# Re-Framing Capitalism

#### DBT

##### Contributor
If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business.
So the person gets $0/hr rather than$12/hr. Somehow I think the $12/hr is better. Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them. It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs. Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom. What??? People want to spend as little as they can to get as much as they can. So managers being people, you are right. If you need to buy a new car and you find the model you want for two thousand dollars less at one dealership than another one, which dealer are you going to buy from? Do you feel that you should make the dealer with the lowest price take another two thousand dollars because it just wouldn't fair not to? After all, the dealer has financial responsibilities for his family. On the other hand, workers want to get payed as much as they can get. Should they voluntarily ask for less because to accept more would mean someone else would have to do without? You missed the bit about a power imbalance between individual workers and employers.....where there is virtually no negotiating pay rates in some sectors, this is our rate, take it or leave it. Which is the reason why unions were formed in the first place - collective bargaining increases negotiating power - and progressive nations set a minimum wage. No I didn't miss the power imbalance. There is a power imbalance in all human dealings. But you seem to believe that the worker is always at the mercy of the business manager. I didn't say the worker is ''always at the mercy of the business manager'' - I said that there is a power imbalance between an individual worker and business manager. That imbalance can shift if the business is short of workers and has trouble attracting applicants.....at which point the pay rate offered goes up. But that wasn't the point. Not so. A worker that feels that they are so valuable to the business because of their great qualifications that they deserve a higher wage can negotiate with the company for their wage. They also are free to leave (and can use that as bargaining leverage) and offer their expertise to another company that recognizes their talent, leaving the first business to suffer the loss of his talent. I wasn't talking about employees with highly marketable skills who are in demand and are offered attractive salaries. And labor unions do not always benefit the worker. My older brother was a staunch union man working for the old Eastern Airlines. The airline was in financial problems and the Union decided to strike for wages. This bankrupted the airline and he had to find a grunt job pulling wire for a contracting company for one third the salary he had been making... still a union job though. Thousands of old Eastern Airlines employees ended up in the same boat. There are exceptions to practically everything. Unions can go overboard. Employers can be extremely exploitative,unsafe work practices, poor wages, etc. #### Swammerdami ##### Squadron Leader Staff member If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. That seems to demonstrate a lack of understanding of how a business works. . . . The workers are their own profit centers and they are selling their labor as their product so they need to decide what price they are setting for their product. If they over price their product then their potential customer (the business they want to work for) may buy their competitor's product. Yes. The idea that Amazon's profits are due to its workers and should be fully shared with them is absurd. Like it or not, that labor is a commodity. (How about a company losing money? Should those workers share in the losses? ) Production comes from land, capital machinery, entrepreneurial skills, skilled and unskilled labor, and so on. In olden times unskilled labor was a huge portion of the total contribution to product, so unskilled laborers got a reasonable portion of the total "pie" unless there was institutionalized oppression. But nowadays land is scarce, and expensive automation has reduced the value of some human labor. Simple economic logic dictates that unskilled labor will get a smaller share of the "pie." For a functional economic society, some sort of "basic income" will be needed. In particular, making employers responsible for employee healthcare is silly, and reduces the incentive to hire. It's too bad that inertia perpetuates that silliness. #### Loren Pechtel ##### Super Moderator Staff member If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. So the person gets$0/hr rather than $12/hr. Somehow I think the$12/hr is better.

Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them.

It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs.

Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom.
In other words, you can wave a magic wand and fix the problem.

Nope, the way to get rid of bad jobs is to create better jobs.

#### DBT

##### Contributor
If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business.
So the person gets $0/hr rather than$12/hr. Somehow I think the $12/hr is better. Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them. It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs. Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom. In other words, you can wave a magic wand and fix the problem. Nope, the way to get rid of bad jobs is to create better jobs. I made no mention of "bad jobs" or getting rid of them. #### Loren Pechtel ##### Super Moderator Staff member If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. So the person gets$0/hr rather than $12/hr. Somehow I think the$12/hr is better.

Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them.

It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs.

Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom.
In other words, you can wave a magic wand and fix the problem.

Nope, the way to get rid of bad jobs is to create better jobs.

I made no mention of "bad jobs" or getting rid of them.

You didn't use the words, but that's what you're in effect calling $12/hr jobs. #### DBT ##### Contributor If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. So the person gets$0/hr rather than $12/hr. Somehow I think the$12/hr is better.

Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them.

It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs.

Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom.
In other words, you can wave a magic wand and fix the problem.

Nope, the way to get rid of bad jobs is to create better jobs.

I made no mention of "bad jobs" or getting rid of them.

You didn't use the words, but that's what you're in effect calling $12/hr jobs. Nothing to stop a profitable business from offering better pay and conditions except an unwillingness to do so in order to maximise profit. #### Harry Bosch ##### Contributor If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. So the person gets$0/hr rather than $12/hr. Somehow I think the$12/hr is better.

Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them.

It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs.

Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom.
In other words, you can wave a magic wand and fix the problem.

Nope, the way to get rid of bad jobs is to create better jobs.

I made no mention of "bad jobs" or getting rid of them.

You didn't use the words, but that's what you're in effect calling $12/hr jobs. Nothing to stop a profitable business from offering better pay and conditions except an unwillingness to do so in order to maximise profit. Maximizing profit is human nature. When you hire a firm to repair your fence, do you offer to pay them more than their bid? #### DBT ##### Contributor If a job can't generate enough revinue to pay someone a reasonable rate, the firm should reconsider its business plan. Of course it's not that simple, some menial jobs can be allocated to juniors on commensurate rates. Janitorial work may generate no revenue, yet cleaning is essential work, therefore the business, being otherwise profitable wears the cost. Just a part of running a business. So the person gets$0/hr rather than $12/hr. Somehow I think the$12/hr is better.

Killing bad jobs doesn't magically make good jobs appear. If good jobs exist the bad jobs will die a natural death anyway, no need to do anything to get rid of them.

It's a matter of a power imbalance between management and workers and not good or bad jobs, or killing jobs.

