# Re-Framing Capitalism

#### Bomb#20

##### Contributor
It's a mostly "take and very little give" relationship.

They do about 50 B in profit per year.

I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard.
Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"?

#### rousseau

##### Contributor
It's a mostly "take and very little give" relationship.

They do about 50 B in profit per year.

I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard.
Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"?

There likely is an argument to be made that the world is moving into a new era of corporate power, and isn't as state-centric as it once was. But what conclusions or responses derive from that, I really don't know.

The one thing that's certain is that human nature doesn't really change. The left will always be the left, the right will always be the right, they'll be in a permanent tug-a-war and whatever's going to happen is going to happen.

#### steve_bank

##### Diabetic retinopathy and poor eyesight. Typos ...
Were seeing avilabilty of land and prices going up with supply and demand.

Seattle continues to grow and nobody has a fucking clue where all the people moving to Seattle are going to live.

Amazon is building two towers over in Bellevue which initially will have about 10,000 people.

There are few that hold a lot of wealth. However the vast majority of business in the USA are small to medium many family owned.

It is not the same economy Maex commented on in the 19th century.

When Starbucks was arted the founders wer down at the docks humping sacks of coffee.

#### Swammerdami

Staff member
I started skimming the thread, only to see that I'd already made some of the most important points, especially in #214.

I'll just add one more point:
A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired.

If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off.

Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better.

#### DBT

##### Contributor
"Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food.

To learn more about the people who use these programs, we analyzed employment data from 11 states and Census data.

We found:

Most worked for private sector employers in places like restaurants, department stores, and grocery stores

Others worked for state governments, public universities, or nonprofit organizations

Some employers in selected states had thousands of beneficiaries in their workforces."

#### Bomb#20

##### Contributor
I'll just add one more point:
A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired.

If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off.
Right. I was criticizing the endless self-deceptive rhetoric on this topic; I wasn't criticizing unions.

