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Capitalism is Legalized Robbery

An analysis of capitalism illustrating that not only are there periodic examples of large, conspicuous thefts, but also an everyday, disguised theft of the value created by the working class.
There are occasions in the history of capitalism when robbery by capitalists becomes conspicuous to even the casual observer. Enron came to the deregulated electricity market in California and manipulated the electricity market with clever schemes having names like Death Star, Ricochet and Fat Boy. Enron and other energy companies stole billions of dollars from consumers, and then when the state of California stepped in, they stole billions more from the taxpayers and forced the state to sign long term contracts with energy producers at very high prices. The Federal Energy Regulatory Commission under the Bush administration acted as coconspirators in this episode by stalling on mandating price caps, refunding only a pittance of the amount stolen, and refusing to let the state out of its long term contracts.

Withholding power at critical moments to drive electricity prices sky high, these energy companies caused rolling blackouts, which resulted in numerous accidents and some deaths. In a just world they could be indicted for murder, as well as grand theft, because they must have known what the consequences would be of these blackouts.

In addition, Enron stole the life savings of many of its employees by fraudulent accounting practices and encouraging its employees to buy more stock, when the top executives had already sold out near the peak price and knew a precipitous decline in stock price was coming because of serious financial difficulties.

Slightly more than a decade earlier, there was another massive theft by corporate America called the savings and loan scandal. The amounts stolen here were staggering-on the order of 500 billion dollars. Instead of trying hard to retrieve the money from the thieves, the average American taxpayer was saddled with the bill, roughly five thousand dollars per family.

The corporate media like to pretend that these occurrences are aberrations which happen infrequently and that those responsible are punished adequately. Actually, they occur quite often, and the people responsible usually get only a slap on the wrist because they are respected businessmen, rather than common street criminals.

The history of American capitalism is one continuous series of these scandals and thefts. Capitalists like Rockefeller, Morgan, Mellon, DuPont and others got the name "robber barons" because of their many nefarious schemes to enrich themselves. The Populist movement arose in the late 19th century because farmers were being robbed by the banks and railroads. As an interesting aside, the Wizard of Oz was a symbolic fable written by a populist named Frank Baum. The wicked witches represented the banks and railroads.

However, there is a much more subtle and less noticeable form of theft by the capitalist system. One can comprehend this theft by examining Marx's Labor Theory of Value. The theory is that all wealth comes from labor and that the more labor that goes into a product, the more valuable it is. Profit is that part of the price of a product which rightly belongs to the worker, but is siphoned off by the capitalist due to his ownership of the means of production, also a result of theft.

I think the validity of this theory can best be visualized by thinking back to a primitive time when little of value existed. In order to provide food, clothing, shelter and other basic human needs, energy had to be expended as work to extract things of value from the natural world. The more energy that was expended, the more things of value came into existence. At a certain point in time with increased efficiency a surplus came into existence allowing a leisure class to develop, which lived off the labor of others. This leisure class then created an ideology which justified and legitimized their existence, sometimes using religion as in the divine right of European kings to rule their subjects. Of course, capitalism has also created a whole mythology to justify the existence of its ruling class.

When skilled craftsmen of various kinds developed, one can easily see how something they expended a lot of work to produce would be worth more than one requiring less effort. Then, mass production lines arose with capitalism and one can comprehend that cheaper products would result because with machinery the amount of labor required per item produced is much less. The leisure class that arose previous to capitalism had the land and the capital to build factories and purchase mass production machinery and exploit the labor of others, paying them only a fraction of the value their labor created.

Some people try to poke holes in the labor theory of value by pointing out all the other factors involved in the price of a product like the price of raw materials, utilities like electricity and water, transportation, etc. However, these things are all the result of past labor, so there is no contradiction here.

A good indicator of the validity of a scientific theory is if it can predict a future result. The labor theory of value predicts depressions. Since workers are paid only a fraction of the value they create and profit is taken by the capitalist, then workers should be able to buy back only a fraction of the goods and services they produce. This is indeed true. Capitalism always results in overproduction, inventories increase, workers need to be laid off and a depression occurs.