Managers are motivated to keep running costs down, which means paying the minimum. Without protection for vulnerable workers, a race to the bottom.
In other words, you can wave a magic wand and fix the problem.

Nope, the way to get rid of bad jobs is to create better jobs.

I made no mention of "bad jobs" or getting rid of them.

You didn't use the words, but that's what you're in effect calling $12/hr jobs. Nothing to stop a profitable business from offering better pay and conditions except an unwillingness to do so in order to maximise profit. Maximizing profit is human nature. Maximizing profit is human nature, which is why those best positioned to profit do the best. When you hire a firm to repair your fence, do you offer to pay them more than their bid? The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. #### skepticalbip ##### Contributor The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell. #### Loren Pechtel ##### Super Moderator Staff member You didn't use the words, but that's what you're in effect calling$12/hr jobs.

Nothing to stop a profitable business from offering better pay and conditions except an unwillingness to do so in order to maximise profit.
Yeah, the usual infinite profit myth. That's not how the world works--a company that is making extra profit will find itself facing more competition. Only companies with monopoly power can actually make extra profit on a sustained basis.

#### DBT

##### Contributor

The customer may hold the balance of power when it comes to quoting price.

The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work.

If the shoe is on the other foot, prices surge, they quote high.

Supply and demand.

Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature.
So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell.

It appears that I understand the issue far better than you.

We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules.

There are countless examples of this in history and in current times.

#### DBT

You didn't use the words, but that's what you're in effect calling $12/hr jobs. Nothing to stop a profitable business from offering better pay and conditions except an unwillingness to do so in order to maximise profit. Yeah, the usual infinite profit myth. That's not how the world works--a company that is making extra profit will find itself facing more competition. Only companies with monopoly power can actually make extra profit on a sustained basis. I didn't mention 'infinite profit' - that is your strawman. A profitable company should be able to meet its running costs without shafting its workers. #### skepticalbip ##### Contributor The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell. It appears that I understand the issue far better than you. We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules. There are countless examples of this in history and in current times. And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages. WTF do you have against the idea of someone improving their skills so that their labor will be valuable and companies will compete to hire them? That would be good for the worker, good for the company, and good for the country. #### DBT ##### Contributor The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell. It appears that I understand the issue far better than you. We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules. There are countless examples of this in history and in current times. And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages. But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate? Have you forgotten history, the reasons why unions were formed? Where workers getting their share of the profits when they worked 12 hour days, six days a week for a pittance? You must understand that it's more a matter of power balance rather then market value when it comes to wage rates. The rate goes up if workers are in short supply, not necessarily because the firm is generating more profit. Often it doesn't matter how profitable the company, minimum wage is paid, power balance is the rule. WTF do you have against the idea of someone improving their skills so that their labor will be valuable and companies will compete to hire them? That would be good for the worker, good for the company, and good for the country. There is work that needs doing regardless of upward mobility. Where immigrants do menial work that the native population refuses because it's dirty, hard and lowly paid, yet it is essential work. Some don't have the capacity to become Lawyers, Doctors or Engineers, and there would be a glut if everyone could. Someone has to do the menial work, and they should not be exploited or marginalized. Basically; ''The idea wages are set by demand and supply and productivity is ‘bankrupt’. They are determined by power, experts say.'' Quote: ''The aim of this essay will determine there is a power imbalance existing in between the employment relationship. In the employment era, there are existence of employers and employees. There is always a link between the employer and employee and it is known as the employment relationship (International Labour Organization, 2008). Basically, the employment relationship is equally important for employers and employees as it will determine the performance and working condition of the employees. However, power always exists in the employment relationship between employers and employees. Power is defined as “the capability to impose power that can be used to analyze power relationship between an employer and an employee in an employment contract” (Geoff H, 2006).When there is a misuse of power, it will create a power imbalance between employers and employees. Employers will use their own bargaining power to adjust wages to a specific levels, (Geoff H, 2006), whereby the employees have the intrinsic power to control over by determine the wages and other conditions of employment of the employee side (Geoff H, 2006). There are evidences of power imbalance proved in the employment relationship, whereby employers have the power to exploit their employees and the employees have the expert power and the help of trade union to against been exploited by their employers. The gap between employers and employees should be nearer.'' #### skepticalbip ##### Contributor The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell. It appears that I understand the issue far better than you. We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules. There are countless examples of this in history and in current times. And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages. But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate? They are apparently getting more than their 'fair market value' as evidenced by Walmart is finding that automation is more economical than the non-skilled workers it is replacing. Of course Luddites will have hissy fits. Skilled labor does not mean lawyers, doctors, engineers, etc. It means plumbers, electricians, carpenters, heavy equipment operators, etc. etc. Skills that can be learned in fairly short time either in a trade school, independently, or as on the job training. Such skilled labor is in high demand and well paid. Minimum wage jobs that require no skills should be considered by a worker as temporary while they are learning the skills to really enter the job market. I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual. #### rousseau ##### Contributor There are evidences of power imbalance proved in the employment relationship, whereby employers have the power to exploit their employees and the employees have the expert power and the help of trade union to against been exploited by their employers. The gap between employers and employees should be nearer.'' You repeat points like this on similar threads, but the line of thinking never goes beyond the superficial level, and really doesn't address what's actually happening. It makes a good sound-byte to stick up for employees, which is fine, but the repetitive and vague comments aren't that interesting. - Have you considered that when unions rose to power there was a real, and significant imbalance that ended up being rectified because it was literally unjust - Have you considered the situation where corporations flounder and fail because they can't pay skilled employees enough - What about how our quality of life has risen so much, that it makes it possible for populations to reach excess (glut of unskilled labour) - To what degree is the well-being of the world at large the responsibility of corporations? - To what degree is the well-being of the world at large the responsibility of those people themselves, and their family? - What about employees who are skilled enough that it drives up their wages? - Sociologically, can a corporation even pay an employee more than their value on the market, except in rare cases - What goal are we actually driving at with the economy, and how should we achieve it? Is giving more and more people slightly more money actually the answer? (yes this is a complicated question) etc etc I'm all for social justice, but the problem is a lot more complicated than this conversation conveys. And we keep repeating these same points ad nauseum. #### Bomb#20 ##### Contributor Hi, Bomb. I know you're smarter than you sound. At this point, if I wrote "The sky is blue" I think you'd post an erudite-sounding paragraph discussing the difference between azure and cyan. Good argument. I'm not sure what you mean by "government-enforced ownership." A main role of government is to HELP the rich everyone with police, judges and prisons so that the mob can't rush in and seize the rich's property. FIFY. Which is to say, when the mob rushes in and seizes the rich's property, who exactly do you think it is that winds up doing grunt work in Paris while going from salon to salon trying to convince anyone who'll listen to help restore them to their former riches, and who exactly do you think it is that's still trapped in Russia, starving to death in the resulting famine? I'm not bothering to understand what this means, except as a variation on "The police will protect the homes of everyone. whether they live in a$100 million mansion or under a bridge." Oh, wait. Even that's not true: Wealthy people do generally get better response from police and justice system.
Well, dude, if you don't bother to understand, you have no one to blame but yourself when you wind up completely misunderstanding. Exactly which part of "famine" do you think means something about equality of police response? When governments stop using police, judges and prisons to prevent mobs from rushing in and seizing the rich's property, you get famines. The Soviet Union, China, North Korea, Cambodia. That is the mechanism by which the role of government you mentioned helps everyone; it isn't by means of protecting the homes of those living under bridges that it helps everyone.

