How Are We Doing on May Day?

Some bad news and a little good news, plus a fun story.

By David R. Henderson. 

"Today, May 1, is May Day. It is celebrated by communists in many countries.

So I thought it would be a good idea to take stock and see where we are on the road to the communist ideal. In The Communist Manifesto, Karl Marx and Friedrich Engels laid out 10 interim measures on the way to communism.

I’ll give each of the 10 measures in their exact wording, with my comment and evaluation after each, with a funny story after #2.

They wrote:

The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.

Of course, in the beginning, this cannot be effected except by means of despotic [DRH note: That’s an interesting admission.] inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production. [DRH note: Notice their implicit admission that some of these measures will cause problems that they’ll then use to advocate more government inroads rather than reversals of the measures that caused problems. Ludwig von Mises made this same point, with, of course, a different conclusion about in direction policy makers should proceed.

These measures will, of course, be different in different countries.

Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes.

Although we are not close to abolition of property in land, governments at various levels prevent people from using their land for many peaceful purposes, e.g., housing, often prevent owners from evicting tenants and even squatters, and sometimes use eminent domain to take people’s land forcibly.

2. A heavy progressive or graduated income tax.

At the federal level and in many states such as New York and California, we do have a very heavy progressive, or graduated, tax. As a result, tax rates on income from work range from 0 percent to over 50 percent.

Here’s my fun story. Last year I wrote a piece for Hoover that was critical of some ideas on energy policy advocated by UC Berkeley economist of UC Berkeley Severin Borenstein. He defended government mandates to require higher-income people to pay more for electricity. I titled my article “California Gets a Jolt of Marxism.”

I sent him a link to the article, and he wrote back. Here’s what he said:

Interesting. It leaves me wondering

- whether you think that progressive income taxation is Marxism
- whether you think that all road use should be paid for on a volumetric basis, even if that leads to prices well above social marginal cost
- whether you think that economics just get it wrong when it worries about prices not reflecting social marginal cost
- whether you have a bumper sticker that says "taxation is theft" ;-)

I answered:

Yes, it is applied Marxism and 2 people who understood that were Marx and Engels. That’s the second of the 10 measures they recommend in The Communist Manifesto.

I answered his other points too but reporting them here would take me too far afield.

Borenstein quickly backed down on the Marxism point, writing:

On Marxism, I guess I asked the wrong question. Do you think governments should not use progressive income taxation?  

3. Abolition of all rights of inheritance.

We still have strong rights of inheritance although the federal government does take a big chunk of inheritances that exceed $12.92 million. The tax rate for amounts above that threshold start at 18% and rise to 40%. Individual state governments (not California, for some reason) often tax estates that are well below $12.92 million.

4. Confiscation of the property of all emigrants and rebels.

We seem to have mainly dodged a bullet on this one.

5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.

Although there is still lots of private credit, much of it is in the hands of the state and much of private credit is regulated heavily by the state. And we’re moving more and more in that direction. And, of course, the Federal Reserve is a large state bank.

6. Centralisation of the means of communication and transport in the hands of the State.

Much of communication and much of transportation is decentralized, but much of it is centrally regulated. Think FCC for communication and FAA, TSA, Amtrak, and government roads for transportation.

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of wastelands, and the improvement of the soil generally in accordance with a common plan.

We have avoided most of this.

8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.

Fortunately, there are no industrial armies and there is no conscription, except for juries. Indeed, people often get financially penalized with lower welfare payments and zero unemployment benefits when they do work.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

We have pretty much avoided this.

10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

Marx and Engels would be pretty happy about this one because there are universal government schools for which people pay zero in tuition but heavily in taxes, the size of which has nothing to do with whether one has kids in these government schools. Also, even children who would love to drop out of school at, say, age 15, and work in productive jobs are legally prevented from doing so.

To slightly rephrase a line that former EconLog co-blogger Arnold Kling uses when reporting awful things, “Have a nice May Day.”

An earlier version of this appeared at Econlib on May 1, 2023. As a commenter pointed out on that post, “Given things like Operation Choke Point and Trudeau’s reaction to the trucker protest, I don’t think we’re as far from this as we should be.”"