Socialism Does Not Ential Taxation

A recent episode of The Majority Report had a good discussion on "The People's Republic Of Walmart", in which authors Leigh Phillips and Michal Rozworski argue that much of the capitalist economy of the West is centrally planned at present. They argue that the exploitation of global corporations and monoliths like Walmart and Amazon are the best arguments against centrally planned capitalism.

The antidote to the increasing lack of freedom which rampant free market capitalism causes is a form of democratic socialism, where workers who are producing all the value get a democratic say in how their workplace is run. Workers share profits, and profits do not go only to the few. A world without exploitative bosses, a distributed democratic non-centrally planned socialism. A localized worker-based society. Walmart and Amazon could still exist, but they would be owned and operated by their workers. Entrepreneurs would still exist, and they could still earn shares in the profits of the businesses they found,it's just they would not be acting like dictators over the people they employ.

We expect democracy in our public sphere. Why the hell do most people (especially in the USA) not demand full democracy in their private workplaces?

Here is the episode:

The episode also satirised a segment on Fox and Friends where a reality TV personality cites the children's storey "The little Red Hen" as a great teaching story abut the merits of capitalism. Along with this dumbed down commentary, the guest mentioned taxation --- the great enemy of capitalism. Or is it?

I have to make this comment:

It's going to blow conservative minds when they finally realise social democracy does not really need income taxes. Social democrats need to pound the message that government spending on social programmes is always funded by the deficit, not by taxes. Taxes are really FOR CAPITALISM, because taxation makes the dollar valuable. But little do they know it. Most conservatives think they have it all figured out, but (Dunning-Kruger) they are pretty stupid people I find, if you press their intellect gently enough.

Point 1. The Little Red Hen teaches about the merit so hard work and thrift. but it does not tell children why currency money is valuable. Money (currency) has value ONLY because you are forced to pay taxes with it. You cannot pay your taxes with sweat, pixie dust, diamonds, gold yachts or beer. It has to be paid in dollars, which is why everyone seeks dollars.

Point 2. Taxes have never been used to pay for government social programmes,. If they were, then there would be no Internet, no Interstate highways, no public libraries, no military, no schools, no universities, no public hospitals, and no government. Almost 99% of government spending is done by deficit spending.

How is this possible? Won't government quickly run out of money to pay interest on the deficit?

No. The deficit is not a debt. An entity that can print it's own money, the single sovereign issuer of the currency, can always pay it's debts. Furthermore, money flows like a conserved quantity. One sectors debt is another sectors surplus. We want the private sector to be in surplus. That means necessarily the government should always run deficits.

This is not even a question of how to spend deficit money. It is simply the logic of monetary flow. If you do not want households to be in debt, then the government MUST run a deficit. The only two exceptions would be (1) if in international trade your country has a huge surplus, then the government might be in revenue surplus, and households also in surplus. But that does not hide the fact that minus the trade surplus, the government MUST be running a deficit domestically if their private citizens are to be flourishing in surplus, or (2) if there is hyperinflation, which typically only results from a demand-pull effect when government spending is fraudulent (not spending on actual productive capacity).