# 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.
...
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.
...
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