The Economics Department

[Politesse]

Should someone who goes through all the work and training to be a brain surgeon be compensated the same as a cab driver?

No, but both forms of labor should be compensated in such a way that you will live above the poverty line if you work them full time.

 

[skepticalbip]

Should someone who goes through all the work and training to be a brain surgeon be compensated the same as a cab driver?

That is what it comes down to, what is 'fair'?

One of the positives of the existing system is you can work as little as possible or as hard as you want to making money.

That is a political question. You are asking what economic system the government should impose and/or allow.

 

[bilby]

Does the Labor Theory of Value make sense today? Did it ever?

What determines the value of anything that is bought and sold in the marketplace?

The value is determined by if anyone wants wants it and what they are willing to pay.

Someone could spend weeks making making something but if no one wants it then it has no value.

Quite. The "supply and demand" nonsense that was Trojaned in there is contradictory with the argument that value is determined by what someone is willing to pay; If what someone was willing to pay was determined by supply and demand, then all original paintings would have equal (and very high) value. Oddly, my untalented daubings, despite being far fewer in number than van Gogh's surviving works, are less valuable than 'Sunflowers'.

 

[bilby]

Should someone who goes through all the work and training to be a brain surgeon be compensated the same as a cab driver?

Before asking that, shouldn't you ask whether the best and only determinant of how much a person should be paid is the amount of effort required to obtain the requisite skills?

Because that assumption, that more "work and training" required to do a job renders that job more valuable, looks to me exactly like the labour theory of value that, up to this point, everyone in this thread has agreed to be nonsensical.

It takes a lot of effort, and a lot of time, to learn to juggle chainsaws. There are FAR fewer chainsaw jugglers in the world than there are brain surgeons (reflecting the huge effort and difficulty in becoming a chainsaw juggler); Yet there are likely hundreds of times more people who have seen a chainsaw juggling act than there are people who have had brain surgery.

So by your hypothesis, and by Lumpen's 'supply and demand' hypothesis, chainsaw jugglers should earn similar money to that earned by neurosurgeons.

That is what it comes down to, what is 'fair'?

Not really. There are two questions here: What is the 'value' of someone's labour? (An economic question); And what compensation for someone's existence (including, but not necessarily limited to, their paid labour) is 'fair'? (A political question).

One of the positives of the existing system is you can work as little as possible or as hard as you want to making money.

One of the problems of the American school of thought is that it considers making money to be significant and important in its own right. Which is, frankly, no less incoherent than the labour theory of value - a theory that once again you are depending upon here. Lots of people gain vast wealth for no more effort than being born; Many more gain vast wealth working in a clean office never picking up anything heavier than a pen; And a huge number remain poor despite long hours of gruelling labour in all weathers.

Working "as little as possible or as hard as you want" appears to be almost completely unrelated to "making money". If anything, correlating income against effort suggests that the more you earn, the less you need to do to earn it, and the less you need to do to further increase your earnings.

 

[untermensche]

Controlled by workers? Russian and Chinese communism tried that, both failed.

Russia morphed into an authoritarian kleptocracy and China is communist in name only. China morphed into a quasi free market economy. They identify as socialist these days.

In any economic system the same issues exist, how oo allocate labor, compensation, and what and how much gets produced. On the scale of the USA exactly how would the 'people' control the economy?

Orwell's Animal Farm comes to mind.

Animal farm is not about worker control. It is about what plagues humanity. It was about anti-democratic thinking.

Worker control ever happened except in Anarchist Spain in the 30's. That's why Nazi Germany, fascist Italy, capitalist US and Britain and dictatorial USSR calling itself communist all attacked the Anarchists.

The Soviet Union was a rigid top-down dictatorship. Same with China.

Were you asleep during history class? Never heard of Stalin?

Workers didn't control shit in either the Soviet Union or China.

US workers had some control when unions controlled the Democratic Party.

And when unions controlled the Democratic party it was the golden age of US capitalism and the Middle Class arose.