But there's something monumentally silly about going from ten workers paid $1000 each to nine workers paid$1200 each and taxed 111 each to compensate the laid off worker, meaning nine workers get a net 9% raise for doing the same work while one worker gets a full-time paid vacation. If the employers are going to pay 8% more money for 10% less labor and the monetary proceeds for the workers are going to be shared out, why the heck shouldn't the leisure proceeds also be shared out? All ten workers could get 8% more money for 10% less labor. Besides, since the intent is to out-negotiate the employer by putting up a united front, it's important to keep the workers' interests from conflicting. So they need to demand a shorter workweek. Then nobody gets laid off. Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better. That's also a good idea. #### Bomb#20 ##### Contributor "Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food. ... About 70% worked full time Most worked for private sector employers in places like restaurants, department stores, and grocery stores Others worked for state governments, public universities, or nonprofit organizations Some employers in selected states had thousands of beneficiaries in their workforces." Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives. #### Loren Pechtel ##### Super Moderator Staff member I started skimming the thread, only to see that I'd already made some of the most important points, especially in #214. I'll just add one more point: A company that agrees to pay higher wages than it would have paid had the union not insisted on it is a company that will hire fewer workers than it would otherwise have hired. If wages rise X% then Y% of workers will be laid off. The relationship between X and Y is important. Many real-world experiments show that X exceeded Y; not only are the remaining employees better off but they can afford taxes sufficient to help out those laid off. Best is to improve the (no-strings-attached) "safety net," perhaps as Andrew Yang proposes though my version is much better. The XY arguments I've seen have two critical flaws: 1) Raising wages rarely destroys companies now. Fundamentally, profit margins are set by market forces and can't be altered by the government in the long run. In a competitive situation profit margins gravitate to a value based on how risky the industry is. This is enforced by the twin facts that if profit is too high new players will enter and if profit is too low companies that fail will not be replaced by new players. Wages generally go up in good times, the true test comes in the next bad time--companies fail and aren't replaced. Your Y suddenly got bigger in a way you can't expect to detect statistically because it's too distant. (Detecting layoffs is already very murky due to statistical noise even in the short run.) 2) They always look at the cost to an industry--but if you're actually going to raise wages you need to push that through the whole supply chain, not merely one spot on the chain. #### DBT ##### Contributor "Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food. ... About 70% worked full time Most worked for private sector employers in places like restaurants, department stores, and grocery stores Others worked for state governments, public universities, or nonprofit organizations Some employers in selected states had thousands of beneficiaries in their workforces." Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives. Subsidizing firms by subsidizing workers when the business, even though it has the means to pay a decent wage place, doesn't do so because it can get away with it? #### lpetrich ##### Contributor It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete. Confusing production and distribution just so one can win. As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. So whether zero-sumism is a fallacy or an absolute truth depends on what will help one win arguments. Also, businesses operate collectively, especially big businesses, contrary to the individualist fantasies of pro-capitalist ideologues. In fact, such ideologues ought to hate big businesses and try to break them up on the ground that they encourage people to be collectivist. One can ask how much each employee's work contributes to a business's revenue, and while it is not necessarily an equal amount, it is also not those at the top contributing 100% and everybody else 0%, which is what many capitalism apologists seem to believe. #### bilby ##### Fair dinkum thinkum It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete. Confusing production and distribution just so one can win. As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. So whether zero-sumism is a fallacy or an absolute truth depends on what will help one win arguments. Also, businesses operate collectively, especially big businesses, contrary to the individualist fantasies of pro-capitalist ideologues. In fact, such ideologues ought to hate big businesses and try to break them up on the ground that they encourage people to be collectivist. One can ask how much each employee's work contributes to a business's revenue, and while it is not necessarily an equal amount, it is also not those at the top contributing 100% and everybody else 0%, which is what many capitalism apologists seem to believe. Not only are corporations almost exclusively collectivist, they are also centrally planned dictatorships, run by a politburo board of directors who are ruthless against dissidents whistle-blowers who attempt to expose any failings to the wider world. The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware* *Difference may not apply to defence contractors. Soviet Union not available after 1991, or if sold out. DBT #### Bomb#20 ##### Contributor "Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food. ... About 70% worked full time Most worked for private sector employers in places like restaurants, department stores, and grocery stores Others worked for state governments, public universities, or nonprofit organizations Some employers in selected states had thousands of beneficiaries in their workforces." Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives. Subsidizing firms by subsidizing workers when the business, even though it has the means to pay a decent wage place, doesn't do so because it can get away with it? What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? Much the same issue came up in another thread last year. I challenged your subsidy assertion and you walked away. https://iidb.org/threads/what-do-you-want-to-do-with-the-little-people.23498/page-4#post-883080 #### JohnG ##### Senior Member It's a mostly "take and very little give" relationship. They do about 50 B in profit per year. I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard. Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"? I don't think its accurate to say they "gave" products to customers - it traded for as much as it thought the market could bear. From a labor perspective their takeover of our company has been a disaster. Our staffing has shrunk by half, relying on "go getters" to work long hours and extra days. Good people are now leaving. Pay raises have stagnated, and mngmt bonuses are based on how much they produce vs cost - which seems like a good idea on paper, but it's been a shit show. It's a myth that the private sector doesn't waste money, less corruption (lots of back door deals going on with suppliers) and is more efficient. #### Attachments • mitsu.jpg 115.4 KB · Views: 3 #### Bomb#20 ##### Contributor It isn't indifference to ethics; it's just that trying to explain ethics to anticapitalists is exhausting and usually futile. They are trapped in a zero-sum-game mentality that got hard-wired into our brains from a million years of living as hunter-gatherers, and ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete. Confusing production and distribution just so one can win. Having faith that production and distribution are separable problems just so one can feel self-righteous, by appeasing one's unexamined hunter-gatherer moral intuition, by forcing farmers to live by it, in the teeth of the empirical evidence that farmers living by hunter-gatherer rules is as sure a recipe for starvation as hunter-gatherers living by farmer rules is. Anticapitalists are a species of creationist. Both because they take for granted that a thing would still exist even in the absence of the material cause of its existence, and also because they run Hume's infamous transition in reverse, imagining they can deduce what is from their convictions about what ought to be. As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. Any opponent in particular? Or was that just a Trumpian "people are saying"? Capitalist countries have independent labor unions. Socialist countries invariably prohibit them, for the same reason a government of snake-oil salesmen would prohibit real doctors. A labor union is a group of producers voluntarily coordinating their economic activities for mutual benefit -- which is exactly what a corporation is. Capitalism isn't opposed to labor unions. Labor unions are capitalism in action. So whether zero-sumism is a fallacy or an absolute truth depends on what will help one win arguments. Are you suggesting that the existence of disagreement shows truth is subjective? Zero-sumism is a fallacy, full stop. Also, businesses operate collectively, especially big businesses, contrary to the individualist fantasies of pro-capitalist ideologues. In fact, such ideologues ought to hate big businesses and try to break them up on the ground that they encourage people to be collectivist. That's on a level with your ludicrous but oft-repeated fantasy that libertarians are pro-slavery. Why on earth would you imagine an individualist pro-capitalist ideologue ought to try to break up big businesses? If other individuals choose to organize themselves into big businesses, that's their individual right whether the individualist hates it or not. Stopping other individuals from making their own choices just because one doesn't like it is a collectivist thing, not an individualist thing. You appear to be drawing conclusions about what people who don't think like you would do by taking for granted that they think just like you. One can ask how much each employee's work contributes to a business's revenue, and while it is not necessarily an equal amount, it is also not those at the top contributing 100% and everybody else 0%, which is what many capitalism apologists seem to believe. No it isn't. There are exactly zero capitalism apologists who seem to believe that. You hypothesized that belief and imputed it to capitalism apologists even though they didn't say anything of the sort. Most likely you did this because they gave explanations for their views that are so completely alien to the way your mind works that you couldn't understand them at all, so you just threw what they actually said in your mental dumpster, and instead of "putting on your listening ears" you just accounted for their opinions to yourself by imagining they believe whatever the bejesus you would need to believe, in order for you to reach their conclusions. I.e., your mental model of the minds of people who disagree with you is a self-contradictory jumble of their conclusions with your premises. #### DBT ##### Contributor "Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program for food. ... About 70% worked full time Most worked for private sector employers in places