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Even the walking dead have by now heard Barack Obama’s classic collectivist slip, “If you’ve got a business, you didn’t build that. Somebody else made that happen.” But it’s important to point out what lies at the heart of such an idiotic statement.

Karl Marx called it the “Labor Theory of Value.” This is the rather vague notion that calls for a laborer to receive “all the fruits of his labor.” Oversimplified, the Marxist believes that if a man puts $100 worth of labor into the making of a product (and assuming he makes every aspect of the product himself, which is almost never the case), he is being “exploited” if someone buys it from him for $100 and resells it for $125.

This sounds great to Marxist politicians and professors, except for one small problem: Today, the U.S. and all other civilized countries have division-of-labor economies. How does one determine how much labor, in terms of money, each laborer has put into a particular product in a division-of-labor economy?

In the above example, the Marxist would argue that the additional $25 belongs to the laborer who “made” the product. Of course, the Marxist does not explain what happens if the person who buys the product later sells it for only $75. Should the laborer then refund him the $25 loss he incurred?

And how does one keep track of each laborer from whom he has bought a product so he can send him the profit realized from reselling the product at a higher price years down the road?

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And how do you define “physical labor”? Is writing a book physical labor? Or should an author’s profits go to the workers who do the typesetting, printing, shipping and other physical tasks related to the manufacture and distribution of his book? I wonder if Barack Obama would be willing to give all the money he made writing his two “memoirs” (rolling eyes) to the workers who produced the physical copies of his books.

It is obvious that the Labor Theory of Value, aside from relying on the immoral concept of forcible interference in the marketplace, is unrealistic to the point of being absurd. It is an unintelligible notion that has no way of being explained in the real world – or any other world.

And yet, the abstract notion that “the laborer should not be exploited for profit” still persists today, as evidenced by Obama’s amazing remarks. This is especially true on college campuses, where young people are being brainwashed with a plethora of false premises.

Unfortunately, few college professors are intellectually honest enough to explain the connection between freedom and free enterprise. Without free enterprise, true freedom is not possible. The reality is that before there can be any physical labor to perform, someone must come up with an idea, someone must invest capital, and someone must organize people together for productive purposes.

Even if it were possible to define the Labor Theory of Value in an intelligible way, it still would overlook the fact that cost, price and value are three distinctly different considerations. Cost relates to how much capital (including that invested in labor) it takes to produce a product. Price is what is being asked for the product. Value is what any particular person at any given time believes the product is worth.

You and I may buy the same item at the same time for the same price, but you may value it more than I do. Thus, had it been asked, you may have been willing to pay a higher price for the item than I would.

The Labor Theory of Value is just another example of the anti-capitalist mentality that in every transaction, one person must win and another must lose. From whence comes that long-ago, not-so-gentle threat from M.O. (before she was transformed into the gracious, kind, gentle first lady), “Someone is going to have to give up a piece of their pie so that someone else can have more.”

The only way the Labor Theory of Value can make any sense is if every person were an individual entrepreneur producing each item in its entirety. And a society of entrepreneurs is hardly compatible with communist doctrine. A society in which a laborer receives “all the fruits of his labor” is not only impossible to construct, the very idea violates every canon of ethics concerned with human freedom.

Nevertheless, the idea of the laborer being exploited is what is at the heart of all class-warfare rhetoric. What the Labor Theory of Value attempts to hide is the reality that the U.S. is a nation overrun by what Eric Hoffer once referred to as “labor fakers.”

For example, since Barack Obama took office in 2009, the number of people receiving disability payments has increased by 5 million. That’s one out of every 18 people in the United States! You can now receive disability payments for such “ailments” as depression, attention-deficit disorder and chronic-fatigue syndrome.

The problem is not that workers are exploited. The real problem is that too many workers simply don’t work. And Obama wants us to believe that small business owners aren’t the ones who built their businesses?

Barack Obama should take a tip from futurist Alvin Toffler (“Future Shock”), who said that when he was a Marxist in his late teens and early 20s, he, “like many young people, thought I had all the answers. But I soon learned that my ‘answers’ were partial, one-sided and obsolete.”

Message to the Emperor of Envy in the White House: Your answers are partial, one-sided and obsolete. Get with it. Workers don’t build businesses. Entrepreneurs build businesses, and they pay workers to perform tasks that are needed to accomplish that.

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