Wealth of Nations

[coloradoatheist]

No but other companies selling widgets at >$12 would if that's the going rate. Some firm might induce consumers to buy more widgets or gain market share at $10, hence a marginal value of widget making to that firm of <$10, but that doesn't determine what a widget maker will work for. The market does that and the demand for widgets is positively correlated with wage levels.

For company A they person has a -$2 utility for the widget maker, but for company B the utility is >0. So company B could hire the person if they think they can sell the widgets at a greater price than what he/she could produce.

 

[Canard DuJour]

No but other companies selling widgets at >$12 would if that's the going rate. Some firm might induce consumers to buy more widgets or gain market share at $10, hence a marginal value of widget making to that firm of <$10, but that doesn't determine what a widget maker will work for. The market does that and the demand for widgets is positively correlated with wage levels.

For company A they person has a -$2 utility for the widget maker, but for company B the utility is >0. So company B could hire the person if they think they can sell the widgets at a greater price than what he/she could produce.

Yes (if I understand you), but the market determines whether company B can do so, not any decision or determination of company B's. And company A's determination of -$2 marginal utility will not induce widget makers to work for $2 less.

 

[Loren Pechtel]

The firm decided it could make money by hiring people to do <x>. That is determining the marginal utility of <x> even though it's not put in those terms.

No and not really.

Whether a firm can make money from <x> depends on market conditions which it does not "decide". Say a firm ascertains that consumers will pay $10 each for widgets which take an hour each to make. If the going rate for widget makers isn't less than $10/hr, the marginal utility of the worker to that firm is neither here nor there. Conversely, if the going rate is substantially less, a profit maximising firm won't pay any more. In neither case is the wage determined by the worker's marginal utility to that firm.

The conditions are determined in the sense of caused or specified by the market and determined in the sense of discerned or ascertained by the firm. You're equivocating the two.

The company doesn't control the situation but they do decide if it's profitable to hire someone under those conditions.

 

[Loren Pechtel]

For company A they person has a -$2 utility for the widget maker, but for company B the utility is >0. So company B could hire the person if they think they can sell the widgets at a greater price than what he/she could produce.

Yes (if I understand you), but the market determines whether company B can do so, not any decision or determination of company B's. And company A's determination of -$2 marginal utility will not induce widget makers to work for $2 less.

The market decides what widgets are worth. The company decides if it can make a profit selling widgets at that price--if so it hires widget makers. It's this decision that we are calling the marginal utility calculation. In a simplistic case like this everyone in the market faces basically the same calculation and thus if there is a widget business at all it makes sense to hire widget makers. If the math goes the other way there will be no players in the game.

In a more complex case it might make sense to company A but not to company B.

 

[Canard DuJour]

Yes (if I understand you), but the market determines whether company B can do so, not any decision or determination of company B's. And company A's determination of -$2 marginal utility will not induce widget makers to work for $2 less.

The market decides what widgets are worth. The company decides if it can make a profit selling widgets at that price--if so it hires widget makers.

No it calculates whether it can. Calling that a 'decision' is a slight metaphor which doesn't usually matter, but saying the wage is determined by that calculation reverses the causality.

It's this decision that we are calling the marginal utility calculation.

Then you're not talking about the calculation economists think determines the wage.

In a simplistic case like this everyone in the market faces basically the same calculation and thus if there is a widget business at all it makes sense to hire widget makers. If the math goes the other way there will be no players in the game.

In a more complex case it might make sense to company A but not to company B.

And in neither case does the calculation determine the wage level. Rather, prevailing wage levels determine the calculation. Where the going wage rate is substantially below the profit margin, profit maximising firms pay the going rate, not the marginal value of the labour.

 

[untermensche]

It's hard to recognize Smith because he has been so distorted by present day Capitalists.

But he believed that free markets would lead to greater and greater equality.

As we see, the markets we have today are not the markets Smith had in mind.

 

[coloradoatheist]

It's hard to recognize Smith because he has been so distorted by present day Capitalists.

