Economic Illiteracy of Trump & Musk

As I’ve opined before, when it comes to History and specifically the History of Political-Economy and Classical Economics, Trump and Musk are both illiterate, and likely most of the cabinet is as well. An ongoing discussion that reveals those facts is the weekly chat between Nima and professors Michael Hudon and Richard Wolff. The discussion transcripts get published with some delay at Hudson’s website and more specifically at this section, although a few are missing. Today’s discussion yet again provides key information of where we were and where we’re going. One example of why Musk is illiterate is provided by his proposal to privatize Amtrak and the US Postal Service because he thinks they’ll be run better—produce a profit—when privatized. What Musk misses completely is the reason they are both Public Utilities in the first place—they subsidize all US business and the general public. They aren’t supposed to make a profit beyond what it takes to recoup operating costs because if they did that profit would be derived from the much higher prices charged for their products, which would drive inflation throughout the entire economy. And we’ve seen what happens to such organizations when they’re privatized—they get run into the ground as whatever assets that can be quickly monetized will be sold and the money generated will be siphoned off into the pockets of management and owners, not given to the public which paid for those assets. That’s one form of Rent Seeking, which is a non-productive action that constitutes roughly 60% of what’s called the GDP—the P stands for Product, which is something tangible that’s produced. Most of what’s added to P are transfer payments—Rents.

It’s hard to avoid some of the previous historical background to today’s crises covered on earlier shows, but the reality is from the POV of political-economy and the Classical School of Economics very little has changed since Adam Smith wrote The Wealth of Nations, although Smith’s words have been grossly distorted for political reasons over the last 140 years or so. But the real key in dealing with today’s Junk Economics is to understand why Marx’s work was so vilified even before the advent of Communism, and that what’s commonly attributed to him wasn’t his work at all—the Labor Theory of Value—which was first formulated by Adam Smith and then David Ricardo. What Marx did was to refine and polish the theory—note that it’s not a hypothesis: it’s a theory meaning it’s factual and can be replicated.

The first 2/3s of the show is certainly worth watching, but the last third from the 42:35 mark finally gets into the theory aspect with Wolff then Hudson pointing to the utterly “bizarre” nature of Team Trump’s words/actions. I’ve already written about the ultimate aim and the philosophical system that IMO is being deployed and acted upon, Libertinism being the latter while I’d rather readers view how the former is dealt with by Hudson. (My definition of Libertinism: Ultrahyper individualism disregarding all social responsibility while wanting everything for the Self to be provided by others/inferiors that makes the adherent easily prone to Pleonexia and Megalomania, almost always practiced by the very wealthy/powerful.)

The basic foundation for any form of political-economy is the determination of who is to benefit from the system being designed. I advocate people-centered development because its aim is to benefit the entire society. Historically, the best way to accomplish that is via a hybrid mixed economic system that combines the best attributes of Socialism and Capitalism and is managed by a meritocratic representative democratic political system. The goal is Harmony within society and in relations with the world. At this moment in Human development, it’s clear that a system of collective defense is required so that no nation threatens another. Once Humanity evolves to the point where it becomes clear that Hegemony is unproductive and threatens Harmony resulting in the rejection of Hegemony, Humanity can finally dispose of nuclear and other weapons of mass destruction. Given the current backwardness in human behavior displayed by certain nations, it may take several centuries to attain Harmony. But as Richard Wolff lectures at the end of the discussion, we won’t get there with societies unversed in the key elements of economic theory that will enable the creation of the required political-economic systems capable of producing Human Harmony. Those elements aren’t difficult to understand and ought to be taught at age 12, if not earlier, and is one of the arguments for systems of education to be centralized and standardized so all members of society receive the same level of education so every person has the opportunity to excel at whatever proves to be their profession.

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