Economic Inequality and Government Policy

[Harry Bosch]

If the source of all the value is the worker it follows that any worker has all he or she needs to capture all the value they create. It's basic logic.

Yep, that's a great point! Socialists and anarchists don't understand the value of capital, ownership, management, and etc.

 

[arkirk]

?? Workers quit corporations every single day to start competing companies. Of course there are barriers to entry, nothing is easy.

If the source of all the value is the worker it follows that any worker has all he or she needs to capture all the value they create. It's basic logic.

We are treating this whole situation like it is some kind of cosmic contest and forgetting that the wealth is already almost entirely in the hands of the rich who can control just how much wealth can be on the table at any time. The rich always have the option of taking their football and going home with it...not playing at all. That is where job shortages come from. In the stock market it is called profit taking. The rich hold all the paper and control the play. So it is not possible for most to simply walk out and get going in their own business. Go back and review the rules of the board game Monopoly. THAT is the game that is being played here. Now look at the losers. They are losers and permanently so because THE GAME IS OVER.

The wealth in our society is concentrated and those born to impoverished parents are in fact, barring unusual circumstances, born losers.

 

[untermensche]

If the source of all the value is the worker it follows that any worker has all he or she needs to capture all the value they create. It's basic logic.

Yep, that's a great point! Socialists and anarchists don't understand the value of capital, ownership, management, and etc.

Anarchists most certainly do.

They understand that within a capitalist system, which is just a system of organized theft from workers, that workers are denied both ownership and control and the fruits of their labor.

And Anarchists would like to replace the current system of theft with a system of economic justice.

They would like to put ownership into it's rightful hands, into the hands of workers.

They would like to put management into it's rightful hands, into the hands of workers.

 

[doubtingt]

Since the thread has become focused only on the Labor market issue, I will focus on the Taxation issue. The OP focuses on taxation effects on the relative difference in personal income, and mentions public services funded by taxation only as a means for lower income people to increase personal income.



But a critical feature of taxation is that it shifts some of private wealth into public wealth that (can) improve the well being of all and reduce the amount of personal income needed to enjoy that level of well being. It directly redistributes wealth, so long as you consider that public wealth is just as important to the things impacted by private wealth disparity. This is why private wealth disparity is only modestly related to negative social factors that it is related to. The amount of public wealth matters a great deal. There are ways in which private wealth disparities and grow slightly and yet the public wealth increases by enough to offset any negative impact of private disparity. The problem is that extreme private wealth disparities typically harm and lower the public wealth, in part but not solely because regressive taxation and massive loopholes for the rich and corporations are used to increase the wealth of the already rich while directly reducing public wealth.

Ideally, a better stat would consider a ratio of private wealth disparity over public wealth that is used to benefit all equally or even skewed toward benefits to the low end. However, this such qualified public wealth is hard to measure with any reliable precision because it means making judgment call about how each dollar in gov revenue is used. For a country like the US that spends so much of its revenue on making a handful of people in the military industry more rich, with little benefit and often harm to the rest of society, the amount of revenue way over-estimates the true amount of public wealth.

Well, if the worker can capture all of the value they create by going into business for themselves, their taxes will probably go up and the taxes paid by people whose incomes depend on taking value (i.e., greedy capitalists and useless managers) that workers create will go down.

But since redistributive policies will become unnecessary we should be OK.

Yes, in an impossible fantasy world (free-market faithers really love such worlds) in which every single person is separate owner and laborer, requiring that no company makes more widgets than the owner can make with their own hands and mind, then you'd have a point. In the real world, you don't.

 

[dismal]

Well, if the worker can capture all of the value they create by going into business for themselves, their taxes will probably go up and the taxes paid by people whose incomes depend on taking value (i.e., greedy capitalists and useless managers) that workers create will go down.

But since redistributive policies will become unnecessary we should be OK.

Yes, in an impossible fantasy world (free-market faithers really love such worlds) in which every single person is separate owner and laborer, requiring that no company makes more widgets than the owner can make with their own hands and mind, then you'd have a point. In the real world, you don't.

If all the value comes from the worker the worker does not need anything else to unlock all the value.

If all the value does not come from the worker where does it come from?

