Why did Karl Marx want an unequal income tax and what? Central Bank?!

Martin Luther, Ghandi, and other greats of history, changed the world.

But if you’re going to support “change”, make sure it’s change for the better, and beware of the unintended consequences.

One could say Karl Marx changed the world too, and now we have a central bank and a “progressive” income tax that stunts economic growth. I used to wonder why he would see an advantage for Communist Party plans in a capitalist nation to those two things.

But two plus two equals five. They found a way to wrap it in a nice “alms for the poor” package: “From each according to his ability, to each according to his need” for taking more from each dollar of income from some people than from others, and “maximum employment and stable prices” for a central bank.

When I was a socialist dupe, I wasn’t even thinking about why a socialist movement should call for a central bank. After learning later on after changes in my thinking that ensued among other things from the growing distrust of the whole “dictatorship” part of the “dictatorship of the proletariat” and observing the superficial self-serving hypocrisy of many of the radical movement leaders of the time.

Some are sincere, but like C. S. Lewis pointed out, the most dangerous power grab is the one motivated by “doing good”, because its fruits engender a pompous arrogance toward others who “don’t understand”.

WHY KARL MARX WANTED A “PROGRESSIVE” INCOME TAX
–In capitalist countries

The progressive income tax increases political power over private wealth and moves the issues of wealth and fruits of production into the arena of government power and political discussion. It brings “class warfare” into public discussion, and promotes class envy, and when done with savvy demagoguery, distracts from the fact of property as a natural and civil right to the idea that it all belongs to the government to use for the “common good”, for the use of the collective.

In other words, it’s a Trojan horse, meant to both concentrate control of wealth into the hands of political kingmakers and money changers. It even brings the owners of wealth to centers of government power to beg for relief, and makes it a political issue pitting confiscators concerned about the poor (as if) against people who make too much money. Or have too much. (Never mind if you notice the “confiscators of wealth” never let their own be confiscated.)

So it’s a matter of setting up private wealth as something a strong central government allows you to keep if it serves a “public” purpose, and promotes collectivist thinking. Especially the poor, and middle class, are fooled into thinking confiscation of whatever individuals own is “fair game” for political discussion.

That’s the way it has happened.

WHY KARL MARX WANTED CENTRAL BANKING
–In capitalist countries

This one is not quite the obvious Trojan horse as the “progressive” [sic] income tax, because it provides hints that maybe there’s pieces in the strategy he kept in the dark. As a matter of fact, the Kremlin in the “new” and “capitalist” Russia still has some writings of Karl Marx under lock and key in secure vaults and has not allowed them publication.

Karl Marx knew for a fact when he wrote this in his Communist Manifesto that central banks in capitalist countries would inevitably be run by private banks, or at least bankers with deep ties to private capitalist banks, because who else would understand banking?

Most people understand that their government’s central bank has an official function relating to the economy.

In the States (USA), the central bank is known as the Federal Reserve Bank, surely because even as late as 1913 Americans still had some memory of Abraham Lincoln’s warning against “the money power” and Andrew Jackson’s calling central-banking advocates a “den of thieves and vipers” when he dissolved the then central bank.

In fact, it has to do with control over a nation’s economy and “do good” by way of manipulating the official money supply. But over time, having the money supply chained down by adherence to a gold standard limited how much manipulation they could get away with, and since power corrupts, and people in positions of this or that kind of power, always see their “hammer” of power as way to fix anything in the “nail” of the economy or banking.

In other words, the pressure on all central banks was to drop the pesky habit of giving people gold for their certificates.

So the pressure on central bankers –and politicians, easily lured by easy money– was to “free themselves” from basing currency on value and moving it to fiat money, a simple government declaration that it has value.

But now they could just print money to cover any kind of contingency.

Okay, so central banking concentrates control of the economy through monetary policy into the hands of central planners.

Free market forces are still at work, though, and in fact central banks count on the “free market forces” when they print money or remove it from circulation to manipulate the money supply.

Now comes the endless cycle of tweaking that forever requires a central bank to fix its own errors, and to “fix” the blowback that free market forces inflict upon central planners all the time.

Printing money, especially if a central bank can make it a “loan” to the rest of us, would have been a dream come true for bankers and money changers in the Middle Ages.

But now you have the corruption of power kicking in. The central bank creates this fiat money out of thin air, and it is created as a debt to itself by member banks. Those banks are the next beneficiaries, because they now have more money to work with for loans. This “new money” next gets to the biggest debtors, biggest corporations and government entities who now work with it for their own ends.