But that ended with Clinton 30 years ago.

 

[steve_bank]

Should someone who goes through all the work and training to be a brain surgeon be compensated the same as a cab driver?

That is what it comes down to, what is 'fair'?

One of the positives of the existing system is you can work as little as possible or as hard as you want to making money.

That is a political question. You are asking what economic system the government should impose and/or allow.

It is a social science question, but yiu can not discuss it without politics as well.

Going forward the economic system will determine social and civil stability. Right now in Seattle we have experienced social and civil instability. It is not pretty.

As to the people controlling the economy we saw some of that dea play out here. The CHOP zone filled with people who declred it independent of civil law and govt control. Result, anarchy, murder, crime, violence, rape, and suppression of free speech.

The economy is everything.

 

[laughing dog]

Does the Labor Theory of Value make sense today? Did it ever?

What determines the value of anything that is bought and sold in the marketplace?

The value is determined by if anyone wants wants it and what they are willing to pay.

Someone could spend weeks making making something but if no one wants it then it has no value.

Quite. The "supply and demand" nonsense that was Trojaned in there is contradictory with the argument that value is determined by what someone is willing to pay; If what someone was willing to pay was determined by supply and demand, then all original paintings would have equal (and very high) value.

Only if people had the same taste for original paintings regardless of their style or content.

 

[laughing dog]

Or there are other versions of the LTV which say essentially the same thing. E.g., supposedly Adam Smith and David Ricardo made similar statements describing what "value" is, and they made the quantity of labor the basic measure of the value.

The people who suppose Adam Smith to have said essentially the same thing read him carelessly. Here's the clearest explanation of the distinction I've seen:

Smith is saying that the value of something to you is the labor it saves you, and the cost of something to you is its opportunity cost: what you have to give up to get it. But the "labor theory of value" says that the cost of something to me should be determined by the labor it costs you, who are trying to sell it to me. That's not the same thing.​

(Source: someone with the handle "pdonis")

Actually Smith differentiated between the real value and nominal value of a product. The "real" value to Smith is determined by labor but the nominal value is not. (https://www.adamsmithworks.org/documents/steven-horwitz-adam-smith-on-the-labor-theory-of-value).

Another way to look at the labor theory of value is that it is search for an explanation of the "true" or "real" value rather than the market or exchange value. Whether or not one thinks that the distinction between "real/true' value and the market value is useful or helpful is another matter.

Long ago, the discipline of political economy abandoned the distinction between "true" and "market" value as useful.

 

[Lumpenproletariat]

"The Citizen Dividend" -- maybe a legitimate theory of wealth redistribution (less inequality)

Just heard this book promoted on a Left-wing talk show. Our Fair Share by Brian C. Johnson.

This might be legitimate economics vs. the very popular employer-bashing Crybaby Economics we hear so much. The worst of Crybaby Economics can be summed up as

• free-trade-bashing, globalism-bashing, China-bashing
• immigrant bashing and bashing employers who hire immigrants
• demand for higher minimum wage


It's not only Democrats who are the crybaby-panderers, but also Republicans:

Donald Trump was a champion for Crybaby Economics, bashing foreign competition/globalism, cracking down on desired immigration to get needed work done, and even promoting higher wages in his revised Mexico-U.S.A. trade agreement. Democrats and labor favored this latter part of Trump's trade deal, as usual putting petty politics and labor union demagoguery ahead of the economy. Driving up the wage level for autoworkers serves no purpose other than to drive up prices consumers must pay, and also hurt production. Artificially higher cost of business is popular among some crybabies but makes the whole population worse off.



But Crybaby Economics is not the only element in Progressive/Left wealth-redistribution agenda. The crusade for income redistribution has a good part to it, along with the bad. The bad part is the constant obsession with wages and employer-bashing.



