Higher global unemployment is the result of lower global labor share

[angelo]

Okay, I see where you're coming from. The crooked capitalists are to blame for all the world's ills. If only they shared their wealth with the downtrodden and the just plain lazy who will not get off their arses and at least have a go to better himself.
Most "capitalists" risked their all to get to where they are. It's also such sentiments that would transfer most of the wealth from first world countries to third world countries just so we can all be equal? I don't begrudge an honest business man who has made good through the sweat of his brow. Remember that if it wasn't for such people their wouldn't be an economy.

 

[arkirk]

Okay, I see where you're coming from. The crooked capitalists are to blame for all the world's ills. If only they shared their wealth with the downtrodden and the just plain lazy who will not get off their arses and at least have a go to better himself.
Most "capitalists" risked their all to get to where they are. It's also such sentiments that would transfer most of the wealth from first world countries to third world countries just so we can all be equal? I don't begrudge an honest business man who has made good through the sweat of his brow. Remember that if it wasn't for such people their wouldn't be an economy.

You are putting words in my mouth and thoughts in my head. I never once mentioned "crooked capitalists." What I am saying is to take the focus off punishing perfectly innocent parties for things they could not help. You have a number of salient exemplars embedded firmly in YOUR PSYCHE. They all just happen to be poor, unemployed or perhaps sick, perhaps even unable to accomplish profitable work and of course it was their fault because it is their nature to be screwed up perhaps morally not aligned with you. Because this laggardlyness is ingrained in these poor ingrates, there is to your way of thinking no reason to help them as all attempts to help them would be futile. That excuses YOU from any humanitarian obligation and nullifies any thoughts you might be violating anybody's civil rights...in YOUR MIND.

It is funny how you decided my answers to problems involved opprobrium or possibly a penal attitude toward today's winners in the capitalist marble game. We are all forced into the game simply by breathing. The game merely directed them to where they are today. It is the nature of the game itself and how it is being played that concerns me, not chasing and punishing "bad guys."

 

[angelo]

In most western nations there are safety nets for such people you describe. But were it not for the taxes that we all pay one way or the other, there wouldn't be any money to provide for the unfortunate. I'm not begrudging them. I'm talking about the bludgers and the no hopers who expect, nay, demand that society owes them a living. I'm not talking about the family that loses the breadwinner and suddenly find themselves living in poverty. Of course these people should get help.

It is sometimes futile to throw good money after bad though. The millions sent to third world countries that doesn't reach the people it's supposed to help but is skimmed off by their corrupt governments/despots who then live in opulent mansions and have Swiss bank accounts while the population perish from hunger and lack of shelter and health care.

 

[Petrel]

In most western nations there are safety nets for such people you describe.

Only because some heavily-maligned political elements fought long, hard battles to create a safety net - which is already in tatters and soon to be removed altogether.

But were it not for the taxes that we all pay one way or the other,

No, we don't all. The rich pay less and the super-rich pay none, and their share is decreasing. At the low end, tax paid by workers is decreasing as more lose their jobs, or their wage falls below cost of living. Not only does the income and income tax of labourers decline, but so does disposable income, and thus property tax, gas and sales tax share. The tax burden is increasingly concentrated on the white collar wage-slave - who is increasingly expendable.

wouldn't be any money to provide for the unfortunate.

There soon won't be.

I'm talking about the bludgers and the no hopers who expect, nay, demand that society owes them a living.

The straw man. The one in five hundred who picks up the odd undeserved crumb. Not the criminals who live high and wide, gamble away the pensions of their employees, then expect, nay, demand, that society owes them a six billion dollar bailout.

I'm not talking about the family that loses the breadwinner and suddenly find themselves living in poverty. Of course these people should get help.

Families lose their breadwinners to unemployment, drink, insanity, war, despair, illness, gunshot wounds, irresponsibility, drugs, car accidents and prison. The kids are equally hungry, however their support disappeared.

It is sometimes futile to throw good money after bad though. The millions sent to third world countries that doesn't reach the people it's supposed to help but is skimmed off by their corrupt governments/despots who then live in opulent mansions and have Swiss bank accounts while the population perish from hunger and lack of shelter and health care.

Sure, but the lobbyists who helped it get to the 'right' [temporary] third world ally work for the arms manufacturers whose contracts depend of export treaties. The lobbyists and munitions workers at least pay taxes.

