LFC makes the following comment: “Prof. Wolff has said that one of his aims is to "put the irony into the equations," but where is the irony here? I get the mocking language ("moneybags") and the element of mystification, but mockery and mystification aren't the same as irony. So where is it?”
Once again, I am afraid that by rushing through my ideas too quickly I have neglected to include essential points, so instead of the next episode in this soap opera I will directly address LFC’s question. That will actually set things up for what I wanted to say next.
The central ironic utterance whose true meaning Marx seeks to expose is the phrase “free market....” [emphasis added]
AN ADDENDUM BY WAY OF A RESPONSE
Robert Paul Wolff | Professor Emeritus, University of Massachusetts Amherst
3 comments:
The purpose of capital markets is to allocate capital to its highest and best use (HABU). What professor Wolff and other Marxists miss is that they always start with a business already in operation, and then make the claim that the management makes the decisions and not the shareholders.
But it is the shareholders in their capacity of allocating capital that brings those businesses into existence, and it is for that they get a return. Shareholders who are good at making those capital allocation decisions become richer and make more of those decisions, and those that are not become poorer as a result and make less decisions. Hence, the saying by Buffett:
"The market is a wealth transfer mechanism, it transfers wealth from the less informed to the more informed."
I wonder who professor Wolff thinks should be making those capital allocation decisions? The government in a centrally planned economy? Worker cooperatives?
“The purpose of capital markets is to allocate capital to its highest and best use (HABU).“
That is not the purpose anymore and hasn’t been for decades. It’s more a casino where you play with other people’s money and get paid no matter if you win or lose. Buffet is one of those.
Why the fixation on publicly traded businesses and shareholders?
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