GOOD LEFTIST ECONOMICS VS. BAD

When the Leftists go after the employers as a class, demanding higher minimum wage and more labor laws to crack down indiscriminately on employers per se, they are destroying the economy by discouraging work and needed production.

On the other hand, a tax on the super-rich per se (not on employers as a class), might be a legitimate way to redistribute wealth from the extreme top down to the middle- and lower-income classes.

This author was interviewed by Chicago's progressive talk show host Joan Esposito, and this discussion was able to go several minutes without one crybaby attack on employers, and without identifying the whole country with "the working class" and "the workers" as being the ones victimized by the income inequality (or wealth inequality) problem.

Instead of identifying "the workers" or "the working class" as the counterpart to the super-rich who dominate the economy, the author identifies all of us, all who are not in the top 10% or top 1% wealthiest, as the ones who deserve a larger share. And this larger share is to be gained not mainly through giving money to select victims down below, but by having the super-rich pay for public needs, like infrastructure, which is being neglected. So that the resources are to go to us all, from the lowest to the highest, for benefits to everyone.


excerpt from a book promotion:

Brian C. Johnson combines accessible scholarship on wealth and income inequality in America with deeply personal accounts of six Americans of diverse backgrounds who are each wrestling with what it means to survive and thrive in this new economic world. In so doing, he offers a solution that is as visionary as it is practical. Dubbed the Citizen Dividend, this revolutionary model assumes that economic growth is built off of the wealth we have created together as a country, and together we all reap its benefits. In Our Fair Share, Johnson lays the groundwork for implementing this solution, detailing what the Citizen Dividend is, offering examples of similar existing models, outlining the benefits of such systems, tackling some of the common concerns that arise, and offering a path toward making it a reality.

It appears to at least reduce way down, if not eliminate altogether, the element of employer-bashing and Crybaby Economics we constantly get from the Left, from the Bernie-AOC-Left assault against capitalism, aimed at the hated employer class, and instead focuses on simply taking a larger share of wealth from the very top 1% (or 10%) wealthiest, without scapegoating employers per se or equating this class with the super-rich.

 

[laughing dog]

The Citizens dividend appears to be just a different version of "crybaby economics". Once you utter "deserve a larger share", it is "crybaby economics".

 

[Lumpenproletariat]

A rule for higher wages, but overall increased poverty and suffering

Should someone who goes through all the work and training to be a brain surgeon be compensated the same as a cab driver?

No, but both forms of labor should be compensated in such a way that you will live above the poverty line if you work them full time.

"above the poverty line" is subjective, no objective meaning or standard to measure, varies from individual to individual, from one locality to another, one society to another.

There are inevitably some low-skill workers, in virtually all economic environments, who cannot get hired unless they take employment at a compensation level lower than what someone labels as "the poverty level." In their case, the 2 choices are 1) a low-paying job (below "the poverty level"), or 2) no job and thus a worse level of poverty.

So if we apply this nice-sounding mandate that everyone working must be paid at the poverty level or higher, and any employment not in compliance with this is ruled out or not permitted, then this pleasant-sounding mandate means worse poverty for all those workers. It means increased suffering for a certain class of low-skill job-seekers.

At best you can only hope that the same mandate, though inflicting increased suffering onto this low-value class, also causes reduced suffering to some other class, and that this reduced suffering (or increased benefit) is greater than the harm done to the low-value class made worse off. But it's probably not true that the increased benefit to some poor workers offsets the increased suffering to others, because one definite result of this mandate is that it causes net reduced production in the whole economy, because the elimination of the low-paid employment results in a total net reduced production in the overall economy = reduced supply to all consumers.

If all we know for sure is that total production (supply) is reduced, and thus less total wealth is produced, that means a total net reduction of supply to all consumers throughout the whole economy. Probably meaning overall net more harm than benefit.

 

[steve_bank]

Or there are other versions of the LTV which say essentially the same thing. E.g., supposedly Adam Smith and David Ricardo made similar statements describing what "value" is, and they made the quantity of labor the basic measure of the value.