 

[Harry Bosch]

Anarchists most certainly do. They understand that within a capitalist system, which is just a system of organized theft from workers, that workers are denied both ownership and control and the fruits of their labor. And Anarchists would like to replace the current system of theft with a system of economic justice. They would like to put ownership into it's rightful hands, into the hands of workers. They would like to put management into it's rightful hands, into the hands of workers.

You are walking into dismal's point. If all value comes from labor, then any worker owned company would crush any corporation.

 

[skepticalbip]

Anarchists most certainly do. They understand that within a capitalist system, which is just a system of organized theft from workers, that workers are denied both ownership and control and the fruits of their labor. And Anarchists would like to replace the current system of theft with a system of economic justice. They would like to put ownership into it's rightful hands, into the hands of workers. They would like to put management into it's rightful hands, into the hands of workers.

You are walking into dismal's point. If all value comes from labor, then any worker owned company would crush any corporation.

And since there are hundreds if not thousands of labor owned companies in the US, this should raise the suspicion among anarchists that they could possibly be wrong since none of them dominate the market.

 

[untermensche]

Anarchists most certainly do. They understand that within a capitalist system, which is just a system of organized theft from workers, that workers are denied both ownership and control and the fruits of their labor. And Anarchists would like to replace the current system of theft with a system of economic justice. They would like to put ownership into it's rightful hands, into the hands of workers. They would like to put management into it's rightful hands, into the hands of workers.

You are walking into dismal's point. If all value comes from labor, then any worker owned company would crush any corporation.

Management is labor.

If you have a system where workers are stolen from so that management can be paid more then that system will attract the most talented managers.

Anarchism disallows theft from workers, so management skills cannot be paid more at the expense of other workers.

I agree that systems that allow theft from workers have certain inherent advantages.

But none of those advantages are experienced by most workers. Most suffer for that advantage.

 

[arkirk]

You are walking into dismal's point. If all value comes from labor, then any worker owned company would crush any corporation.

And since there are hundreds if not thousands of labor owned companies in the US, this should raise the suspicion among anarchists that they could possibly be wrong since none of them dominate the market.

Earlier in this thread, I pointed out that we are in a Monopoly game and the game is over. Whatever business you go into, worker owned or not, the financial resources for effective start up is already pretty much frozen in the hands of those with no interest in worker owned business and who do not want the competition. Keep in mind the conditions that are on the ground today, and in fact, since the early 1900's.......game over.

Even successful capitalistic enterprises have a rough time unless it involved new technology and those got the interest and investment of the rich early on. We do not have enough fallow ground in our current economic climate to start successful worker owned businesses. It would definitely take far less capital to compete with a worker owned business, but it still takes some capital investment. When it is game over it is the rare business of any kind that can start up and be successful.

 

[untermensche]

And since there are hundreds if not thousands of labor owned companies in the US, this should raise the suspicion among anarchists that they could possibly be wrong since none of them dominate the market.

Earlier in this thread, I pointed out that we are in a Monopoly game and the game is over. Whatever business you go into, worker owned or not, the financial resources for effective start up is already pretty much frozen in the hands of those with no interest in worker owned business and who do not want the competition. Keep in mind the conditions that are on the ground today, and in fact, since the early 1900's.......game over.

Even successful capitalistic enterprises have a rough time unless it involved new technology and those got the interest and investment of the rich early on. We do not have enough fallow ground in our current economic climate to start successful worker owned businesses. It would definitely take far less capital to compete with a worker owned business, but it still takes some capital investment. When it is game over it is the rare business of any kind that can start up and be successful.

It is possible to create an economic climate where worker owned businesses are at a disadvantage.

But that does not mean worker owned businesses are an inferior model. They simply need to be in a different environment to work efficiently.

They need different laws and rules and norms.

With dictatorial control you create a lot of wealth for the dictators. With worker control you create a lot of wealth for the workers.

 

[arkirk]

That's what I was saying...

Earlier in this thread, I pointed out that we are in a Monopoly game and the game is over. Whatever business you go into, worker owned or not, the financial resources for effective start up is already pretty much frozen in the hands of those with no interest in worker owned business and who do not want the competition. Keep in mind the conditions that are on the ground today, and in fact, since the early 1900's.......game over.