So capitalism results in glaring examples of robbery like Enron and the savings and loan disaster, but also is a continuous every day robbery of the working person. This is not discussed by the corporate media because the last thing they would want you to know is that capitalist society is based on theft. That might cause a revolution.

homepage: homepage: http://www.theblackflag.org/

Not robbery but fraud, Gary 05.Jan.2004 13:11

Mike stepbystepfarm <a> mtdata.com

You Marxists are just as hoodwinked as the rest.

The capitalists don't own the means of production any more than my cat does. But they have convinced you that they do, you believe them, you believe that you have to organize people to take away their property when in reality all you have to do is get people to stop believing. Ownership isn't a "reality" in the sense that this rock is here, and would still be here, even if every last one of us disbelieved in the existence of this rock. It's a SOCIAL reality and so does "vanish" when universally disbelieved --- just as meaningless if I tried to explain to you your relationship to and responsibilities toward your "relations" within your matrilineal clan <<you are not from a society which recognizes "matricalns">>

Robbery is theft by force. There's no force involved here, the enforcers working for the capitalists are just as convinced of the reality of the "ownership" relationship as the capitalists themselves AND AS YOU ARE.

You say nonsense, you are a "matrialist", this is all real. No it's not. Suppose two persons each tried entering the headquarters of a Fortune 500 company and occupy the CEO's office, each fully convinced that he WAS the CEO. One is a homeless person with mental problems. What happens to him? Obviously he never gets beyond the security guards at the door, and if he did get in, would be noticed by people in the halls, the secretary in his office -- he'd be ejected. But the other person, what determines if HE is ejected or allowed to occupy the chair behind that fancy desk. Why the BELIEFS of the guards at the door, people in the halls, and the secretary in his office. If they believe he is, then he is, otherwise he'd be treated as being just as crazy as the first person.

hey Mike-- 05.Jan.2004 14:53

'stepbystepfarm' IS A FRAUD.

"The capitalists don't own the means of production any more than my cat does."

if the capitalists don't own them,

and your cat doesn't,

WHO DOES?

"No force involved", Mike? 05.Jan.2004 15:41

GRINGO STARS

What do you call the police force and the military forces and the private security forces?

They are all FORCES which protect, with sometimes lethal violence, the ownership of capital - on behalf of the capitalist (ruling) class. Try taking away part of an assembly line someday and you'll see how "no" force is involved.

Reply to Mike 05.Jan.2004 16:16

Gary Sudborough IconoclastGS@aol.com

You say that robbery is the expropriation of wealth by force and you are correct, but there are plenty of examples of capitalists using force to attain greater wealth. What about the forcible eviction of peasants from the Commons in England or their forcible dispossession in other countries so independent laborers could be converted into factory workers? What about wars fought for the capitalists' possession of other countries' natural resources and cheap labor? In a war between two individual capitalists over the Albany and Susquehanna railroad, Jay Gould and Pierpont Morgan sent locomotives toward each other from opposite ends of the tracks and after the resulting crash, their respective goon squads got out and fought over possession of the railroad. Pierpont Morgan won that particular struggle. Then, there are the attempts to break unions by force. There are many examples of goon squads busting striker's heads or even capitalists bribing governors to call out state militias to use force on strikers. In the Ludlow massacre of striking coal miners in Colorado, Rockefeller used his influence to have the state militia called out and they machined gunned men, women and children in a tent colony set up by the strikers. Capitalists can use legal means since the laws are created by men in their back pocket, they can use fraud, but they have never shrunk from the use of force. Most of the recent wars can be attributed to their desire for greater wealth.

Incidentally, the CEOs of large corporations are generally the highly paid managers and not the people who really own most of this country's wealth and increasingly that of the world. You need to look at people like the Morgans, Mellons, Rockefellers, Fords, Harrimans, DuPonts, etc. for the real owners of the capital in this country. In case that you think their ownership is imaginary, I'm sure legal documents exist to prove it,and I would hate to march in and try to take possession of their wealth. I'm confident that some imaginary police would put some imaginary bumps on my head and imprison me in an imaginary jail.