More goodies and bennies for government officials, and corporate enterprises, with special positioning for those who are politically connected. There is now more money in more hands to chase after the same production of goods, so suppliers run out of inventory faster, so they start gleefully ratcheting the price upwards. Even if they peg it to a CPI, it’s the same effect.

The money keeps on “trickling down” through the system and the last guy in line is the poor wage earner.

Now THAT is what “voodoo economics” really is. That’s the “trickle down” that hurts the poor.

It’s a simplification of what happens, and other factors are left out of the scenario, but in essence this is what happens when you add it the other considerations.

But what is visible to the “masses”, especially when the media they count on is clueless or compliant, is that the rich are making off with all this money, so blame the rich.

Well, in fact, the central banking institutions are indeed run by the rich, but somehow until Ron Paul’s presidential campaigns, they have escaped scrutiny by the body politic.

It is now inescapable though. There is a lot of big money and bigger power at stake, lots and lots of it, so it is difficult to predict what calamities might ensue if their gravy train is threatened.

But back to Karl Marx. All this concentration of wealth at the center, with the biggest and most powerful private bankers wedded to the political class in the person of the Central Bank. Power corrupts, and as Thomas Jefferson warned the tendency of all governments is just grow and never shrink.

Central banking works to concentrate power over the private economy in the hands of central planners. This tends to impoverish the nation as described above and devalue the currency but eventually when people lose confidence in their shrinking currency –with its value being robbed by stealth without even leaving their pockets– they become fodder for radicalization and demands to nationalize the wealth.

But on the darker side, we see that central banking also is a game that favored the richest capitalist bankers -at least some of them– in one point of Karl Marx’s Communist Party platform.

What’s up with that?

More on that later..

11 Responses to “Why did Karl Marx want an unequal income tax and what? Central Bank?!”

  1. Jamie Says:

    An excellent analysis of what is going on in America right now. Thank you for restoring my faith that SOMEONE in this country has retained their sanity and know what is going on.

  2. elijah1757 Says:

    The rich get richer and the poor get poorer. And then there comes the time when the turnip — providing no blood — is cooked. I wonder is that’s where the saying came from? “We’re cooked!”
    Great content trutherator.

  3. Todd Topolski Says:

    Let me add it is much more than even you have correctly surmised. Notice the tax is specific to Wages, not other forms of obtaining wealth. As you noted, they dont confiscate from themselves.

    The purpose of the graduated tax system is primarily to ensure NO one moves up in class. Since the vast majority of income is earned as a wage the target wages for tax.

    Plus they always take enough and more to ensure the wage earner cant become rich.

    The communists must have a poor class to enslave and use as an excuse for all of their actions And the communists need a middle class to steal the money and power from.

    Regardless of the ridiculous claims of the left wing marxists, the vast majority of wealth is among the middle class. The rich are few and they know how to do things like leave a country and not be pillaged. The middle class has just enough money to steal but not enough to defend themselves from the tyranny of the left.

    The Graduated tax system is designed specifically to ensure a perpetual class in misery and a perpetual class with just enough to steal from.

    The goal, of course money is needed to impose communism. James Madison was very specific in declaring a constitutional protection long since removed by democrats was to deny the Feds direct taxation, without money you cant have a tyranny. Karl Marx wrote very specifically into his insane plan, a graduated tax designed for the purpose of getting all the money possible directly from the people. This is of course one plank of the 5 the democrats have successfully imposed.

    The author is of course correct also, the graduated tax system has multiple purposes as he described. I just wanted to add this one specificlly because without taking the money in this exact way, socialism cant be imposed.

    Because if everyone started moving up and becoming well off and happy, there is no place for communism. Misery must exist for socialism to be imposed and the Progressive tax system is designed to make that misery happen and line the pockets of Elites as well.

  4. trutherator Says:

    Yes Todd, “Plus they always take enough and more to ensure the wage earner cant become rich.”.

    And if a poor man or wage earner manages to save enough to invest and grow a small Mom & Pop business, they have put a paper ceiling in place at 50 employees as a major hurdle for small-scale entrepeneurs. At 50, thousands of regulations kick in.

    The mass of regulations have the purpose of centralizing power. The principle of “economies of scale” and “law of diminishing returns” means that for most technologies, you get less cost per unit of manufacture when you increase volume of production, but there is an optimal point after which that return begins to decline and finally even turn negative.

    So the truth is there is no such thing as “too big to fail”. The truth is that government regulations and the complicated tax laws with its built-in inequalities and subsidies and selective breaks, these all favor the biggest-sized enterprises that can afford the biggest army of lobbyists and the biggest payoffs.

  5. Harley Says:

    Great eye opening article. Thanks for the follow on The Harley Factor. I’m following you as well and look forward to reading more.