like restaurants, department stores, and grocery stores Others worked for state governments, public universities, or nonprofit organizations Some employers in selected states had thousands of beneficiaries in their workforces." Cool! These are all indications that we as a society have finally started allowing labor supply and demand, employability, public assistance, and self-supportingness to become continuous monotonic functions, instead of the traditional cliffs. This is all to the good. Cliffs create massive inefficiencies and perverse incentives. Subsidizing firms by subsidizing workers when the business, even though it has the means to pay a decent wage place, doesn't do so because it can get away with it? What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? Much the same issue came up in another thread last year. I challenged your subsidy assertion and you walked away. https://iidb.org/threads/what-do-you-want-to-do-with-the-little-people.23498/page-4#post-883080 It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet fuck all for their time and labour because, well, the government is taking care of it Is that how capitalism is supposed to work? Pay fuck all and expect the government to take up the deficit? That's the way of the free market? Workers, powerless to negotiate a better deal, must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? In a society with such great wealth and resources, it's obscene. Last edited: #### Bomb#20 ##### Contributor Not only are corporations almost exclusively collectivist, they are also centrally planned dictatorships, run by a politburo board of directors who are ruthless against dissidents whistle-blowers who attempt to expose any failings to the wider world. The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware* *Difference may not apply to defence contractors. Soviet Union not available after 1991, or if sold out. Why did you write all that? Were you attempting to persuade anyone to see things your way? Or were you just preaching to the choir of your fellow religionists, fishing for admiration and showing off your considerable literary talents? Your argument is brain-damaged. When I was a kid, as it happens, my mom helped design military hardware at a large defense contractor. This was back when the Soviet Union was still available. So according to you, there was no difference in governance between her employer and the USSR. Finland–Russia border "... The Soviet side had extensive electronic systems and patrols to prevent escapes. Soviet border surveillance began at a great distance from the actual border, and was as extensive as elsewhere along the Iron Curtain. The first surveillance was already in railway stations in cities, where the militsiya monitored potentially suspicious traffic. The border zone began at 120 kilometres (75 mi) from the border. A special permit was required for entry, and the first line of control had electronic alarms. At 60 kilometres (37 mi), there was a raked sand strip (to detect footprints) and a thin alarmed tripwire. At 20 kilometres (12 mi), there was a 3 metres (9.8 ft) tall barbed wire fence, with a top that curved inwards towards Soviet territory (to keep people from leaving the USSR). The fence had an electronic alarm system. However, it was not protected underground and tunnelling under it was possible. ...​ When my mom's boss was replaced by a male chauvinist pig who figured girl weapon designers were secretaries, she eluded the guards, snuck across 120 km of obstacles, dragged a leafy tree branch behind her to erase her footprints, spotted the tripwire, and dug a tunnel under the barbed wire fence. Oh, wait, no she didn't. She just quit. The corporation's governance, in spite of having no lack of military hardware, did not regard itself as entitled to stop its underlings from leaving. Corporations are almost exclusively individualist. The difference between individualist and collectivist operations is not whether the participants cooperate with another for a shared objective, but whether individual cooperation is voluntary, and whether the governance tries to ensure that the cooperative operation not only benefits the collective, but also benefits each individual participant. #### lpetrich ##### Contributor Confusing production and distribution just so one can win. Having faith that production and distribution are separable problems just so one can feel self-righteous, ... Thank you for proving my point. As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. Any opponent in particular? Or was that just a Trumpian "people are saying"? I don't want to violate this board's rules against personal attacks. Capitalist countries have independent labor unions. Socialist countries invariably prohibit them, ... Define "socialist countries". This also seems to me an attempt to take credit for what one opposes. Also, businesses operate collectively, especially big businesses, contrary to the individualist fantasies of pro-capitalist ideologues. In fact, such ideologues ought to hate big businesses and try to break them up on the ground that they encourage people to be collectivist. That's on a level with your ludicrous but oft-repeated fantasy that libertarians are pro-slavery. Why on earth would you imagine an individualist pro-capitalist ideologue ought to try to break up big businesses? ... Because they end up dominating the economy and making non-collectivist employment very limited. The appropriate sort of economy for individualists is an economy of small farmers and artisans and shopkeepers. Because anything larger than a mom-and-pop business is collectivist. Talking about voluntary agreement to participate in collectivism evades the essential point, and it raises serious questions about the commitment to individualism of those making such agreements. #### bilby ##### Fair dinkum thinkum Why did you write all that? Were you attempting to persuade anyone to see things your way? Duh, obviously I was. That's why pretty much everyone here writes stuff (including you). You, of course, decided not to do so, apparently because you share with many Americans an inability to distinguish between 'capitalism' and 'freedom'. If your thesis is that the only important difference between the USSR and a modern American corporation is that in the latter case, people are free to leave, then it's not communism, or socialism, but imprisonment that you oppose. Corporations are centrally planned economies, and many are larger both in economic terms and in terms of population than many nation states. Centrally planned economies clearly work, even (as you point out) without the use of force to keep people from leaving. We don't disagree that people should be allowed to leave; We do, apparently, disagree on whether this freedom is an attribute of capitalism, or an independent variable that is unrelated to the choice of free markets vs central planning. DBT #### Loren Pechtel ##### Super Moderator Staff member It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet fuck all for their time and labour because, well, the government is taking care of it Is that how capitalism is supposed to work? Pay fuck all and expect the government to take up the deficit? That's the way of the free market? Workers, powerless to negotiate a better deal, must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? In a society with such great wealth and resources, it's obscene. Removing the government support wouldn't make the companies pay more, it would just lower the standard of living of the people in those jobs. #### DBT ##### Contributor It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet fuck all for their time and labour because, well, the government is taking care of it Is that how capitalism is supposed to work? Pay fuck all and expect the government to take up the deficit? That's the way of the free market? Workers, powerless to negotiate a better deal, must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? In a society with such great wealth and resources, it's obscene. Removing the government support wouldn't make the companies pay more, it would just lower the standard of living of the people in those jobs. The point was that there is a power imbalance that prevents many workers from negotiating a better deal for themselves, and this makes it necessary for the government to aid/subsidize people who are working for a living, doing productive work, helping to generate profits for a company, yet are paid so poorly that they cannot meet their basic needs. Free market economics? "Maximise profits, pay fuck all, the government can take care of them?" #### Swammerdami ##### Squadron Leader Staff member Having faith that production and distribution are separable problems just so one can feel self-righteous, by appeasing one's unexamined hunter-gatherer moral intuition, by forcing farmers to live by it, in the teeth of the empirical evidence that farmers living by hunter-gatherer rules is as sure a recipe for starvation as hunter-gatherers living by farmer rules is. I agree with some of your views, but your view of Stone Age cultures is too reductionist and at best misleading. We have a thread discussing The Dawn of Everything where IIDB experts may comment on the Davids' comparisons of early forager, farmer, and pastoralist societies. (My readings are as yet inadequate for me to post a summary.) Anyway, why would one want to go back that far? For most of history, most unskilled or semi-skilled workers have endured barely subsistence income. There is good evidence of English prices and wages. In the early 14th century annual real wages for labor in England had fallen to about £1100 (in 2010 pounds). This rose to £2300 in the late 14th century (partly in response to Black Death-induced labor shortage), but this had fallen back to about £1700 by the 17th and 18th centuries. In fact it was not until the 1830's that wages finally returned to the late 14th century level. In 1880, real wage passed £4000, in 1895 £5000, and in 1924 £6000. This meager wage growth came despite that this was a time of rapid productivity growth due to industrialization, as well as exploitation of the British Raj. After1924, real annual wage growth in England was faster. It passed £7000 in 1930, £8000 in 1949, £10,000 in 1965, and first passed £23,000 in 2009. We don't need to cross-check to confirm that this rise in real wages coincided with the rise of trade unions and wider suffrage. #### Bomb#20 ##### Contributor It's a mostly "take and very little give" relationship. They do about 50 B in profit per year. I am certainly not against capitalism but lets not pretend that the pendulum hasn't swung hard. Google tells me Mitsubishi's profit margin is about 4%. So 50 B in profits means 1.25 T in revenue. Customers got stuff from Mitsubishi that was worth more than 1.25 T to the customers -- they bought the stuff because they wanted it more than they wanted 1.25 T. Are you counting all that trillion-plus-worth of stuff Mitsubishi gave its customers, when you say "take and very little give"? I don't think its accurate to say they "gave" products to customers - it traded for as much as it thought the market could bear. Do you think it's accurate to say they "took" money from customers? The customers traded for as much goods and services as they thought the market could bear. If you mean they "took" your company, do you think that's accurate? The previous owners presumably traded it for as much money as they thought the market could bear. Do you have some