 

[SimpleDon]

I'd hope so, but aren't optimistic. The gov'ts might want to follow suit, but the corporations wouldn't. Steps toward demand led domestic economies would have to include pretty heavy handed restrictions on outsourcing, offshoring, subcontracting etc. I doubt any forseeable US gov't is even capable of that, let alone likely to initiate it.

I would hope that at some point people would snap out of this free market stupor that most people seem to be in and to realize that people are more important than corporations, profits and financial markets. That these things are only the "how" of the economy and not the "why" of it. The success of the economy and all of these things can only be measured in how well that the economy does for all of the people in society, not in how well they do for themselves.

By any standard the supply driven economy has been a failure compared to the demand driven one that it replaced. Not especially surprising for an economic philosophy that boiled down to making a few people very rich would eventually make everyone else more prosperous too.

 

[SimpleDon]

In the not so distant future with most of the manufacturing done in Asia and elsewhere because of the labour component of the cost, the west has to either finds ways to keep unemployment rising to catastrophic levels by smarter tech, improving productivity or peg the salaries to sustainable levels.
What does a ceo of a major Asian conglomerate make per annum? I'll bet it's nowhere near what they are paid in many Western nations.

I read that when Mercedes bought Chrysler there were more than twenty executives at Chrysler who made more money than the CEO of Dalimer Benz, the parent company of Mercedes. And Dalimer was many times larger than Chrysler.

One of the easiest things to outsource are the services of the head office of a corporation. I know that I helped to do this for my company in the late 1990's. Accounting, a great deal of HR, purchasing, engineering and even marketing can now be out sourced to Hong Kong, Singapore or New Delhi with savings of one half or more. So much of business today is over the internet and by phone that it doesn't much matter where people are actually located.

 

[SimpleDon]

Can't anybody here see the dichotomy? It is assumed there are two teams...the capital team and the labor team, and everybody is expected to work for their team to totally crush the other team. We are one society with two factions that work to destroy each other. They are doing so unwittingly, and both sides imagine that only their solution will work.

Everybody likes to feel there is something special about themselves. Unfortunately that specialness everybody believes they have gives them the feeling they have right to struggle with their fellow humans. We have to learn how to share. This is something nobody in a capitalist system understands anymore. When you suggest a more egalitarian model for the economy, you are immediately attacked for being a Luddite, or a person trying to turn the clock back.

With all this struggling and shuffling after symbolic wealth, we have forgotten that we are organisms that must power themselves through life with their own body and muscles and biotic potential. In today's world, everybody assumes they have the right to travel great distances, use huge amounts of natural resources and in general escape the limitations of their own biology. We consume huge amounts of fuels and our muscles get flabby. We indulge in the stock market and our ability to understand our own nature (organism) gets buried in a game that can, in my humble opinion kill us all.

Alan Watts used to say we are a society that is hung up on words. The words and symbols on money and stock certificates and land titles, and such need to recognized for what they are...symbols that deny our true relationship to our environment. I argued for a long time in the other forum about the "value" of a worker's labor. trying to make it clear that the true value is human survival and well being. The capitalists just said, "If it isn't profitable for me to pay another person for his wages, why should I hire him?" Their thinking is simply "I am a special person with the right to "employ" (use) other people for purposes not their own. Isn't that special?

Symbols and systems of symbols crumble in time and lose their meaning. What does not lose its meaning to a human being is whether he/she is eating well, has sufficient shelter and comfort. We have a choice. Are we going to be predatory to each other in some sort of Friedmanesque tragic play reenactment or are we going to adjust to the conditions the real world provides us?

Our past provides us many examples of man's inhumanity to man. If indeed man cannot learn how to share better with his own kind and the rest of nature, he has a very short, very miserable future.

Tell this to the capital team! They are the ones who told us that society would advance further and faster if we let them have all of the gains from growth and increases in productivity for some time to let them invest in new production facilities and to grow the economy so that eventually the benefits would trickle down to everyone and that everyone would be better off. And since then the growth rate and capital investment has decreased, not increased, income inequality has continued to grow, not shrink. We have more unemployment, not less. And the economy is more unstable because of the massive amount of excess capital in the economy, capital that has repeatedly built one unsustainable asset bubble after another.

Why do we have to accept this as what conditions that the world presents to us when these are man made conditions, ones that we brought on ourselves?

