Archived: Apr 14, 2008

> Editorial

Evading tax, responsibility

Capitalists keep poor impoverished

By Nathan Johnson

$11 trillion, or one-third, of the global GDP is virtually untaxed in tax havens which cater to wealthy corporations and individuals.

“Tax the rich, feed the poor, till there are no rich no more.” Lyrics from Ten Years After song, “I’d Love to Change the World.”

April 15, tax day, is a day of resentment for typical Americans as they file their income taxes. Meanwhile, $11 trillion, or one-third, of the global GDP is virtually untaxed in tax havens which cater to wealthy corporations and individuals.

Half of world trade passes through these tax havens designed to skirt conventional taxation that their clientele were subject to before moving “off-shore.” Corporations that make the move gain an obscene advantage over their competition, inciting market rivals to follow suit, causing a capitalist domino effect. Social Watch states that over the past generation, “The number of recognized tax havens has increased from about 25 to 72.”

Predictably, when corporations and capitalists act in their personal material interest to maximize profit, the world’s poor suffer. Oxfam conservatively estimates an annual $50 billion in lost revenue attributable to tax havens, precisely the amount the World Bank says is needed yearly to cut “extreme world poverty” in half within 13 years.

Western governments are similarly miserly with regard to reducing global poverty. The Third World debt would be eliminated if the wealthiest nations designated just 0.7 percent of their gross national income to foreign aid. Shamefully, Project Censored reports, “The U.S., at just 0.14 percent, is the least generous provider of aid in proportion to national income of any developed country.”

As it stands, “Low-income countries paid $39 billion in debt payments and interest in 2003, while they received only $27 billion in aid,” according to Project Censored. Poor nations that oppose neo-imperialism risk having their aid cancelled, while obedient poor nations will be chained in debt nevertheless. To quote Che Guevara, “It is better to die standing than to live on your knees.”

The labor theory of value, according to which a commodity’s value is determined by the amount of labor it contains, best explains imperialism. There are many elegant proofs of the labor theory of value. For instance, when supply and demand equal each other their magnitudes cancel each other out and the value alone remains. Supply and demand can explain the oscillations around this point, but not the point itself. Besides, it’s intuitive that labor intensive commodities such as houses are more costly than, say, pizzas or T-shirts.

Commodities are sold at equal price even if they do not have equal value, that is, even if they do not contain the same amount of socially-necessary labor. For example, a commodity might sell for $40 on the market when it takes one hour to produce in a developed country and 10 hours in an underdeveloped country. Thus, it’s “fair” for people in the poor country to have to work 10 times more just because they happened to be born in a country with a lower productivity of labor than the developed country.

Far from being lazy, workers in underdeveloped countries work longer and more intensively than the workforces of developed nations out of sheer necessity.

Moreover, the productivity of labor is determined above all by the degree of industrialization and automation attained. No matter how hard laborers in China or Mexico toil, America or Japan will be able to produce the same commodities faster. Accordingly, rich nations drain the value out of poor nations under the guise of “free trade.” This is the basis of neo-imperialism, which has economically enslaved nations despite formal independence from their imperialist masters.

Socialist trade is based on labor time, with incentives provided for inventors who can safely improve labor productivity and/or product quality. Useful inventions are made available to all so society doesn’t waste labor using outdated technology needlessly.

Importantly, once something has been invented it doesn’t have to be reinvented several more times, as under capitalism, since information is shared and not hoarded.

With regard to finding cures, sharing information is the promise and logic of socialized medicine, not to mention putting people before profits.

Currently, corporations and their interest groups oppose foreign aid when it increases competition, which is directly against their material interests. Some foreign aid is “profitable” in creating consumers out of the recipients or in securing a government contract, but enough aid for the poor to stand on their own two feet is “unprofitable.” Similarly, public education in America must be good enough to create a skilled-labor workforce, but not so good that the masses come to learn certain truths about their own government, national history and capitalism.

> Comments

T.S. on Apr 14, 2008 at 11:51 AM:

"For instance, when supply and demand equal each other their magnitudes cancel each other out and the value alone remains."