The way forward to reduce (not eliminate) income inequality is by
• Making tax codes more progressive. People earning $10 million annually should pay at least a slightly higher tax rate than those making do with just$1 million annually.
This is a popular sentiment. I find it incomprehensible except as an expression of unalloyed outgroup hostility, or else perhaps as a strategic attempt to divide and conquer by creating a conflict of interests. Why on earth should the government involve itself in interfering with the results of the market specifically on behalf of those making $1 million a year, people who don't need the help, people who are evidently entirely capable of simultaneously standing on their own feet while also paying their full share of a citizen's obligation to help cover the general overhead of maintaining a functioning society? So multi-millionaires have the same needs, wants and life-styles as multi-billionaires? How the devil did you get that out of what I wrote? Of course they have different needs, wants and lifestyles. You appear to have concluded I was implying they had the same needs, wants and lifestyles because you took some other premise of your own for granted. Most likely it was the authoritarian premise that it's a proper function of government to micro-manage the people's wants and lifestyles in pursuit of whatever goals government social engineers happen to prioritize whether there's a rational basis for it and a compelling state interest at stake or not. I submit that there's a rational basis and a compelling state interest at stake when the government decides poor workers being able to afford shoes for their kids is more important than a rich investor being able to afford a vacation in Cancun. But that does not qualify as a reason to imagine there's any rational basis or any compelling state interest at stake when the government decides rich investors being able to afford vacations in Cancun is more important than a richer CEO being able to afford to buy a Hawaiian island. The differences between multi-millionaires' needs, wants and lifestyles and those of multi-billionaires are too trivial to constitute grounds for discrimination in favor of the one against the other. A government should not enact one law for me and a different law for thee if it doesn't have a darn good reason. How about people earning$900,000? The way you write, I'd guess your ideal tax table would be full of "cliffs".
Dude! You just made that up. The way I write had nothing to do with it. You picked two arbitrary data points so I talked about those two data points. How I would extrapolate below those two points was left unspecified. Of course if the tax system were up to me it wouldn't have cliffs. Cliffs are stupid -- they create perverse incentives. And as some wag put it, "People respond to incentives. That is the whole of economics -- the rest is commentary."

My guess is your math is good enough to know that an infinitely-differentiable function which is straight-lined over any tiny segment must be straight-lined everywhere.
You have a purely aesthetic preference for analytic functions? Personally, I bear no prejudice against spline curves. "Infinitely differentiable" is not a compelling state interest. My guess is your math is good enough to know a discontinuous function is a cliff, but a function with a discontinuity in its second derivative is not a cliff and does not create a perverse incentive.

Besides which, good luck getting a tax law full of logs and exponentials enacted. Existing American tax rates aren't even splines; they're just piecewise linear, in service of the very compelling state interest in a tax law that's comprehensible to accountants, and taxpayers, and basically everyone but politicians. (Did I mention I'd be in favor of making it a felony to do taxes for a congressthing? That would simplify the tax law right quick. )

The moral case for a progressive tax is two-fold. First, it's a way to correct for the economic insanity western civilization has gotten itself into of taxing workers on their income instead of on their profit: the excess of their income over the necessary expenses they must pay in order to maintain that income stream.

What on earth are you babbling about? If you think Elon Musk should have been allowed to deduct his health insurance premium from his $30+ billion income in 2021, I don't disagree. I'm "babbling" that a poor worker on the edge of holding it together should get to deduct his health insurance premium and his grocery bill and his rent; and the fact that he can't deduct any of those and can't even deduct a major hospital bill unless it exceeds 7.5% of his income is stupid, and unjustifiable. And discriminatory, since businesses are allowed to deduct the expenses they have to spend in order to keep their revenue streams coming. (And yes, Musk should be allowed to deduct those things too, since the law should be the same for everyone unless there's a darn good reason otherwise.) It's the political clique which you now seem to be allied with that eliminated most deductions. What the bejesus are you on about? Who is it you think I'm allied with? There is no political clique that gives a rat's ass about what I'm talking about. A plague on all their houses. I'm Thoreau's "majority of one". . . .But neither of those reasons has any bearing on people making$1 million a year. So what moral justification is there for progressive tax rates at the high end of the income scale?
I write "a slightly higher tax rate" and you accuse me of coddling those with a million-dollar income? If I were going for the grade-school "logic" that apparently appeals to you now, I'd accuse you of coddling those who make just $900,000. As opposed to the grade-school illogic that appeals to you? You'd accuse me of that because you make up garbage about others. I said not a word about$900,000; you impute cliffs and extrapolations without evidence, for rhetorical purposes. Don't do that.