  6. ian Says:

    Pity people don’t read das capital instead of the trutherator you might learn something.

  7. trutherator Says:

    Ludwig von Mises laid waste to Marxist economics in his books. You can find them on-line (without charge) at http://www.mises.org.

    The Federal Reserve Act nationalized the business cycles and more than a century of poor-to-rich wealth transfer in the United States in 1913.

    Keynesian economists later accelerated these economic trends and the crippling of the free market in the 1930’s. Keynesian economics is a creeping slow form of Marxism in the sense that they both are based on using the strong guns of central state control to solve the problems of the poor.

    At least that’s their cover story. The topmost-level bankers of the Central Band (the Federal Reserve and its worldwide collaborators) know that their actions put their own cliques in charge by separating the rest of us from our currency. At the same time, they secure their monopoly and plans by making your life a miserable hell if you try to escape their still mostly hidden hegemony.

    The Internet is blowing the whistle on them. We’ll see who catches the future first. Expect the Wicked Empire to strike back.

  8. trutherator Says:

    Hello Juan, Thanks for your comment!

    Capitalists are investors who invest their savings in to capital goods that they use to produce consumer goods.

    Capitalism is the acquisition and use of capital goods to produce consumer goods.

    Imagine a truly free market, absent coercion by force. This is not what the U. S. has today, and never really had. In its first century through the beginning of the 20th century, it was *mostly* free market. But Alexander Hamilton at the start tried to set up that central bank for his own profit and convinced George Washington to do it.

    The only way a “capitalist” can even have an “evil greedy” profit is by convincing consumers to buy his product. He has to price it low enough to compete against other “capitalists”, but he has to price it high enough to recuperate the costs of the investment in “capital goods”.

    The purchaser of those consumer goods only buys it if he sees an increase in his own value.

    That pricing mechanism is totally lost if any government that rules by force (and ALL of them do rule by coercion, “or else”). Like Obama’s “Buy it or else” rule for Obamacare, or “Don’t buy it or else” like the abusive and (racism-vestige) war on non-violent drug use.

    By this time, unless you’ve gotten a nice taste of Austrian economics, or learned to love personal individual liberty, a couple of objections have come across your mind.

    But note that almost ALL problems that are blamed on capitalism are really the fault of what we call “CRONY Capitalism”. That refers to the practice of some companies getting special privilege through relationships with government and the individuals in government.

    Wikipedia has good descriptions for some things, as here:

    Crony capitalism is an economy in which businesses thrive not as a result of risk taken for them, but rather, as a return on money amassed through a nexus between a business class and the political class. This is done using state power to crush genuine competition in handing out permits, government grants, special tax breaks, or other forms of state intervention[1][2] over resources where the state exercises monopolist control over public goods, for example, mining concessions for primary commodities or contracts for public works. Money is then made not merely by making a profit in the market, but by profiteering by ‘rent seeking’ using this monopoly or oligopoly.”

    Okay here’s a simpler description: in “crony capitalism”, corporations and companies get subsidies, tax breaks, or other advantages in the market from decisions made by individuals in government offices. Regulations are like this: they favor the bigger corporations because the bigger they are, the less percentage of budget it costs them to jump all the hurdles.

    That’s why socialism doesn’t work. It has no way of knowing what people will need or want to buy next year, so they “plan”. The only way they can “plan” is to guess. The result is that demand is half what they thought at the price they have to charge to cover costs, so they have articles left over.

    Or maybe they make too many! There’s only one maker of something so there’s no competition from less favored investors that would make the price go down.

    What a waste! Compare that the phone situation, before and after cell phones. The phone company worked the same way for about a century while it had a monopoly, not that much innovation. That was a GOVERNMENT-enforced monopoly. Long distance subsidized local phone service, but there was little profit in the service especially even for the subsidized poor.

    When a judge ruled that the monopoly company now had to adjust to competition, new long-distance companies jumped in, innovated, and long-distance prices came down.

    A few years after that technology became cheap enough for cellular phone service. New markets opened up for devices and for service, and wide open competition and beat-the-other-guy competition brought the prices so far down that even almost all of the poorest families in the poorest barrios of my wife’s natal company of one of the poorest countries in the hemisphere, Honduras, is able to have a phone, wait a minute, a SMART phone, wait a minute, smart phones for most of the adults!

  9. Founders: Liberalism=Treason | Bible & Constitution News Says:

    […] ONE OF THEIR ENUMERATED, CONSTITUTIONAL DUTIES*; THEN INSTITUTED THE PROGRESSIVE INCOME TAX (WHICH IS MARXIST), AND THE INTERNAL REVENUE SERVICE TO ENFORCE AND COLLECT […]

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