Man is Greedy, Beer is Scarce, and Marxists are Crazy

Throughout my readings of Man, Economy, and State, it is apparent to me that Marxists would reject the notion that actors seek to maximize revenue; or, in Marxist terms, that “man is greedy!”

In my picturing of hypothetical debates with Marxists, it would appear that this rejection is consequent of a fundamental misunderstanding of praxeology, among other definitional issues. As a caveat, it may be possible that, for those Marxists that have a more complete understanding of praxeology, I am fashioning a deliberate straw-man in this post. This being said, it is hard for me to picture a Marxist that wouldn’t refute this claim. In my time at Guelph, I have interacted with several Marxists, and even taken a Marxist class in which the professor advocated for the abolition of the money economy and return to direct exchange, one example among several others that show an absence of any economic understanding. Thus, from my perspective, it doesn’t seem particularly outlandish to characterize Marxists in disputing that actors seek to maximize revenue, as most I have personally experienced had an unfounded dismissal, or a blatant delusion towards anything involved with economics and praxeology, unfortunately paired with a hatred of all things markets, revenue maximization being one such thing.

In regards to actors maximizing revenue, my formulation of their response would be something along the lines of, “you are assuming that man is inherently greedy, and in my Marxist ideal, man would not act in ways that you describe.” The argument, however, that a rational actor would seek for his good a price of 100 ounces rather than 99 ounces relates not to any abstract nature of man, and has nothing to do with greed in the sense that actors are “primarily selfish, greedy, [and] competitive”. Rather, it is based on praxeology, scarcity, and logical deduction from the action axiom. Every actor seeks to maximize his psychic revenue by virtue of the fact of scarcity; man’s time is scarce, as is his means. This fact of scarcity brings about the deduction that man will always economize both his means and his time so that it maximizes utility based on his value scale. If he did not economize these things, this would imply that his means are not scarce, which leads us, as all praxeological things do, back to a core consequence of the action axiom: human action in itself implies scarcity. It can be deduced, then, that man would not act if he lived in what Rothbard described as “paradise”, namely a place where scarcity is non-existent, as a lack of scarcity implies that there are no alternatives, and thus no action may take place.

Therefore, when a Marxist claims that he would reject the notion that actors seek to maximize revenue on the basis of human nature, a praxeologist merely must point out that through deductions from the action axiom, actors MUST maximize their revenue as a requirement of action. If he points to the obvious example that he could “in reality” prefer receiving 100 tonnes of gold to 100,000, as the 100,000 would cause him undue hardship through transportation, caretaking, etc., then the praxeologist may point out that the gold is no longer homogenous; in actuality these things have become different goods, and the law that actors maximize revenue still holds strong. While each marginal unit may physically be identical, the 100,000 tonnes of gold is not equally serviceable to 100 tonnes due to the aforemention issues with transporting/caring for 100,000 tonnes, a distinction that Rothbard explains with much more clarity than I do.

It must be noted that, as praxeologists state positively that man must maximize his revenue, they make no normative claim whatsoever insofar as the ends of the maximization. It may be in exchangeable goods, like money, or nonexchangeable goods, like satisfaction in work itself, but whichever goods they may be, man will maximize his revenue.

So, in summation, it must be said that for Marxists to challenge the notion that actors seek to maximize their revenue, or that “man is greedy”, they must reject the notion of scarcity itself, as scarcity and maximizing revenue are logically tied together through action. Of course, I am sure that some Marxists would reject the notion that scarcity exists, however this is an absurd claim in itself, a myth that will be dispelled in later posts.