The people who suppose Adam Smith to have said essentially the same thing read him carelessly. Here's the clearest explanation of the distinction I've seen:

Smith is saying that the value of something to you is the labor it saves you, and the cost of something to you is its opportunity cost: what you have to give up to get it. But the "labor theory of value" says that the cost of something to me should be determined by the labor it costs you, who are trying to sell it to me. That's not the same thing.​

(Source: someone with the handle "pdonis")

Actually Smith differentiated between the real value and nominal value of a product. The "real" value to Smith is determined by labor but the nominal value is not. (https://www.adamsmithworks.org/documents/steven-horwitz-adam-smith-on-the-labor-theory-of-value).

Another way to look at the labor theory of value is that it is search for an explanation of the "true" or "real" value rather than the market or exchange value. Whether or not one thinks that the distinction between "real/true' value and the market value is useful or helpful is another matter.

Long ago, the discipline of political economy abandoned the distinction between "true" and "market" value as useful.

In modern terms I would frame that as simply the cost of labor and materials of a product versus what the market value is.

 

[steve_bank]

The only objective way to asses a poverty level is having enough for food and decemt shler for self and family.

Poverty in the USA today is nothing like what poverty meant when I was born in 1951.

A smart phone with global connivations on tye net costs around $60 and internet service can be as low as $30 a month.

The way to ascees a poverty line is the average wage versus hw nany hours yu have to work for something.''In tye 0s a fuly loaded IBM PC coud run $4-6k and wages were around $8 an hour.

You had to work roughly 400-500 hours to buy an IBM.

Today wages are $15-25 a hour and a PC can be had for around $1k or about 100 hours.

The true measure is how log the average person has to work to buy something.

The cost of a Big Mac was once used to compare earning power around the world.

 

[Lumpenproletariat]

It's supply-and-demand which primarily determines the value. All the rest is secondary to supply-and-demand.

Before asking that, shouldn't you ask whether the best and only determinant of how much a person should be paid is the amount of effort required to obtain the requisite skills?

Because that assumption, that more "work and training" required to do a job renders that job more valuable, looks to me exactly like the labour theory of value that, up to this point, everyone in this thread has agreed to be nonsensical.

It's still nonsensical. The value is the supply and demand only, regardless of the "work and training" required. What's important about the "work and training" is that this has an impact on the supply. It's only because "work and training" has an impact on supply that it also is important in determining the value. If the production is more difficult, for whatever reason, then that makes the product more scarce.

E.g., today there is a shortage of PLUMBERS. The main problem is the lack of supply. But the reason is that there've been so few plumbers trained. The plumber trainees must do some work to prepare, but not as much work as -- how about a personnel relations psychology counselor, e.g.

So lets compare Plumber trainees vs. personnel relations psychology counselor trainees

Which is more valuable? Probably today the Plumber trainee is more valuable, despite not having to do as much training. The plumber does not require 2 or 3 college degrees like the psychology counselor. Nevertheless, today the shortage of plumbers is greater. So the new trained plumber is in more demand, will probably get hired sooner and be paid more.

So it's not that the "training and work" is more valuable or determines the value. Rather it's the supply-and-demand which determines the value, totally, with the training and work being only secondary to the supply-and-demand.

So yes, the "training and work" is important in determining the value. But only because this impacts on the supply-and-demand, or is secondary to supply-and-demand as the primary determinant of the value. While the "training and work" is of secondary importance only.

It takes a lot of effort, and a lot of time, to learn to juggle chainsaws. There are FAR fewer chainsaw jugglers in the world than there are brain surgeons (reflecting the huge effort and difficulty in becoming a chainsaw juggler); Yet there are likely hundreds of times more people who have seen a chainsaw juggling act than there are people who have had brain surgery.