(For what it's worth, I don't see a good reason for the top tax bracket not kicking in at a level below my income. I'm a prosperous well-paid worker bee. Never been to Cancun, but it doesn't take a $900,000 income to go there and I could go if I prioritized that.) And why are we speaking of "morality" again? "Again"? You started it and neither of us stopped. If you're under the impression that "People earning$10 million annually should pay at least a slightly higher tax rate than those making do with just $1 million annually."​ and "Corporations should pay higher tax."​ aren't moral claims, you're delusional. Corporations should pay higher tax. <counterargument snipped> Gibberish. <counter-counterargument snipped> You're gasping[sic] at straws to bring up side-issues like this. What's next? A lecture on the difference between "qualified" dividends and "unqualified"? Dude, you're the one who brought up a detail of the tax code. If it's a side-issue, let's move on. Anyway, property tax — though arguably regressive — is a better way to raise revenue than, e.g. sales or payroll tax. If you don't know why start a thread and ask So who said anything in favor of sales and payroll taxes? Those (and a payroll tax is a sales tax) have a greater distorting effect on economic decision-making than property taxes, income taxes, and profit taxes. ... AFTER you've calmed down. ... says the guy who resorted to insults and wrote in all caps. [rant rant babble babble] I had a very favorable impression of Bomb#20. Well-informed, articulate and intelligent centrist views. I hope that Bomb#20 comes back. Good argument. #### DBT ##### Contributor There are evidences of power imbalance proved in the employment relationship, whereby employers have the power to exploit their employees and the employees have the expert power and the help of trade union to against been exploited by their employers. The gap between employers and employees should be nearer.'' You repeat points like this on similar threads, but the line of thinking never goes beyond the superficial level, and really doesn't address what's actually happening. It makes a good sound-byte to stick up for employees, which is fine, but the repetitive and vague comments aren't that interesting. I repeat it because the subject comes up and power imbalance is relevant to the issue of pay and conditions. Individual workers have very little negotiating power unless they have skills that are in demand....which mostly does not apply to menial but essential work. Which in turn leaves that sector of workers hung out to dry, unless they have collective bargaining or union representation. I repeat it because that's how the world works. Business managers don't feel the need to be generous or even work out fair market value, their interest lies in keeping running costs down, and workers in that sector are easy to dismiss. Human nature 101. - Have you considered that when unions rose to power there was a real, and significant imbalance that ended up being rectified because it was literally unjust Obviously i have. The situation was improved through union action and progressive elements in Government. Which does not mean that Business interests no longer take advantage of workers in certain sectors. Many do because they can. That being the reason why we have minimum wage and safe work practices in legislation. #### DBT ##### Contributor The customer may hold the balance of power when it comes to quoting price. The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work. If the shoe is on the other foot, prices surge, they quote high. Supply and demand. Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature. So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell. It appears that I understand the issue far better than you. We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules. There are countless examples of this in history and in current times. And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages. But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate? They are apparently getting more than their 'fair market value' as evidenced by Walmart is finding that automation is more economical than the non-skilled workers it is replacing. Of course Luddites will have hissy fits. Skilled labor does not mean lawyers, doctors, engineers, etc. It means plumbers, electricians, carpenters, heavy equipment operators, etc. etc. Skills that can be learned in fairly short time either in a trade school, independently, or as on the job training. Such skilled labor is in high demand and well paid. Minimum wage jobs that require no skills should be considered by a worker as temporary while they are learning the skills to really enter the job market. I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual. The desire to reduce running costs drives automation, which doesn't mean that Walmart wasn't a profitable business before automation. It's another example of cost cutting in order to increase profits. If pay can't be kept to a bare minimum, practically slave wages, let's automate. If that practice becomes widespread, there may be fewer customers - there being a large base of long term unemployed - to buy their products. Not to mention creating a sector of disenfranchised people living with a sense hopelessness, drug addiction and social unrest. Something like the road the US is going down right now. Walmart annual/quarterly gross profit history and growth rate from 2010 to 2022. Gross profit can be defined as the profit a company makes after deducting the variable costs directly associated with making and selling its products or providing its services. • Walmart gross profit for the quarter ending April 30, 2022 was$34.722B, a 0.9% decline year-over-year.
• Walmart gross profit for the twelve months ending April 30, 2022 was $143.438B, a 1.53% increase year-over-year. • Walmart annual gross profit for 2022 was$143.754B, a 3.54% increase from 2021.
• Walmart annual gross profit for 2021 was $138.836B, a 7.33% increase from 2020. • Walmart annual gross profit for 2020 was$129.359B, a 0.2% increase from 2019.

#### skepticalbip

##### Contributor

The customer may hold the balance of power when it comes to quoting price.

The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work.

If the shoe is on the other foot, prices surge, they quote high.

Supply and demand.

Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature.
So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell.

It appears that I understand the issue far better than you.

We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules.

There are countless examples of this in history and in current times.
And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages.

But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate?
They are apparently getting more than their 'fair market value' as evidenced by Walmart is finding that automation is more economical than the non-skilled workers it is replacing. Of course Luddites will have hissy fits.

Skilled labor does not mean lawyers, doctors, engineers, etc. It means plumbers, electricians, carpenters, heavy equipment operators, etc. etc. Skills that can be learned in fairly short time either in a trade school, independently, or as on the job training. Such skilled labor is in high demand and well paid. Minimum wage jobs that require no skills should be considered by a worker as temporary while they are learning the skills to really enter the job market.

I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual.

The desire to reduce running costs drives automation, which doesn't mean that Walmart wasn't a profitable business before automation.

