Mr. Dexter Wakefield: A Crash Course in Economics

Author: David Markopoulos | Living Education

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Mr. Dexter Wakefield, a long-time minister serving as the Director of Legal Affairs at Headquarters, has a long background in finance, business, and entrepreneurship. In a recent forum to the Living Education students, he addressed a growing trend in our modern culture toward socialism, its implications, and the problem with this school of thought.

Socialism on the Rise

With the recent election of a Democratic Socialist, Zohran Mamdani, to the role of New York City mayor, socialism has come to the forefront of America’s attention lately. Mayor-elect Mamdani has been a vocal critic of capitalism, calling it “theft.” But is this the most accurate descriptor of the capitalist model, and is socialism a safe alternative?

Labor Theory of Value

One element of Socialism is the Labor Theory of Value. This rule dictates that the value of a product can only be equal to the labor that went into it. Looking at economics from this standpoint means that any price not determined by these factors would seem unfair. Further, in order to make any kind of profit, you have to pay workers less than what is “fair.” However, the issue is that this does not account accurately for supply and demand, and a consumer’s personal judgment on utility. A consumer will typically pay the price they personally deem the best—meaning their notion of value supersedes the thought process behind why that item was marked as such to begin with.

Creation of Wealth

Creation involves destruction—or, in a more economic sense, to create products, you have to destroy the raw materials as you found them and put them back together to make something new. Raw metals mined in the earth need to be refined and shaped. This process carries risk—not just physical risk, but financial and legal risk. As Mr. Wakefield pointed out, with all the unknowns that lie along the creative process, the ultimate value of a product depends greatly on how well you manage risk. This adds a completely new dimension to the discussion that socialism often fails to account for.

Mr. Wakefield also pointed out that economics is not “trickle-down,” but rather “ripple-out.” Capitalist societies are typically much more stable than socialist societies because they account for these factors. It also creates more room for innovation and long-term growth. This is missing from socialism, where autocrats make top-down decisions for the people.

Pillars of Entrepreneurship

Entrepreneurs and businessmen have a difficult job competing in the market. However, understanding the democracy of the market is a critical skill, and it is important to understand the principles of the economic climate in which we operate. Understanding what goes into a product, what determines its price, and the service it provides is an important focus for entrepreneurs and for those living and operating in a capitalistic society.

David Markopoulos is a Living Education alumnus from the 2023-2025 school years. Originally hailing from Chicago, he currently works for the Living Education program.