Even successful capitalistic enterprises have a rough time unless it involved new technology and those got the interest and investment of the rich early on. We do not have enough fallow ground in our current economic climate to start successful worker owned businesses. It would definitely take far less capital to compete with a worker owned business, but it still takes some capital investment. When it is game over it is the rare business of any kind that can start up and be successful.

It is possible to create an economic climate where worker owned businesses are at a disadvantage.

But that does not mean worker owned businesses are an inferior model. They simply need to be in a different environment to work efficiently.

They need different laws and rules and norms.

With dictatorial control you create a lot of wealth for the dictators. With worker control you create a lot of wealth for the workers.

The cards are all stacked in this game. The unhealthy economic climate is already in place and has to be changed or we will continue to have the same thing...

Adjustments need to be made and those with the power to make those changes show not the slightest interest in changing things. The yachts and the 40million dollar mansions are just too comfortable for them to allow change. The game is over and they do not want to start up a new game. That would entail handing out game pieces...their loot!

 

[untermensche]

The cards are all stacked in this game. The unhealthy economic climate is already in place and has to be changed or we will continue to have the same thing...

Adjustments need to be made and those with the power to make those changes show not the slightest interest in changing things. The yachts and the 40million dollar mansions are just too comfortable for them to allow change. The game is over and they do not want to start up a new game. That would entail handing out game pieces...their loot!

No system of power ever gave up their power voluntarily.

The real problem is the corporate system of power is rapidly altering the environment.

What it is doing to workers is minor compared to that.

 

[bigfield]

Since the thread has become focused only on the Labor market issue, I will focus on the Taxation issue. The OP focuses on taxation effects on the relative difference in personal income, and mentions public services funded by taxation only as a means for lower income people to increase personal income.

public services which indirectly allow people of lower economic status to accumulate wealth (e.g. education services, health services, transport services, etc.)

But a critical feature of taxation is that it shifts some of private wealth into public wealth that (can) improve the well being of all and reduce the amount of personal income needed to enjoy that level of well being. It directly redistributes wealth, so long as you consider that public wealth is just as important to the things impacted by private wealth disparity. This is why private wealth disparity is only modestly related to negative social factors that it is related to. The amount of public wealth matters a great deal. There are ways in which private wealth disparities and grow slightly and yet the public wealth increases by enough to offset any negative impact of private disparity. The problem is that extreme private wealth disparities typically harm and lower the public wealth, in part but not solely because regressive taxation and massive loopholes for the rich and corporations are used to increase the wealth of the already rich while directly reducing public wealth.

Point taken about the effects of public spending on cost of living/affordability of a given standard of living.

What regressive taxation are you referring to? US Social Security? Sin taxes? Do you include VAT, sales tax and GST?

As far as tax avoidance is concerned, are there reasons for not closing these loopholes other than the wealthy protecting themselves? I can see potential benefit in some policies like tax offsets for R&D.

Ideally, a better stat would consider a ratio of private wealth disparity over public wealth that is used to benefit all equally or even skewed toward benefits to the low end. However, this such qualified public wealth is hard to measure with any reliable precision because it means making judgment call about how each dollar in gov revenue is used. For a country like the US that spends so much of its revenue on making a handful of people in the military industry more rich, with little benefit and often harm to the rest of society, the amount of revenue way over-estimates the true amount of public wealth.

Despite the difficult in measurement, it seems like a very useful metric, and a useful principle for determining whether public spending is too high or too low.

 

[doubtingt]

Yes, in an impossible fantasy world (free-market faithers really love such worlds) in which every single person is separate owner and laborer, requiring that no company makes more widgets than the owner can make with their own hands and mind, then you'd have a point. In the real world, you don't.

If all the value comes from the worker the worker does not need anything else to unlock all the value.

If all the value does not come from the worker where does it come from?

I don't agree that all value comes from the worker, but the issue is not that the worker "needs" something else, but that it is highly inefficient for all of the people involved in producing widget X to be working independently. The company that combined many people's efforts and reduced redundancy would make more widgets with less total effort, sell them at lower cost and put the others out of business. That in itself is not a problem, but can be a good thing when it means people have to spend less effort to meet their shared needs. The problem is when all of the benefits of that efficiency go to only a couple people involved in creating the widgets. And the other problem is when the wear and tear on the public infrastructure and resources whose use is what allowed for the company to exist, helped create the context that allowed a market for the widgets, and educated its workers is not adequately replenished from the profits.