It's another example of cost cutting in order to increase profits. If pay can't be kept to a bare minimum, practically slave wages, let's automate.
If it were the old British mercantile system of the 1800s (that Marx railed against), that gibberish would almost make a little sense. However, today keeping costs down is necessary to compete in the market.
If that practice becomes widespread, there may be fewer customers - there being a large base of long term unemployed - to buy their products.
Utter nonsense. The world is much more than Walmart.
Not to mention creating a sector of disenfranchised people living with a sense hopelessness, drug addiction and social unrest.
More Marxist nonsense.
You still haven't explained why you think that unskilled people can't learn the skills necessary so they can compete in the job market, if they have the initiative. It is as if you believe that individuals have absolutely no personal responsibility, that they are surfs forbidden by law to act in their own behalf as individuals. You appear to accept the Marxist idea that, instead of individuals, only classes exist and that everyone must remain in their class because there are class barriers and there is no class mobility.

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#### DBT

##### Contributor

The customer may hold the balance of power when it comes to quoting price.

The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work.

If the shoe is on the other foot, prices surge, they quote high.

Supply and demand.

Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature.
So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell.

It appears that I understand the issue far better than you.

We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules.

There are countless examples of this in history and in current times.
And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages.

But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate?
They are apparently getting more than their 'fair market value' as evidenced by Walmart is finding that automation is more economical than the non-skilled workers it is replacing. Of course Luddites will have hissy fits.

Skilled labor does not mean lawyers, doctors, engineers, etc. It means plumbers, electricians, carpenters, heavy equipment operators, etc. etc. Skills that can be learned in fairly short time either in a trade school, independently, or as on the job training. Such skilled labor is in high demand and well paid. Minimum wage jobs that require no skills should be considered by a worker as temporary while they are learning the skills to really enter the job market.

I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual.

The desire to reduce running costs drives automation, which doesn't mean that Walmart wasn't a profitable business before automation.

It's another example of cost cutting in order to increase profits. If pay can't be kept to a bare minimum, practically slave wages, let's automate.
If it were the old British mercantile system of the 1800s (that Marx railed against), that gibberish would almost make a little sense. However, today keeping costs down is necessary to compete in the market.
If that practice becomes widespread, there may be fewer customers - there being a large base of long term unemployed - to buy their products.
Utter nonsense. The world is much more than Walmart.
Not to mention creating a sector of disenfranchised people living with a sense hopelessness, drug addiction and social unrest.
More Marxist nonsense.
You still haven't explained why you think that unskilled people can't learn the skills necessary so they can compete in the job market, if they have the initiative. It is as if you believe that individuals have absolutely no personal responsibility, that they are surfs forbidden by law to act in their own behalf as individuals. You appear to accept the Marxist idea that, instead of individuals, only classes exist and that everyone must remain in their class because there are class barriers and there is no class mobility.

It has nothing to do with Marxism. It's how the world works, human nature in relation to how business is conducted in terms of profits and running costs.

It's only natural that a business maximizes its profits and keeps its costs down.

Which is fair enough.

The issue here is when business interests take advantage of marginalized workers and use their own leverage to suppress wages to the point where the pay rate barely cover basics expenses and do not relate to the productive value the employees.

Employers get to pick what they pay.

''If price growth merely stays at its current level of 3.5%, the budget’s forecast of 3.25% wages growth means real wages will fall.
And, given most of the budgets since 2014 have overestimated wages growth, it is worth considering what would happen if wages growth has been overestimated once again: real wages would fall still further.

Something weird is happening in the labour market.

With very few unemployed people available for each vacancy, employers ought to be offering higher wages to compete for workers.
But the concept of “monopsony” gives us an idea why that’s not happening.

The core idea of monopsony is that employers can choose (within constraints) the wages they pay their workers.''

#### Harry Bosch

##### Contributor

The customer may hold the balance of power when it comes to quoting price.

The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work.

If the shoe is on the other foot, prices surge, they quote high.

Supply and demand.

Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature.
So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell.

It appears that I understand the issue far better than you.

We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules.

There are countless examples of this in history and in current times.
And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages.

But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate?
They are apparently getting more than their 'fair market value' as evidenced by Walmart is finding that automation is more economical than the non-skilled workers it is replacing. Of course Luddites will have hissy fits.

Skilled labor does not mean lawyers, doctors, engineers, etc. It means plumbers, electricians, carpenters, heavy equipment operators, etc. etc. Skills that can be learned in fairly short time either in a trade school, independently, or as on the job training. Such skilled labor is in high demand and well paid. Minimum wage jobs that require no skills should be considered by a worker as temporary while they are learning the skills to really enter the job market.

I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual.

The desire to reduce running costs drives automation, which doesn't mean that Walmart wasn't a profitable business before automation.

It's another example of cost cutting in order to increase profits. If pay can't be kept to a bare minimum, practically slave wages, let's automate.
If it were the old British mercantile system of the 1800s (that Marx railed against), that gibberish would almost make a little sense. However, today keeping costs down is necessary to compete in the market.
If that practice becomes widespread, there may be fewer customers - there being a large base of long term unemployed - to buy their products.
Utter nonsense. The world is much more than Walmart.
Not to mention creating a sector of disenfranchised people living with a sense hopelessness, drug addiction and social unrest.
More Marxist nonsense.
You still haven't explained why you think that unskilled people can't learn the skills necessary so they can compete in the job market, if they have the initiative. It is as if you believe that individuals have absolutely no personal responsibility, that they are surfs forbidden by law to act in their own behalf as individuals. You appear to accept the Marxist idea that, instead of individuals, only classes exist and that everyone must remain in their class because there are class barriers and there is no class mobility.
It's much more fun to play video games than train for new skills.

#### skepticalbip

##### Contributor

It has nothing to do with Marxism. It's how the world works, human nature in relation to how business is conducted in terms of profits and running costs.
I guess then that it is just a wild coincidence that you seem to see the way the world works the same way Marx saw it... and both offer many of the same "solutions". You should read Marx. You would find a new kindred spirit.

Personally I found kindred spirits when reading thinkers like Voltaire, Montesquieu, and Smith.

#### Tharmas

##### Veteran Member
I'm no economist, but my understanding is that Marx developed his ideas about how capitalism works based on the earlier economic theories of various pro-capitalist writers. For instance, the labor theory of value comes from Adam Smith.