But he believed that free markets would lead to greater and greater equality.

As we see, the markets we have today are not the markets Smith had in mind.

Do you have which sections Smith said it would lead to greater equality and did he discuss consumption equality or straight wealth equality?

 

[untermensche]

It's hard to recognize Smith because he has been so distorted by present day Capitalists.

But he believed that free markets would lead to greater and greater equality.

As we see, the markets we have today are not the markets Smith had in mind.

Do you have which sections Smith said it would lead to greater equality and did he discuss consumption equality or straight wealth equality?

Smith was a man of the Enlightenment. He believed in morality.

Not the present system completely devoid of morality.

The present system would be condemned by Smith as much as it is condemned by Chomsky.

As far as the exact section in the book, I am in the process off moving and all my books are boxed up. I can't help you at present.

 

[coloradoatheist]

Do you have which sections Smith said it would lead to greater equality and did he discuss consumption equality or straight wealth equality?

Smith was a man of the Enlightenment. He believed in morality.

Not the present system completely devoid of morality.

The present system would be condemned by Smith as much as it is condemned by Chomsky.

As far as the exact section in the book, I am in the process off moving and all my books are boxed up. I can't help you at present.

I think it would be hard for them to see what we have today and make a good comparison.

 

[untermensche]

Smith was a man of the Enlightenment. He believed in morality.

Not the present system completely devoid of morality.

The present system would be condemned by Smith as much as it is condemned by Chomsky.

As far as the exact section in the book, I am in the process off moving and all my books are boxed up. I can't help you at present.

I think it would be hard for them to see what we have today and make a good comparison.

It would be impossible.

But if you have actually read 'The Wealth of Nations' you would know that Smith condemned the division of labor and the greed of the wealthy.

Those things have not changed.

Equality was an ideal of the Enlightenment. Equality in every way that is possible to achieve. In opportunity, in the ability to survive, in the ability to not suffer under the heel of somebody because they are rich.

The French still hold equality as an ideal in their society. That is why they have superior Social Services to the US.

In the US this ideal is downplayed. Just the way the rich and powerful want it.

 

[coloradoatheist]

I think it would be hard for them to see what we have today and make a good comparison.

It would be impossible.

But if you have actually read 'The Wealth of Nations' you would know that Smith condemned the division of labor and the greed of the wealthy.

Those things have not changed.

Equality was an ideal of the Enlightenment. Equality in every way that is possible to achieve. In opportunity, in the ability to survive, in the ability to not suffer under the heel of somebody because they are rich.

The French still hold equality as an ideal in their society. That is why they have superior Social Services to the US.

In the US this ideal is downplayed. Just the way the rich and powerful want it.

And the US was created under different ideals than France. It was created under liberty and equality, but a different equality. But I think Smith had some things right, and some things wrong. That's also why dismal said that current economic theory should be looked at.

 

[untermensche]

And the US was created under different ideals than France. It was created under liberty and equality, but a different equality. But I think Smith had some things right, and some things wrong. That's also why dismal said that current economic theory should be looked at.

Yes, All men are created equal, except our slaves.

The US is a nation built around the desires of the wealthy.

From the educational system to the economic system.

People who tried to form unions were attacked and killed, with the support of the police.

The OWS protestors were attacked and assaulted by the police.

Any attempt to create equality and freedom, like Social Security and Medicare are attacked and under continual threat.

The US system has abandoned the Enlightenment for something more primitive.

 

[coloradoatheist]

And the US was created under different ideals than France. It was created under liberty and equality, but a different equality. But I think Smith had some things right, and some things wrong. That's also why dismal said that current economic theory should be looked at.

Yes, All men are created equal, except our slaves.

The US is a nation built around the desires of the wealthy.

From the educational system to the economic system.

People who tried to form unions were attacked and killed, with the support of the police.

The OWS protestors were attacked and assaulted by the police.

Any attempt to create equality and freedom, like Social Security and Medicare are attacked and under continual threat.