This agrees with supply-and-demand as determining the market value of both. Perhaps there is a very good chainsaw juggler who can attract large audiences and earn more than a brain surgeon. Most jugglers probably aren't good enough to arouse enough interest to earn as much as a brain surgeon. Entertainment can be hugely rewarding/profitable to someone who is good enough. Probably natural talent is also a factor, which is mostly due to luck. But there's no reason why a very talented juggler couldn't earn more than an average brain surgeon, in rare cases of exceptionally talented jugglers, or other kinds of entertainers. Obviously some professional athletes earn far more than a typical brain surgeon, because of their rare talent.

Supply-and-demand is what explains it. Not "work and training" per se.

So by your hypothesis, and by Lumpen's 'supply and demand' hypothesis, chainsaw jugglers should earn similar money to that earned by neurosurgeons.

Maybe some do -- rare cases, rare talent, attracting large-enough audiences. Nothing rules it out. If none of them earns that much it's because there isn't that much demand for such entertainment.

Not really. There are two questions here: What is the 'value' of someone's labour? (An economic question); And what compensation for someone's existence (including, but not necessarily limited to, their paid labour) is 'fair'? (A political question).

No, "fair" is a totally subjective notion, varying widely from one philosopher / religious guru to another.

"Fair" can have no objective meaning other than in terms of the utilitarian benefit/harm which results from the labor or production for the benefit of consumers, or benefit of the public in the case of infrastructure or public goods. And the only "fair" that has any objective meaning is the "fair" to the consumers/public for whom the work or the production takes place.

Serving those consumers, or serving the public is the only overall benefit which matters. Whatever best accomplishes that service to consumers / public matters. Whatever system of paying workers/producers that results in the best output for all consumers is the right system.

 

[Lumpenproletariat]

"Crybaby" Economics vs. Economics 1A

The Citizens dividend appears to be just a different version of "crybaby economics". Once you utter "deserve a larger share", it is "crybaby economics".

No, the words "share" and "deserve" are not always crybaby ideas.

E.g., if you're mugged on the street and all your money is taken, you're entitled to complain that you "deserve" back what was taken from you. Or, if a deal is agreed to between 2 parties, in a contract they sign and which requires payment by one to the other, it's not necessarily "crybaby economics" for one to complain that the other violated the terms, or that one's "share" turned out less than what was agreed to.

The word "crybaby" does not describe every possible demand anyone might make, or every possible complaint someone has that they "deserve" something or that they ended up with less than their entitlement.

The idea that the whole society "deserves" a "share" in the wealth of certain super-rich members, like oil tycoons etc., isn't necessarily a "crybaby" idea. These issues are settled by looking at all the facts, such as the social costs and benefits, and trying to maximize the benefits to everyone and minimize the costs.

"Crybaby Economics" best describes the protectionist trade economics of demagogues like Bernie Sanders and Donald Trump. But not all demands are "crybaby" demands. Bernie's demand for a tax on Wall Street is not a "crybaby" demand like his China-bashing trade demands are.

 

[laughing dog]

The Citizens dividend appears to be just a different version of "crybaby economics". Once you utter "deserve a larger share", it is "crybaby economics".

No, the words "share" and "deserve" are not always crybaby ideas.

E.g., if you're mugged on the street and all your money is taken, you're entitled to complain that you "deserve" back what was taken from you. Or, if a deal is agreed to between 2 parties, in a contract they sign and which requires payment by one to the other, it's not necessarily "crybaby economics" for one to complain that the other violated the terms, or that one's "share" turned out less than what was agreed to.

Your examples are ridiculous because they do not deal with "deserve a larger share".

The word "crybaby" does not describe every possible demand anyone might make, or every possible complaint someone has that they "deserve" something or that they ended up with less than their entitlement.

No one said it did.

The idea that the whole society "deserves" a "share" in the wealth of certain super-rich members, like oil tycoons etc., isn't necessarily a "crybaby" idea. These issues are settled by looking at all the facts, such as the social costs and benefits, and trying to maximize the benefits to everyone and minimize the costs.