I believe, but I may be mistaken because it’s been fifty years, that I learned about Marx’s sources from Edmond Wilson’s To the Finland Station, which traces the development of socialism from the French Revolution right up to the eve of the Communist Revolution in 1917.

I am not necessarily claiming that the labor theory of value is correct or accepted by economists today. It's just one example of an idea Marx picked up from capitalist apologists.

#### Loren Pechtel

##### Super Moderator
Staff member
The customer may hold the balance of power when it comes to quoting price.

The firm may be desperate for work, perhaps with too much competition in town they quote low in order to secure work.

If the shoe is on the other foot, prices surge, they quote high.

Supply and demand.

Individual workers without marketable skills, without protection in law, or a union, tend to get exploited. That's human nature.
So you do understand. A worker with nothing marketable to sell to his customer (the business he wants to work for) will not get much for his product (his labor). It is odd that you advocate that the business should pay more to buy an unmarketable product rather than that the worker should develop some marketable skills to sell.

It appears that I understand the issue far better than you.

We are not just talking nothing more than a commodity, but people's lives. Just because there may be a pool of unemployed to draw from shouldn't give firms free rein to exploit. Which is why progressive nations set minimum pay and conditions.....without which it's a race to the bottom. Merciless exploitation of workers regardless of the firms ability to pay significantly more. Greed rules.

There are countless examples of this in history and in current times.
You are still giving no reason to believe a business can remain in business while paying too much. Maybe for a while during good times but the market sets a basic profit ratio and good wishes can't change that--a field of business which makes too much profit will face added competition as others try to get in on the good times (exception: those with monopoly power of some type). A field of business which makes too little profit will not see replacement of attrition. In either case this will in time move the profit margin back to where the market puts it.

The only way you can overcome this is by force--minimum wage laws. However, when minimum wage is above market rate you will find employers exploiting their workers in other ways--they'll put up with the exploitation rather than not have a job.

Thus the only true fix is to improve the economy.

#### Loren Pechtel

##### Super Moderator
Staff member
And you don't seem to understand reality. When the minimum wage is set at a rate greater than the value/hour of unskilled workers then the company automates or relocates or maybe drops a product line (and the workers on that product) that is made unprofitable. Which means that rather than receiving low wages the worker receives no wages.

WTF do you have against the idea of someone improving their skills so that their labor will be valuable and companies will compete to hire them? That would be good for the worker, good for the company, and good for the country.
Blasphemy!

It's religious thinking--a fundamental tenant of their faith is that there is enough profit to fund anything they consider worthwhile. It's a matter of faith, contradicting it is blasphemy and basically incomprehensible and thus any rebuttal will not be understood. Note that it is not only the left that has this problem, we see even more of it from the right.

#### Loren Pechtel

##### Super Moderator
Staff member
But it's not set at market value of the labour. Look at places like Walmart, do you think that the workers are getting a fair market value for their labour and the wealth they help generate?

As usual, the demonizing of WalMart. Oops--they tend to pay more than similar jobs elsewhere. Their real "sin" is their rabid anti-union stance, not their wages.

#### Loren Pechtel

##### Super Moderator
Staff member
I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual.
Yes. We have community colleges. We should have community trade schools.

#### Loren Pechtel

##### Super Moderator
Staff member
• Walmart annual gross profit for 2022 was $143.754B, a 3.54% increase from 2021. • Walmart annual gross profit for 2021 was$138.836B, a 7.33% increase from 2020.
• Walmart annual gross profit for 2020 was \$129.359B, a 0.2% increase from 2019.
And this is supposed to prove anything beyond your lack of economic knowledge?

Hint: What's the GDP growth rate for the USA?

Walmart is a nationwide company. If it were simply holding even you would expect it to grow with the economy. That's all your numbers show.

#### Loren Pechtel

##### Super Moderator
Staff member
I'm no economist, but my understanding is that Marx developed his ideas about how capitalism works based on the earlier economic theories of various pro-capitalist writers. For instance, the labor theory of value comes from Adam Smith.

I believe, but I may be mistaken because it’s been fifty years, that I learned about Marx’s sources from Edmond Wilson’s To the Finland Station, which traces the development of socialism from the French Revolution right up to the eve of the Communist Revolution in 1917.

I am not necessarily claiming that the labor theory of value is correct or accepted by economists today. It's just one example of an idea Marx picked up from capitalist apologists.
There is a fundamental flaw in his system that Marx knew about.

Note that he said a country must industrialize before going Marxist. This shows that he knew a Marxist system can't build factories, only steal them. He failed to realize that "industrialize" is not a one-and-done thing, those factories keep getting replaced.

#### skepticalbip

##### Contributor
I think it is a failure of government and government schools that people are graduating from public schools with no job skills. The "industrial arts" that were taught were phased out during the middle 20th century. Classes like wood shop, metal shop, auto shop, etc. etc. gave students skills that would allow them to step into a well paying job. Now learning job skills is left to the initiative of each individual.
Yes. We have community colleges. We should have community trade schools.
We do have two year technical schools but the public high schools should reinstitute the teaching of 'industrial arts' like they did until the mid 20th century. For instance a student that completed the courses of 'auto shop' would graduate from high school prepared to step into a well paying auto-mechanic job.

#### skepticalbip

##### Contributor
I'm no economist, but my understanding is that Marx developed his ideas about how capitalism works based on the earlier economic theories of various pro-capitalist writers. For instance, the labor theory of value comes from Adam Smith.

I believe, but I may be mistaken because it’s been fifty years, that I learned about Marx’s sources from Edmond Wilson’s To the Finland Station, which traces the development of socialism from the French Revolution right up to the eve of the Communist Revolution in 1917.

I am not necessarily claiming that the labor theory of value is correct or accepted by economists today. It's just one example of an idea Marx picked up from capitalist apologists.
There is a fundamental flaw in his system that Marx knew about.

Note that he said a country must industrialize before going Marxist. This shows that he knew a Marxist system can't build factories, only steal them. He failed to realize that "industrialize" is not a one-and-done thing, those factories keep getting replaced.

