(OPE-L) Re: taxation and public finance

From: OPE-L Administrator (ope-admin@ricardo.ecn.wfu.edu)
Date: Tue May 25 2004 - 14:40:33 EDT

Reply by JB to Paul B's question./In solidarity, Jerry

----- Original Message -----
From: "Jurriaan Bendien" <andromeda246@hetnet.nl>
Sent: Tuesday, May 25, 2004 8:35 AM
Subject: Re: (OPE-L) Re: taxation and public finance

Time does not permit me to track this whole quotology through again,
it's in
there somewhere, maybe I get around to it later if I survive this. I
don't normally like talking about advanced issues in political economy,
because then you get all this nonsense from doctrinaire Marxist dorks
and their fake orthodoxy.

I have already quoted on OPE-L what Marx said about it just before
publishing Capital Volume 1, but, he also raised the topic in many other
discussions e.g. about free trade, in the Grundrisse, in other economic
manuscripts, and in Das Kapital. As Angus Maddison notes, Marx wrote
about 12,000 pages of unpublished manuscript in total and then you could
go many ways with it. Marx said things about taxation also in regard to
Ricardo, and in fact if you go to http://www.marxists.org and type in
'"tax" you will find 385 references and that should be enough for your
creditable scholarly Marxological article on tax in Capital & Class or
something. Or look at http://www.mlwerke.de/me/me09/me09_075.htm or
www.praxisphilosophie.de/hosswert.pdf and so on. For the rest, in modern
scholarship "taxation" is just about porno so it is not possible to have
a meaningful discussion about it beyond pomo waffle.

Basically Marx considered taxation as a derived source of income, the
levying of which is responsive, or reacting, to more basic
socio-economic relations and value-creation. Therefore, the struggle
over taxation itself, does not yet get to the real nature of what the
class conflict is about. But Marx also admits, that tax becomes part of
the cost-structure of social production, and that it can can
independently influence commodity prices, and alter value-magnitudes.

But the Marxist treatment of taxation by the epigones is usually
vulgar and silly because they don't understand Marx's dictum that
"capitalist production is the unity of the production process and
circulation process." And then the Marxist-fundamentalists say oh well
"tax is just surplus-value" and forget about it, but this is obviously
just a static, crude and vulgar economics that has little to do with
reality. The core class content of taxation was sketched by Karl Marx in
his brilliant article "Moralising Criticism and Critical Morality; A
Contribution to German Cultural History Contra Karl Heinzen" (in MECW
Volume 6, p. 312, October 1847). This article, if you read it through,
is in some ways far more important than ""The German Ideology" in
understanding Marx's rapid evolution in those years from democratic
liberalism to a communist/socialist position. I will just quote a few
bits leading up to the essential quote:

"We are therefore faced with two kinds of power, on the one hand the
of property, in other words, of the property-owners, on the other hand
political power, the power of the state. "Power also controls property"
means: property does not control the political power but rather it is
harassed by it, for example by arbitrary taxes, by confiscations, by
privileges, by the disruptive interference of the bureaucracy in
industry and trade and the like. In other words: the bourgeoisie has not
yet taken political shape as a class. The power of the state is not yet
its own power. In countries where the bourgeoisie has already conquered
political power and political rule is none other than the rule, not of
the individual bourgeois over his workers, but of the bourgeois class
over the whole of society, Herr Heinzen's dictum has lost its meaning.
The propertyless of course remain untouched by political rule insofar as
it directly affects property. Whilst, therefore, Herr Heinzen fancied he
was expressing a truth as eternal as it was original, he has only
expressed the fact that the German bourgeoisie must conquer political
power, in other words, he says what Engels says, but unconsciously,
honestly thinking he is saying the opposite. He is only expressing, with
some emotion, a transient relationship between the German bourgeoisie
and the German state power, as an eternal truth, and thereby showing how
to make a "solid core" out of a "movement". (...) The question of
property as it has been raised in "our own day" is quite unrecognisable
even formulated as a question in the form Heinzen gives it: "whether it
is just that one man should possess everything and another man
nothing.... whether the individual should be permitted to possess
anything at all" and similar simplistic questions of conscience and
clichés about justice. The question of property assumes different forms
according to the different levels of development of industry in general
and according to its particular level of development in the different
countries. (...) The question of property, which in "our own day" is a
question of world-historical significance, has thus a meaning only in
modern bourgeois society. The more advanced this society is, in other
words, the further the bourgeoisie has developed economically in a
country and therefore the more state power has assumed a bourgeois
character, the more glaringly does the social question obtrude itself,
in France more glaringly than in Germany, in England more glaringly than
in France, in a constitutional monarchy more glaringly than in an
absolute monarchy, in a republic more glaringly than in a
constitutional monarchy. Thus, for example, the conflicts of the credit
system, speculation, etc., are nowhere more acute than in North America.
Nowhere, either, does social inequality obtrude itself more harshly than
in the eastern states of North America, because nowhere is it less
disguised by political inequality. If pauperism has not yet developed
there as much as in England, this is explained by economic circumstances
which it is not our task to elucidate further here. Meanwhile, pauperism
is making the most gratifying progress. (...) But by "the connection
between politics and social conditions" Herr Heinzen actually
understands only the connection between the rule of the princes in
Germany and the distress and misery in Germany.
The monarchy, like every other form of state, is a direct burden on the
working class on the material side only in the form of taxes. Taxes are
the existence of the state expressed in economic terms. Civil servants
and priests, soldiers and ballet-dancers, schoolmasters and police
constables, Greek museums and Gothic steeples, civil list and services
list - the common seed within which all these fabulous beings slumber in
embryo is taxation."

So there you have it: "Taxes are the existence of the state expressed in
economic terms." and then the issues are the class content of taxation
and the socio-political mandate for taxation. Marxists don't understand
this, and then they try to derive the form of the state from the logic
of capital and so on, but as Ernest Mandel pointed out long ago in his
article on the state-derivation debate, this fake, dogmatic
Hegelianising ignores completely that the bourgeois classes historically
took over an existing state apparatus, and modified it, and that the
struggle over taxation was crucial to the bourgeois bid for state power
in the first place. I have no time to work on these issues now but have
a look at

and then you will see that tax is between a quarter and half of the
annual value-added in developed capitalist societies, yet the Marxist
literature has almost nothing to say about it. I mentioned previously
that the US federal tax take only (this does NOT include US state &
local taxes) is equal to the official GDP value of the Russian
federation. Only a brainless economist would therefore ignore the
importance of taxation for value theory.

My main experience with modern social scientific academia is that few
understand what the questions are, and they all reject theory, and they
are unwilling to systematically study any empirical data, and therefore
little good research gets done anymore, it's just a lazy porno-pomo
mishmash which  from a scholarly point of view is banale crap.

However a Marxist economist who thinks ahead, rather than being
backwardlooking, would concern himself with taxation and intellectually
prepare the radical movement for what is to come.


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