Coverting income to assets and why it matters

March 27, 2008

One of the obstinate labor aristocracy criticisms of MIM on the third cardinal principle is that income is not assets and Marxism is about control of the means of production, so therefore MIM’s analysis of so-called workers is wrong. This sort of argument is prevalent because of the ebb of the communist movement which has reduced the pool of possible leaders to draw from. These critics did not read what MIM actually said and also lack in many ways indicative of general communist problems today.

In the first place, in the real world, income and assets overlap. That is a factual matter and MIM Lite only regrets not stealing proprietary data when it had the chance to prove it in public. People experienced with social data would not really question this point, but our poorly attended communist movement does question it, as if the top 10% by income in the world were not mostly the same 10% holding the most assets.

The problem in our ranks is especially disconcerting because the leading section of imperialism, the finance capitalists know better. For the finance capitalists, income and assets are converted into each other all the time. Plebians can think about putting money in a certificate of deposit in a bank and obtaining an interest rate. If a capitalist puts $1 million in the bank certificate and the interest rate is 5% and inflation is 0%, then the capitalist receives $50,000 income a year for that certificate of deposit.

The finance capitalists have gone a step further, because they get used to forgetting about the initial $1 million and simply evaluating how much income comes in each year and figuring out what it would take to boost that income. So a typical business student learns concepts such as “present value,” while our would-be communists learn how to say, “the workers should have overthrown the Stalinists and instituted free pizza and beer.”

Here is an example from the Wikipedia about what business students might learn.

“Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. Present value calculations are widely used in business and economics to provide a means to compare cash flows at different times on a meaningful ‘like to like’ basis.”

That could be a difficult web page to read. However, if one can guarantee an income now and into the future, say $X payment every month for Y years, that figure can be converted into an asset a finance capitalist would be willing to exchange for right now. That figure is not $X times 12 times Y, but there is some figure such that a finance capitalist would be willing to exchange an asset now in order to obtain the steady income later. In other words, income flows are assets already in the minds of the finance capitalists.

MIM’s philistine critics dogmatically repeated something they read somewhere about how a worker making¬†double what another worker makes might still be exploited, which is true. One worker could earn subsistence wages while another earns less than subsistence. A subsistence worker “eats” his income and would have nothing leftover to provide guaranteed income to anyone else.

Yet in the u.$. case, what we are usually handling is income above and beyond the means of subsistence–luxury goods and means of production. Year after year, the Amerikan petty-bourgeoisie enjoys a living standard above the means of subsistence and thus it is meaningful to covert its income into assets for calculation sake. In the finance capitalist’s world, whether those with income convert their income to assets in an actual market or not may be irrelevant. For proletarian theoretical purposes, we can also deduce that a steady flow of income IMPLIES social access to capital and can be calculated per business school procedures, the likes of which Wikipedia explains.

By looking at the income or cash flow of the Amerikan petty-bourgeoisie historically or into the future, we can, if we have to, calculate its implied assets. We can even do so after we subtract out income that really goes to subsistence. The remainder will be capital–the appropriation of labor from other countries’ labor. Sheer luxury consumption funded by collecting interest on a $1 million certificate of deposit and luxury consumption by the Amerikan population generally are the same thing in terms of the studies suggested by the labor theory of value.

MIM’s critics who simply make up their economic analyses in order to obtain 51% of voters–most likely for the Democratic Party or Labour in England–are bourgeois democrats. They are political analysts with no anchor in Marxist political economy.

Those who make up their economic analyses in order to flatter 90% of a country such as the united $tates are bourgeois populists.

Those who like Marx uphold the labor theory of value look at the cost of subsistence, luxury consumption and matters such as total profits. Marxist scientists will perform the calculations necessary to learn how much exploitation is happening or not happening. Marxism has nothing to do with bourgeois democratic or bourgeois populist political formulas unless capitalism has not fully established itself and the bourgeoisie is playing a progressive role.


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