And DBT's ideas repeat this. He wants to control how Walmart, an already established company, operates rather than develop a company along his ideal of how a company should operate to compete with and drive Walmart out of business.

#### DBT

##### Contributor
Nothing of the sort. DBT doesn't ''want to control anything.'' I merely point out the obvious.

That the issue of inequality, pay, wealth, power, status, is and always was a matter of power imbalance between individuals, groups and organizations.

Abstract
''Social inequality has become a challenging social phenomenon in many advanced countries lately. Individuals are affected by social divisions of race, gender, economic, cultural, and political structures. Among these social divisions, income and power inequality have become the major political preoccupation in most developed countries. In the United States, income disparity between the upper and middle classes has been increasing for several decades. While the top 1% earners who contributed to 10% of the U.S. national income in 1980 increased to 20% in 2016, the bottom 50% earners who contributed to 20% of national income in 1980 decreased to 13% in 2016. There have been several interpretations of this phenomenon but from a globalization point of view. This study, therefore, seeks to explore the phenomenon from a globalization standpoint. Using intersectionality as the theoretical framework, this paper explains how various social constructs (e.g., race, gender) intersect in a globalized economy to create income and power disparities.''

Inequality is a vicious cycle
“The rich get richer, the poor get poorer” is not just a cliche. The concept behind it is a theoretical process called “wealth concentration.” Under certain conditions, newly created wealth is concentrated in the possession of already-wealthy individuals [5]. The reason is simple: People who already hold wealth have the resources to invest or to leverage the accumulation of wealth, which creates new wealth. The process of wealth concentration arguably makes economic inequality a vicious cycle.

The effects of wealth concentration may extend to future generations [3]. Children born in a rich family have an economic advantage, because of wealth inherited and possibly education, which may increase their chances of earning a higher income than their peers. These advantages create another round of the vicious cycle.

The French economist Thomas Picketty recently published a book, Capital in the Twenty-First Century [6]. Picketty’s thesis supports the previous proposition. It is a 700-page book on the topic of income inequality. The rich collection of statistics in the book shows that in almost every country (examined by Picketty), the wealth gap has widened since 1980. Picketty holds the view that inequality will remain as long as the aforementioned wealth concentration process persists through generations. However, Picketty argued that global inequality has probably decreased, as there has been rapid growth in Asia partly at the expense of lower-to-middle income earners in developed countries. The statistics show economic inequality is not just the top 10 percent of the population is richer than the bottom 20 percent. Rather, it is “1 percent versus the remaining 99 percent,” i.e. the top 1 percent of the population has the vast majority of wealth in the economy and control of financial markets.

#### skepticalbip

##### Contributor
That the issue of inequality, pay, wealth, power, status, is and always was a matter of power imbalance between individuals, groups and organizations.
Exactly. The ideal that Marx dreamed of was absolute equality of wealth, power, and status. That was the idea behind his utopia of no private property and no government where everyone shared everything, a paradise of community where everyone willingly worked together for a common cause. He called it communism.

#### DBT

##### Contributor
That the issue of inequality, pay, wealth, power, status, is and always was a matter of power imbalance between individuals, groups and organizations.
Exactly. The ideal that Marx dreamed of was absolute equality of wealth, power, and status. That was the idea behind his utopia of no private property and no government where everyone shared everything, a paradise of community where everyone willingly worked together for a common cause. He called it communism.

Not really, not even close...collective bargaining, a more equal balance of power enables workers to negotiate better pay and condition within their sector. The business needs workers, workers need incomes, and if the power balance is reasonably workers can secure a better deal.

Nobody has suggested that a cleaner gets the same as a mechanic or a mechanic gets the same as a brain surgeon. Just that there is a vast gulf between those at the bottom and those at the top of the economic heap, and that the sheer size of that gulf should be addressed.

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright

#### Bomb#20

##### Contributor
I'm no economist, but my understanding is that Marx developed his ideas about how capitalism works based on the earlier economic theories of various pro-capitalist writers. For instance, the labor theory of value comes from Adam Smith.
David Ricardo, actually. Adam Smith knew better.

#### skepticalbip

##### Contributor

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright
People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.

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#### Loren Pechtel

##### Super Moderator
Staff member
Nothing of the sort. DBT doesn't ''want to control anything.'' I merely point out the obvious.

Notably, you failed to respond to my point.
Inequality is a vicious cycle
“The rich get richer, the poor get poorer” is not just a cliche. The concept behind it is a theoretical process called “wealth concentration.” Under certain conditions, newly created wealth is concentrated in the possession of already-wealthy individuals [5]. The reason is simple: People who already hold wealth have the resources to invest or to leverage the accumulation of wealth, which creates new wealth. The process of wealth concentration arguably makes economic inequality a vicious cycle.

Of course--the same factors that made one rich and another poor remain in effect.

The effects of wealth concentration may extend to future generations [3]. Children born in a rich family have an economic advantage, because of wealth inherited and possibly education, which may increase their chances of earning a higher income than their peers. These advantages create another round of the vicious cycle.

But note that wealth also dissipates over time because most people have more than one child. The Law of Primogeniture existed specifically because they knew that without it wealth would soon be dissipated. We don't operate under a primogeniture system.

The French economist Thomas Picketty recently published a book, Capital in the Twenty-First Century [6]. Picketty’s thesis supports the previous proposition. It is a 700-page book on the topic of income inequality. The rich collection of statistics in the book shows that in almost every country (examined by Picketty), the wealth gap has widened since 1980. Picketty holds the view that inequality will remain as long as the aforementioned wealth concentration process persists through generations. However, Picketty argued that global inequality has probably decreased, as there has been rapid growth in Asia partly at the expense of lower-to-middle income earners in developed countries. The statistics show economic inequality is not just the top 10 percent of the population is richer than the bottom 20 percent. Rather, it is “1 percent versus the remaining 99 percent,” i.e. the top 1 percent of the population has the vast majority of wealth in the economy and control of financial markets.
I read part of his book, gave up when it became apparent he was incapable of seeing that there kept being new players climbing up on top, not merely the old players passing it to their children.