 

[arkirk]

Tell this to the capital team! They are the ones who told us that society would advance further and faster if we let them have all of the gains from growth and increases in productivity for some time to let them invest in new production facilities and to grow the economy so that eventually the benefits would trickle down to everyone and that everyone would be better off. And since then the growth rate and capital investment has decreased, not increased, income inequality has continued to grow, not shrink. We have more unemployment, not less. And the economy is more unstable because of the massive amount of excess capital in the economy, capital that has repeatedly built one unsustainable asset bubble after another.

Why do we have to accept this as what conditions that the world presents to us when these are man made conditions, ones that we brought on ourselves?

The so called bubbles exist because easy money schemes are always unsustainable. Man's physical economy on the planet is a ZERO SUM GAME. Things like respiration, and the food and water cycle are cyclical and there is always needed an anti-action to make more action possible. The capitalist system regards the earth as a storehouse of wealth there for the taking. Capitalists regard money in your pocket as wealth there for the taking. When it comes their turn to facilitate the circulation of wealth economy demands, they balk and go into gambling mode. Part of their problem is that they believe in magical thinking...that the symbols of wealth are wealth.

This type of thinking compartmentalizes the hard cases and losers in a class that is ashamed of itself and shame them regularly. This type of thinking gave us credit cards, student loan debt, housing foreclosures, private contract prisons, and now offers us pollution from sea to shining sea. The idea is simply this magical game MUST BE MANDATORY as that is the only way the human being can work. It says NO to sharing. It says NO to community. It says NO to democracy. It tells us we must develop all our fossil fuels "or we will lose the profit when somebody else does it." It does not consider the physical world or the requirements of our ecosystems. It only considers commerce and trade. It does not want the common man educated. It scoffs at human equality...frequently creating straw men such as we have seen presented to us in this thread. Most importantly, it does not offer the human race an opportunity to flourish or even to survive.

We can continue with this game or we can agree to re-write the rules. This is a horror to people like the Koch Brothers or Mr. Blankfein at Goldman Sachs. They fervently believe, and I quote Blankfein, "We are doing God's work." Nothing strengthens belief in magic like magically high profits. Yes, they engineer the things, but No, they don't understand that it simply cannot stand on its own. They played somewhat by the rules and feel justified in their hoarding of the symbols of wealth. It is the same sort of scenario as the Catholic Church had in the middle ages...they believed they were right and they would do anything to keep that belief alive.

 

[angelo]

Doing away with the profit driven economy [capitalism] will never happen unless the world goes down the true communist way. That's like going back to living in communes as the cave men did.

 

[arkirk]

Doing away with the profit driven economy [capitalism] will never happen unless the world goes down the true communist way. That's like going back to living in communes as the cave men did.

We will all expect to profit from our good works. Your remark smacks of sour grapes, of someone who has been betrayed perhaps and soured on the idea of cooperative community production. I think your attitude comes from living with a constant deluge of propaganda by capitalists who make their living by not working but instead extracting work and money from others. That is their way of life. That is their attitude toward humanity, That is their attitude toward the environment. The funny thing is...billionaires do not think what they are doing is robbery. They just feel entitled. They devalue with their rhetoric those they have to hurt or deprive to extract great advantages for themselves over the best interests of the rest of society.

It is thus, we have mountaintops blown off in the scramble for coal profits. It is thus the people of West Virginia are treated as if their communities don't count. It is thus the watersheds in these areas are treated as unimportant. What departs in the full blooming of excessive capitalism is a sense of being a part of the community, and even a sense of being part of nature itself. It is thus a coal mining CEO feels it is okay to leave his deleterious effects in affected communities (everything from pollution to poverty to ignorance to disease). It is thus, he feels no compunction not to lie to the community from which he is extracting wealth. I am sorry you feel that man simply cannot live without this form of behavior. You must be a really sad, hopeless person.

 

[angelo]

I'm a realist, you are very naive my friend. But at the same time you are enjoying the fruits of a capitalist, profit driven economy and the technology it has brought to the world. You would send us all back to live in a cave if you had your way.

capitalists who make their living by not working but instead extracting work and money from others

This is called contracting, happens every day and most of the time very profitable to both parties. Not all that much different to franchising where the franchisee pays the franchisor for his idea and the risk he took originally to test his ides.

 

[Canard DuJour]

I would hope that at some point people would snap out of this free market stupor that most people seem to be in and to realize that people are more important than corporations, profits and financial markets.

Most people do realise it and aren't in the free market stupor, if they ever were. The problem is that both the political process and formal economics are too compromised to change it. Here we are talking about labour vs capital share, but the neoclassical paradigm barely recognises the distinction. It's largely been the neoclassical project to excise class from formal description of economy. Supply-side still makes sense in such a description. Elect a Barrack Obama and he will consult a Larry Summers.

