemistry and metallurgy. I was adding to my skillset and, I thought, staving off the end of my career as a chemist.

I also hoped that startup would pay bigger dividends but ultimately, it didn’t and I found myself at a crossroads which led me to where I am today.  Had I not gone through the complete reframing of my place in the world – I’m only a victim of my previous choices – I would have never survived that period or be the man I am today, capable of doing the things I currently do.

I could have sank into envy and self-destruction.  And that, sadly, is where a lot of people are today.  It’s dressed up in a lot of cheap rhetoric, some of which is fair, but most of it isn’t.

I keep coming back to the Millennials’ need for authenticity as one of the driver’s of much of today’s politics and economic decisions.  Slowly, as the oldest ones approach middle age, they are seeing the game for what it is and are getting really angry.

That’s good, because many of them are angry at the right people.  While they would never willingly associate themselves with “the right” when you present them with key insights into why they are feeling what they are feeling, it moves them away from the Marx and towards the Mises.

Neither one is a savior here.  As people , we’re clearly not built to overcome the trauma of living in this fallen world and the emotional abuse that it inflicted on all of us. We’re the children of the bottom of the cycle.

But, it is during these climaxes in history that great changes in perspective occur.  That’s what’s happening here. People only make real substantive change when the crisis is in front of them, not over the horizon.

So, we’ll have to suffer through this period and watch as many of us go through the agonizing process of the Kubler-Ross model of grief, while embracing bad ideas at times along the way.

The current political landscape is a mess and as we “celebrate” labor’s contributions to the world, on the eve of the Presidential primary season, note how there is a concentration of major unions all on strike or threatening to, mostly against the wishes of best interests of their membership.

  • UPS narrowly avoided a Teamster’s led strike in July
    The Screen Actors Guild is on strike because they know deep fakes and AI are about to replace actors.
  • The Writer’s Guild is on strike because the suits have been over-paying actors for generations.
  • The UAW is fearing the job loss from EVs that is coming thanks to “Biden” and Davos mandating an end to individual travel.
  • Now, railroad workers in the northeast are threatening to strike over wages while state budgets are collapsing.

The rhetoric coming out of SAG, the Writers’ and the UAW is simple political insanity. These are attacks by organized labor on behalf of Davos to further weaken industries that are already in serious trouble thanks to the return of risk premia to the capital markets.

The auto industry can’t afford one-tenth of what UAW boss Shawn Fain is putting on the table:

“We have a lot of options that we’re looking at but extensions on the contract is not one of them,” Fain continued.

He said, “We’ve been clear” to Ford, General Motors, and Stellantis about “what our priorities are,” such as a 46% wage increase, reinstating traditional pensions, and trimming the workweek down from 40 to 32 hours. 

These are demands which cannot even be considered a ridiculous opening offer. They are far more a political gambit designed to blackmail both auto workers and producers into making a deal which will destroy both of them.

This is an industry that will never recover the sales losses from COVID, nor will it make the switch to EVs that no one really wants to drive. And yet, CAFE regulations from the “Biden” administration pretty much phase out ICEs (and complexity) in car manufacturing in the US in the next ten years.

UAW workers can have all of those things the Fain demands, but then he will control a UAW with 10% of its membership.

And guess what? In the minds of those who still believe in Marx, it will be management’s fault. Because in a Labor Theory of Value world only labor matters.

Management is the enemy because all profit is exploitation. It’s a distraction to shift the blame onto big corporations rather than the government that was in bed with those same corporations the entire time.

Look, management doesn’t hate labor, they hate paying more for it than the value that labor produces.

If you don’t believe me why are all the cool cars still produced outside the US market? The small pickups, the free-breathing diesels, etc. It’s because of CAFE and the immense regulatory burden placed on the entire auto industry here in the US.

So, there will be plenty of complicated internal combustion engines produced by these same companies making auto workers wealthy all over the BRICS+ space in the coming years. Meanwhile, they are using the Labor Theory of Value to tell US auto workers they are worth $50+/hour plus benefits to monitor robots doing the jobs they used to do.

These “labor negotiations” are just another attack vector by rapacious corporatists. And it will be insanity like this that will eventually break their stranglehold on the labor narrative. No one cares that the actors are on strike, or the writers.

The UAW has shaken down the “Big 3” so many times that most cars are produced in Right-to-Work states anyway. And guess what? Those places are all thriving, so much so, that CNBC released their list of the 10 worst states to live in the US.

If this isn’t just another pathetic attempt at gatekeeping and desperation to keep the ‘good people’ from leaving the shitholes of the Northeast and West Coast I don’t know anything about anything anymore.

In short, because people respond to incentives and because they have a memory of a better life they will not leave behind stories of the ‘bad old days’ of capitalism, even the tarnished and bastardized version we still practice for the next generations.

No, the anger and frustration embodied by what I recently called “The Oliver Anthony Gap” will end this nonsense sooner than we think.

This is just part of the cycle of history folks. And like good little Marxists they want you to believe that that cycle is horizontal, that things really don’t get better, just a different kind of worse.

But the reality is that the cycle of human liberty is upwardly sloping.

Marx has been in ascendance for over 150 years.  Interest rates are at historic lows. The idea that we can retrograde society and humanity to go forward is a lie, a lie that enriches them and maintains their power, while convincing us we don’t have any.

But the truth is the Rent-Seekers have no more wealth to extract from the world.  It’s all Death Star or bust for them now.  They will double down on saving the world from capitalism because that’s all they have and to do that they have to elevate everything we do to an ‘extinction-level event.’

But, we all know that’s a manufactured and a product of our own self-loathing, downstream of their abuse. Once you break that cycle, the only path is being #ungovernable.

So, no Truce with the Davos Furies folks.  Give no ground on COVID masks, health passports, Climate Change or ESG.  It’s all just Labor Theory of Value nonsense to separate you from your reason and ultimately your wealth.

This is what really fuels all of my rants.  It was this insight connecting money, time and wealth extraction that set me on this path.  That’s what I celebrate on Labor Day, the opportunity to work at my highest capacity for those who value it.

Reprinted with permission from Gold Goats ‘n Guns.

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