#### Loren Pechtel

##### Super Moderator
Staff member

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright
People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.
This. Unions would be subject to anti-trust action if they weren't specifically shielded from it.
I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.
Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.

#### skepticalbip

##### Contributor
Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.
True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

#### bilby

##### Fair dinkum thinkum
But note that wealth also dissipates over time because most people have more than one child.
Not in the developed world, they don’t. And if current trends continue, that claim will soon be untrue globally.

The Total Fertility Rate in the USA, for example, is 1.70 children per woman, or 0.85 children per parent.

Most people in the USA, Europe, and Australasia have fewer than one child. In the US, people have 85% of a child, on average.

https://ourworldindata.org/fertility-rate

#### DBT

##### Contributor

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright
People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.

Sure, people can and do capitalize their labour. The issue here is that some have virtually no leverage without collective bargaining.

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.

#### DBT

##### Contributor
Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.
True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''

#### skepticalbip

##### Contributor

"If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and resources of their country, then that implies the right of men to capitalize their labor" - Frank Lloyd Wright
People can and do capitalize their labor. Their labor is the product that they sell to those who will pay for it. In this case an individual is a business. Antitrust laws had to be passed to prevent businesses from colluding to fix the prices of their products because such collusion was destroying competition and the free market because collusion creates product pricing above 'fair market value'. Individuals (who are their own business) colluding to fix the prices of their product (their labor) by forming a union is no different.

I know that this will make no sense to you since you can not think of people as individuals, only as a member of a class.

Sure, people can and do capitalize their labour. The issue here is that some have virtually no leverage without collective bargaining.

It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.
As I said, you wouldn't understand because you can't think of people as individuals, only as members of a class. I have no idea how you manage to see individuals as competitors when competing for a job but not as individuals when fixing a price for their labor.

As individuals they compete to sell their product just as businesses compete to sell their products so, yes, either can get more for their product if they collude to fix the price rather than compete for the business. The 'fair market price' is set by competition. It is the price that the seller is willing to accept and price that the buyer is willing to pay. Of course the seller would like to get more and the buyer would like to pay less but 'fair market price' is where they agree. When collusion is involved then the price will be set at higher than the 'fair market value' because the seller wants more than 'fair market value'.

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#### skepticalbip

##### Contributor
...
Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.
True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''
As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'. There was in the 1800s when Marx set out the basis of your philosophy.

#### rousseau

##### Contributor
...
Which is the problem with Picketty's book--he's entirely focused on members of classes without realizing the classes are not fixed. The people that fly high often crash hard and the later generations rarely lack the skill to maintain the wealth they do inherit.
True. And, on the flip side, many individuals that would be grouped in DBT's class of 'the underdogs' become powerful or wealthy or even 'stinking rich'. What DBT and those with his mindset see as classes is an illusion, only a snapshot in time, because individuals can and do change their condition in life constantly. Some improve, some decline, some flutter back and forth.

You are presenting a Strawman. Percentage wise, very few workers become billionaires.

''In America, there were 607 billionaires in 2018 – one in 538,715 of the population and 11.8 million household millionaires (3 percent).''
As usual, you fail to understand.

The point is that there is nothing holding an individual in a 'class'.

DBT you might find Anthony Giddens' The Class Structure of the Advanced Societies a good read. It's a good analysis and is along the lines of what skepticalbip is explaining.

In short, classes don't really exist, but the fundamental schism we do see is usually property ownership vs lack of property ownership. Obviously it's a good bit more complicated than this.

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#### steve_bank

##### Diabetic retinopathy and poor eyesight. Typos ...
Punting aside slavery for the moment. The idea of the USA was a meritocracy instad of an aristocracy where birth defined your soical statsus and limited your life. The prime example of aristocracy is the British royals and the British class structure. People have defernce due to the family. People carry a formal title of 'sir'. That is what the founders fought a revolution over in part.

Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The student loan program was about churning society from the bottom up. Stirring the pot.

Russian communism on paper was a classless society. It was a miserable drab existence. Some progressives probably think a classless society equates their image of justice.

You can substitute hierarchical for class. Humans naturally form into hierarchical structures. Leaders and followers.

#### rousseau

##### Contributor
Yes we have an obvious class structure, but we also have upward mobility. One of the founders of Intel was a Hungarian immigrant. Bill and Hilary Clinton had humble beginnings.

The problem with this idea is that there is no internal coherency or intrinsic relationship between members of so-called 'classes'. Blurry boundaries, which makes the concept a convenient short-hand, but a fallacy for the most part. Every individual has a different combination of capital and market-skills, which is why we see upward and downward mobility.

It's true that any community forms a kind of hierarchy, with more poor people than rich, but that's exactly what you'd expect in any community, at any point in history. Wealth is rare and hard to come by.

#### Loren Pechtel

##### Super Moderator
Staff member
But note that wealth also dissipates over time because most people have more than one child.
Not in the developed world, they don’t. And if current trends continue, that claim will soon be untrue globally.

The Total Fertility Rate in the USA, for example, is 1.70 children per woman, or 0.85 children per parent.

Most people in the USA, Europe, and Australasia have fewer than one child. In the US, people have 85% of a child, on average.

https://ourworldindata.org/fertility-rate
Well, when I took math class 1.70 was greater than 1. Has that changed?

#### Loren Pechtel

##### Super Moderator
Staff member
It is specifically collective bargaining that gives them the leverage to negotiate a better deal.

Extortion works. Duh.

They were not getting fair market share for their input into the business because as individuals because as individuals they were at a disadvantage, they don't have a leg to stand on - ''take it or leave it, there are plenty more willing to work for less'' - until they approach management as a group.

Which doesn't mean they all get equal pay, a cleaner doesn't get the same rate as a supervisor, just that they are able to improve their lot, where before they could not.
Except the market as a whole does move wages. Don't pay enough, lose your workers to the competition.