American politics has drifted into theater, and the reporting of news has followed close behind. What once aimed at informing the public now often entertains it. In that environment, celebrity-seeking politicians\u2019 demagogue for attention, trading reasoned argument for applause lines, while intuition and virtue signaling increasingly substitute for disciplined thought.<\/p>\n\n\n\n
A recent interview between Representative Alexandria Ocasio-Cortez and podcaster Ilana Glazer offers a telling example. In it, Ocasio-Cortez asserted that vast wealth is inherently unearned:<\/p>\n\n\n\n
\u201cThere\u2019s a certain level of wealth and accumulation that is unearned\u2026 You can\u2019t earn a billion dollars.\u201d<\/p>\n\n\n\n
The exchange that followed was less a dialogue than an affirmation loop\u2014each assertion met with enthusiastic agreement, but little scrutiny. What emerged was not an argument, but a performance.<\/p>\n\n\n\n
Yet beneath the rhetoric lies a familiar intellectual lineage. Ocasio-Cortez\u2019s claim closely echoes Karl Marx\u2019s labor theory of value\u2014the idea that the worth of a good or service is determined by the labor required to produce it. This theory, once influential, has long since been rejected across the spectrum of modern economics.<\/p>\n\n\n\n
Economists from the Austrian school, such as Ludwig von Mises and F.A. Hayek, and later thinkers like Milton Friedman, demonstrated its shortcomings. Even progressive economists including John Maynard Keynes and Paul Samuelson declined to embrace it. The central problem is straightforward: labor alone does not determine value.<\/p>\n\n\n\n
Modern economic thought rests instead on the principle of marginal utility. Value is not intrinsic to an object, nor dictated by the effort invested in it. It is subjective, varying from person to person and moment to moment. A glass of water is priceless in a desert and nearly worthless beside a flowing river. Value emerges from individual preference and scarcity, not from labor inputs.<\/p>\n\n\n\n
Equally important, voluntary exchange is not a zero-sum contest. Buyers and sellers engage in transactions because each expects to benefit. Prices reflect this mutual agreement, not exploitation. The notion that wealth accumulation is inherently unjust ignores the fundamental dynamics of exchange in a free market.<\/p>\n\n\n\n
Marxist theory, in contrast, struggles to explain how prices are formed, how profits arise, or why exchanges occur at all. For this reason, it is widely regarded by mainstream economists as an inadequate\u2014if not pseudoscientific\u2014framework for understanding modern economies.<\/p>\n\n\n\n
History reinforces this conclusion. Economic systems grounded in socialist or collectivist principles have repeatedly failed to deliver sustained prosperity, whether in the Soviet Union, Maoist China, or more recently in Venezuela and Cuba. Even within the United States, heavily regulated economies at the state level, in Blue States and cities offer catastrophic results. I suggest reading Howard Schultz\u2019s (The Founder and former CEO of Starbucks) Farewell letter to Washington State in the Wall Street Journal.<\/p>\n\n\n\n