There was a brief window of contrition in 2008 when Wall St and economists alike were prepared to admit fault. We missed it. Creditors, not debtors, got the bailouts. Narratives blaming the little guy and gov't were concocted (with a few begrudging nods to Hyman Minsky). We're now being told to get used to the new normal, regardless of what we realise.

That these things are only the "how" of the economy and not the "why" of it. The success of the economy and all of these things can only be measured in how well that the economy does for all of the people in society, not in how well they do for themselves.

By any standard the supply driven economy has been a failure compared to the demand driven one that it replaced. Not especially surprising for an economic philosophy that boiled down to making a few people very rich would eventually make everyone else more prosperous too.

I and millions of others completely agree. Unfortunately it doesn't help with the bind we're in.

 

[ksen]

But at the same time you are enjoying the fruits of a capitalist, profit driven economy and the technology it has brought to the world.

Well, the technology most likely created through evil government investment and commercialized by the private sector.

Is there any area where privatization has resulted in lower costs and better performance?

 

[angelo]

Privatisation is an ideal way for governments to boost their budgets. But only profitable gov assets can be flogged. No one wants to pay for a loss making enterprise. In that case its usually contracted out.

 

[ksen]

Privatisation is an ideal way for governments to boost their budgets.

How so?

But only profitable gov assets can be flogged. No one wants to pay for a loss making enterprise. In that case its usually contracted out.

I don't know what you're saying here. The government is more likely to privatize a loss making enterprise?

What specific areas has privatization helped lower costs and increase performance?

 

[angelo]

Not too many, but have one example that comes to mind here. A gov operated and owned gas supplier to domestic households. Losing big time because of bad management and far too many people that were surplus to needs. Privatasing this concern turned
It into a profitable company. Many jobs surplus to need were axed.

 

[angelo]

Anybody ever stop and think that there are too many people in the world? Ever more growth population wise can only increase this situation for the worst. Some would say population explosion= more consumers. But these people have to be able to have employment before they can be consumers.

 

[bilby]

Anybody ever stop and think that there are too many people in the world? Ever more growth population wise can only increase this situation for the worst. Some would say population explosion= more consumers. But these people have to be able to have employment before they can be consumers.

Given that economic growth has massively outstripped population growth since the development of agriculture, it is pretty clear that this is complete bollocks.

The total world per-capita product is the relevant measure here (for population to be the problem would imply world gross product per capita falling, as the number of persons increases); world product per capita has been increasing, since basically forever, with tiny setbacks interspersed with massive growth phases.

The answer to your question is, "Yes, lots of people have considered that there are too many people in the world, and they have all been very, very wrong - often disastrously so".

As bad ideas go, this one is perhaps one of the worst in the history of mankind.

It almost invariably leads to someone deciding that there are too many of 'them' (while, coincidentally, there turn out to be just enough of 'us'), at which point war, genocide, famine or mass deprivation of liberty (or any combination of these four) are just around the corner.

That this idea is dangerously alluring, despite being completely wrong, has been well known for centuries. See, for example, Swift's Modest Proposal

 

[arkirk]

Not too many, but have one example that comes to mind here. A gov operated and owned gas supplier to domestic households. Losing big time because of bad management and far too many people that were surplus to needs. Privatasing this concern turned
It into a profitable company. Many jobs surplus to need were axed.

So now a private company makes profits and we all pay more for unemployment. You have an unhealthy desire for explosive growth of profit centers, as if they were some type of miraculous savior for mankind...jetisoning
worthless lagards and routing profits to investors. When it was "privatized," it was bought for pennies on the dollar from the government (the usual route of privatization) by people who soon become oligarchs if they are not already. Your vision of their "success" is created for the owner by somebody on Madison Ave.

What actually is happening here is that the commons are being stolen from the people on the basis the well to do deserve to run everything. Does angelo atheist propose we remove some of these supernumary people from the planet so his idea of free market can work better? By remove, I mean kill. Private business simply is too divorced from society as a whole to be trusted with control of our commons. Privatization just complicates the problems of the government, especially if it is trying to be the government of all the people and serve all the people.

 

[angelo]

Whether it's right or wrong Western governments are set in their ways and will keep on selling the family farm bit by bit until the only government owned enterprises left are the always loss making public transport, health services, public servants/services. etc., etc.. Capitalism is far from a perfect system, but all the other systems are far worse.