consistent criterion for what counts as giving and taking, according to which it's a mostly "take and very little give" relationship? From a labor perspective their takeover of our company has been a disaster. Our staffing has shrunk by half, relying on "go getters" to work long hours and extra days. Good people are now leaving. Pay raises have stagnated, ... I'm sorry to hear the new owners aren't treating you as well as the old owners did. That happened to me too -- the brilliant founder retired, the board hired a bean-counter to be the new CEO, and a few years later they sold the whole company to a foreign corporation. Then the new owners broke it up and sold off pieces; my division got traded to some random company that was less fun to work for; I ended up quitting. Life, eh? Making a trade, whether it's baseball card for hockey card or it's money for labor, is not a promise that the same trade will remain available forever. Sometimes the people we're trading with want to move on. It's a myth that the private sector doesn't waste money, less corruption (lots of back door deals going on with suppliers) and is more efficient. Of course there's waste and corruption everywhere -- welcome to the damned human race. As far as being more efficient goes, how are you measuring efficiency? Was there an Eastern-Bloc state-owned car manufacturer that paid higher wages and made better cars cheaper than a private Japanese car manufacturer? #### Bomb#20 ##### Contributor What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? "Keep paying", you say. That expression refers to continuation of an existing arrangement, which implies before the subsidy was provided the firm was already paying some worker a rate so low that it doesn't allow him to pay for the basics of rent, food, clothing, transport. Apparently that was working for the firm, so why would it have stopped if the worker remained unsubsidized? If you mean the worker would have stopped coming to work, that's not terribly plausible, since he was already making a choice to keep coming to work under those conditions, and his reasons for doing so wouldn't go away just because a government didn't start subsidizing him. And in the event that he does stop coming to work, the firm will presumably just hire somebody else to do the same job, at the wage the market is bearing. Marginal workers are entering and dropping out of the labor market all the time. The way a government subsidy to poor people is actually likely to affect prices is by changing workers' calculations of what they can afford to do. Some of them will no longer need to work; the ones who still need to work will have a cushion that lets them be choosier about what jobs to take. It will in general make the poor less desperate. Being less desperate improves anyone's negotiating position. And since some will stop working or will keep looking until they find better jobs, the supply of workers filling the demand for people to do low-skill jobs will decrease. Both those effects will drive up the market wage. So a government subsidy will more likely stop firms from paying workers such low rates. Is that how capitalism is supposed to work? Pay ... all and expect the government to take up the deficit? That's the way of the free market? "Free market" is a relative term; it's up to government to decide just how free it wants markets to be. "Capitalism" is just a catch-all term for the freer end of the spectrum -- no government has ever wanted markets completely free. Governments put their thumb on the scale all the time for all manner of reasons -- some honorable, some less so. Subsidies to workers are one of the ways government transfers wealth from the rich to the poor. Stopping workers and employers from making mutually beneficial trades is one of the ways government transfers wealth from the rich and poor to the middle class. Workers, powerless to negotiate a better deal, But of course most workers are not powerless to negotiate a better deal. The great majority of workers aren't subsidized and are getting a better deal; and if they need to improve their negotiating power, unionization is legal. Government subsidies are a tool for helping the subset of workers who face personal obstacles to succeeding in the labor market; they're not for keeping the economy viable. must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? Quite possibly, if the number of workers who can't make it on their own is too high. But why would it be that high? Riots, revolution and let them eat cake happened not because France was capitalist -- it wasn't -- but because France blew its budget on wars of choice and paid the bills by suppressing its economy with tariffs and by regressive taxes on the poor that the nobility was exempt from. In a society with such great wealth and resources, it's obscene. Yes, if subsidies weren't available it would be obscene. That's why they're available. You appear to be coming at this from a point of view of ignoring individual circumstance and assuming that the working class is an undifferentiated mass -- as though "Millions of American adults who earn low wages rely on federal programs to meet basic needs" meant a hundred and fifty million. Since some companies aren't paying some workers enough for "the basics of rent, food, clothing, transport", you're arguing as though companies in aggregate aren't paying workers in aggregate enough for "the basics of rent, food, clothing, transport". The latter would create a sustainability problem; but doing it on a case-by-case basis doesn't. Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs? #### steve_bank ##### Diabetic retinopathy and poor eyesight. Typos ... Amazon workers getting food stamps. #### Loren Pechtel ##### Super Moderator Staff member It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet fuck all for their time and labour because, well, the government is taking care of it Is that how capitalism is supposed to work? Pay fuck all and expect the government to take up the deficit? That's the way of the free market? Workers, powerless to negotiate a better deal, must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? In a society with such great wealth and resources, it's obscene. Removing the government support wouldn't make the companies pay more, it would just lower the standard of living of the people in those jobs. The point was that there is a power imbalance that prevents many workers from negotiating a better deal for themselves, and this makes it necessary for the government to aid/subsidize people who are working for a living, doing productive work, helping to generate profits for a company, yet are paid so poorly that they cannot meet their basic needs. Free market economics? "Maximise profits, pay fuck all, the government can take care of them?" You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. #### DBT ##### Contributor What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? "Keep paying", you say. That expression refers to continuation of an existing arrangement, which implies before the subsidy was provided the firm was already paying some worker a rate so low that it doesn't allow him to pay for the basics of rent, food, clothing, transport. Apparently that was working for the firm, so why would it have stopped if the worker remained unsubsidized? If you mean the worker would have stopped coming to work, that's not terribly plausible, since he was already making a choice to keep coming to work under those conditions, and his reasons for doing so wouldn't go away just because a government didn't start subsidizing him. And in the event that he does stop coming to work, the firm will presumably just hire somebody else to do the same job, at the wage the market is bearing. Marginal workers are entering and dropping out of the labor market all the time. The way a government subsidy to poor people is actually likely to affect prices is by changing workers' calculations of what they can afford to do. Some of them will no longer need to work; the ones who still need to work will have a cushion that lets them be choosier about what jobs to take. It will in general make the poor less desperate. Being less desperate improves anyone's negotiating position. And since some will stop working or will keep looking until they find better jobs, the supply of workers filling the demand for people to do low-skill jobs will decrease. Both those effects will drive up the market wage. So a government subsidy will more likely stop firms from paying workers such low rates. Is that how capitalism is supposed to work? Pay ... all and expect the government to take up the deficit? That's the way of the free market? "Free market" is a relative term; it's up to government to decide just how free it wants markets to be. "Capitalism" is just a catch-all term for the freer end of the spectrum -- no government has ever wanted markets completely free. Governments put their thumb on the scale all the time for all manner of reasons -- some honorable, some less so. Subsidies to workers are one of the ways government transfers wealth from the rich to the poor. Stopping workers and employers from making mutually beneficial trades is one of the ways government transfers wealth from the rich and poor to the middle class. Workers, powerless to negotiate a better deal, But of course most workers are not powerless to negotiate a better deal. The great majority of workers aren't subsidized and are getting a better deal; and if they need to improve their negotiating power, unionization is legal. Government subsidies are a tool for helping the subset of workers who face personal obstacles to succeeding in the labor market; they're not for keeping the economy viable. must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? Quite possibly, if the number of workers who can't make it on their own is too high. But why would it be that high? Riots, revolution and let them eat cake happened not because France was capitalist -- it wasn't -- but because France blew its budget on wars of choice and paid the bills by suppressing its economy with tariffs and by regressive taxes on the poor that the nobility was exempt from. In a society with such great wealth and resources, it's obscene. Yes, if subsidies weren't available it would be obscene. That's why they're available. You appear to be coming at this from a point of view of ignoring individual circumstance and assuming that the working class is an undifferentiated mass -- as though "Millions of American adults who earn low wages rely on federal programs to meet basic needs" meant a hundred and fifty million. Since some companies aren't paying some workers enough for "the basics of rent, food, clothing, transport", you're arguing as though companies in aggregate aren't paying workers in aggregate enough for "the basics of rent, food, clothing, transport". The latter would create a sustainability problem; but doing it on a case-by-case basis doesn't. Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs? Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates. And the point being that without collective bargaining individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times. #### DBT ##### Contributor It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet fuck all for their time and labour because, well, the government is taking care of it Is that how capitalism is supposed to work? Pay fuck all and expect the government to take up the deficit? That's the way of the free market? Workers, powerless to negotiate a better deal, must be supported by government subsidies? What if that wasn't available? Riots? Revolution? Let them eat cake? In a society with such great wealth and resources, it's obscene. Removing the government support wouldn't make the companies pay more, it would just lower the standard of living of the people in those jobs. The point was that there is a power imbalance that prevents many workers from negotiating a better deal for themselves, and this makes it necessary for the government to aid/subsidize people who are working for a living, doing productive work, helping to generate profits for a company, yet are paid so poorly that they cannot meet their basic needs. Free market economics? "Maximise profits, pay fuck all, the government can take care of them?" You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. #### DBT ##### Contributor "Millions of Americans employed at some of the country's largest companies have had to rely on food stamps and Medicaid, with giants like Walmart and McDonald's employing the most workers whose income is subsidized by taxpayers, according to a new study. The Government Accountability Office, a nonpartisan congressional watchdog, released a study commissioned by Sen. Bernie Sanders, I-Vt., last month based on data provided by 11 states. The report found that, in every state studied, Walmart was one of the top four employers whose workers rely on food stamps and Medicaid. McDonald's is among the most subsidized employers in at least nine states. Walmart employs about 14,500 workers in Arkansas, Georgia, Indiana, Maine, Massachusetts, Nebraska, North Carolina, Tennessee and Washington who rely on Supplemental Nutrition Assistance Program (SNAP) benefits, the study showed, while McDonald's employs about 8,780 SNAP recipients in those states. More than 2% of the Walmart workforce in states like Georgia and Oklahoma have had to rely on Medicaid benefits, a number that rises to more than 3% in Arkansas, where the company is based. Other corporate giants who have a large number of workers relying on federal benefits included Amazon, Dollar Tree, Dollar General, Burger King, Wendy's, Taco Bell, Subway, Uber...." #### Bomb#20 ##### Contributor ...ten thousand years of farming hasn't been long enough to wrap their minds around the new reality that zero-sum-game thinking has become hopelessly, unethically, obsolete. Confusing production and distribution just so one can win. Having faith that production and distribution are separable problems just so one can feel self-righteous, ... Thank you for proving my point. Which point of yours did I prove for you? Were you trying to make the point that thinking up an unworthy motive to impute to the other guy is a really easy way to get out of substantively addressing the topic in dispute? You proved that all by yourself; all I did was repay you in like coin. If you're claiming I proved I was confusing production and distribution, show your work. As to zero-sumism, it's treated as self-evident truth by certain opponents of labor unions. Any opponent in particular? Or was that just a Trumpian "people are saying"? I don't want to violate this board's rules against personal attacks. I point out leftists exhibiting a zero-sum-game mentality pretty often and it's never been construed by moderators as a personal attack. I'm pretty sure if you simply quote somebody opposing labor unions with a zero-sum-game argument, nobody will see that as a TOU violation. Capitalist countries have independent labor unions. Socialist countries invariably prohibit them, ... Define "socialist countries". Who, me? "A socialist state, socialist republic, or socialist country, sometimes referred to as a workers' state or workers' republic, is a sovereign state constitutionally dedicated to the establishment of socialism. " - Wikipedia "Socialism is a left-wing to far-left economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership." - Wikipedia​ If you regard Wikipedia as unreliable... socialism noun 1: "a theory or system of social organization that advocates the ownership and control of the means of production and distribution, capital, land, etc., by the community as a whole, usually through a centralized government." - dictionary.com socialism noun 1: "any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods" - Merriam-Webster socialism "An economic system in which the means of production are controlled by the state." - OED​ This also seems to me an attempt to take credit for what one opposes. Um, what is it you say I'm taking credit for that you say I oppose? Why on earth would you imagine an individualist pro-capitalist ideologue ought to try to break up big businesses? ... Because they end up dominating the economy and making non-collectivist employment very limited. The appropriate sort of economy for individualists is an economy of small farmers and artisans and shopkeepers. Because anything larger than a mom-and-pop business is collectivist. Talking about voluntary agreement to participate in collectivism evades the essential point, and it raises serious questions about the commitment to individualism of those making such agreements. Well, in the first place, thank you, Humpty-Dumpty. "Individualism" doesn't automatically mean whatever the heck you say it does without regard to what other people use it to mean. individualism noun 1 "a (1): a doctrine that the interests of the individual are or ought to be ethically paramount also : conduct guided by such a doctrine (2): the conception that all values, rights, and duties originate in individuals b: a theory maintaining the political and economic independence of the individual and stressing individual initiative, action, and interests" - Merriam-Webster​ You are making an argument about petrividualism, not individualism. And in the second place, even if it were true that individualism implied opposition to anything larger than mom-and-pop businesses, that in no way implies an ideologically motivated individualist ought to try to break up big businesses. Even if he hates them, he is not the only individual, and part of individualism is respect for all individuals' rights, not just for his own individual interests. This may be a hard thing for authoritarians to wrap their minds around, but not everybody thinks he has a right to make others follow his dictates. For example, I'm for free speech. Communists are against free speech. Going by your reasoning, I as a free speech supporter "ought to" favor censoring communists, since if they get their way they'll censor us all. But that's not how it works. Free speech is for everyone, even communists. If somebody wants to advocate communism, I don't agree with what he says but I'll defend his right to say it. Likewise, if an individualist hates big businesses, so what? If other individuals' choices to organize themselves into big businesses end up dominating the economy and making what your Humpty-Dumpty language labels "non-collectivist" employment very limited, so what? Rights and duties originating in individuals does not imply other individuals have a duty not to compete with his favorite economic model, and does not imply he has a right to stop other individuals' customers from making their individual choice to buy from a big business instead of a mom-and-pop. So why on earth would that individualist's preference for a mom-and-pop economy trump his commitment to letting other individuals make their own choices in life? "I had to destroy individualism in order to save it?" Talking about voluntary agreement to participate in "collectivism" is the essential point. "Collectivism" is not a synonym for "cooperation", no matter how much leftists would like it to be. The essential point is who makes the decision about which activities a person cooperates in: the individual or the collective. #### Loren Pechtel ##### Super Moderator Staff member You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages. #### Swammerdami ##### Squadron Leader Staff member I have frequently said "Economics should not be viewed as a morality play." This thread has good examples of contrary thinking. Jeff Bezos earns more money than his workers. Duh! That's called ordinary capitalism. ("If you don't like it move back to North Korea!" ) Do be aware, by the way, that some small-business owners actually make LESS than their low-wage workers. They're struggling (gambling) in hopes of a turnaround. If they succeed, must they split the profits with those who "produced the goods or services"? If I bet on 22 at the roulette table, and 22 wins, must I split the proceeds with the croupier "who made it all possible"? Emotionally I align with progressive Democrats. But some of their ideas are idiotic. I've previously mentioned watching Ted Kennedy on C-SPAN circa 1994 arguing with a bag of BigMac and Fries. "Don't you think you have a MORAL obligation to provide your employees with health insurance?" Who nominated that imbecile to be the Exalted Cyclops of the Democratic Party? Obviously it's not just the Left that introduces "morality" inappropriately. If Amazon workers set up picket lines, the Right might chime in with "Don't you have a MORAL obligation to let Amazon hire scabs?" What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? I've heard the OPPOSITE argued! That if UBI (cf. Andrew Yang) were introduced, workers would be less desperate and companies like Amazon would need to offer more money to attract them. Government-paid health care? Yes. Government-subsidized child care? Yes. Increase taxes on corporations and the rich? Yes. Incentivize hiring by changing payroll tax schedules and insurance mandates? Yes. Raise the federal minimum wage? Yes. It may be a good approach given political realities. Government-mandated improvements in working conditions? Maybe. But framing the discussion to label corporations and the rich as "Evil" or positing their "moral obligations"? This is nonsense. Count me out. #### DBT ##### Contributor You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages. I'm not assuming anything. #### Bomb#20 ##### Contributor Why did you write all that? Were you attempting to persuade anyone to see things your way? Duh, obviously I was. That's why pretty much everyone here writes stuff (including you). Whom were you trying to persuade, then? What person who did not already agree with you could plausibly have been persuaded by a claim as blatantly false as "The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware"? That's so ridiculous you surely didn't even believe it yourself. You're a very smart guy; I don't know why you feel the need in thread after thread to make transparently imbecilic claims like that. It looks like some cross between telling your own "team" what it takes pleasure in hearing, and performance art. You, of course, decided not to do so, apparently because you share with many Americans an inability to distinguish between 'capitalism' and 'freedom'. You, of course, should be dismissed by everyone, because you're a guy who makes baseless trumped-up racism accusations. Whether I am able to distinguish between 'capitalism' and 'freedom'* is not an inch more relevant to whether we're trying to be persuasive and to the correctness of your "The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware" claim than your bad habits in overpopulation debates. When you brought up my alleged inability* you were making an ad hominem argument. Don't do that. Yes, of course I was trying to persuade anyone. Specifically, I was