The US system has abandoned the Enlightenment for something more primitive.

The liberty was the ideal, unfortunately slavery was too entrenched at the time and would have split the nation apart before it was formed. They were idealists, but also practicalists at the time.

I'll agree with you in part about OWS, though most of the protests were peaceful, however there are rules governing peaceful protest too.

And social security has really only become possible because of capitalism. How much concern at Adam's smith time was that it was the government's responsibility to make sure that you can retire and the government pay for it?

 

[untermensche]

What you call practicality was merely the desire of rich scumbags to exploit other people. In the case of slavery, torture was the method used to achieve this.

The US was founded around this desire and is still completely devoted to it.

Today torture isn't used to compel people to serve the rich, deprivation is used. The lack of adequate decent jobs and social services.

That is why the rich want to make the population as dependent and weak as possible. That is why unions have been crushed over the past 50 years.

 

[coloradoatheist]

What you call practicality was merely the desire of rich scumbags to exploit other people. In the case of slavery, torture was the method used to achieve this.

The US was founded around this desire and is still completely devoted to it.

Today torture isn't used to compel people to serve the rich, deprivation is used. The lack of adequate decent jobs and social services.

That is why the rich want to make the population as dependent and weak as possible. That is why unions have been crushed over the past 50 years.

Slavery has been around for thousands of years, it just became a bigger thing with society able to start transporting slaves around the world. It was the industrial revolution that started the decline of slavery.

Humans having wants and needs is what drives society. Unions have gone away because of many reasons.

 

[untermensche]

Slavery has been around for thousands of years, it just became a bigger thing with society able to start transporting slaves around the world. It was the industrial revolution that started the decline of slavery.

Humans having wants and needs is what drives society. Unions have gone away because of many reasons.

At the time of the US Revolution slavery had been abolished in many parts of the world.

Slavery was merely a rich man's desire.

Kind of like the invasion of Iraq and the illegal destruction of unions that has taken place over the past 50 years.

 

[Axulus]

Where the going wage rate is substantially below the profit margin, profit maximising firms pay the going rate, not the marginal value of the labour.

If the cost of the labor is less than the marginal value, then profits can be increased further by increasing production and hiring more people.

 

[Bomb#20]

But if you have actually read 'The Wealth of Nations' you would know that Smith condemned the division of labor...

I have read it; and no, he didn't. He gave division of labor most of the credit for the productivity gains that increase general standards of living. But as usual, Smith saw nuance where ideologues prefer to see black and white -- the same as with corporations, which people often erroneously claim Smith condemned. No, what Smith did was point out both advantages and disadvantages. In the case of division of labor he advocated government interventions such as public education to deal with the downsides.

 

[untermensche]

But if you have actually read 'The Wealth of Nations' you would know that Smith condemned the division of labor...

I have read it; and no, he didn't. He gave division of labor most of the credit for the productivity gains that increase general standards of living. But as usual, Smith saw nuance where ideologues prefer to see black and white -- the same as with corporations, which people often erroneously claim Smith condemned. No, what Smith did was point out both advantages and disadvantages. In the case of division of labor he advocated government interventions such as public education to deal with the downsides.

Smith says that the division of labor will reduce humans to stupid nonthinking animals.

He said we should do everything to prevent the rich from reducing humans in this way.

 

[coloradoatheist]

I have read it; and no, he didn't. He gave division of labor most of the credit for the productivity gains that increase general standards of living. But as usual, Smith saw nuance where ideologues prefer to see black and white -- the same as with corporations, which people often erroneously claim Smith condemned. No, what Smith did was point out both advantages and disadvantages. In the case of division of labor he advocated government interventions such as public education to deal with the downsides.

Smith says that the division of labor will reduce humans to stupid nonthinking animals.

He said we should do everything to prevent the rich from reducing humans in this way.

Our jobs have gone the other direction though, where more thinking is required. The jobs during Smith's time weren't the ones needing today's college degrees.