Socialists have it all wrong about stolen wealth and taxes, according to Marian L. Tupy, a senior fellow at the Cato Institute, in a Washington Post commentary. The daily paper is the property of Jeff Bezos, head of Amazon, and one of the wealthiest people in the world.
I will return to that point. First, however, consider Tupy’s comment on the process of wealth creation, a sweeping assertion against his definition of socialism as a critique of capitalism. “But the idea that wealth is taken from others rather than created is an idea economists rebutted 155 years ago,” according to Tupy.
The economists that Tupy cites to support his statement are Carl Menger, William Stanley Jevons and Léon Walras. The central dispute, according to Tupy, is the source of value. Do employees create value? Or is value what employers create?
In Marx’s view, the wage-worker on the job creates value that the capitalist takes. That process of making and taking flows from control of the workplace. The employer dominates the employee and what happens on the job. The boss doesn’t have to be right. The boss just has to be the boss.
In particular, Tupy disagrees with U.S. socialists such as Sen. Bernie Sanders (I‑Vermont), New York Mayor Zohran Mamdani (D) and Rep. Alexandria Ocasio-Cortez (D‑New York). These politicians’ views that the wealth of 1,000 U.S. billionaires creates poverty and requires reform for the public good is mistaken, and threatens the source of value creation.
“Value is created whenever someone rearranges the world into a shape that others want,” according to Tupy. “It is measured by the buyer, not the worker.”
In other words, the consumer, or buyer, not the producer, or worker, is the king, a process that is the result of employers control over employees, the foundation of marketplace consumption. In Tupy’s perspective, value gets created via exchange in the marketplace, not through theft of labor time, or unpaid toil, in the workplace.
We are talking about value, the difference between a price employers pay employees to produce a good or service, and the marketplace price for buyers. That is the difference, or surplus, between employees’ wages and higher prices that buyers pay for a good or service that results from an employee’s labor time. Under capitalism that surplus value flows from the workplace to an employer, not employee.
Employers arrange this social relationship, according to Tupy. That is true. Socialism is a critique of that employer-employee relationship, domination and subordination.
Policy efforts through the tax system to solve the problem of billionaires receiving larger and larger pieces of the economic pie are doomed to fail, according to Tupy. To be clear, the U.S. socialists who Tupy critiques for their support of taxing the wealth of billionaires and redistributing it to working families are Sanders, Mamdani and Ocasio-Cortez. This trio is not calling for a socialist order to take private property in the form of factories and offices to place them under public control for its economic interest.
I digress. Back to the tax system and next steps to tax wealth. “In November,” according to Tupy, “Californians will vote on a 5 percent wealth tax on all billionaire residents in the state. Researchers at the Hoover Institution estimate that, thanks to billionaires fleeing California, the net present value of the tax will be negative $24.7 billion.”
That’s a big number. Here’s an even bigger number to put $24.7 billion into context. The California economy is $4.25 trillion. Accordingly, $24.7 billion is roughly 0.581 percent, or 1/172 0f $4.25 trillion.
Speaking of taxes, Amazon launched its online business as a bookseller in July of 1995. For two decades, the company legally dodged sales tax due to its lack of a physical presence in certain states. That legal tax dodge resulted in a price advantage over the competition, leading to scores of mom-and-pop bookstores going out of business.
In terms of labor on the job, Amazon is infamous for unsafe working conditions. According to Juliana Kim of National Public Radio, “A Senate committee investigation accused the nation’s largest online retailer Amazon of putting workers at risk of injury in the name of speed — while manipulating workplace injury data to portray its warehouses as safer than they truly are.”
Speed on the job increases output per worker, or productivity. Increased productivity means that workers’ speeded-up labor puts more commodities into the marketplace. Workers’ wages can rise with productivity increases. The key word is can when it comes to productivity and workers’ pay.
We turn to recent numbers for the employee class and its share of the economic pie. “The labor share, which is the percentage of output that accrues to workers in the form of compensation,” according to the Bureau of Labor Statistics, “was 53.7 percent in the first quarter of 2026, the lowest recorded value since the series began in 1947.” Value that employees create in the workplace is flowing away from them and is at a record low.
Why? Employees who are in labor unions can bargain collectively with employers for wage increases tied to productivity gains. In this way, union employees can get their share of productivity increases. Amazon is famously anti union, hiring expensive law and lobbying firms to defeat union organizing campaigns.
Amazon is a proxy for an employer class that has successfully weakened labor unions since the postwar economy (1945-1975) ended. Employers have reduced the unionized fraction of the workforce from 20 percent in 1983 to 9.9 percent in 2024. It is a matter of labor exploitation. Tupy’s use of the word innovation to describe what employers do for society is a distraction from the rising popularity of socialism in the U.S., especially among young Americans.