trying to persuade you not to advocate lunatic-fringe positions that do nothing but throw gunk into what could be a rational discussion; I was trying to persuade DBT to apply critical thought to what people on his own side argue before reflexively "Like"ing their posts; and likewise any leftists reading your post similarly reflexively. (* And of course I am able to distinguish between capitalism and freedom, and nothing I wrote suggests otherwise. You made that up out of whole cloth. There can be freedom without capitalism in any hunter-gatherer tribe with reasonable leadership; and as for capitalism without freedom, the SCOTUS just authorized it and it's the law of the land in thirteen states.) If your thesis is that the only important difference between the USSR and a modern American corporation is that in the latter case, people are free to leave, then it's not communism, or socialism, but imprisonment that you oppose. But of course that's not my thesis and you have no reason to imagine it is. You claimed the only difference in governance was military hardware, so I disproved that idiocy with a counterexample. This does not constitute a claim that imprisonment is the only counterexample. I was obviously not even stipulating that that's the only important difference in governance, let alone the only important difference at all. Duh! Corporations are centrally planned economies, and many are larger both in economic terms and in terms of population than many nation states. Centrally planned economies clearly work, That's ridiculous. A corporation is not an economy. You might as well claim an elephant is a biosphere. A corporation is one little component of a much larger economy. A centrally planned goods production operation's success is no more proof that a centrally planned economy would work than it's proof that an elephant would work without a forest generating tons of vegetation. Corporations work, among other reasons, because they receive and respond to external price signals from suppliers and customers. In any event, for you to even bring up central planning misses the point altogether. lpetrich was implying that production and distribution should be treated as independent problems, as Marxism advocates. Central planning failed in the USSR not merely because it doesn't scale well from a corporation to a whole economy, but also because Soviet central planners tried to treat production and distribution as independent problems. Corporate central planners don't do that. even (as you point out) without the use of force to keep people from leaving. We don't disagree that people should be allowed to leave; We do, apparently, disagree on whether this freedom is an attribute of capitalism, or an independent variable that is unrelated to the choice of free markets vs central planning. Central planning is a red herring; this freedom is an attribute of linking production and distribution. One of the ways corporations are individualist operations is, as I said, that corporate governance tries to ensure that the cooperative operation not only benefits the collective, but also benefits each individual participant. People being free to leave pushes corporations to govern themselves that way -- they have to distribute enough to every individual whose help they need to make it worth his while, or else go broke. If the central planners were smart enough, central planning could in principle provide prosperity and freedom to everyone in a whole economy, while allowing people to leave, and give people enough reason to stay to keep the system afloat. Soviet planners and academics in the 60s and 70s had high hopes that they'd be able to do that by using computers to overcome their horrific scaling problems. The trouble is, for that to work the planners would need to plan distribution so as to duplicate the incentive structures that corporate planners evolved to persuade suppliers and customers to stay, instead of planning distribution to satisfy Marxist ideological conventions about who ought to get what. So if the planners are unwilling to do that, or if they've been trained since childhood to never be able to grok that that's what they need to do, then the people they need to stay will choose to leave. Then the governance structure will have to choose between letting people leave and losing its power, or letting people leave and abandoning its instinct to delink production and distribution, or leaving up its inward-curving barbed wire fences and deploying half its workforce to imprisoning the other half. Making sure every individual benefits is a necessary step in a non-slavery production process; it's the step in the process that owners perform; when collectivists adopted the faith that owners are an unnecessary and parasitical part of the production process who can be dispensed with without negative consequences, that is the step they set themselves up to lose; when collectivists have historically taken power and gotten rid of the owners, that is the step they lost; that is why when collectivists have historically taken power and gotten rid of the owners production plummeted; that is why collectivists historically reintroduced slavery. #### Loren Pechtel ##### Super Moderator Staff member You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages. I'm not assuming anything. You're not addressing my point. #### DBT ##### Contributor You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages. I'm not assuming anything. You're not addressing my point. You made no point to address. You made an assertion which has been addressed time and time again. I could explain again, but nothing would change. What I said about power imbalance and wage rate negotation is clear enough. The articles I posted on low pay and food stamps, etc, are clear enough. #### Bomb#20 ##### Contributor Having faith that production and distribution are separable problems just so one can feel self-righteous, by appeasing one's unexamined hunter-gatherer moral intuition, by forcing farmers to live by it, in the teeth of the empirical evidence that farmers living by hunter-gatherer rules is as sure a recipe for starvation as hunter-gatherers living by farmer rules is. I agree with some of your views, but your view of Stone Age cultures is too reductionist and at best misleading. I wouldn't have thought I'd said enough about stone age cultures for it to register on a reductionism scale. What specifically did I say that you think is wrong or misleading? I don't think it's controversial to say hunter-gatherer societies are generally more egalitarian than farmer societies. The whole point of the "gathering" part of hunting and gathering is to take the plants you find back to the community base and share them with others instead of eating them on the spot like a chimp. And when a hunter brings back game, everybody gets some; the hunter doesn't sell cuts of meat off to the highest bidders. We have a thread discussing The Dawn of Everything where IIDB experts may comment on the Davids' comparisons of early forager, farmer, and pastoralist societies. (My readings are as yet inadequate for me to post a summary.) Haven't read it. Has the part you read said something that conflicts with what I said? Anyway, why would one want to go back that far? For most of history, most unskilled or semi-skilled workers have endured barely subsistence income. There is good evidence of English prices and wages. In the early 14th century annual real wages for labor in England... I'm not following. Who is it who wants to go back that far? What point are you making, and how does it bear on the points I was making? If you mean, why am I talking about stone age cultures in the first place, it's for context. A lot of people, especially leftists, make arguments that rely on zero-sum-game reasoning, even though it should be painfully obvious to everyone, from the fact that today eight billion people have a much higher standard of living than 400 million people had in the 14th century, that economies are not a zero-sum game, and haven't been a zero-sum game since people figured out you can bury a bag of grass seed, wait six months, and fill ten bags with new grass seed. So how should people react to hearing zero-sum-game arguments? Well, we could look back no further than the 14th century, see no fundamental change in the principles of production, assume history doesn't matter, and try to account for their arguments by saying "Leftists are idiots." But that doesn't get us anywhere. It seems to me it's more useful to ask what accounts for the enduring appeal of zero-sum-game reasoning. And the answer that makes sense to me is that zero-sum-game reasoning was essentially correct in the era before people were taking deliberate action to increase the amount of renewable resources. If you hunt and eat two rabbits when you only need one, there will be one less rabbit out there in the meadow for the other people in the community to hunt and eat. Your prosperity impoverishes others. And that's how economics worked for 99% of mankind's existence on earth. Of course thinking that way got wired into our brains -- we evolve a lot more new DNA in a million years than in ten thousand. It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? I've heard the OPPOSITE argued! That if UBI (cf. Andrew Yang) were introduced, workers would be less desperate and companies like Amazon would need to offer more money to attract them. ^^^^ That ^^^^ is a cause-and-effect mechanism. #### Loren Pechtel ##### Super Moderator Staff member You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages. If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate. You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages. I'm not assuming anything. You're not addressing my point. You made no point to address. You made an assertion which has been addressed time and time again. I could explain again, but nothing would change. What I said about power imbalance and wage rate negotation is clear enough. The articles I posted on low pay and food stamps, etc, are clear enough. Why does the past not show what would happen if you remove the government aid? #### Bomb#20 ##### Contributor What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? ... Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs? Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates. Well, in the first place, the company isn't expecting the government to do anything here. The company and the employee trade money for labor whether the employee is covering rent with a government subsidy, or is crashing with a friend, or is living out of his car, or hasn't moved out of his parents' home. And in the second place, why do you call the subsidy "part of their employee's wages"? Wages are what the buyer of labor pays for labor. When an Amazon worker gets food stamps, that's not payment for labor. The government gives him food stamps whether he's working or not. The government is buying an improved living standard for one of its citizens; it's not buying his labor. You appear to be coming into this with the assumption that since we as a society have decided a person is worth "the basics of rent, food, clothing, transport", it must necessarily imply that his work is worth "the basics of rent, food, clothing, transport". How the heck does that follow? That's magical thinking. People are more than the services they do for others. We are ends in ourselves, not mere means to an end. Act so as to treat humanity, whether in your own person or in that of another, at all times also as an end, and not only as a means. - Groundwork of the Metaphysics of Morals, Immanuel Kant​ And the point being that without collective bargaining That is a point, not the point. We're arguing about subsidies, not unions. individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times. Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer. #### DBT ##### Contributor What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer? It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little? ... Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs? Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates. Well, in the first place, the company isn't expecting the government to do anything here. The company and the employee trade money for labor whether the employee is covering rent with a government subsidy, or is crashing with a friend, or is living out of his car, or hasn't moved out of his parents' home. And in the second place, why do you call the subsidy "part of their employee's wages"? Wages are what the buyer of labor pays for labor. When an Amazon worker gets food stamps, that's not payment for labor. The government gives him food stamps whether he's working or not. The government is buying an improved living standard for one of its citizens; it's not buying his labor. You appear to be coming into this with the assumption that since we as a society have decided a person is worth "the basics of rent, food, clothing, transport", it must necessarily imply that his work is worth "the basics of rent, food, clothing, transport". How the heck does that follow? That's magical thinking. People are more than the services they do for others. We are ends in ourselves, not mere means to an end. Act so as to treat humanity, whether in your own person or in that of another, at all times also as an end, and not only as a means.​ - Groundwork of the Metaphysics of Morals, Immanuel Kant​ And the point being that without collective bargaining That is a point, not the point. We're arguing about subsidies, not unions. individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times. Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer. The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer. A power imbalance that enables the employer to offer shit rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance, which serves to maintain the status quo. #### Swammerdami ##### Squadron Leader Staff member I agree with some of your views, but your view of Stone Age cultures is too reductionist and at best misleading. I wouldn't have thought I'd said enough about stone age cultures for it to register on a reductionism scale. What specifically did I say that you think is wrong or misleading? I don't think it's controversial to say hunter-gatherer societies are generally more egalitarian than farmer societies. The whole point of the "gathering" part of hunting and gathering is to take the plants you find back to the community base and share them with others instead of eating them on the spot like a chimp. And when a hunter brings back game, everybody gets some; the hunter doesn't sell cuts of meat off to the highest bidders. We have a thread discussing The Dawn of Everything where IIDB experts may comment on the Davids' comparisons of early forager, farmer, and pastoralist societies. (My readings are as yet inadequate for me to post a summary.) Haven't read it. Has the part you read said something that conflicts with what I said? "At best misleading" was a euphemism for "WRONG." I'll trouble myself to type in words from the Dawn book now in front of me and opened to page 99. The Dawn of Everything said: . . . the Nambikwara lived in what were effectively two very different societies. During the rainy season they ... practiced horticulture; during the rest of the year they dispersed into small foraging bands. Chiefs ... during the 'nomadic adventures' of the dry season ... gave orders, resolved crises and [were] authoritarian. [During the wet season life was more anarchistic and socialistic] I'm much too lazy to type in an entire paragraph, let alone the whole book. But even before I read Dawn I thought it was well-known that early farming societies tended to be collectivist, while hunters and especially herders were more likely to develop notions about property rights. There is good evidence of English prices and wages. ...14th century... I'm not following. Who is it who wants to go back that far? What point are you making, and how does it bear on the points I was making? If you mean, why am I talking about stone age cultures in the first place, it's for context. A lot of people, especially leftists, make arguments that rely on zero-sum-game reasoning, even though it should be painfully obvious to everyone, from the fact that today eight billion people have a much higher standard of living than 400 million people had in the 14th century, that economies are not a zero-sum game, and haven't been a zero-sum game since people figured out you can bury a bag of grass seed, wait six months, and fill ten bags with new grass seed. According to the website Measuringworth, the average annual real wage in England was £2682 in 1389, compared with barely half that level (£1449) in 1801. Even by 1867, 80 years after James Watt's perfection of the steam engine, England's real wage was only £2991, about 11% higher than the 1389 wage. This suggests to me that the meme "A rise in productivity raises all boats" is an over-simplification of economic reality. #### Bomb#20 ##### Contributor Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates. Well, in the first place, the company isn't expecting the government to do anything here. ... And the point being that without collective bargaining individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times. Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer. The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer. A power imbalance that enables the employer to offer ... rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance, As has been repeatedly pointed out by multiple people upthread, the government assistance isn't what's causing the power imbalance, isn't what's causing the employer to offer low rates and isn't what's causing the employee to take them rather than leave. Quite the reverse -- the assistance gives employees more options, which improves their power and helps them negotiate higher pay. which serves to maintain the status quo. Are you talking about the effect on the whole society rather than on an individual employee and employer? If by "maintain the status quo", you mean the availability of food stamps and other government assistance to the working poor helps cause employees to be paid low rates because it helps prevent a socialist revolution, then no, that's ridiculous. If there were a socialist revolution then the current system of private employers competing with one another for employees would be replaced with a government monopsony: only one buyer for labor. Of course the state would take advantage of its lack of competitors to pay the workers even less than private employers pay them. When has there ever been a state-owned economy that paid the workers as well as they're paid in the free world? There's a reason the barbed-wire fences around the Eastern Bloc curved inward. #### DBT ##### Contributor Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates. Well, in the first place, the company isn't expecting the government to do anything here. ... And the point being that without collective bargaining individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times. Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer. The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer. A power imbalance that enables the employer to offer ... rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance, As has been repeatedly pointed out by multiple people upthread, the government assistance isn't what's causing the power imbalance, isn't what's causing the employer to offer low rates and isn't what's causing the employee to take them rather than leave. Quite the reverse -- the assistance gives employees more options, which improves their power and helps them negotiate higher pay. You missed the point entirely. I have never made the claim that government assistance is causing the power imbalance between management and workers. The power imbalance existed long before government assistance and it is the reason why unions were formed in the first place. I've been through all this. The point is that government assistance should not be necessary for full time workers. which serves to maintain the status quo. Are you talking about the effect on the whole society rather than on an individual employee and employer? If by "maintain the status quo", you mean the availability of food stamps and other government assistance to the working poor helps cause employees to be paid low rates because it helps prevent a socialist revolution, then no, that's ridiculous. If there were a socialist revolution then the current system of private employers competing with one another for employees would be replaced with a government monopsony: only one buyer for labor. Of course the state would take advantage of its lack of competitors to pay the workers even less than private employers pay them. When has there ever been a state-owned economy that paid the workers as well as they're paid in the free world? There's a reason the barbed-wire fences around the Eastern Bloc curved inward. Isn't it clear by now that I'm talking about an inherent power imbalance between individual workers and management? That it is this imbalance of power that enables management to suppress wage rates in a certain sector of the economy, Walmart, Amazon, fast food industry, etc. #### Swammerdami ##### Squadron Leader Staff member The point is that government assistance should not be necessary for full time workers. What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"? When in a verbose mood I might propose 2 or 3 possible interpretations of your sentence, and discuss them in turn without further input. However I've expended my daily quota of unsolicited verbosity in another thread in a magnificent atomic-bomb counting post (and without garnering a single Like ). #### DBT ##### Contributor The point is that government assistance should not be necessary for full time workers. What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"? When in a verbose mood I might propose 2 or 3 possible interpretations of your sentence, and discuss them in turn without further input. However I've expended my daily quota of unsolicited verbosity in another thread in a magnificent atomic-bomb counting post (and without garnering a single Like ). I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy. That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage. Supply and Demand “At the bottom end, there’s really no shortage of people that can do low-skilled work, and that’s true in rich countries as that work gets automated or offshored and sent overseas,” explained Hay Group’s Ben Frost, global product manager for pay products, during a March 2015 podcast on the report’s findings. “What that means is that there is very little pressure to increase pay for jobs at the bottom end, where there is more supply than there is demand.” ''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least16 an hour. McDonald’s, Wal-Mart and T.J. Maxx also have announced increases for their lowest-paid workers.