"Crybaby Economics" best describes the protectionist trade economics of demagogues like Bernie Sanders and Donald Trump. But not all demands are "crybaby" demands. Bernie's demand for a tax on Wall Street is not a "crybaby" demand like his China-bashing trade demands are.

Your word salad is special pleading for your crybaby economics because there is no objective reason for your target recipients to get what you feel they deserve. Your "maximizing the benefits to everyone" standard is ill-defined handwaving to justify your normative economics (or what people call "political views).

 

[bilby]

The only objective way to asses a poverty level is having enough for food and decemt shler for self and family.

Poverty in the USA today is nothing like what poverty meant when I was born in 1951.

A smart phone with global connivations on tye net costs around $60 and internet service can be as low as $30 a month.

The way to ascees a poverty line is the average wage versus hw nany hours yu have to work for something.''In tye 0s a fuly loaded IBM PC coud run $4-6k and wages were around $8 an hour.

You had to work roughly 400-500 hours to buy an IBM.

Today wages are $15-25 a hour and a PC can be had for around $1k or about 100 hours.

The true measure is how log the average person has to work to buy something.

The cost of a Big Mac was once used to compare earning power around the world.

Why is the average person the benchmark?

Leaving aside the question of which "average" (mean and median get you very different results), whatever is so important about the average? Why not measure by the number of people who don't have enough to eat, or don't have a place to sleep that's out of the rain?

What does it matter that a Big Mac takes fewer working hours to earn, to a person without a job? What good is cheap rent to a person with no money? What is the value of a society that discards people who cannot reach a standard specified by their "average" compatriots?

Humans have always supported vast numbers of people who cannot support themselves. What a broken and pathetic philosophy it is, that says we can turn our backs on some of those people, because they are unable or even just unwilling to be enslaved to the ideal of the average?

This monstrous and stupid concept of self reliance and self sufficiency is truly awful. No person can live without the support of others. Bear Grylls may be able to survive in the wilderness for months, but he cannot do so using only those things made by Bear Grylls. His Swiss Army Knife implies the existence of, and his dependence on, Switzerland and her Army.

What bizarre logic says that a baby can be provided for, despite having never done anything useful for anyone; But that a man who has fallen on hard times cannot or should not be provided for?

Are we to accept that the nurturing, feeding, teaching, and loving of a child is of zero value? Because zero is the current market rate paid by those consumers.

Any theory of value that implies zero value for this freely given but clearly essential activity is itself valueless. And even libertarians typically resile from saying that infants should become financially indebted to their carers - while missing the obvious contradiction implied by putting people in debt for education.

The very central tenet of the OP - that economics is itself important and can be separated from politics - is beyond absurd. It's a denial of the fundamental fact that Homo Sapiens is a social species. Which is a philosophy that can only be seriously believed by the insane.

Accounting degrees of indebtedness* is a fairly useful tool. It has wide application. But it's not, and cannot be, universal.

Economists think money can do everything, but they're like Glaswegian chefs, who having discovered deep frying, refuse to countenance any other recipe for anything.







*ie "Money"

 

[fromderinside]

OK. So average is a crap notion.

I suggest you come back with a set of operations that can be objectively applied to commerce. Then, instead of reading awful this, and impossible that, we might be treated to the basis for a discussion.

It's not my ship to keep afloat.

Who are, from whence come, Glaswegians?

 

[bilby]

OK. So average is a crap notion.

I suggest you come back with a set of operations that can be objectively applied to commerce. Then, instead of reading awful this, and impossible that, we might be treated to the basis for a discussion.

It's not my ship to keep afloat.

Who are, from whence come, Glaswegians?

I don't give shit the first about "commerce". What matters is society. Commerce is one of many facets of society, and shouldn't be elevated above all others.

And Glasgow.

 

[Bomb#20]

Who are, from whence come, Glaswegians?

And Glasgow.

Well, getting from "gow" to "weg" at least vaguely makes sense. Explain "Taswegians".