Some of that value orginates from the capital and not just the labor put into it.

"Thus, it’s “fair” for people in the poor country to have to work 10 times more just because they happened to be born in a country with a lower productivity of labor than the developed country."

Their standard of living will rise as they industrialize and technology improves. As it is right now it's stupid to equalize world wealth. With current development if everyone on the planet were to have the same standard of living as here we'd need to expand to 6 planets. The economy would collapse and we'd all be alot poorer than we are now. That includes our own poor by the way. I'm middle class not rich, but to make this work you'd need to take away my money. I'm sorry but I'm not giving up my plasmascreen.

T.S. on Apr 14, 2008 at 12:04 PM:

With no profit motive technology wouldn't develop nearly as quickly. That's why countries like America, Japan, and Britain develop the most technology and communist ones like the USSR and the PRC stagnate.

Johanan Raatz on Apr 14, 2008 at 04:35 PM:

Nathan;

Though we have ideological differences on capitalism I agree with you about the extreme poverty. I'm a welfare state capitalist so I support a safety net. Capitalists have property rights but property rights come second when people are starving to death.

Now as for the rest of this I'm going to have to say that this is what happens when a society adopts moral relativism. The critical theorists and much of modern Marxism has done this but it has backfired in their faces.

You see Marxism (with a few exceptions) is based on ethical egoism. In much of Marxism the proletariat are selfishly breaking the rules. Now this may not seem so bad considering their position. The only trouble is that (especially with the advent of critical theory) this moral relativism permeates the rest of society and infects the bourgousie as well. The bourgousie then start selfishly breaking the rules also. And then it just makes the situation of the poor even worse.

The end result is that you end up with abominations like the Animal's Farm of China. The irony in this case, is that the Chinese are now being treated unjustly by both the communist and capitalist definitions of fairness despite the fact that what is going on in China is done so under the names of both capitalism and communism. The Communist Party can trade freely but it's people can't so it is unfair in the capitalist sense as well. This is because the capitalists are now breaking the rules as well.

The same rules that allow people to get rich also protect the rights of the poor. If you break them you do so at your own peril.

Nathan Johnson on Apr 15, 2008 at 08:35 AM:

T.S.,

I wonder if you would feel the same way if you were a migrant worker working 12 hour days, while certain billionaires do not work a day in their life.

Jacob Flom on Apr 15, 2008 at 09:47 AM:

T.S. "it's stupid to equalize world wealth. ... I'm sorry but I'm not giving up my plasmascreen."

It's really sickening that you are a college student and still think this way, If you saw a child dying in front of you, you probably wouldn't lift a finger.

Johanan Raatz on Apr 15, 2008 at 10:00 AM:

Nathan;

"T.S.,

I wonder if you would feel the same way if you were a migrant worker working 12 hour days, while certain billionaires do not work a day in their life."

See? This is what I'm talking about. Despite my agreement with him on capitalism he appears to be motivated on a selfish attitude. This is your moral relativism backfiring on you.

Nathan Johnson on Apr 15, 2008 at 11:55 AM:

As Nietzsche wrote, what is done out of love is beyond good and evil. As Che Guevara wrote, the true revolutionary acts out of great feelings of love. Put it together, and now we're beyond morality.

Johanan Raatz on Apr 15, 2008 at 12:57 PM:

"As Nietzsche wrote, what is done out of love is beyond good and evil."

I don't buy that. I think the two are on par. Love in it's pure form is one of the virtues of goodness. Now if you read Nietzsche he despised the "Last man" which looks similar to the individual in the communist idea of utopia. He glorified the "Over man." He was arguably a fascist philosopher. I find it interesting that you would keep reffering to him.

"As Che Guevara wrote, the true revolutionary acts out of great feelings of love."

Che was also known for being openly full of hate. The fact that he was a mass murderer and you are glibly quoting him while at the sametime bashing me for reservedly supporting Pinochet is more than a little hypocritical don't you think?

"Put it together, and now we're beyond morality."