“How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?”

#### Swammerdami

Staff member
Do NOT think I am arguing against your position. I just find your choice of words confusing.

The point is that government assistance should not be necessary for full time workers.

What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"?

I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy.

That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage.. . .

''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least $16 an hour. . . . “How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?” The claim I asked about is, in effect, that the lowest-paid workers SHOULD get a wage higher than the present$7.25 minimum. And your first sentence in defense of the claim is that workers do NOT get such a wage. Do you see my confusion? I still don't know if your "should" refers to a logical, economic, or moral implication.

Seven years ago the Aetna CEO said he was raising wages to $16 minimum, and challenged other CEOs to do the same. Did this impose a moral obligation on those other CEOs? Since that was seven years ago and some wages are still low, it doesn't seem to have forced wages up by competition for labor. If you were a powerful Congressman, what remedies would you propose? Higher minimum wage? Dictating labor representation on boards, as some European countries do? Some sort of UBI? I am open-minded about remedies; I just find words like "SHOULD" to be confusing and ambiguous. #### bilby ##### Fair dinkum thinkum What I think DBT is saying, is that if government assistance were not present, the business model would collapse because a large fraction of their workforce would be dead. #### Loren Pechtel ##### Super Moderator Staff member The point is that government assistance should not be necessary for full time workers. Take it up with whatever deity you think made the system. It's not the responsibility of the companies to deal with the problem as they didn't cause it. #### DBT ##### Contributor The point is that government assistance should not be necessary for full time workers. Take it up with whatever deity you think made the system. It's not the responsibility of the companies to deal with the problem as they didn't cause it. The system is rigged by those in power and position to favour those in power and position, tax breaks, labour laws, poor minimum wage rates, etc.. Government looks after the big end of town and the little guy is left to rot....oh, wait, they may need food stamps to get by to prevent mass protests or a revolution. #### DBT ##### Contributor Do NOT think I am arguing against your position. I just find your choice of words confusing. The point is that government assistance should not be necessary for full time workers. What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"? I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy. That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage.. . . ''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least$16 an hour. . . .

“How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?”

The claim I asked about is, in effect, that the lowest-paid workers SHOULD get a wage higher than the present $7.25 minimum. And your first sentence in defense of the claim is that workers do NOT get such a wage. Do you see my confusion? I still don't know if your "should" refers to a logical, economic, or moral implication. Seven years ago the Aetna CEO said he was raising wages to$16 minimum, and challenged other CEOs to do the same. Did this impose a moral obligation on those other CEOs? Since that was seven years ago and some wages are still low, it doesn't seem to have forced wages up by competition for labor.

If you were a powerful Congressman, what remedies would you propose? Higher minimum wage? Dictating labor representation on boards, as some European countries do? Some sort of UBI? I am open-minded about remedies; I just find words like "SHOULD" to be confusing and ambiguous.

Unless workers adopt collective bargaining, unionize and lobby, increase their leverage, fight for a better deal, not much is likely to change.
Government tends to look after the big end of town and unless pressure for change is applied, nothing is likely to change.

I'm just pointing to the root cause of the issue, a power imbalance between individual workers (without special skills) and management, which allows management to get away with paying substandard wages and poor working conditions, ie, the government needs to step in and subsidize low-income workers.

Is that how a capitalist economy works?